IBM (IBM) investor relations material

Executive summary

• Second-quarter 2026 revenue reached $17.2B, up 1–1.1% year-over-year, with net income at $2.2B and diluted EPS of $2.27, both down 1–1.3% year-over-year.

• Software revenue grew 5–5.1%, Consulting was flat or up 1%, and Infrastructure declined 7–7.4% year-over-year.

• Free cash flow for the first half was $4.8B, flat year-over-year, with $3.2B returned to shareholders via dividends.

• The Confluent acquisition was completed in Q1 2026, strengthening the software portfolio.

• Investments in AI, automation, and quantum computing are prioritized to drive future growth.

Financial highlights

• Q2 revenue was $17.2B, up 1–1.1% year-over-year; net income for Q2 was $2.2–2.8B, with diluted EPS at $2.27 (down 1.7%) and operating EPS at $2.93 (up 4.6–5%).

• Gross profit margin for Q2 was 57.7% (GAAP), 59.4% (non-GAAP), both down 0.7–1.0 points year-over-year.

• Adjusted EBITDA for Q2 was $4.8B, up 2% year-over-year, with a margin of 27.8–28%.

• Free cash flow for H1 was $4.8B, flat year-over-year.

• Cash and equivalents at quarter-end were $8.2B.

Outlook and guidance

• Full-year 2026 constant currency revenue growth expected at 4–5%, with free cash flow projected to increase by about $1B year-over-year.

• Operating pre-tax margin expansion of 100 basis points anticipated for the full year.

• Management remains confident in the hybrid cloud and AI strategy, focusing on innovation and productivity.