IBM Filings — International Business Machines Corp - FilingSpy
IBM
International Business Machines Corp
A giant of the technology world, IBM builds hybrid cloud and AI platforms, software, servers, storage, and consulting services used by businesses and governments everywhere. It began in 1911 as the Computing-Tabulating-Recording Company, which made punch-card tabulators, time clocks, and weighing scales; in 1924 Thomas Watson renamed it International Business Machines. Fun fact: it's nicknamed "Big Blue" after its blue mainframe cabinets, and its Watson AI famously beat human champions on the quiz show Jeopardy!.
IBM Q2 2026 revenue rose 1.1% to $17.2B but missed expectations as IBM Z fell 42% against the z17 launch quarter a year ago.
The z17 mainframe cycle that drove IBM's fastest growth in years has now become a . rose 1.1% to $17.2B and fell 1.7% to $2.27, as a 42% drop in revenue offset an 11.2% increase in and an 18.9% increase in Data. The company is now navigating the back half of a product cycle while deal delays and a revenue shortfall pressured margins.
Key takeaways
rose 1.1% to $17.2B, but results missed expectations due to an shortfall and deal delays, with Software up 5.1%, Consulting flat, and Infrastructure down 7.4%.
Infrastructure fell 7.4% as declined 42% against the strong z17 launch quarter a year ago, while Distributed Infrastructure rose 37% on supply-constrained server and storage demand.
Software grew 5.1%, below expectations, with down 8.1% tied to weakness, while Hybrid Cloud rose 11.2% and Data rose 18.9% driven by the Confluent acquisition.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 1.1% to $17.2B, but results missed expectations due to an IBM Z shortfall and deal delays, while operating (non-GAAP) EPS grew 4.6% to $2.93.
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Total grew 1.1% (1.1% ) to $17.2B, with Software up 5.1% (4.6% cc), Consulting flat (up 1.1% cc), and Infrastructure down 7.4% (7.4% cc).
contracted 1.0 point to 57.7% as the shortfall and mix shift weighed on profitability, while operating pre-tax margin rose 0.3 points to 19.2% helped by productivity savings and lower SG&A.
fell 1.3% to $2.165B and declined 1.7% to $2.27, while was $2.4B, down $0.3B , and the company returned $1.6B in dividends.
Consulting was flat as reported but grew 1.1% at , while the company cited deal delays as a factor in the overall revenue miss.
What changed
The z17 mainframe cycle that drove Infrastructure up 15.3% in Q1 2026 and 17.0% in Q3 2025 has now reversed: fell 42% in Q2 2026 against the launch quarter comparison, confirming the deceleration flagged as a watch item.
Software growth decelerated to 5.1% from 11.3% in Q1 2026, with the decline tied directly to the shortfall, while and Data remained the growth engines.
Consulting constant-currency growth of 1.1% was a modest improvement from 0.9% in Q1 2026, but deal delays cited by management suggest the signings recovery flagged in prior quarters has not yet converted into reported acceleration.
of $2.4B was down from $4.9B in Q1 2026, reflecting the seasonal working-capital pattern, and the company continued returning $1.6B in dividends while integrating the Confluent acquisition.
What to watch
Q3 2026 Infrastructure to see if the 42% decline deepens or stabilizes as the z17 cycle moves further past its launch-quarter peak.
Software growth trajectory after the 5.1% Q2 result, and whether and Data can sustain double-digit growth to offset the drag from .
Consulting constant-currency and signings in Q3 2026 to see if the deal delays cited in Q2 resolve and convert into reported growth above the 1.1% level.
Full-year 2026 against the $12.1B 2025 result as the company integrates Confluent and manages the working-capital effects of the z17 cycle normalization.
Software was below expectations, with down 8.1% due to weakness, while () grew 11.2% and Data grew 18.9% driven by the Confluent acquisition.
Infrastructure declined 7.4% as fell 42% against a strong z17 launch, but Distributed Infrastructure surged 37% on supply-constrained server and storage demand.
contracted 1.0 point to 57.7% due to shortfall and mix, while operating () gross margin fell 0.7 points to 59.4%.
rose 5.3% to $2.8B, helped by productivity savings and lower SG&A, with operating pre-tax margin up 0.3 points to 19.2%.
was $2.5B, down $0.3B , and the company returned $1.6B in dividends while maintaining a strong liquidity position.