Track market-moving stories before they get noisy

Figma: Sustaining Consistent Revenue GrowthFigma (FIG +5.85%) generates revenue by selling subscriptions to its collaborative, browser-based design and prototyping software.

It introduced new timeline-based animation tools at its annual conference in June 2026, and it reported approximately -43% net income margin for the quarter ended March 31, 2026.

IBM: Navigating Revenue FluctuationsInternational Business Machines (IBM +3.60%) delivers comprehensive technology solutions, consulting services, and hybrid cloud infrastructure to global enterprise clients.

It disclosed a shortfall in preliminary results on July 14, 2026, while recording a 15% EBIT margin for the quarter ended June 30, 2026.

Why Revenue Matters for Retail InvestorsRevenue shows investors the total money coming into a business before expenses are deducted. Tracking this figure helps investors understand the total scale and top-line growth trajectory of a business.

Quarterly Revenue for Figma and International Business MachinesQuarter (Period End)Figma RevenueInternational Business Machines RevenueQ3 2024 (Sept. 2024)$198.6 million$15.0 billionQ4 2024 (Dec. 2024)$216.9 million$17.6 billionQ1 2025 (March 2025)$228.2 million$14.5 billionQ2 2025 (June 2025)$249.6 million$17.0 billionQ3 2025 (Sept. 2025)$274.2 million$16.3 billionQ4 2025 (Dec. 2025)$303.8 million$19.7 billionQ1 2026 (March 2026)$333.4 million$15.9 billionQ2 2026Not yet reported$17.2 billion (period ended June 2026)Data source: Company filings. Data as of July 24, 2026.

Foolish TakeVenerable IBM’s revenue towers over newcomer Figma’s sales, but that’s to be expected given the former has existed for over a century. IBM has transformed its business substantially over that time. It now focuses on the fast-growing artificial intelligence sector, providing software and cloud infrastructure for customers seeking to adopt AI, as well as an army of consultants to help clients navigate how to do so.

IBM’s volatile sales trend speaks to the choppy nature of selling hardware and consulting services. Its zSystems line of computer mainframes incorporating AI were a hot seller when they launched last year, but in the second quarter of 2026, Z sales were down 42% year over year. This combined with missing Wall Street’s Q2 revenue expectations amid the AI boom understandably worried investors, sending IBM shares to a 52-week low of $199.19 on July 23.

Figma’s revenue trend speaks volumes about the success of its business. The company’s Q1 sales of $333.4 million represented amazing 46% year-over-year growth as it continued to produce quarterly increases. That trend is expected to extend into Q2 with a forecast of revenue between $348 million to $350 million.

Figma’s design products are clearly winning over customers. Yet its stock fell to a 52-week low of $16.60 in April after Wall Street became concerned AI’s ability to quickly generate images on the fly would take business away from Figma. The company’s sales trend reveals this isn’t happening, and in fact, its business is thriving.

Robert Izquierdo has positions in Figma and International Business Machines. The Motley Fool has positions in and recommends Figma and International Business Machines. The Motley Fool has a disclosure policy.

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Lou Whiteman discuss:

IBM’s terrible, horrible, no good, very bad day.Shifting spending habits from enterprise clients.America’s biggest banks are reaping huge windfalls.Mailbag: How to buy Treasuries?Mailbag: What to make of Toast?To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on July 14, 2026.

Tyler Crowe: Big banks are loving this market. Today on Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool contributors Lou Whiteman and Matt Frankel. As I hinted with the intro, we're going to get into the blockbuster quarter that just about every bank had that reported today, and it was pretty much anybody that is a major bank in the United States reported today, and it looked fantastic. We're also going to get into some reader emails. But first, we're going to start with the big news moment of the day. That is shares of IBM are down 26% as we are taping this show after the company issued preliminary results for the upcoming quarter that really were not in line with analyst expectations. Now, Lou, this was a big drop. I saw a Bloomberg headline earlier before we got on. It was the biggest drop since, I think, 1968 for the stock more than Black Monday in 1987. What was this big drop for what it seemed to me was a relatively modest revision to what we were seeing? There had to have been more to the story here?

Lou Whiteman: I think there is. How did you say, this isn't the full earnings release. This is preliminary. IBM, basically, all they warned is revenue is going to come in about 17.2 billion short of 17.9 billion. It's not a huge amount. I think what triggered the sell-off is the reasoning given CEO Arvind Krishna said, last few weeks of June, IBM saw clients shift capex towards hardware servers, memory storage, away from Big Blue. That's probably not just a last two weeks at a quarter thing, given the way the stock had traded up. I think that this is a head for the exit, sell the news, a move.

Tyler Crowe: Something in the difference of a $700 million change in revenue. The number sounds big, but again, if we're talking about 17 billion give or take a few hundred million. That's not a big deal. Now, Matt, the three of us did a live event for the Motley Fool back in San Diego a few months ago, and you made the case for IBM stock as one of your top picks right now. Now, I'm not trying to put you on full blast here because the stock is down, and let's all make fun of Matt. But does anything that announced today alter your thinking here. Like we said, this isn't a huge revision, but there seems to be some other stuff going on here.

Matt Frankel: Yes. First of all, I welcome being called out when I make a public call on a stock like this, and then something like today happens. As Lou said, the numbers themselves weren't too awful. That 17.2 billion versus 17.9 billion, that's not worthy of a 26% drop all by itself, but there is more to the story. Earnings per share came in at 293 versus expectations of 302, not worthy of a 26% drop. This would be IBM's worst single day ever, by the way. The previous biggest one-day drop they had was Black Monday in 1987, and this would exceed that.

The question that seems to be on investors’ minds and the one that is more worthy of the drop we're seeing is if the shift towards spending more on things like memory and other hardware is a temporary headwind or is it becoming a permanent problem for companies like IBM? Krishna's own explanation is that clients redirected their late July or late June capex towards servers, storage, and memory to lock in supply ahead of price hikes. Remember, we've seen Apple raise its prices recently, specifically because of memory. Same idea here. That sounds like a temporary reaction by IBM's customers to soaring memory prices. But on the other hand, Micron recently said that memory supply is going to be tight well into 2027, and we're starting to see these memory companies shift toward longer-term price-agreed service contracts. That's what scares me about this long term.

Tyler Crowe: This is what bugged me about it a little bit as well. If this was just a one-off, like things are going to get shifted maybe six or nine months down the road. Again, $700 million in sales, not the biggest thing. It seems like this is a big move for a short-term headwind. But when I see things like this, and let's all be honest here, there's a lot of institutional investors and high-frequency traders and might know a little bit more because they can pick up the phone and ask a few things. One of the things I think of is there might be more than one cockroach in the kitchen here. As we're looking forward, investors that are looking at IBM, maybe want to think like, Oh, man, maybe this is just a good time to buy some cheap shares because of what we've seen today, what else could be coming down the pipe that may assuage investors or maybe something that may signal it's an actual rough patch. What are some other things that we can look for that may be promising or signs of worse to come?

Matt Frankel: One thing we don't have yet, and Lou mentioned, this is just a preliminary report. We don't know everything. We don't have IBM's bookings yet, meaning the future revenue now is being committed to. That's been a big driver of the stock in recent quarters, especially on the AI side of the business. But judging by Krishna's generally negative tone that we've heard today, I'm not expecting the bookings number to look nearly as stellar as it did last quarter. The fact that they pre-announced is really the biggest red flag here, and that’s usually reserved for when things are especially bad.

My bottom line is that today's move makes sense. It isn't a reason to panic. To be transparent, IBM is a relatively small position in my portfolio right now. I'm planning to cautiously add to it a little bit if this price holds. The risk-reward makes a lot of sense to me, especially if you have a five-plus-year time horizon. At that San Diego event you mentioned, I talked about things like how IBM's quietly becoming the quantum computer leader as part of my thesis. But I'm going to be watching their full earnings report when it comes out on July 22, very closely. That's my birthday, and that's how much I'm paying attention to this. I'm still going to be reading it.

Lou Whiteman: I think it's important to mention just when we talk about it on sale today. Basically, the drop means we’re back to where we were in mid-May. Before people yell, go out, it's a buying opportunity. I do think that perspective is needed. The real question here, as Matt hinted at this is, is that there is a way to spin this as it's a temporary phenomena, and it will pass. There is also a way to read this as what IBM is selling isn't as important to the end customer as what they are buying. There's almost a question about, with consumers we talk about staples and discretionary. There is a way to spin this that IBM is in the discretionary bucket and not the staple bucket here. I don't know if that is the right reading, but I think that's a word of caution, and you think about this, you can't spend all the money on the world on everything. At the end of the day, corporations have to make choices. The choices they made in this quarter did not benefit IBM.

Matt Frankel: I would agree with that that IBM is more in the discretionary basket than consumer staples, especially when it comes to what we're talking here. You can hire all the AI consultants you want to. If you don't have enough memory to keep your systems going, that really doesn't matter. When it comes to what their clients are spending money on, it is more of a discretionary thing, and that's why we're seeing revenue flow during this AI cycle.

Tyler Crowe: As Lou said, let's keep this all in perspective. Over the past three years, IBM is beating the market. Over the past five years, the IBM is beating the market on a total performance basis. Like you said, it's about the same where as it was in May. It's about the same where it was in January. 2026 has not been IBM's shining year so far. But if we start pulling back the carton, things are still looking OK. We'll have to see whether or not this is a foreboding sign or maybe just a temporary road block, but we will see. Coming up next, we're going to really jump into bank earnings.

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Tyler Crowe: I was checking the earnings calendar for today, and of course, we had all the Big Banks, and then there was one other company, Fastenal, which I found funny. It was almost like one of these things is not like the other situation where it's like, we're going to talk about gigantic banks, and then an industrial parts distributor. But considering how robust and beating expectations that pretty much every bank posted, it seemed like it was the more appropriate thing to talk about than this small industrial parts manufacturer, which, maybe for another time.

