IBM Q2 2026 Earnings Release

IBM announced its second-quarter 2026 results, with a positive outlook for the full year. The company now expects constant currency revenue growth between 4-5% and anticipates a $1 billion increase in free cash flow year-over-year. Key growth drivers include the software segment, particularly Red Hat, watsonx portfolio, HashiCorp, and Confluent, which showed strong performance. The company is also investing in its go-to-market strategy and specialized talent to capitalize on AI adoption. IBM is accelerating innovation with initiatives like Lightwell for open-source security and continued investment in quantum computing, aiming for a large-scale fault-tolerant quantum computer by 2029. Productivity gains through AI and automation are expected to enhance margins and free cash flow. Despite revenue headwinds in the latter half of Q2, IBM maintained financial and operational discipline, focusing on investments for growth and shareholder returns. Segment results showed growth in Software (up 5%) driven by Hybrid Cloud (up 11%) and Data (up 19%), while Consulting was flat and Infrastructure saw a decline of 7%.