IBM
International Business Machines Corp (IBM) Q2 2026 Earnings Call Highlights: Navigating Revenue ...
Article Summary
HOLD- International Business Machines Corp. (NYSE: IBM) reported 1% revenue growth and a 5% increase in diluted operating earnings per share for Q2 2026, with software revenue growing 5% and Red Hat accelerating 11% sequentially, but infrastructure revenue declined 7% and mainframe performance fell below expectations.
- International Business Machines reported a significant shortfall in software revenue due to shifts in client spending priorities, with 80% of annual recurring revenue coming from recurring software, supported by strong demand for subscription and consumption-based offerings.
- IBM maintained a strong liquidity position with $8.2 billion in cash and a solid investment-grade balance sheet, with $62 billion in debt and $4.8 billion in free cash flow through the first half of the year.
- Full-year revenue growth is expected to be between 4% and 5% with software growth of 6% to 8% and infrastructure growth in the low-to-mid-single digits.
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Growth Stock Scoring Breakdown
| METRIC | VALUE | WEIGHT | ANALYSIS |
|---|---|---|---|
| Sales Growth TTM ? | 9.7% | 25% | 35.0 ptsBelow Screener (9.7%) - Weak growth |
| EPS Growth Next 5Y ? | 6.6% | 25% | 20.0 ptsWeak (6.6%) - Low expectations |
| Target Price Upside ? | 25.9% | 20% | 75.0 ptsSignificant Upside (25.9%) - Target: $259.10 vs Current: $205.77 |
| Gross Margin % ? | 57.8% | 15% | 80.0 ptsVery Healthy (57.8%) - High-quality margins |
| Drawdown from 52-Wk High ? | -38.1% | 15% | 80.0 ptsSolid Dip (-38.1%) - Good entry zone |
Disclaimer: This rating is for informational purposes only and is not financial advice.
All data sourced from Finviz.
Always conduct your own research and consult with a financial advisor before making investment decisions.
Past performance does not guarantee future results.
About IBM
- International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
- It operates through Software, Consulting, Infrastructure, and Financing segments.
- The Software segment offers hybrid cloud and AI platforms that allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate.
- The Consulting segment delivers strategy and technology services and intelligent operations, providing business transformation, technology implementation, managed services, application modernization, and AI-powered solutions.
- The Infrastructure segment provides on-premises and cloud-based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment.
- Its Financing segment offers client and commercial financing, and facilitates IBM clients' acquisition of hardware, software, and services.
- It has strategic partnerships with various companies, including hyperscalers, service providers, global system integrators, and software and hardware vendors that include Adobe, Amazon Web Services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others.
- Additionally, the company operate a data streaming platform.
- The company has a strategic collaboration with Arm Holdings plc for the development of new dual-architecture hardware that helps enterprises run future AI and data intensive workloads; and strategic partnership with three.ws to advance ai-powered 3d agent technology; has a collaboration with Lightwell to help strengthen open source software supply chain.
- The company was formerly known as Computing-Tabulating-Recording Co.
- International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.