Today, JP Morgan, Bank of America, Wells Fargo, Goldman Sachs, and Citigroup all reported earnings, and all of them reported better than expected results. I think the theme of this quarter was massive gains in equity trading. I think Goldman Sachs led the way, where they brought in $7.5 billion in equities trading this quarter alone. Now, we can say that it was stock volatility and the SpaceX IPO that resulted in some one-off gains. But are there some less discussed themes that led to all these companies posting such good results?

Matt Frankel: Yes, you're right, Tyler, that the results were generally excellent, and they're not just typical earnings beats here. JPMorgan Chase reported $7.70 in earnings per share. That's almost $2 more than expected. They beat revenue expectations by about $7 billion, not even close. It's not just investment banking. Wells Fargo, their earnings beat by a significant margin, even though they have a very small investment bank. I push back a bit when it comes to equity trading, on the one-off framing that you just said around, the volatility in the SpaceX IPO. We're seeing M&A at a level that we haven't seen since 2021. Global M&A was $3 trillion in the first half, so it wasn't just one deal or IPO. It's a general industrywide trend.

The question is how sustainable is it? But to more directly answer your question, one thing that I'm not seeing discussed that much is the net interest income side of this. Even with the Fed essentially on hold right now, the banks are generally raising their net interest income expectations. JPMorgan Chase they’re expecting $2.5 billion more in full-year net interest income than they were in April. They're seeing strong loan growth. The internal rate dynamics, meaning what they're paying on deposits versus what they're getting on loans is better than expected. There are a few other big themes, wealth management inflows across the board. Investors are putting money to work that had been on the sidelines. JP Morgan reported 44,000 "first-time investors.” Goldman's assets under management grew by 20% year over year, and the market isn't up by 20%. More importantly, credit quality is holding up better than we expected. The big banks, they're reporting lower than expected charge offs almost across the board. It shows that despite some major economic fears inflation, the Iran war, things like that, consumers and businesses are still staying pretty healthy.

Lou Whiteman: Matt did a great job breaking it down. I'll just make a couple of quick points. One, on net interest margin. Higher for longer works with banks. I'm going to just go up and scream that from the hilltops again. Financials makes so much sense to me right now. Now, where they are valued, especially in the regional banks, I think let's learn a lesson from this in terms of what the interest rate cycle means for banks. The other thing, let's just do a special shout out for Citi. Citi is usually the butt of a joke when we're discussing banks. They have a long history of screwing things up. But CEO Jane Fraser, the restructuring program seems to be working. Their hidden goals ahead of schedule. They raised the dividend by 12%, announced a 30 billion with a B share buyback program. Citi is the laggard of this group in terms of multiples. The investor takeaway here is maybe it's time to take Citi seriously. Maybe it's time to give them a look.

Tyler Crowe: Matt, to your point, saying it wasn't necessarily a one-off event, but it certainly does feel like a vibes event. Like you said, M&A activity is high, IPO activity is high. Money is moving off the sidelines to use the term, the animal spirit seems to be really hitting everybody right now, and everybody seems to be cashing in. Of course, the house tends to win, and the house, in this case, is the Big Banks. I want to drill into something a little bit more specific, though, and it was a few weeks back. The banks, all of them, went through their stress test, basically, working with regulators to figure out how much capital you need to keep on the books in the event of a credit event, a lot to do with Dodd-Frank, back after the great financial crisis, just in making sure that we don't run into the same problems we had again. Most of them passed with flying colors this time, in part because the regulatory stress test wasn’t quite as robust as it has been in years past. So much so that there were discussions at the time about accelerated buybacks and other ways of releasing capital that was on the balance sheet for safety reasons. Did that play any part in these results, and that has all these stocks doing incredibly well, or is that maybe just a later down the road story?

Lou Whiteman: It wouldn't have played a part in the results. It might be part of the enthusiasm today, although, look, the bank's got a nice boost when it was announced. I think why we're seeing the stocks moving higher, it's a simple answer. It's today's results. If one bank shows resilience, that's great for that one bank. But the across-the-board positivity, that implies that it wasn't a one-quarter fluke. It wasn't a one-time thing from anyone. There's a lot of fear in nervousness when it comes to financials right now. I think just the across-the-board success today, that should alleviate some of that nervousness.

Tyler Crowe: Coming up after the break, we're going to jump into the mailbag.

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Tyler Crowe: Hey, everyone, just a quick reminder, if you want to ask a question to us and have it read live on air, go ahead and send email us at [email protected]. That's podcast with S at fool.com. Three request as always. Keep it Foolish. Keep it short enough. I can read on air and try not to ask any individual advice, so we don't get in trouble with the SEC. We normally only do one, but we're going to do a two for today because we actually got a little bit of fan mail for Lou on this one, because somebody apparently is a big fan of you talking about T-bills either here on the podcast or in some of our live appearances that we do for members over at The Motley Fool. Lou, the question comes from Marianne and says, Lou often mentions that he parks money in T-bills. Could you give us a tutorial on how to actually buy T-bills? Lou, take it away.

Lou Whiteman: Sure. Well, first off, the argument for it is, it doesn't replace equities. But look, right now, I'm getting almost 4% on six-month bills. If that's better than most online savings accounts, so why not just chase the yield? As far as how you buy them, a couple of pointers: you can buy treasuries through the U.S. government at treasurydirect.gov, or you can do it through most brokerages. There isn't a different price or different rate, so it's really how you want to do it. I buy through Vanguard, but I know some people like to separate it out. I've heard good things about Treasury Direct. That's whatever you want to do. Actual user experience varies by brokerage.

It's very similar to buying stocks, though. You just click Buy bonds, select Treasuries instead of Corporates. You can buy existing treasuries on the open market. But what I do is I buy new issues and just hold the maturity. The most confusing thing, or the thing you might want to look at, is the way they’re priced. You buy new issues in $1,000 increments, but you don't pay face value. You pay the amount before interest. If you pay, say, 980 bucks today and get 1,000 bucks back in six months, for example, that's the most confusing part. Other than that, pretty straightforward. Again, it's just as an alternative to savings accounts when the rates are better, why not take advantage of the rate?

Tyler Crowe: Well, Marianne, I hope that answers your question. Back to the stock-related ones, we got a question from Brian, and he really went out of his way to say that he’s from corn country of Illinois and not just some other part of Illinois. Brian asks, guys, what is up with Toast? I've owned it for about two years. Stocks down quite a bit. Motley Fool podcast and not to Brian's email, but in a lot of other places women Motley Fool's extended Universe of Media. We've talked positively about Lee, and it's been used rather ubiquitously. I think it has a decent market share right now. Brian asked, restaurant parking lots usually seem full. I'm aware costs have increased, and margins are tight. Is this a lost cause stock Toast? I usually hang up stocks a couple of years. What are your current thoughts on Toast?

Matt Frankel: I'm a fan of Toast. To be fair, I'm one of the ones that you're referring to that usually speaks positively of it, so that's probably not a surprise. But the growth story here is still intact, despite any AI disruption fears. Annual recurring revenue grew by 26% in the last quarter. They added 7,000 new locations, so it's a product that's still resonating with customers. Their margins are excellent. Their operating margin not adjusted was above 20% for the first time ever in the most recent quarter. They're aggressively buying back stock, so the management clearly thinks the stock is underprice. The bear case here with all software as a service businesses like this, is that AI agents are eventually going to commoditize it and drive down users, drive down pricing power, things like that.

Toast is nicely insulated from this for a few reasons. No. 1, it owns the full stack, meaning hardware and software. The little Toast things that servers hold in their hands only work with Toast software. It has done an excellent job of building out its own AI tools. The fact that it's used in 171,000 locations right now, that's a pretty competitive advantage in an industry that has a somewhat transient workforce. If you're already trained on Toast in one restaurant, you can easily move to another restaurant, and it's a lot less friction to move jobs. There are some risk factors here to keep in mind, for sure. Memory costs, we've talked about in other segments, they're expected to be a pretty big margin headwind to Toast because they have a lot of memory needs. There's a lot of competition. Clover has more locations. Just Toast has more volume. Block’s Square is still a big part of the restaurant industry. This is still not a cheap stock. But as long as it keeps growing the top line at 20% year over year and is doing it profitably, keeps building out its ecosystem of features, I am a fan of Toast at these levels.

Lou Whiteman: I like the business better than the stock. I've never been enamored with the stock. It's just restaurants are such a tough, low-margin business. Matt mentions 171,000 locations, but from the BLS numbers, there's about over 1 million restaurant locations, so it's not a huge market share. I don't see anything in what Toast does that it might have been Forward, but I don't think there's anything that can't be copied by Clover. So many restaurants go out of business. I don't know if just getting your tools established or anchored in. I don't know if switching costs matter too much. I think this continues to be a just slugfest business, tough to gain margin, tough to gain real pricing power. Again, I like as a consumer, they've made the restaurant experience better for me. I wish them all the best, but it's just not a stock I'm interested in.

Tyler Crowe: I don't really have a horse or a dog in this fight, I guess, if you will, mixing my metaphors as always. But just throwing on the bear case cap for a second here. Matt, to your point, it is an intensely competitive space with Clover and Square. The three of them combined have hoovered up a decent amount of the space in terms of market share. Toast gains in market share up until now have garnered that 20% revenue growth or ARR growth that they have seen. The thing that I keep coming back to when I look at this is what you said was, as long as they keep that 20% revenue growth, well, that involves continuing to grow market share.

I think that the market share gains from here, where I think they're somewhere in the mid-20s percent, at least in some independent data that's been put out there, is going from that to 40% is much harder than going from 5-10% up to where it is today. There is a real possibility that revenue could slow as a result because it becomes much more of a knife fight, getting market share relative to a lot of its competitors. But it seems to be, as anyone who has either seen it or if you talk with people in the industry, they seem to really like the product, and so it has that aspect to it. Not saying that it can't do it, but it's just going to get harder from here. That's all the time we have for today. Lou, Matt, thanks for sharing thoughts. I'm going to hit disclosure, and we'll get out of here.

