10-QPeriod: Q1 FY2026

INTERNATIONAL BUSINESS MACHINES CORP Quarterly Report for Q1 Ended Mar 31, 2026

Filed April 23, 2026For Securities:IBM

Summary

International Business Machines Corporation (IBM) reported a strong first quarter for 2026, with total revenue increasing by 9.5% year-over-year to $15.9 billion. This growth was driven by robust performance across its segments, particularly Software and Infrastructure, with Software revenue up 11.3% and Infrastructure revenue up 15.3%. The company also highlighted a significant increase in its operating (non-GAAP) earnings, which grew by 20.1% to $1.8 billion, demonstrating effective cost management and operational efficiency. The company's strategic focus on hybrid cloud and AI continues to yield positive results, evidenced by strong revenue growth in key software offerings like Hybrid Cloud and Automation, and the successful integration of recent acquisitions such as Confluent. IBM generated $5.2 billion in cash from operations and $2.2 billion in free cash flow, underscoring its financial stability and ability to return value to shareholders through dividends while also investing in strategic growth initiatives.

Financial Highlights

49 data points
Beta

Revenue

$15.92B

56.2% Gross Margin

Net Income

$1.22B

7.6% Net Margin

EPS (Diluted)

$1.28

Total Assets

$156.23B

Cash & Equivalents

$10.82B

Free Cash Flow

$4.94B

Financial Statements
Beta
Revenue$15.92B
Cost of Revenue$6.97B
Gross Profit$8.95B
R&D Expenses$2.17B
SG&A Expenses$5.09B
Operating Income$1.22B
Interest Expense$473.00M
Net Income$1.22B
EPS (Basic)$1.30
EPS (Diluted)$1.28
Shares Outstanding (Basic)938.53M
Shares Outstanding (Diluted)952.13M

Key Highlights

  • 1Total revenue grew 9.5% to $15.9 billion in Q1 2026, up from $14.5 billion in Q1 2025.
  • 2Software segment revenue increased 11.3% to $7.05 billion, driven by Hybrid Cloud and Data offerings.
  • 3Infrastructure revenue saw a significant jump of 15.3% to $3.33 billion, boosted by strong performance in Hybrid Infrastructure and IBM Z.
  • 4Operating (non-GAAP) earnings surged by 20.1% to $1.8 billion, indicating improved profitability and operational efficiency.
  • 5Diluted earnings per share (EPS) from continuing operations increased by 14.3% to $1.28.
  • 6Cash from operating activities was $5.2 billion, an increase of $0.8 billion year-over-year.
  • 7IBM completed the acquisition of Confluent, Inc. in March 2026 to bolster its AI and data flow capabilities.

Frequently Asked Questions

IBM reported a 9.5% year-over-year increase in total revenue, reaching $15.9 billion for the first quarter of 2026, compared to $14.5 billion in the same period of 2025. Adjusted for currency, revenue growth was 6.1%.

The Software segment showed strong growth, with revenue up 11.3% to $7.05 billion, driven by Hybrid Cloud and Data offerings. Infrastructure revenue also performed well, increasing by 15.3% to $3.33 billion, largely due to Hybrid Infrastructure and IBM Z. Consulting revenue grew by 4.0% to $5.27 billion.

IBM completed the acquisition of Confluent, Inc. in March 2026. This strategic move aims to enhance IBM's capabilities in deploying generative and agentic AI by providing improved data flow and communication between environments, applications, and APIs.

Profitability improved, with operating (non-GAAP) earnings increasing by 20.1% to $1.8 billion. Diluted earnings per share from continuing operations rose by 14.3% to $1.28. The company generated strong cash flow, with $5.2 billion from operating activities and $2.2 billion in free cash flow.