IBM reported a strong start to 2026 with broad-based revenue growth across its segments, driven by double-digit increases in Software and Infrastructure. The company demonstrated robust margin expansion and significant growth in profit and free cash flow, reflecting effective portfolio management and disciplined execution.
Revenue increased 9% year-over-year (6% at constant currency) to $15.9 billion.
positiveSoftware revenue grew 11% (8% at constant currency) to $7.1 billion, with strong contributions from Hybrid Cloud, Automation, and Data.
positiveInfrastructure revenue surged 15% (12% at constant currency) to $3.3 billion, led by Hybrid Infrastructure and IBM Z.
positiveOperating (Non-GAAP) Gross Profit Margin expanded 110 basis points to 57.7%.
positiveOperating (Non-GAAP) Pre-Tax Income Margin expanded 140 basis points to 13.4%.
positiveFree cash flow increased by $0.3 billion year-over-year to $2.2 billion.
positiveThe company declared an increased quarterly cash dividend to $1.69 per share, marking the 31st consecutive year of dividend increases.
positiveConsulting revenue grew only 4% (1% at constant currency), indicating slower growth in this segment compared to Software and Infrastructure.
attentionInfrastructure Support revenue declined 2% (6% at constant currency).
attentionIBM Financing revenue grew 15% (10% at constant currency) but represents a small portion of total revenue ($0.2 billion).
attentionTotal current liabilities increased to $40.1 billion from $38.7 billion at year-end 2025.
attentionTotal debt increased by $5.1 billion year-to-date to $66.4 billion.
attentionCash, cash equivalents, and marketable securities decreased by $2.6 billion from year-end 2025 to $11.8 billion.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total | CC |
|---|---|---|---|---|---|
Software | N/A | — | — | — | +7.9% |
Consulting | N/A | — | — | — | +0.9% |
Infrastructure | N/A | — | — | — | +11.7% |
Financing | N/A | — | — | — | +10.2% |
| Total Revenue | $0.00M | — | — | 100.0% | — |
Segment performance shows business unit health and growth drivers. Constant currency (CC) removes FX impact for like-for-like comparison.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
| Metric | Value | Period | Specificity | vs Prior |
|---|---|---|---|---|
| revenue | 5% plus | FY2026 | directional | New |
| free_cash_flow | about $1 billion | FY2026 | directional | New |
| software_revenue | 10 plus% | FY2026 | directional | New |
| consulting_revenue | low to mid-single digits | FY2026 | wide_range | New |
| infrastructure_revenue | down low single digits | FY2026 | directional | New |
| operating_pre_tax_margin | about a point | FY2026 | directional | New |
| operating_tax_rate | mid-teens | FY2026 | tight_range | New |
| free_cash_flow | about $1 billion | FY2026 | directional | New |
| revenue | similar to the full year | Q2 2026 | directional | New |
| operating_pre_tax_margin | about 50 basis points | Q2 2026 | directional | New |
| operating_tax_rate | mid-teens | Q2 2026 | tight_range | New |
The first quarter was a strong start to the year with broad-based revenue growth across our segments.
These results reflect the integrated value of our portfolio and the trust clients put in us to improve their operations.
As clients scale use cases, AI continues to be a tailwind for our global business.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.