As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements are sponsored content and provide for informational purposes only. To see our full advertising disclosure, please check out our show notes. Thanks to producer Bart Shannon and the rest of The Motley Fool team for Lou, Matt, and myself. Thanks for listening, and we'll chat again soon.

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NEW YORK, July 24, 2026 (GLOBE NEWSWIRE) -- Leading securities law firm  Bleichmar Fonti & Auld LLP announces an investigation into International Business Machines Corporation (NYSE:IBM) for potential securities fraud after its significant stock drop. If you invested in IBM, you are encouraged to obtain additional information by visiting: https://www.bfalaw.com/cases/ibm-class-action-lawsuit.

Bragar Eagel & Squire, P.C. Litigation Partner Brandon Walker Encourages Investors Who Suffered Losses In IBM To Contact Him Directly To Discuss Their Options

If you purchased or acquired stock in IBM and would like to discuss your legal rights, contact Bragar Eagel & Squire partners Brandon Walker or Melissa Fortunato by email at [email protected] or by telephone at (212) 355-4648.

Click here to participate in the action.

NEW YORK, July 23, 2026 (GLOBE NEWSWIRE) --

What’s Happening:

Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, is investigating potential claims against International Business Machines Corporation (“IBM” or the “Company”) (NYSE:IBM) on behalf of IBM stockholders. Our investigation concerns whether IBM has violated the federal securities laws and/or engaged in other unlawful business practices. Investigation Details:

On July 14, 2026, IBM reported its preliminary Q2 2026 financial results. The Company fell short of analyst expectations, with CEO Arvind Krishna blaming the shortfall on weakness in the software and infrastructure business, with customers shifting budgets to hardware like memory chips. Following this news, IBM's stock price dropped by 24.6% in morning trading that day. Next Steps:

If you purchased or otherwise acquired IBM shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Melissa Fortunato by email at [email protected], by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you. About Bragar Eagel & Squire, P.C.:

Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, South Carolina, and California. The firm represents individual and institutional investors in securities, derivative, and commercial litigation as well as individuals in consumer protection and data privacy litigation. The firm has a nationwide practice and routinely handles cases in both federal and state courts. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

Follow us for updates on LinkedIn and Facebook, and keep up with other news by following Brandon Walker, Esq. on LinkedIn.

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IBM CEO Arvind Krishna said that only 2% of his company's software could be replaced with applications constructed by artificial intelligence models, as he seeks to reassure Wall Street following disappointing second-quarter results.

"The rest of our software really helps people get ready for AI, unlocking data in real time, reducing the cost and complexity of managing it, going across the hybrid infrastructure, which most of our clients are using," Krishna told CNBC's "Squawk on the Street" on Thursday. "And because it would be what you would call maybe infrastructure software, not applications, I believe it'll be a tailwind for us."

Wall Street has turned skeptical on software stocks over the past couple years due to concerns that AI will disrupt their business models as technology from Anthropic, OpenAI and others gets more powerful. IBM shares are down about 30% this year, and the iShares Expanded Tech-Software Sector Exchange-Traded Fund (IGV) has dropped 17%.

In February, IBM saw shares sink 13% after Anthropic issued a blog post on its Claude Code tool's ability to modernize code written in Cobol, which is often found on mainframes.

Krishna told analysts on Wednesday, after the company's earnings report, that IBM's current-generation z17 mainframe encountered challenges in the quarter. Finance chief Jim Kavanaugh said some customers chose to spend money on other data center equipment, such as servers and storage, as memory prices spike because of AI chip requirements.

For every dollar in revenue IBM generates from mainframe infrastructure, it picks up $3 in software. Just as IBM's Z mainframe business saw revenue drop 42% in the quarter, transaction processing software declined 9%. It was a sudden shift from the first quarter, when Z revenue grew 48%, and transaction processing increased 2%.

During the June quarter, 45% of IBM's revenue came from software, where profit margins are the strongest.

Krishna said Starbucks spends about $2 million per year on IBM software. He said the coffee maker is taking out Tririga lease management software. IBM bought Tririga in 2011, and plans to end support in 2027.

"That is a big component of that 2% I talked about, and I do think that software like that is subject to risk," he said. "By the way, what they had in place was a 10-year-old piece of software."

While IBM stuck with its guidance for a $1 billion bump to free cash flow in 2026, Kavanaugh said Wednesday that he now expects 6% to 8% growth in software revenue for the year. In January, he said he was confident the growth rate would be in the double digits.

Krishna said on Thursday that mainframe hardware capacity is growing, which has implications for software.

"The software on that tends to lag the hardware capacity, and I do think that if we give it another year, you'll find the software will catch back up," he said.

About 75% of deals that slipped from the second quarter should come back to IBM before year end, Krishna said.

"We would avoid giving full credit for the maintained guide until a larger portion of the slipped activity is reflected in reported results," analysts at Jefferies wrote in a Thursday note to clients. They recommend buying the stock.

watch now

IBM shares came under pressure after weaker-than-expected mainframe sales weighed on the company's outlook. CEO Arvind Krishna joins Bloomberg to explain why he sees the slowdown as temporary, how AI is reshaping enterprise technology spending, and why he's betting on quantum computing as IBM's next major growth engine.

IBM cuts its 2026 revenue growth outlook after delayed software deals, while early Q3 closures and infrastructure strength support a second-half rebound.

© Sundry Photography / iStock Editorial via Getty Images

IBM (NYSE: IBM | IBM Price Prediction), which has been poorly run for decades, is on the ropes. The company has had plenty of practice managing decline. When it warned about its earnings a week ago, the stock dropped over 20%. It is down 30% for the year, while the S&P is up 9%. The picture is even bleaker from another vantage point: in early June, the stock changed hands at $329, but it trades at very slightly better than $200 now.

Yesterday, IBM reported the full extent of its failure with weak Q2 results. First, IBM announced it would cut guidance, although the revision was minor. The staggering news, however, was that revenue from IBM’s Z mainframe dropped 42%. This, in turn, dragged down infrastructure revenue by 7% year-over-year to $3.8 billion. While IBM suggested that customers were not abandoning the mainframe platform entirely, the data shows they are certainly moving away from IBM’s offerings at an accelerating pace.

Revenue for the second quarter was $17.2 billion, which was up 1% year over year. Net income was down 1% to $2.2 billion. IBM’s future depends on the credibility of a comment by CEO Arvind Krishna: “We are confident in IBM’s strategy and portfolio, and in our ability to capture growth opportunities ahead. We fundamentally believe that we are in the early innings of a structural shift for business, and that our portfolio — across software, infrastructure, and consulting — is well-positioned to help our clients tap the value, and manage the challenges of an AI-driven future.” The market begs to differ. Investors are not confident.

IBM acts as if it were still an important pillar of America’s megatech industry, but it is not. By way of contrast, the much larger Microsoft (NASDAQ: MSFT) saw a 17% increase in its most recent quarter to $81.3 billion. The software giant’s EPS hit $5.18, compared to $3.24 in the year-ago period. Microsoft’s net income of $38.5 billion for the period is 2.3 times IBM’s total revenue for its most recent quarter.

Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Alphabet (NASDAQ: GOOG) all have higher revenue than Microsoft’s, and Nvidia’s (NASDAQ: NVDA) is almost as high as any of those. It is another sign of how small and inconsequential IBM’s revenue is compared to that of the larger tech companies

Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Apple didn't make the cut. Grab the names FREE today.

IBM is special, in a sense. The company lost whatever clout it had decades ago. In 1980, IBM ranked ninth on the Fortune 500, America’s largest companies based on revenue. Since then, it has missed the opportunity to lead in personal computers, PC operating systems, e-commerce, tech operating systems, search, and, more recently, AI. It is hard to find a tech company that lost that many chances to be a leader.

IBM’s market cap is just under $200 billion. Microsoft’s market cap is $2.9 trillion. Alphabet’s is $4.2 trillion. Privately held OpenAI is estimated at $900 billion.

IBM has lost ground for decades, and it can’t make any of that up.

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Contact [email protected] for any questions or corrections.

International Business Machines Corp (NYSE:IBM) shares were set to open about 2% lower on Thursday after the technology company reported second-quarter revenue and adjusted earnings that missed Wall Street expectations while lowering its full-year constant currency revenue growth forecast.

For the quarter, IBM reported adjusted earnings per share of $2.93, below the $2.97 expected by analysts, while revenue rose 1% year-over-year to $17.16 billion, missing the LSEG consensus estimate of $17.58 billion.

The company now expects full-year constant currency revenue growth of 4% to 5%, down from its previous outlook, while maintaining its expectation for free cash flow to increase by about $1 billion year-over-year in 2026. IBM also said it aims to expand its full-year pre-tax margin by about one percentage point through productivity improvements.

Software revenue increased 5% to $7.8 billion, led by 11% growth in Hybrid Cloud, including Red Hat (NYSE:RHT), and a 19% increase in Data. Automation revenue rose 4%, while Transaction Processing declined 8%.

Consulting revenue was flat at $5.3 billion, or up 1% in constant currency, with both Strategy and Technology and Intelligent Operations posting flat reported growth.

Infrastructure revenue declined 7% to $3.8 billion, reflecting a 42% drop in IBM Z revenue and a 10% decline in Hybrid Infrastructure, partially offset by 37% growth in Distributed Infrastructure. Financing revenue increased 12% to $200 million.

"We are confident in IBM's strategy and portfolio, and in our ability to capture growth opportunities ahead,” IBM CEO Arvind Krishna said in a statement.

“We fundamentally believe that we are in the early innings of a structural shift for business, and that our portfolio - across software, infrastructure, and consulting - is well-positioned to help our clients tap the value, and manage the challenges, of an AI-driven future.”

