Q2 26 EPS
$2.93
MISS 1.35%
Est. $2.97
Q2 26 Revenue
$17.16B
vs S&P Since Q2 26
+7.6%
BEATING MARKET
IBM +12.4% vs S&P +4.7%
Market Reaction
Did IBM Beat Earnings? Q2 2026 Results
International Business Machines posted a rare stumble in the second quarter of 2026, missing Wall Street's earnings target and snapping what had been five consecutive quarters of consensus EPS beats. The technology giant reported operating diluted EP… Read more International Business Machines posted a rare stumble in the second quarter of 2026, missing Wall Street's earnings target and snapping what had been five consecutive quarters of consensus EPS beats. The technology giant reported operating diluted EPS of $2.93, falling short of the $2.97 analyst consensus by 1.35%, while revenue grew just 1.1% year over year to $17.16 billion, with management citing "revenue headwinds late in the second quarter" as the primary culprit. The softest spot was Infrastructure, where a 42% collapse in IBM Z mainframe revenue dragged the segment down 7.4% to $3.83 billion, reflecting a late-cycle trough between mainframe refresh cycles. Software offered a partial offset, rising 5.1% to $7.76 billion on the strength of Red Hat's 11% growth and a 19% surge in Data, though Consulting contributed little at just 1% constant-currency growth. Adding to investor unease, a securities fraud inquiry into the company's pipeline disclosures has heightened scrutiny of its forward commentary. IBM did raise its full-year constant-currency revenue growth outlook to 4% to 5%, while maintaining expectations for roughly $1.00 billion in year-over-year free cash flow improvement.
Key Takeaways
- • Red Hat hybrid cloud growth of 11% drove Software segment performance
- • Data sub-segment grew 19%, reflecting strong demand for AI-ready data solutions
- • Distributed Infrastructure (Power and Storage) grew 37% with nearly $500 million order backlog
- • AI and automation-driven productivity improvements enhancing margins and free cash flow
- • IBM Z mainframe cycle decline of 42% was a significant headwind to Infrastructure revenue
IBM Forward Guidance & Outlook
IBM raised its full-year 2026 constant currency revenue growth guidance to a range of 4-to-5 percent, with currency now expected to be neutral to growth for the year. The company continues to expect full-year free cash flow to increase by about $1 billion year-over-year. IBM also now expects improved pre-tax income margin expansion for the full year, driven by AI-powered productivity initiatives across software development, sales and marketing, and supply chain optimization.
IBM YoY Financials
Q2 2026 vs Q2 2025, source: SEC Filings
IBM Revenue by Segment
With YoY comparisons, source: SEC Filings
“We are confident in IBM's strategy and portfolio, and in our ability to capture growth opportunities ahead. We fundamentally believe that we are in the early innings of a structural shift for business, and that our portfolio - across software, infrastructure, and consulting - is well-positioned to help our clients tap the value, and manage the challenges, of an AI-driven future.”
— Arvind Krishna, Q2 2026 Earnings Press Release
IBM Earnings Trends
IBM vs Market 30 Day Price Reactions
30-day stock return vs benchmark after each earnings
IBM EPS Trend
Earnings per share: estimate vs actual
IBM Revenue Trend
Quarterly revenue: estimate vs actual
IBM Quarterly Results
6 quarters of earnings data
| Quarter | EPS Est. | EPS Act. | Surprise | Revenue | Rev. Surprise |
|---|---|---|---|---|---|
| Q2 26 MISS | $2.97 | $2.93 | -1.35% | $17.16B | — |
| Q1 26 BEAT | $1.81 | $1.91 | +5.45% | $15.92B | +1.70% |
| Q4 25 BEAT FY | $4.29 | $4.52 | +5.40% | $19.69B | +2.48% |
| FY Full Year | $11.35 | $11.59 | +2.11% | $67.54B | +0.74% |
| Q3 25 BEAT | $2.45 | $2.65 | +8.31% | $16.33B | +1.45% |
| Q2 25 BEAT | $2.65 | $2.80 | +5.47% | $16.98B | +2.32% |
| Q1 25 BEAT | $1.43 | $1.60 | +12.04% | $14.54B | +1.05% |