IBM 8-K
EarningsGuidance
Software growth faced infrastructure weakness and late-quarter revenue headwinds; IBM expects improved FY pre-tax margin expansion.
Filed 2026-07-22 16:10 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q2 2026 results with updated FY2026 expectations. Revenue rose 1% Y/Y, with software growth offset by weaker infrastructure and late-quarter revenue headwinds. IBM also expects improved full-year pre-tax income margin expansion.
Key Figures
| Metric | Q2 2026 | Q2 2025 | Y/Y |
|---|---|---|---|
| Revenue | $17.2B | $17.0B | 1% |
| Gross profit | $9.91B | $9.98B | -1% |
| Pre-tax income | $2.48B | $2.60B | -5% |
| Income from continuing operations (GAAP) | $2.17B | $2.19B | -1% |
| Operating earnings from continuing operations (non-GAAP) | $2.79B | $2.65B | 5% |
| Diluted EPS from continuing operations (GAAP) | $2.27 | $2.31 | -2% |
| Diluted EPS from continuing operations (non-GAAP) | $2.93 | $2.80 | 5% |
| Operating cash flow | $2.60B | $1.70B | 53% |
| Free cash flow | $2.54B | $2.85B | -11% |
- Gross profit margin fell to 57.7% from 58.8%; pre-tax income margin fell to 14.4% from 15.3%. Software revenue grew 5% to $7.8B, consulting was flat at $5.3B, and infrastructure declined 7% to $3.8B. Power and Storage orders built a backlog of nearly $500M.
- H1 operating cash flow was $7.77B vs $6.07B; free cash flow was $4.76B vs $4.81B. Cash, restricted cash and marketable securities totaled $8.2B, down $6.3B from year-end 2025; debt totaled $62.0B, including $13.0B of IBM Financing debt. IBM invested $10.5B in acquisitions YTD and paid $1.6B in Q2 dividends.
- Quarterly dividend of $1.69/share, payable 9/10/2026 to holders of record 8/10/2026.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Revenue growth (constant currency) | FY2026 | 4%-5%; currency expected to be neutral to growth at current exchange rates | — | — |
| Free cash flow increase Y/Y | FY2026 | ≈$1B | — | Reaffirmed |
| Pre-tax income margin expansion | FY2026 | Improved expansion expected | — | — |
Investor Takeaways
- FY2026 constant-currency revenue growth, free cash flow and pre-tax margin expansion are the execution markers after late-Q2 revenue headwinds.
- IBM plans to invest more than $10B in quantum computing over five years and remains on track to deliver its first large-scale fault-tolerant quantum computer by 2029.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3