Jefferies analysts wrote that the revenue miss was primarily driven by weaker-than-expected software performance, with software revenue growing 5% versus the firm's expectation for 10% growth. The analysts noted that consulting was broadly in line with expectations, while infrastructure revenue also came in weaker than anticipated.

The analysts said management attributed the software shortfall to customers accelerating spending on supply-constrained servers, storage and memory ahead of expected price increases, which reduced near-term software spending. They added that roughly one-third of the delayed mainframe deals had already closed during the first three weeks of the third quarter, supporting management's view that the weakness was largely a timing issue rather than a structural change in demand.

Jefferies also noted that IBM's updated guidance reflects a range of possible outcomes. The low end of the company's 4% to 5% constant currency revenue growth forecast assumes little recovery in delayed transactions during the second half of the year, while the high end assumes most of those deals are completed. The analysts said the burden now shifts to third-quarter execution, with investors looking for evidence that the delayed business materializes.

The firm added that IBM's recurring software revenue base and unchanged free cash flow guidance provide support for the investment case, but it would wait for more of the delayed transactions to appear in reported results before becoming more constructive. Jefferies maintained its $260 price target on the stock.

, /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of International Business Machines Corporation ("IBM" or the "Company") (NYSE: IBM).  Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether IBM and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On July 14, 2026, IBM released its financial results for the second quarter of 2026.  IBM announced a disappointing quarter that it attributed to "a shortfall in our Z performance and the associated software stack, primarily in Transaction Processing."  IBM also disclosed that it had "faltered," and "did not adapt and move quickly enough" so that "numerous large deals failed to close on the timelines we expected, driving the majority of our shortfall." 

On this news, IBM's stock price fell $73.16 per share, or 25.21%, to close at $217.07 per share on July 14, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes. 

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

SOURCE Pomerantz LLP

23.7.2026 15:49, IBM, GOOG, TSLA, NOW, GOOGL, BAAGOOGL, RTX

Index Dow Jones -0,69 % na 51857,39 b., S&P 500 -0,76 % na 7441,85 b., Nasdaq Composite -1,49 % na 25308,58 b.

Index S&P 500 na začátku obchodování oslabuje, když obavy z neustále rostoucích výdajů na umělou inteligenci převážily nad jinak silnými hospodářskými výsledky společnosti Alphabet.

Technologická konglomerát Alphabet (-6,3 %) zveřejnil výsledky hospodaření za druhý kvartál roku 2026. Trhy zaujaly především výsledky Google Cloud, jehož výnosy meziročně vzrostly o 82 %. Nicméně rostoucí poptávka po cloudových službách a umělé inteligenci má za následek růst kapitálových výdajů, které jsou v tomto roce projektovány v rozmezí 195-205 mld. USD. Volné hotovostní toky poprvé v historii dosáhly záporných hodnot, a to 5,9 mld. USD.

Akcie Tesla padají o 11 %. Výrobce elektromobilů zveřejnil hospodářské výsledky za druhé čtvrtletí roku 2026, ve kterém zisk na akcii zaostal za průměrným odhadem analytiků, zatímco tržby odhady překonaly. Analytici zároveň upozorňují, že může trvat déle, než se výdaje do segmentu fyzické AI (robotika, autonomní vozidla) promítnou do výnosů a zisků firmy.

Výsledky zveřejnily rovněž například IT společnost IBM (-1,9 %), softwarová společnost ServiceNow (+0,1 %) či letecký a obranný koncern RTX (+7,9 %).

Index S&P 500 -0,76 % na 7441,85 b. Nejsilnější sektory S&P Změna Nejslabší sektory S&P Změna Průmysl +2 % Komunikační služby -4,3 % Energie +1,7 % Zbytná spotřeba -3,6 % Zdravotní péče +0,8 % Nezbytná spotřeba -0,9 % Nejsilnější akcie S&P Změna Nejslabší akcie S&P Změna United Rentals (URI) +12 % Rollins (ROL) -13 % Lockheed Martin Corp (LMT) +10,0 % Tesla (TSLA) -11 % Thermo Fisher Scientific (TMO) +10,0 % T-Mobile US (TMUS) -7,5 % Quest Diagnostics (DGX) +9,6 % Dover Corp (DOV) -6,7 % Allegion (ALLE) +8,1 % Alphabet (GOOG) -6,0 % Zdroj: Bloomberg

Michal Šnobl
Fio banka, a.s.
Prohlášení

Posted by Defense World Staff on Jul 23rd, 2026

ABN Amro Investment Solutions increased its holdings in International Business Machines Corporation (NYSE:IBM – Free Report) by 11.1% in the 1st quarter, according to its most recent filing with the SEC. The institutional investor owned 49,663 shares of the technology company’s stock after buying an additional 4,976 shares during the quarter. ABN Amro Investment Solutions’ holdings in International Business Machines were worth $12,038,000 at the end of the most recent reporting period.

Other hedge funds have also bought and sold shares of the company. Norges Bank purchased a new position in shares of International Business Machines during the fourth quarter valued at approximately $2,446,429,000. Capital World Investors boosted its holdings in International Business Machines by 29.2% in the fourth quarter. Capital World Investors now owns 22,021,912 shares of the technology company’s stock worth $6,523,720,000 after purchasing an additional 4,976,756 shares during the last quarter. Price T Rowe Associates Inc. MD raised its stake in International Business Machines by 83.4% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 5,617,117 shares of the technology company’s stock valued at $1,663,847,000 after buying an additional 2,553,552 shares during the last quarter. Corient Private Wealth LLC raised its stake in International Business Machines by 359.6% during the 4th quarter. Corient Private Wealth LLC now owns 1,896,675 shares of the technology company’s stock valued at $561,814,000 after buying an additional 1,484,026 shares during the last quarter. Finally, Vanguard Group Inc. lifted its holdings in shares of International Business Machines by 1.5% during the 4th quarter. Vanguard Group Inc. now owns 97,216,131 shares of the technology company’s stock valued at $28,796,390,000 after buying an additional 1,439,824 shares during the period. Hedge funds and other institutional investors own 58.96% of the company’s stock.

International Business Machines News Roundup Here are the key news stories impacting International Business Machines this week:

Positive Sentiment: IBM’s earnings matched Wall Street’s EPS estimate, and the company continues to emphasize AI-driven productivity, quantum computing, and strong free-cash-flow generation. IBM (IBM) Matches Q2 Earnings Estimates Neutral Sentiment: After the release, IBM shares saw some after-hours recovery as investors focused on long-term AI and quantum initiatives rather than the immediate headline miss. IBM just cut its outlook. Why its stock is bouncing anyway. Negative Sentiment: IBM lowered full-year revenue guidance and posted weaker sales than expected, with mainframe revenue notably under pressure, raising concerns about near-term growth. IBM Lowers Its Growth Outlook as Sales of Data Center Mainframes Sink 42% Negative Sentiment: Multiple law firms announced securities-fraud investigations following IBM’s sharp stock decline and guidance cut, adding an overhang for investors. IBM Investigated by the Portnoy Law Firm Analyst Upgrades and Downgrades A number of research analysts have weighed in on IBM shares. Oppenheimer downgraded International Business Machines from an “outperform” rating to a “market perform” rating in a report on Wednesday, July 15th. Needham & Company LLC assumed coverage on shares of International Business Machines in a research report on Wednesday, June 3rd. They set a “buy” rating for the company. Jefferies Financial Group lowered their price objective on shares of International Business Machines from $320.00 to $260.00 and set a “buy” rating on the stock in a research note on Tuesday. Sanford C. Bernstein reissued a “market perform” rating on shares of International Business Machines in a report on Thursday, July 16th. Finally, DZ Bank upgraded shares of International Business Machines from a “hold” rating to a “buy” rating and set a $295.00 target price for the company in a research report on Friday, April 24th. Fifteen analysts have rated the stock with a Buy rating, eleven have given a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat, the company has an average rating of “Moderate Buy” and an average target price of $278.68.

Read Our Latest Report on International Business Machines

International Business Machines Stock Down 2.1% Shares of IBM opened at $206.03 on Thursday. The business’s 50 day moving average is $263.26 and its 200 day moving average is $261.42. The company has a current ratio of 0.80, a quick ratio of 0.76 and a debt-to-equity ratio of 1.75. International Business Machines Corporation has a 12-month low of $204.44 and a 12-month high of $332.46. The company has a market capitalization of $193.64 billion, a PE ratio of 18.22, a price-to-earnings-growth ratio of 2.27 and a beta of 0.68.

International Business Machines (NYSE:IBM – Get Free Report) last announced its quarterly earnings data on Wednesday, July 22nd. The technology company reported $2.93 earnings per share (EPS) for the quarter, meeting analysts’ consensus estimates of $2.93. The business had revenue of $17.16 billion during the quarter, compared to analyst estimates of $17.48 billion. International Business Machines had a net margin of 15.61% and a return on equity of 37.23%. The company’s revenue was up 1.1% on a year-over-year basis. During the same period last year, the firm posted $2.80 EPS. Research analysts expect that International Business Machines Corporation will post 12.19 earnings per share for the current fiscal year.

International Business Machines Profile (Free Report)

International Business Machines Corporation (IBM) is a global technology and consulting company headquartered in Armonk, New York. Founded in 1911 as the Computing-Tabulating-Recording Company (CTR) and renamed IBM in 1924, the company has evolved from early electromechanical machines to a diversified technology provider serving enterprises and governments worldwide. IBM is publicly traded on the New York Stock Exchange under the ticker symbol IBM.

IBM’s principal businesses encompass cloud computing and software, infrastructure and systems, consulting and technology services, and research and development.

