International Business Machines (IBM) Q1 2026 (USD): Adj. EPS 1.91 (exp. 1.81), Revenue 15.9bln (exp. 15.62bln). FY adj. revenue growth of atleast 5%.
- Gross margin 56.2%.
- FY free cash flow view: to increase by about USD 1bln Y/Y.
- Increased qtrly cash dividend to USD 1.69 per share.
Segment Results for First Quarter
- Software USD 7.1 bln, +11% y/y (+8% constant currency)
- Hybrid Cloud (Red Hat) +13% (+10% constant currency) Automation +10% (+7% constant currency) Data +19% (+16% constant currency) Transaction Processing +6% (+2% constant currency)
- Consulting USD 5.3 bln, +4% y/y (+1% constant currency)
- Strategy & Technology +4% (+1% constant currency) Intelligent Operations +4% (+1% constant currency)
- Infrastructure USD 3.3 bln, +15% y/y (+12% constant currency)
- Hybrid Infrastructure +28% (+25% constant currency) IBM Z +51% (+48% constant currency) Distributed Infrastructure +17% (+13% constant currency) Infrastructure Support -2% (-6% constant currency)
- Financing USD 0.2 bln, +15% y/y (+10% constant currency)
Context
IBM's Q1 2026 results beat expectations on both adjusted EPS and revenue, showcasing solid growth across its software and infrastructure segments. With a promising FY revenue growth guidance of at least 5% and an increase in free cash flow, the company appears well-positioned to deliver sustained performance, which could positively influence its stock and market sentiment, especially within the IT services sector.
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