IBM posts a $17.1bn quarter and raises its free cash flow outlook
IBM's September quarter revenue reached $17.1bn, up 5% and above the $16.82bn consensus as reported by MarketBeat, as software led the way.
Tier Tier 3 box score
IBM
IBM
Q3 2026
- Revenue
- $17.1 billion ($17,103 million)
- Revenue change, year on year
- +5% (company stated). Prior year $16,331 million printed in the same table
- Net income (GAAP)
- $2.19 billion ($2,190 million), up 26% from $1,744 million a year ago by our arithmetic
- EPS (diluted, GAAP, continuing ops, as reported)
- $2.31, up from $1.84 a year ago (company states up 26%)
- EPS (diluted, total, GAAP)
- $2.30
- EPS (diluted, adjusted, as reported)
- $2.95 on the company's operating basis, up 11% (company stated), prior year $2.65
- Margins
- GAAP gross 56.8%, down 50 basis points. GAAP pretax income margin 14.6%
- Key segment line
- Software $7.8bn ($7,804 million), up 8%. Hybrid Cloud (Red Hat) up 11%. Data up 19%. Distributed Infrastructure up 31%. IBM Z down 20%
- Cash
- Q3 free cash flow $3.0bn, up $0.7bn year to year
- Guidance
- Full year revenue growth of four to five percent at constant currency kept. Free cash flow outlook raised to an increase of more than $1 billion year over year
IBM sells business software, consulting and big computers to companies that want to put AI to work. Its September quarter revenue came in at $17.1bn, up 5% on a year ago, the company says. That was above the $16.82bn consensus as reported by MarketBeat. Software did the heavy lifting at $7.8bn, up 8%, with Red Hat up 11% and the Data group up 19%. Distributed Infrastructure grew 31% while IBM Z mainframes fell 20%. Profit was $2.19bn, up 26% from $1.74bn a year ago by our arithmetic. Profit per share was $2.31, the company says. IBM kept its full year revenue outlook and now expects free cash flow to grow by more than $1bn this year. CEO Arvind Krishna said clients are "now deploying Super Intelligence in ways that transform entire operating models". Why it matters to you: IBM is the veteran coach of company tech, and this is a read on whether big firms are paying to bring AI into their daily work. Filing: IBM 8-K, filed 21 Oct 2026
IBM posted September quarter revenue of $17.1bn, up 5% and above the $16.82bn consensus as reported by MarketBeat, and raised its full year free cash flow outlook.
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Revenue growth is the company's own 5% figure. The profit change is our arithmetic from the same release's figures. The release gives no AI revenue figure, so the AI link rests on the CEO's words. Only revenue is set against consensus. The prior free cash flow outlook is not in this release. No share prices or price moves.