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International Business Machines (IBM) Q3 FY2026 earnings: revenue $17.1 billion, up 4.7% on the year

International Business Machines Corp. (IBM) reported revenue of $17.1 billion for Q3 FY2026, the quarter ended 30 September 2026, up 4.7% on the same quarter a year earlier. Net income was $2.2 billion, up 25.6% on the year, and diluted earnings per share $2.30. The figures are the company's own, from the 10-Q it filed with the SEC on 22 October 2026.

Revenue$17.1 billionup 4.7%
Net income$2.2 billionup 25.6%
Diluted EPS$2.30
QuarterQ3 FY2026ended 30 September 2026

What management said

Guidance figures: 1 raised.

  • Revenue growth accelerated to five percent: Revenue was $17.1 billion, up 5 percent, or 6 percent at constant currency. The release compares this with 1 percent growth in the second quarter.
  • Operating EPS rose 11 percent: Operating (non-GAAP) diluted EPS from continuing operations was $2.95, up 11 percent. GAAP diluted EPS from continuing operations was $2.31, up 26 percent from $1.84.
  • Software revenue grew fastest: Software revenue rose 8 percent, or 9 percent at constant currency, faster than infrastructure at 4 percent and consulting at flat.
Read the earnings call summary

The quarter, against the one before and a year earlier

LineQ3 FY2026Q2 FY2026Q3 FY2025Change on the year
Revenue17,10317,16216,331+4.7%
Cost of revenue7,3897,2556,970+6.0%
Gross profit9,7149,9079,360+3.8%
Gross margin56.8%57.7%57.3%
Research and development2,3782,3112,082+14.2%
Selling, general and administrative4,6204,9814,748-2.7%
Interest expense491486492-0.2%
Pre-tax income2,4972,4792,430+2.8%
Income tax298313686-56.6%
Effective tax rate11.9%12.6%28.2%
Net income2,1902,1651,744+25.6%
Net margin12.8%12.6%10.7%
Diluted EPS$2.30$2.27$1.84+25.0%
$ million except per share.
Read moreFree cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Those four are arithmetic on the filed numbers; everything else is as filed. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and share counts are as they are.

Cash flow and capital returned

LineQ3 FY2026Q2 FY2026Q3 FY2025Change on the year
Operating cash flow4,0252,5973,082+30.6%
Capital expenditure332229255+30.2%
Free cash flow3,6932,3682,827+30.6%
Free cash flow margin21.6%13.8%17.3%
Cash from investing-2,569-481-438n/a
Cash from financing606-5,727-3,012n/a
Depreciation and amortisation1,3781,3491,283+7.4%
Share-based compensation535498444+20.5%
Dividends paid1,5961,5901,569+1.7%
Dividend per share$1.69$1.69$1.68+0.6%
Diluted shares, weighted954m953m949m+0.5%
Shares outstanding at period end945m942m935m+1.1%

Cash flow lines for the quarter; where the company files them year to date, the quarter is the difference between two filings.

Balance sheet at quarter end

LineQ3 FY2026Q2 FY2026Q3 FY2025Change on the year
Shareholders' equity35,53734,45227,905+27.3%
Non-controlling interest66989.085.0+687.1%
Debt63,81761,98763,116+1.1%
Operating lease liabilities2,5742,5152,646-2.7%
Other liabilities52,41453,05652,560-0.3%
Total liabilities and equity155,011152,099146,312+5.9%
Goodwill74,91674,59967,396+11.2%
Intangible assets13,60313,95511,729+16.0%
Cash and equivalents9,2337,17211,569-20.2%
Receivables5,7946,0445,532+4.7%
Inventory1,9451,7461,397+39.2%
Other assets49,52048,58348,689+1.7%
Total assets155,011152,099146,312+5.9%

Questions

What was International Business Machines' revenue in Q3 FY2026?

International Business Machines (IBM) reported revenue of $17.1 billion for Q3 FY2026, the quarter ended 30 September 2026, up 4.7% on the same quarter a year earlier.

How much did International Business Machines earn in Q3 FY2026?

Net income for Q3 FY2026 was $2.2 billion, up 25.6% on the year, and diluted earnings per share $2.30.

When did International Business Machines report Q3 FY2026 results?

International Business Machines filed its 10-Q for the quarter ended 30 September 2026 with the SEC on 22 October 2026.

