IBM has reported a net income of $1.2bn for the first quarter of 2026 (Q1 2026), reflecting a 15% increase from the $1.1bn recorded in the same period of the previous year.
The company reported diluted earnings per share (EPS) of $1.28 from continuing operations for the first quarter of 2026, compared to $1.12 in the same quarter of the previous year, marking a 14% increase.
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IBM’s revenue for the quarter rose by 9% to $15.9bn, compared to $14.5bn in the first quarter of 2025. This growth was driven by strong performances across its business segments, with the Software division leading the charge.
The company’s operating (non-GAAP) pre-tax income from continuing operations increased to $2.1bn, up from $1.7bn, marking a 23% year-on-year growth. The adjusted EBITDA was reported at $4.0bn, an increase from $3.4bn in the previous year, with an adjusted EBITDA margin of 25.0%, up from 23.4%.
The Software division generated $7.1bn in revenue, an 11% increase year-on-year, with notable contributions from Hybrid Cloud (Red Hat) and Data, which grew by 13% and 19% respectively.
The Consulting division saw a 4% rise in revenue to $5.3bn, while the Infrastructure segment reported a 15% increase, reaching $3.3bn. Within Infrastructure, IBM Z experienced a significant 51% growth.
IBM’s net cash from operating activities was $5.2bn, an increase of $800m compared to the same period last year. The company’s free cash flow for the quarter was $2.2bn, up by $0.3bn year-on-year.
IBM ended the quarter with $11.8bn in cash, restricted cash, and marketable securities, a decrease of $2.6bn from the end of 2025. Total debt, including IBM Financing debt, amounted to $66.4bn, an increase of $5.1bn year-to-date.
Looking ahead, IBM maintains its full-year outlook, expecting more than 5% constant currency revenue growth. At current foreign exchange rates, currency is anticipated to provide a tailwind of about half a point to one point for the year’s growth.
The company also projects an increase of approximately $1bn in year-over-year free cash flow.
IBM said that it continues to leverage its portfolio to drive growth and productivity, with a strategic focus on AI and hybrid cloud solutions. The company aims to enhance its capabilities in these areas to meet evolving client needs and capitalise on emerging market opportunities.
IBM chairman, president, and CEO Arvind Krishna said: “The first quarter was a strong start to the year with broad-based revenue growth across our segments. These results reflect the integrated value of our portfolio and the trust clients put in us to improve their operations.
“As clients scale use cases, AI continues to be a tailwind for our global business. IBM products and services are helping clients orchestrate, deploy and govern AI across hybrid environments.”
During the earnings announcement, Krishna emphasised the increasing role of AI in transforming client operations, with IBM committed to facilitating the deployment of AI across hybrid environments. This aligns with the company’s broader strategy to integrate AI and cloud solutions into its core offerings, addressing the evolving needs of enterprises.
Krishna highlighted the expansion of IBM’s software-led platforms, particularly in generative AI and data solutions, as pivotal to driving revenue growth. Additionally, IBM is investing in quantum computing, with plans to deliver a large-scale fault-tolerant quantum computer by 2029.
