International Business Machines Corporation
International Business Machines Corporation Q2 FY26 Results — Earnings Call Analysis
Q2 FY26 earnings call: what management said on revenue, margins and capex.
What the Q2 FY26 call signalled
3 of 4 strong
The short version
- IBM expects constant currency revenue growth of 5+% in 2026, supported by strong software acceleration. - IBM expects constant currency revenue growth of 5+% for 2026.
From International Business Machines Corporation's Q2 FY26 earnings-call transcript · updated 29 May 2026.
Revenue & Sales Performance
- IBM expects constant currency revenue growth of 5+% in 2026, supported by strong software acceleration.
- Software business projected to grow 10+% for the year, driven by portfolio diversification, innovation, GenAI, and M&A synergies (e.g., Confluent).
- Data segment expected to grow in the low 20+% range, contributing 5 points to software growth.
- Red Hat growth accelerated to 10%, contributing 2.5 points to IBM's growth.
- Hybrid Infrastructure and automation businesses showing strong growth, with IBM Z growing 48% this quarter.
- Consulting revenue anticipated to accelerate to low to mid-single digit growth, backed by 30% GenAI backlog penetration.
2 more points from International Business Machines Corporation's call on revenue
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Profitability & Margins
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Capital Expenditure Plans
- IBM continues to invest strategically in innovation and portfolio repositioning, notably in AI and software.
- The company anticipates absorbing about $600 million dilution in 2026 due to Confluent acquisition (stock-based compensation and interest expense), while accelerating cost synergies to expand operating pre-tax margins by about 1 point.
- Higher CapEx is noted as a headwind alongside higher cash taxes and net interest expense.
- IBM leverages strong cash flow and financial flexibility for potential acquisitions, particularly in category-leading technologies with structural growth profiles.
2 more points from International Business Machines Corporation's call on capex
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Fundraising & Capital Structure
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Order Book & Pipeline
- IBM exited last year with an AI-related book of business exceeding $12.5 billion.
- AI is now embedded across IBM’s portfolio, including consulting and software.
- Bookings and pipeline demand for the second quarter indicate no signs of slowing down.
- Consulting backlog has about 30% penetration from generative AI, supporting revenue growth.
- Signings in consulting returned to growth, up 6%, driven by AI-related transformations.
- IBM expects steady constant currency revenue growth of 5%+ in 2026.
- The company maintains prudent guidance for the year despite a strong start.
2 more points from International Business Machines Corporation's call on order book
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What International Business Machines Corporation's management said in earlier quarters
Earlier calls (1)
Others in IT Services this season
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Akamai Technologies, Inc. Q2 FY26 quarterly results analysis. **Cloud Infrastructure Services (CIS):** Expected to grow at least 50% year-over-year in constant
Potential multibaggers · Q2 FY27
This quarter's potential multibaggers
on management's own guidance
- Strong growth2
- Strong growth1
- Strong growth3
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Ranks describe management commentary on revenue and margin from the latest earnings call. Not investment advice.
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Frequently Asked Questions
What were International Business Machines Corporation Q2 FY26 results?
- IBM expects constant currency revenue growth of 5+% in 2026, supported by strong software acceleration. - IBM expects constant currency revenue growth of 5+% for 2026.
What is International Business Machines Corporation share price analysis?
International Business Machines Corporation currently shows a below-average growth signal. The stock trades at a P/E of 22.2 with a market cap of $248,336. Investors should review the full earnings analysis for detailed insights.
Is International Business Machines Corporation planning capital expenditure?
- IBM continues to invest strategically in innovation and portfolio repositioning, notably in AI and software.
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This analysis is AI-generated based on publicly available earnings data and the company's earnings call transcript. This is not investment advice. Please consult a SEBI-registered advisor before making investment decisions.