Quarterly results, the last 20 quarters

Q4 FY2021 * †Q1 FY2022Q2 FY2022Q3 FY2022Q4 FY2022 *Q1 FY2023Q2 FY2023Q3 FY2023Q4 FY2023 *Q1 FY2024Q2 FY2024Q3 FY2024Q4 FY2024 *Q1 FY2025Q2 FY2025Q3 FY2025Q4 FY2025 *Q1 FY2026Q2 FY2026Q3 FY2026
Revenue16,69414,19715,53514,10716,69114,25215,47514,75217,38114,46215,77014,96817,55314,54116,97716,33119,68615,91717,16217,103
Cost of revenue7,1946,8627,2466,6777,0576,7436,9746,7297,1146,7196,8206,5487,1146,5107,0016,9707,7586,9687,2557,389
Gross profit9,5017,3358,2907,4309,6327,5098,5018,02310,2677,7428,9508,42010,4398,0319,9779,36011,9298,9509,9079,714
Gross margin57%52%53%53%58%53%55%54%59%54%57%56%59%55%59%57%61%56%58%57%
R&D1,6251,6791,6731,6111,6041,6551,6871,6851,7481,7961,8401,8761,9671,9502,0972,0822,1872,1732,3112,378
SG&A4,9024,5974,8554,3914,7664,8534,9004,4584,7924,9744,9384,9114,8654,8865,0274,7485,4625,0894,9814,620
Interest expense303311297295313367423412405432427429424455510492478473486491
Pre-tax income2,8686231,722-4,5013,3121,0582,0001,8733,7591,0742,219-8023,3061,1582,5972,4304,1431,3872,4792,497
Tax rate14%-6%15%n/a13%12%21%8%13%-47%18%n/a11%9%16%28%-35%12%13%12%
Net income2,3337331,392-3,1962,7109271,5831,7043,2881,6051,834-3302,9141,0552,1941,7445,6001,2162,1652,190
Net margin14%5%9%-23%16%7%10%12%19%11%12%-2%17%7%13%11%28%8%13%13%
Diluted EPS$2.57$0.81$1.53-$3.54$2.96$1.01$1.72$1.84$3.55$1.72$1.96-$0.36$3.09$1.12$2.31$1.84$5.88$1.28$2.27$2.30
Operating cash flow2,5443,2481,3211,9013,9653,7742,6383,0564,4634,1682,0662,8814,3304,3701,7013,0824,0405,1692,5974,025
Capital expenditure450281339317409300364281300239220286303244210255382232229332
Free cash flow2,0942,9679821,5843,5563,4742,2742,7754,1633,9291,8462,5954,0274,1261,4912,8273,6584,9372,3683,693
Dividends paid1,4741,4751,4881,4911,4941,4971,5101,5151,5181,5221,5361,5431,5461,5491,5631,5691,5741,5761,5901,596
Shares outstanding898m899m903m904m906m908m911m913m915m919m921m925m926m929m932m935m937m940m942m945m
Filing10-K10-Q10-Q10-Q10-K10-Q10-Q10-Q10-K10-Q10-Q10-Q10-K10-Q10-Q10-Q10-K10-Q10-Q10-Q
Each quarter as filed, linked to its filing.
Read more* The fourth quarter is the full year less the first three quarters, because the company files the year and not the quarter on its own. A fourth quarter's EPS, and its diluted share count where shown, are from the company's results press release for that quarter, checked against the company's filed figures or a second data source. A quarter marked † is shown as the company last restated it in a later filing, so it compares with the quarters around it on one basis; rest on a figure for the one first filed. EPS is as filed. Money is in $ million as the company files it, or in $ billion by the switch above the tables; per share figures and the share count are as they are. Free cash flow is operating cash flow less capital expenditure; the effective tax rate is income tax over pre-tax income; margins are the line over revenue. Gross profit is revenue less cost of revenue, and operating income is revenue less the company's own total costs, where the statement does not print those lines. Cash flow lines filed year to date are the difference between two filings. Shares outstanding are at the period end where the balance sheet tags them, otherwise the count on the filing's cover page. A derived fourth-quarter EPS is left blank when a split in the year makes the arithmetic meaningless.

10-Q for the period ended 30 September 2026, filed 22 October 2026: the filing.