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The IBM logo is seen during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 12, 2025. REUTERS/Benoit Tessier/File Photo Purchase Licensing Rights, opens new tab

SummaryCompaniesHRL adds electron spin circuits to IBM's mainly superconducting quantum approachBoeing, GM will continue partnering with IBM on quantum technologies, IBM saysHRL will start making chips at IBM's New York facilitySAN FRANCISCO, July 23 (Reuters) - IBM (IBM.N), opens new tab has agreed to buy HRL Laboratories, a private quantum computing research lab jointly ‌owned by Boeing Co (BA.N), opens new tab and General Motors (GM.N), opens new tab, the company said on Thursday, adding a second pillar to IBM's quantum computing efforts.

IBM has been racing against Alphabet's Google, Microsoft and others to create practical quantum machines that can crack problems that would ​take conventional computers thousands of years to solve.

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In May, U.S. President Donald Trump's administration said it ​would award $1 billion to IBM to set up a new company called Anderon in New ⁠Albany, New York, to serve as a chip factory for U.S. quantum computing firms.

While there is agreement among ​governments and the tech industry that quantum computers are coming, precisely how they will work remains an open ​question. Companies and labs are chasing a half-dozen different ways of making quantum circuits, and the HRL deal will add a second approach to IBM's portfolio.

IBM did not disclose a price for the HRL deal but said that Boeing and GM "will continue ​to partner with IBM" on quantum technologies after the transaction.

IBM, along with Google, has been a proponent of using ​superconductors to craft quantum circuits. HRL, the former research arm of aerospace firm Hughes Aircraft based near Malibu, California, makes electron ‌spin ⁠quantum circuits called "qubits."

Both technologies can be made with the same equipment used to fabricate conventional computing chips, but electron spin circuits can be made much smaller than superconducting circuits.

Those smaller circuits will become useful for IBM's efforts after its "Blue Jay" system, which uses superconducting chips, is delivered in 2033, Jay Gambetta, director of IBM ​Research, told Reuters in an ​interview on Wednesday.

"I and ⁠the team strongly believe that the future is going to be (electron) spins, or superconducting, or possibly a combination of them," Gambetta said. "They (HRL) have a very strong spin ​qubit team, the strongest in the world. ... I would not pursue a second ​path that ⁠was not built on a foundation that could be integrated together."

In the more immediate future, Gambetta said, HRL's team, which currently makes chips at its California facility, will start to make chips at IBM's cutting-edge facility in New ⁠York. Gambetta ​also said that IBM has "a parallel path" of spin-based quantum ​technology in addition to its superconductors "that we'll make available very soon."

IBM's addition of a second quantum technology follows Google's move earlier this year, opens new tab to ​add a second technology based on neutral atoms.

Reporting by Stephen Nellis in San Francisco; Editing by Christian Schmollinger

Our Standards: The Thomson Reuters Trust Principles., opens new tab

On Wednesday, IBM officially reported earnings and the news was as bad as everyone knew it would be.

While the 115-year-old company still generates boatloads of cash — $17.2 billion in revenue, $9.9 billion in gross profit, nearly 58% margins, and $2.2 billion in net earnings for the quarter — its results fell well short of Wall Street’s expectations.

It was such a bad miss that IBM CEO Arvind Krishna and the board took an unprecedented step of warning investors ahead of time that the earnings “was worse than our expectations,” offering everyone a sneak peek.

He published a “letter to investors,” last week sharing preliminary results. It warned of abysmal revenue in the company’s all-important “infrastructure” category and said that profit margins were also going to take a hit. The company’s stock instantly tanked 25%, it’s biggest single-day decline ever. Until then, the stock had performed well under Krishna’s six years of leadership, buoyed by the AI data center boom that had been lifting all boats.

On Wednesday, IBM also lowered its full-year growth forecasts, meaning this horrible quarter would impact the rest of the year. The culprit? IBM’s cash-cow mainframe business was down 42%.

That’s a cascading problem, because as CFO Jim Kavanaugh explained on the quarterly call with investors, IBM earns $3 in software revenue for every $1 of mainframe hardware it sells.

However, the CEO and CFO spent the call insisting that this was a temporary blip and all would be well soon.

What happened, they said, was that “tens” of customers that were due to buy a new mainframe during the quarter opted not to do so. That may not sound like a lot of customers, but mainframes are systems that cost hundreds of thousands to millions of dollars, and with maintenance contracts and software, generate many millions more.

The same AI boom that lifted IBM’s boat also sank it.

Instead of buying a new mainframe, these clients bought other hardware, Krishna explained. They were faced with astronomically high cost increases of 15% to 30% for data center gear and PCs.

“When they were faced with that issue, then they decided to move budget to those areas where they were having that extreme price,” Krishna said.

Enterprise hardware makers like Dell and HP have warned that rising costs on components like memory, caused by the AI build-out boom, have forced them to raise prices. Apple has said the same.

But Krishna promised that those customers will still buy their new mainframes eventually — along with their new software contracts. In fact, he said some of them have already done so this quarter. “We see no evidence of clients moving off the mainframe,” he said.

We’ll have to wait and see. But the tech industry has predicted the death of the mainframe for many decades now. Maybe even AI won’t kill it.

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International Business Machines Corporation (IBM) Q2 2026 Earnings Call July 22, 2026 5:00 PM EDT

Company Participants

Olympia McNerney - Global Head of Investor Relations
Arvind Krishna - CEO, President & Chairman
James Kavanaugh - CFO and Senior VP of Finance & Operations

Conference Call Participants

Amit Daryanani - Evercore ISI Institutional Equities, Research Division
Brent Thill - Jefferies LLC, Research Division
Benjamin Reitzes - Melius Research LLC
Fatima Boolani - Citigroup Inc., Research Division
Erik Woodring - Morgan Stanley, Research Division
Matthew Swanson - RBC Capital Markets, Research Division

Presentation

Operator

Welcome, and thank you for standing by. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time.

Now I will turn the meeting over to Olympia McNerney, IBM's Global Head of Investor Relations. Olympia, you may begin.

Olympia McNerney
Global Head of Investor Relations

Thank you. I'd like to welcome you to IBM's Second Quarter 2026 Earnings Presentation. I'm Olympia McNerney, and I'm here today with Arvind Krishna, IBM's Chairman, President and Chief Executive Officer; and Jim Kavanaugh, IBM's Senior Vice President and Chief Financial Officer.

We'll post today's prepared remarks and a replay of today's webcast on the IBM Investor website within a couple of hours. The earnings presentation is already available. To provide additional information to our investors, our presentation includes certain non-GAAP measures. For example, all of our references to revenue and signings growth are at constant currency. We provided reconciliation charts for these and other non-GAAP financial measures at the end of the presentation, which is posted to our investor website.

Finally, some comments made in this presentation may be considered forward-looking under the Private Securities Litigation Reform Act of 1995. These statements involve factors that could cause our actual results to differ materially. Additional information about these factors is included in the company's

IBM (IBM - Free Report) came out with quarterly earnings of $2.93 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $2.8 per share a year ago. These figures are adjusted for non-recurring items.

A quarter ago, it was expected that this technology and consulting company would post earnings of $1.81 per share when it actually produced earnings of $1.91, delivering a surprise of +5.52%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

IBM, which belongs to the Zacks Computer - Integrated Systems industry, posted revenues of $17.16 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.03%. This compares to year-ago revenues of $16.98 billion. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

IBM shares have lost about 28.9% since the beginning of the year versus the S&P 500's gain of 9.7%.

What's Next for IBM?While IBM has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for IBM was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.83 on $17.03 billion in revenues for the coming quarter and $12.13 on $70.75 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Computer - Integrated Systems is currently in the top 7% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, NCR Voyix (VYX - Free Report) , has yet to report results for the quarter ended June 2026.

This maker of ATMs and other hardware and software to handle payments is expected to post quarterly earnings of $0.16 per share in its upcoming report, which represents a year-over-year change of -15.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

NCR Voyix's revenues are expected to be $517.5 million, down 22.3% from the year-ago quarter.

Image: Shutterstock

Read MoreHide Full Article

Key Takeaways After a Flat-to-Lower Trading Day, Q2 Reports Hit the TapeGOOGL Reported Nearly 4x Earnings Growth Year over YearTesla Missed Earnings by -34% in Q2 Wednesday, July 22nd, 2026

We’ve come to that point in earnings season where after-market-close reports begin to outshine those reported ahead of the open. Market indexes were flat-to-down on the regular trading session, with the Nasdaq shedding -146 points, or -0.57%, while the small-cap Russell 2000 slipped -27 points, -0.92%.

After-Market Earnings Reports at a Glance: GOOGL, TSLA, IBM & More
Search leader and tech conglomerate Alphabet (GOOGL - Free Report) set a very high bar on its earnings beat this afternoon, posting a positive surprise of +216% — $9.11 per share versus a consensus estimate of $2.87, and nearly 4x the $2.31 per share it reported a year ago. Revenues reported at $119.80 billion do  not subtract traffic acquisition costs (TAC), which we here at Zacks do. Thus we see a $103.62 billion top-line, above the $101.28 billion forecast.

Cloud demonstrated +82% growth, $63.2 billion of which came from Search, +24.7% of which saw AI driving search query engagements. YouTube Ads brought in $11 billion for the first time in a quarter. However, this also marked the first quarter of negative free cash flow at Alphabet, -$5.8 billion, on capital expenditures totaling $44 billion. So while the AI trade continues its upward surge, it’s coming with a high price tag. As a result, shares are selling off -1% in late trading.

Tesla (TSLA - Free Report) , conversely, posted a big bottom-line miss in Q2: $0.33 per share versus $0.50 anticipated. Revenues improved nicely to $28.26 billion in the quarter, above the $25.81 million expected and +26% year over year. It also carries negative free cash flow as well, and shares are trading down -3% in after hours, adding to their -16.8% drop since the start of the year.

