IBM reported second-quarter 2026 revenue of $17.2 billion on Tuesday, up 1% year-over-year, and lowered its full-year constant-currency growth outlook to a 4-5% range from the prior "5% or more" band.
Software And Red Hat Lead The Quarter
Software revenue rose 5% to $7.8 billion, with Red Hat accelerating to 11% growth and the Data segment up 19%. Consulting was flat at $5.3 billion. Infrastructure declined 7% to $3.8 billion, weighed down by a 42% drop in the IBM Z mainframe cycle even as Distributed Infrastructure — Power and Storage — surged 37% and built an order backlog of nearly $500 million.
Non-GAAP earnings per share came in at $2.93, up 5% year-over-year. GAAP diluted EPS was $2.27, and free cash flow for the quarter was $2.5 billion. The company reiterated its expectation of a roughly $1 billion year-over-year increase in full-year free cash flow.
Bob, Lightwell And The Anderon Quantum Foundry
Chief executive Arvind Krishna highlighted three commercialisation moves. IBM's Bob AI coding tool is now used by more than 80,000 employees, and Lightwell — a new capability targeting open-source vulnerabilities — has shipped more than 7,500 patches in its first two weeks. On quantum, IBM restated its more than $10 billion commitment over the next five years and the letter of intent with the U.S. Department of Commerce to build Anderon, described as the world's first pure-play quantum wafer foundry.
Cash, Dividend And Growth Portfolio
IBM ended the quarter with $8.2 billion of cash and marketable securities after $10.5 billion of acquisitions year-to-date. The board declared a quarterly cash dividend of $1.69 per share; IBM has paid consecutive dividends every year since 1916. Krishna singled out Red Hat, watsonx, HashiCorp and Confluent as the "high-growth portfolio" the company is scaling coverage around, adding specialised Forward Deployed Engineer roles to support enterprise AI deployment.
The Q2 disclosure lands as Google races ahead with Gemini 3.6 and rivals push similarly aggressive quantum roadmaps.
Reporting based on coverage from IBM Newsroom, Reuters and StockTitan.