One year after hitting the first hurdles tied to the ongoing COVID-19 pandemic, IBM sees a clearer path toward re-gaining its footing. That was the message coming out of the company’s most recent earnings call where IBM management repeatedly touted a rosy performance outlook and hinted at continued acquisitions.

IBM’s first quarter results came in ahead of expectations, with the company posting a surprise increase in revenues. That, combined with a sunny outlook for the rest of the year led to investor bullishness. IBM’s stock hit a new 52-week high shortly after those results were announced and remained positive all day despite the broader Nasdaq trading in negative territory.

Speaking to investors, IBM CEO Arvind Krishna noted that the vendor saw a definite sequential increase in consistent business during the quarter, though it was geographic and industry specific.

“We were talking during the fourth quarter about various pauses, and we didn’t see that in the first quarter,” Krishna said. “With that said, I do have to acknowledge there are some differences by geography and industry.”

Krishna explained that the “Americas was stronger” and that “there are pockets in Asia that depend very much by countries, and we can all get which ones are doing better, which ones are doing worse, it does depend upon both COVID rate, and the pauses that happened then due to business circumstances.”

Europe, however, remains an area “of caution,” he added, acknowledging the ongoing COVID struggles plaguing that continent.

Krishna also noted that from an industry perspective, those that are focused on tourism are continuing to regain their footing in light of the pandemic, though there is a continued broader push toward digital transformation. That is being fed by IBM’s Red Hat business, which posted a normalized 15% revenue growth during the quarter.

“And as they accelerate their digital transformation our hybrid-cloud thesis comes into play very strongly,” Krishna said. “Multi-cloud, multiple public clouds as well as private come into play … and you can see that in our Red Hat results.”

While the new business opportunities are feeding into IBM’s growth, it maintains a strong legacy position. The vendor’s Z mainframe business posted a 49% year-over-year revenue increase. That was notable as it came more than six quarters into its most recent z15 product lifecycle and has outpaced the growth of its previous z14 product line.

From a more strict financial perspective, IBM CFO Jim Kavanaugh explained that the vendor entered 2021 with around $14 billion of cash on hand and that it expects to generate around $16 billion of new cash flow by the end of the year.

Against that potential $30 billion in cash, it expects to have around $17 billion in expenses tied to structural changes and the spin-off of its newly named Kyndryl business; $8 billion in debt maturities, including those tied to its $34 billion Red Hat acquisition; and $6 billion in dividend payments.

The rest is burning a hole in its pocket, with Kavanaugh noting that the company could use some of that excess to continue its buying spree.

“We feel very confident and we will capitalize, whether there's any inorganic opportunities and you're seeing … 11 acquisitions since Arvind has taken over and we’ll continue to capitalize, where it makes the right client value, in the right IBM value, at the right economic equation going forward, but we're not constrained by sources and uses of cash,” Kavanaugh said.

Some of those past acquisitions have included monitoring firm Instana and security firm Spanugo. Kavanaugh added that IBM had closed on six of those acquisitions since the middle of December.

Kavanaugh also noted that it was seeing increased preference from its customers for consumption-based service models, or “opex over capex.” This preference is borne out by many of IBM’s rivals and partners having over the past year rolled out more aggressive consumption-based pricing models for services.

IBM’s management also noted that it had increased its hiring year over year during the quarter, “with thousands of people hired,” Kavanaugh claimed. That is likely to be a harder claim to continue throughout the year as IBM spent most of last year slashing its workforce following the COVID-19 outbreak.

Those cuts included plans to eliminate around 20% of its European workforce and several thousand jobs earlier in the year across different IBM divisions.