IBM (IBM - Free Report) managed to meet bottom-line expectations at $2.93 per share this afternoon, while revenues of $17.2 billion eked out a beat over the $17.17 billion Zacks consensus. Software gained +5% in the quarter, partly on Red Hat’s +11% gains.  The tech giant also said it is “investing aggressively” into quantum computing going forward. Shares are up +2% in today’s after-market.

ServiceNow (NOW - Free Report) posted a +19% beat on its bottom line in Q2 today, with earnings of $0.97 per share outpacing the $0.86 estimate. Revenues of $3.99 billion easily surpassed the $3.92 billion in the Zacks consensus, and the software company increased its subscriber revenue outlook for the full year. Shares are up +3.66% in late trading, filling in some of the -37% crater in stock price year to date.

Texas Instruments (TXN - Free Report) stuck the landing on its Q2 results this afternoon, putting up earnings of $2.14 per share versus expectations of $1.91 — up +52% year over year. Revenues of $5.46 billion outpaced the $5.22 billion forecast, up +23% year over year. The Texas tech giant still has $2.74 billion in free cash flow. Shares have added +1% in late trading to their impressive tally +69.5% year to date.

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Published in artificial-intelligence earnings software tech-stocks

Company provides updated full-year expectations

, /PRNewswire/ -- IBM (NYSE: IBM) today announced second-quarter 2026 earnings results.

"We are confident in IBM's strategy and portfolio, and in our ability to capture growth opportunities ahead. We fundamentally believe that we are in the early innings of a structural shift for business, and that our portfolio - across software, infrastructure, and consulting - is well-positioned to help our clients tap the value, and manage the challenges, of an AI-driven future," said Arvind Krishna, IBM chairman, president and chief executive officer. "In addition, we are taking action to accelerate our revenue growth and profitability, driving productivity across the company with AI and automation, and heavily investing in commercializing innovation at speed and scale. We now expect constant currency revenue growth in the range of four-to-five percent, and we continue to expect free cash flow to increase by about $1 billion year-over-year for the full year."

Full-Year 2026 Expectations

Revenue: The company now expects full-year constant currency revenue growth in the range of four-to-five percent. At current foreign exchange rates, currency is expected to be neutral to growth for the year Free cash flow: The company continues to expect full-year free cash flow to increase by about $1 billion year-over-year Operational Focus Areas

High-Growth Portfolio: Areas of IBM's software business that help clients manage, deploy and build AI-ready solutions, like Red Hat, the watsonx portfolio, HashiCorp, and Confluent continue to deliver strong performance. Within Distributed Infrastructure, Power and Storage grew at a record pace in the second quarter, now having built up an order backlog of nearly $500 million. Together, these offerings closely map to where client demand is strongest. To capture these growth opportunities, IBM is accelerating changes to its go-to-market model by expanding sales coverage across thousands of additional clients where there is significant opportunity. As AI adoption moves from experimentation to enterprise-scale deployment, the company is also investing in more specialized technical and client-facing talent, including Forward Deployed Engineers. Rapid Innovation at Scale: IBM is acting decisively to capture new opportunities as they arise. Lightwell, a new capability to address open source security vulnerabilities, leverages IBM and Red Hat's trust within the open source community, unique approach to AI, and global scale. In the first two weeks of availability, Lightwell has already made more than 7,500 open source patches available to help clients secure vulnerabilities. Additionally, quantum computing continues to be an investment priority for the company. In May, with the U.S. Department of Commerce, IBM announced a letter of intent to build Anderon, the world's first pure-play quantum wafer foundry. IBM will invest more than $10 billion in quantum over the next five years, and remains on track to deliver the first large-scale fault-tolerant quantum computer by 2029. Productivity Enables Investment and Value: IBM is accelerating productivity by scaling software development leveraging AI, increasing the effectiveness of its sales and marketing organization, and optimizing its supply chain. These efforts help enhance margin and free cash flow, and strengthen the company's ability to capture significant growth opportunities. The company now expects improved pre-tax income margin expansion for the full year. "Although we faced revenue headwinds late in the second quarter, we continued to focus on the fundamentals of our business, including driving productivity, strengthening our portfolio, and generating free cash flow," said James Kavanaugh, IBM senior vice president and chief financial officer. "In a quarter like this, it is critical that our financial and operational discipline remains strong and that we continue to invest for growth while returning value to shareholders through our dividend."

  SECOND-QUARTER 2026 INCOME STATEMENT SUMMARY

  Revenue

  Gross

Profit

    Gross

Profit

Margin

    Pre-tax

Income

  Pre-tax

Income

Margin

  Net

Income

  Diluted

Earnings

Per Share

GAAP from

Continuing

Operations

$ 17.2 B

    $  9.9  B

    57.7

%

  $  2.5  B

    14.4

%

  $  2.2  B

    $   2.27

  Year/Year

1

%

  (1)

%

  (1.0)

Pts

  (5)

%

  (0.9)

Pts

  (1)

%

  (2)

%

Operating

(Non-GAAP)

      $ 10.2 B

    59.4

%

  $  3.3  B

    19.2

%

  $  2.8  B

    $   2.93

  Year/Year

      0

%

  (0.7)

Pts

  3

%

  0.3

Pts

  5

%

  5

%

Segment Results for Second Quarter

Software — revenues of $7.8 billion, up 5 percent:
- Hybrid Cloud (Red Hat) up 11 percent
- Automation up 4 percent, up 3 percent at constant currency
- Data up 19 percent, up 18 percent at constant currency
- Transaction Processing down 8 percent, down 9 percent at constant currency Consulting — revenues of $5.3 billion, flat, up 1 percent at constant currency:
- Strategy and Technology flat, up 1 percent at constant currency
- Intelligent Operations flat, up 1 percent at constant currency Infrastructure — revenues of $3.8 billion, down 7 percent:
- Hybrid Infrastructure down 10 percent
      -- IBM Z down 42 percent
      -- Distributed Infrastructure up 37 percent
- Infrastructure Support down 1 percent Financing — revenues of $0.2 billion, up 12 percent, up 11 percent at constant currency Cash Flow and Balance Sheet

In the second quarter, the company generated net cash from operating activities of $2.6 billion, up $0.9 billion year to year. IBM's free cash flow was $2.5 billion, down $0.3 billion year to year. The company returned $1.6 billion to shareholders in dividends in the second quarter.

For the first six months of the year, the company generated net cash from operating activities of $7.8 billion, up $1.7 billion year to year. IBM's free cash flow was $4.8 billion, flat year to year.

IBM ended the second quarter with $8.2 billion of cash, restricted cash and marketable securities, down $6.3 billion from year-end 2025. The company invested $10.5 billion in acquisitions this year. Debt, including IBM Financing debt of $13.0 billion, totaled $62.0 billion, up $0.7 billion year to date.

Dividend Declaration

The IBM board of directors approved a regular quarterly cash dividend of $1.69 per common share, to stockholders of record on August 10, 2026. With payment of the September 10, 2026 dividend, IBM will have paid consecutive quarterly dividends every year since 1916.

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company's current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to, the following: a downturn in economic environment and client spending budgets; a failure of the company's innovation initiatives; damage to the company's reputation; risks from investing in growth opportunities; failure of the company's intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; the company's ability to successfully manage acquisitions, alliances and divestitures, including integration challenges, failure to achieve objectives, the assumption or retention of liabilities and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the company's failure to meet growth and productivity objectives; ineffective internal controls; the company's use of accounting estimates; impairment of the company's goodwill or amortizable intangible assets; the company's ability to attract and retain key employees and its reliance on critical skills; impacts of relationships with critical suppliers; product and service quality issues; the development and use of AI, including the company's increased AI solutions and use of AI technologies; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data protection considerations; adverse effects related to climate change and other environmental matters; tax matters; legal proceedings and investigatory risks; the company's pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company's Form 10-Qs, Form 10-K and in the company's other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference.

Any forward-looking statement in this release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.

Presentation of Information in this Press Release

In an effort to provide investors with additional information regarding the company's results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information, which management believes provides useful information to investors:

adjusting for currency (i.e., at constant currency); presenting operating (non-GAAP) earnings per share amounts and related income statement items; free cash flow; net cash from operating activities excluding IBM Financing receivables; adjusted EBITDA; adjusted EBITDA margin. The rationale for management's use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.

Conference Call and Webcast

IBM's regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. ET, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-2q26. Presentation charts will be available shortly before the Webcast.

Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).

INTERNATIONAL BUSINESS MACHINES CORPORATION

COMPARATIVE FINANCIAL RESULTS

(Unaudited; $ in millions except per share amounts)

    Three Months Ended
June 30,

    Six Months Ended
June 30,

    2026

    2025

    2026

    2025

  REVENUE BY SEGMENT

                      Software

$        7,761

    $        7,387

    $       14,813

    $       13,722

  Consulting

5,327

    5,314

    10,599

    10,382

  Infrastructure

3,835

    4,142

    7,161

    7,027

  Financing

186

    166

    406

    357

  Other

52

    (31)

    100

    30

  TOTAL REVENUE

17,162

    16,977

    33,079

    31,519

                          GROSS PROFIT

9,907

    9,977

    18,857

    18,008

                          GROSS PROFIT MARGIN

                      Software

82.6

%

  83.9

%

  82.7

%

  83.7

%

Consulting

28.9

%

  27.5

%

  28.2

%

  27.4

%

Infrastructure

58.4

%

  61.5

%

  57.7

%

  57.9

%

Financing

42.5

%

  45.7

%

  43.0

%

  45.8

%

                        TOTAL GROSS PROFIT MARGIN

57.7

%

  58.8

%

  57.0

%

  57.1

%

                        EXPENSE AND OTHER INCOME

                      SG&A

4,981

    5,027

    10,071

    9,913

  R&D

2,311

    2,097

    4,485

    4,047

  Intellectual property and custom development income

(166)

    (215)

    (338)

    (468)

  Other (income) and expense

(185)

    (39)

    (186)

    (204)

