$IBM · INTERNATIONAL BUSINESS MACHINES CORP
IBM reported Q3 2026 results on October 21, 2026, with revenue of $17.1B (up 5% reported, 6% at constant currency), exceeding expectations. Software revenue grew 8% to $7.8B, Consulting was flat at $5.3B, and Infrastructure rose 4% to $3.7B. GAAP diluted EPS was $2.31 (up 26% YoY) and Operating (Non-GAAP) EPS was $2.95 (up 11%). The company raised its full-year free cash flow outlook to increase by more than $1B year-over-year.
- Revenue of $17.1B, up 5% (6% at constant currency), exceeding expectations
- Software revenue up 8% (9% CC) to $7.8B, led by Data up 19% and Hybrid Cloud (Red Hat) up 11%
- GAAP diluted EPS of $2.31, up 26% YoY; Operating (Non-GAAP) EPS of $2.95, up 11%
- Free cash flow of $3.0B in Q3, up $0.7B YoY; YTD free cash flow of $7.8B
- Full-year free cash flow now expected to increase by more than $1B year-over-year (raised guidance)
Extended-hours trading shows IBM at $263.82, up +4.92% vs the regular-session close of $251.46, reflecting strong positive reaction to the revenue beat and raised free cash flow guidance.
IBM delivered a rare combination of accelerating revenue growth, margin expansion, and raised cash flow guidance — validating its Super Intelligence/AI strategy is converting to financial results.
IBM's Software-led acceleration (Data +19%, Red Hat +11%) reinforces the enterprise pivot toward AI-driven infrastructure modernization. Distributed Infrastructure surging 31% while legacy IBM Z declines 20% signals the portfolio transformation is gaining traction.
IBM invested $11.4B in acquisitions this year, with debt rising to $63.8B (up $2.6B YTD) and cash reserves down $3.4B to $11.1B — leverage risk if integration or returns disappoint. Currency headwinds could also pressure reported results despite constant-currency growth.
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