IBM reported accelerated revenue growth and strong free cash flow in the third quarter 2026, driven by robust performance in its Software and Infrastructure segments. The company demonstrated successful conversion of enterprise deals and productivity gains, leading to an upward revision of its full-year free cash flow outlook.
Key Highlights
- Software revenue grew 8% year-over-year (9% at constant currency) to $7.8 billion, significantly exceeding the 6.1% consensus estimate.
- Total revenue of $17.1 billion rose 5% year-over-year, beating the $16.82 billion consensus forecast.
- Operating (non-GAAP) EPS reached $2.95, a beat against the $2.87 analyst estimate, while operating pre-tax margins expanded 70 basis points to 19.3%.
- Free cash flow generation remained strong at $3.0 billion for the quarter, with full-year expectations raised to an increase of more than $1 billion year-over-year.