  Interest expense

486

    510

    959

    965

  TOTAL EXPENSE AND OTHER INCOME

7,428

    7,380

    14,991

    14,253

                          INCOME FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES

2,479

    2,597

    3,866

    3,755

  Pre-tax income margin

14.4

%

  15.3

%

  11.7

%

  11.9

%

Provision for/(benefit from) income taxes

313

    404

    484

    507

  Effective tax rate

12.6

%

  15.5

%

  12.5

%

  13.5

%

                        INCOME FROM CONTINUING OPERATIONS

$        2,166

    $        2,193

    $         3,382

    $         3,248

                          DISCONTINUED OPERATIONS

                      Income/(loss)  from discontinued operations, net of

taxes

(1)

    1

    (1)

    1

                          NET INCOME

$        2,165

    $        2,194

    $         3,381

    $         3,249

                          EARNINGS PER SHARE OF COMMON STOCK

                      Assuming dilution

                      Continuing operations

$          2.27

    $          2.31

    $           3.55

    $           3.43

  Discontinued operations

$          0.00

    $          0.00

    $           0.00

    $           0.00

  TOTAL

$          2.27

    $          2.31

    $           3.55

    $           3.43

                          Basic

                      Continuing operations

$          2.30

    $          2.36

    $           3.60

    $           3.49

  Discontinued operations

$          0.00

    $          0.00

    $           0.00

    $           0.00

  TOTAL

$          2.30

    $          2.36

    $           3.60

    $           3.50

                          WEIGHTED-AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING (M's)

                      Assuming dilution

953.3

    948.0

    952.7

    946.7

  Basic

941.2

    930.8

    939.9

    929.4

  INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

  ($ in millions)

  At June 30,
2026

  At December 31,
2025

ASSETS:

        Current assets:

        Cash and cash equivalents

  $             7,172

  $              13,587

Restricted cash

  45

  54

Marketable securities

  960

  830

Notes and accounts receivable - trade, net

  6,044

  8,112

Short-term financing receivables

          Held for investment, net

  5,782

  7,344

  Held for sale

  874

  1,131

Other accounts receivable, net

  1,348

  1,052

Inventories

  1,746

  1,220

Deferred costs

  1,238

  1,084

Prepaid expenses and other current assets

  3,188

  2,530

Total current assets

  28,398

  36,944

          Property, plant and equipment, net

  5,736

  5,899

Operating right-of-use assets, net

  3,068

  3,129

Long-term financing receivables, net

  7,126

  7,708

Prepaid pension assets

  7,645

  7,544

Deferred costs

  835

  825

Deferred taxes

  8,709

  8,610

Goodwill

  74,599

  67,717

Intangibles, net

  13,955

  11,391

Investments and sundry assets

  2,028

  2,112

Total assets

  $          152,099

  $            151,880

          LIABILITIES:

        Current Liabilities:

        Taxes

  $              2,023

  $                2,347

Short-term debt

  5,775

  6,424

Accounts payable

  4,395

  4,756

Compensation and benefits

  3,364

  4,114

Deferred income

  16,160

  16,101

Operating lease liabilities

  770

  800

Other liabilities

  3,425

  4,116

Total current liabilities

  35,912

  38,658

          Long-term debt

  56,212

  54,836

Retirement-related obligations

  8,603

  9,018

Deferred income

  4,272

  4,271

Operating lease liabilities

  2,515

  2,547

Other liabilities

  10,044

  9,810

Total liabilities

  117,558

  119,139

          EQUITY:

        IBM stockholders' equity:

        Common stock

  64,600

  63,318

Retained earnings

  155,937

  155,648

Treasury stock - at cost

  (170,934)

  (170,605)

Accumulated other comprehensive income/(loss)

  (15,151)

  (15,713)

Total IBM stockholders' equity

  34,452

  32,648

          Noncontrolling interests

  89

  93

Total equity

  34,541

  32,740

          Total liabilities and equity

  $          152,099

  $            151,880

INTERNATIONAL BUSINESS MACHINES CORPORATION

STATEMENT OF CASH FLOWS

(Unaudited)

      Three Months Ended
June 30,

  Six Months Ended
June 30,

($ in millions)

  2026

  2025 (1)

  2026

  2025 (1)

Cash flows from operating activities:

                Net income

  $     2,165

  $     2,194

  $     3,381

  $     3,249

Adjustments to reconcile net income to cash provided by operating

activities:

                Depreciation (2)

  533

  578

  1,088

  1,114

Amortization of capitalized software and acquired intangible assets

  817

  687

  1,535

  1,328

Stock-based compensation

  498

  441

  1,004

  842

Net (gain)/loss on divestitures, asset sales and other

  (67)

  (18)

  (78)

  (40)

Changes in operating assets and liabilities, net of

acquisitions/divestitures

  (1,349)

  (2,180)

  836

  (421)

Net cash provided by operating activities

  2,597

  1,701

  7,766

  6,071

                  Cash flows from investing activities:

                Payments for property, plant and equipment

  (229)

  (209)

  (461)

  (454)

Proceeds from disposition of property, plant and equipment/other

  23

  37

  31

  111

Investment in software

  (154)

  (164)

  (313)

  (314)

Purchases of marketable securities and other investments

  (1,259)

  (1,255)

  (2,871)

  (7,740)

Proceeds from disposition of marketable securities and other

investments

  1,152

  4,036

  3,123

  4,962

Acquisition of businesses, net of cash acquired

  (15)

  (747)

  (10,480)

  (7,845)

Divestiture of businesses, net of cash transferred

  -

  -

  1

  (1)

Net cash provided by/(used in) investing activities

  (481)

  1,698

  (10,970)

  (11,281)

                  Cash flows from financing activities:

                Proceeds from new debt

  0

  7

  7,437

  8,385

Payments to settle debt

  (4,213)

  (1,308)

  (7,141)

  (2,565)

Short-term borrowings/(repayments) less than 90 days - net

  1

  0

  0

  (29)

Common stock repurchases for tax withholdings

  (116)

  (153)

  (465)

  (437)

Proceeds from issuance of shares

  240

  186

  418

  401

Financing - other

  (49)

  (22)

  (91)

  (54)

Cash dividends paid

  (1,590)

  (1,563)

  (3,166)

  (3,112)

Net cash provided by/(used in) financing activities

  (5,728)

  (2,855)

  (3,008)

  2,589

                  Effect of exchange rate changes on cash, cash equivalents and restricted

cash

  (35)

  320

  (211)

  487

Net change in cash, cash equivalents and restricted cash

  (3,646)

  865

  (6,423)

  (2,134)

                  Cash, cash equivalents and restricted cash at the beginning of the period

  10,864

  11,161

  13,640

  14,160

Cash, cash equivalents and restricted cash at the end of the period

  $     7,217

  $   12,026

  $     7,217

  $   12,026

_____________________

(1) Reclassified to align with the Consolidated Statement of Cash Flows presentation.

(2) Includes operating lease right-of-use assets amortization.

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

      Three Months Ended

June 30,

  Six Months Ended

June 30,

($ in billions)

  2026

2025

Yr/Yr

  2026

2025

Yr/Yr

Net income as reported (GAAP)

  $   2.2

$   2.2

$  0.0

  $   3.4

$   3.2

$  0.1

Less: income from discontinued operations, net of tax

  0.0

0.0

0.0

  0.0

0.0

0.0

Income from continuing operations

  2.2

2.2

0.0

  3.4

3.2

0.1

Provision for/(benefit from) income taxes from continuing ops.

  0.3

0.4

(0.1)

  0.5

0.5

0.0

Pre-tax income from continuing operations (GAAP)

  2.5

2.6

(0.1)

  3.9

3.8

0.1

Non-operating adjustments (before tax)

                Acquisition-related charges (1)

  0.7

0.6

0.1

  1.4

1.1

0.2

Non-operating retirement-related costs/(income)

  0.1

0.0

0.1

  0.2

0.0

0.1

                  Operating (non-GAAP) pre-tax income from continuing ops.

  3.3

3.2

0.1

  5.4

4.9

0.5

                  Net interest expense

  0.4

0.3

0.1

  0.7

0.6

0.1

Depreciation/amortization of non-acquired intangible assets

  0.7

0.7

0.0

  1.4

1.4

0.0

Stock-based compensation

  0.5

0.4

0.1

  1.0

0.8

0.2

Workforce rebalancing charges

  0.0

0.0

0.0

  0.4

0.3

0.0

Corporate (gains) and charges (2)

  (0.1)

0.0

(0.1)

  (0.1)

0.0

(0.1)

                  Adjusted EBITDA

  $   4.8

$   4.7

$  0.1

  $   8.8

$   8.1

$  0.7

                  Revenue

  $ 17.2

$ 17.0

1 %

  $ 33.1

$ 31.5

5 %

GAAP net income margin

  12.6 %

12.9 %

(0.3)pts

  10.2 %

10.3 %

(0.1)pts

Adjusted EBITDA margin

  27.8 %

27.6 %

0.2pts

  26.5 %

25.7 %

0.8pts

___________________

(1) Primarily consists of amortization of acquired intangible assets.

(2) Primarily consists of unique corporate actions such as gains on divestitures and asset sales.

INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)

      Three Months Ended June 30, 2026

                            ($ in millions)

  Software

    Consulting

    Infrastructure

    Financing

  Revenue

  $          7,761

    $          5,327

    $           3,835

    $           186

  Segment profit

  $          2,502

    $             647

    $              835

    $           108

  Segment profit margin

  32.2

%

  12.1

%

  21.8

%

  58.0

%

Change YTY revenue

  5.1

%

  0.2

%

  (7.4)

%

  12.2

%

Change YTY revenue - constant currency

  4.6

%

  1.1

%

  (7.4)

%

  11.3

%

      Three Months Ended June 30, 2025

                            ($ in millions)

   Software

    Consulting

    Infrastructure

    Financing

  Revenue

  $          7,387

    $          5,314

    $           4,142

    $           166

  Segment profit

  $          2,296

    $             562

    $              965

    $           179

  Segment profit margin

  31.1

%

  10.6

%

  23.3

%

  107.9

%

      Six Months Ended June 30, 2026

                            (Dollars in Millions)

  Software

    Consulting

    Infrastructure

    Financing

  Revenue

  $        14,813

    $        10,599

    $           7,161

    $           406

  Segment Profit

  $          4,601

    $          1,205

    $           1,360

    $           226

  Segment Profit Margin

  31.1

%

  11.4

%

  19.0

%

  55.8

%

Change YTY Revenue

  7.9

%

  2.1

%

  1.9

%

  13.6

%

Change YTY Revenue - Constant Currency

  6.1

%

  1.0

%

  0.5

%

  10.7

%

      Six Months Ended June 30, 2025

                            (Dollars in Millions)

   Software

    Consulting

    Infrastructure

    Financing

  Revenue

  $        13,722

    $        10,382

    $           7,027

    $           357

  Segment Profit

  $          4,143

    $          1,121

    $           1,213

    $           248

  Segment Profit Margin

  30.2

%

  10.8

%

  17.3

%

  69.3

%

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; $ in millions except per share amounts)

    Three Months Ended June 30, 2026

    Continuing Operations

    GAAP

    Acquisition-

Related

Adjustments (1)

    Retirement-

Related

Adjustments (2)

    Tax

Reform

Impacts

    Operating

(Non-

GAAP)

  Gross profit

$  9,907

    $                    287

    $                    —

    $         —

    $       10,194

  Gross profit margin

57.7

%

  1.7

pts

  —

pts

  —

pts

  59.4

%

SG&A

$  4,981

    $                   (421)

    $                    —

    $         —

    $         4,560

  Other (income) & expense

(185)

    1

    (96)

    —

    (280)

  Total expense & other (income)

7,428

    (429)

    (96)

    —

    6,903

  Pre-tax income from continuing operations

2,479

    716

    96

    —

    3,290

  Pre-tax income margin from continuing

operations

14.4

%

  4.2

pts

  0.6

pts

  —

pts

  19.2

%

Provision for/(benefit from) income taxes (3)

$     313

    $                    167

    $                   20

    $          (2)

    $            498

  Effective tax rate

12.6

%

  2.3

pts

  0.2

pts

  (0.1)

pts

  15.1

%

Income from continuing operations

$  2,166

    $                    548

    $                   76

    $           2

    $         2,792

  Income margin from continuing operations

12.6

%

  3.2

pts

  0.4

pts

  0.0

pts

  16.3

%

Diluted earnings per share: continuing

operations

$    2.27

    $                   0.58

    $                0.08

    $      0.00

    $           2.93

      Three Months Ended June 30, 2025

    Continuing Operations

    GAAP

    Acquisition-

Related

Adjustments (1)

    Retirement-

Related

Adjustments (2)

    Tax

Reform

Impacts

    Operating

(Non-

GAAP)

  Gross profit

$  9,977

    $                    225

    $                    —

    $         —

    $       10,202

  Gross profit margin

58.8

%

  1.3

pts

  —

pts

  —

pts

  60.1

%

SG&A

$  5,027

    $                   (348)

    $                    —

    $         —

    $         4,679

  Other (income) & expense

(39)

    (1)

    (25)

    —

    (65)

  Total expense & other (income)

7,380

    (350)

    (25)

    —

    7,005

  Pre-tax income from continuing operations

2,597

    575

    25

    —

    3,197

  Pre-tax income margin from continuing

operations

15.3

%

  3.4

pts

  0.1

pts

  —

pts

  18.8

%

Provision for/(benefit from) income taxes (3)

$     404

    $                    132

    $                     9

    $         —

    $            545

  Effective tax rate

15.5

%

  1.3

pts

  0.2

pts

  —

pts

  17.0

%

Income from continuing operations

$  2,193

    $                    443

    $                   17

    $         —

    $         2,652

  Income margin from continuing operations

12.9

%

  2.6

pts

  0.1

pts

  —

pts

  15.6

%

Diluted earnings per share: continuing

operations

$    2.31

    $                   0.47

    $                0.02

    $         —

    $           2.80

  ____________________

(1) Includes amortization of acquired intangible assets and acquisition-related charges such as in-process research and development, transaction

      costs, applicable retention, restructuring and related expenses, tax charges related to acquisition integration, and pre-closing charges, such as

      financing costs.

(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan

      curtailments/settlements and pension insolvency costs and other costs.

(3) The tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to

      the GAAP pre-tax income.

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; $ in millions except per share amounts)

        Six Months Ended June 30, 2026

    Continuing Operations

    GAAP

    Acquisition-

Related

Adjustments (1)

    Retirement-

Related

Adjustments (2)

  Tax

Reform

Impacts

    Operating

(Non-

GAAP)

  Gross Profit

$ 18,857

    $                  524

    $                    —

    $         —

    $   19,380

  Gross Profit Margin

57.0

%

  1.6

pts

  —

pts

  —

pts

  58.6

%

SG&A

$ 10,071

    $                (829)

    $                    —

    $         —

    $     9,242

  Other (Income) & Expense

(186)

    1

    (192)

    —

    (378)

  Total Expense & Other (Income)

14,991

    (838)

    (192)

    —

    13,961

  Pre-tax Income from Continuing Operations

3,866

    1,361

    192

    —

    5,419

  Pre-tax Income Margin from Continuing

Operations

11.7

%

  4.1

pts

  0.6

pts

  —

pts

  16.4

%

Provision for/(Benefit from) Income Taxes (3)

$      484

    $                 305

    $                   23

    $         (6)

    $        806

  Effective Tax Rate

12.5

%

  2.5

pts

  0.0

pts

  (0.1)

pts

  14.9

%

Income from Continuing Operations

$   3,382

    $              1,056

    $                 169

    $           6

    $     4,613

  Income Margin from Continuing Operations

10.2

%

  3.2

pts

  0.5

pts

  0.0

pts

  13.9

%

Diluted Earnings Per Share: Continuing

Operations

$     3.55

    $                1.11

    $                0.18

    $     0.01

    $       4.84

      Six Months Ended June 30, 2025

    Continuing Operations

    GAAP

    Acquisition-

Related

Adjustments (1)

    Retirement-

Related

Adjustments (2)

    Tax

Reform

Impacts

    Operating

(Non-

GAAP)

  Gross Profit

$ 18,008

    $                  426

    $                    —

    $         —

    $   18,434

  Gross Profit Margin

57.1

%

  1.4

pts

  —

pts

  —

pts

  58.5

%

SG&A

$   9,913

    $                (701)

    $                    —

    $         —

    $     9,212

  Other (Income) & Expense

(204)

    (1)

    (48)

    —

    (253)

  Total Expense & Other (Income)

14,253

    (706)

    (48)

    —

    13,499

  Pre-tax Income from Continuing Operations

3,755

    1,132

    48

    —

    4,935

  Pre-tax Income Margin from Continuing

Operations

11.9

%

  3.6

pts

  0.2

pts

  —

pts

  15.7

%

Provision for/(Benefit from) Income Taxes (3)

$      507

    $                 260

    $                    (3)

    $           2

    $        766

  Effective Tax Rate

13.5

%

  2.2

pts

  (0.2)

pts

  0.0

pts

  15.5

%

Income from Continuing Operations

$   3,248

    $                 872

    $                   51

    $         (2)

    $     4,169

  Income Margin from Continuing Operations

10.3

%

  2.8

pts

  0.2

pts

  0.0

pts

  13.2

%

Diluted Earnings Per Share: Continuing

Operations

$     3.43

    $                0.92

    $                0.05

    $     0.00

    $       4.40

  ____________________

(1) Includes amortization of acquired intangible assets, and acquisition-related charges such as in-process research and development, transaction

      costs, applicable retention, restructuring and related expenses, tax charges related to acquisition integration, and pre-closing charges, such as

      financing costs.

(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan

      curtailments/settlements and pension insolvency costs and other costs.

(3) The tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to

      the GAAP pre-tax income.

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO FREE CASH FLOW RECONCILIATION

(Unaudited)

      Three Months Ended
June 30,

  Six Months Ended
June 30,

($ in millions)

  2026

  2025

  2026

  2025

Net cash provided by operating activities per GAAP

  $     2,597

  $     1,701

  $     7,766

  $     6,071

                  Less: change in IBM Financing receivables

  (302)

  (1,480)

  2,264

  606

                  Net cash from operating activities excl. IBM Financing receivables

  2,899

  3,182

  5,503

  5,465

                  Capital expenditures, net

  (359)

  (336)

  (743)

  (657)

                  Free cash flow

  $     2,540

  $     2,845

  $     4,760

  $     4,808

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

      Three Months Ended
June 30,

  Six Months Ended
June 30,

($ in billions)

  2026

  2025

  2026

  2025

Net cash provided by operating activities

  $   2.6

  $   1.7

  $   7.8

  $   6.1

                  Add:

                Net interest expense

  0.4

  0.3

  0.7

  0.6

Provision for/(benefit from) income taxes from continuing operations

  0.3

  0.4

  0.5

  0.5

                  Less change in:

                Financing receivables

  (0.3)

  (1.5)

  2.3

  0.6

Net (gain)/loss on divestitures, assets sales and other (1)

  (0.1)

  0.0

  (0.1)

  0.0

Other assets and liabilities/other, net (1,2)

  (1.1)

  (0.7)

  (2.0)

  (1.5)

                  Adjusted EBITDA

  $   4.8

  $   4.7

  $   8.8

  $   8.1

                  Revenue

  $ 17.2

  $ 17.0

  $ 33.1

  $ 31.5

Net cash provided by operating activities margin

  15.1 %

  10.0 %

  23.5 %

  19.3 %

Adjusted EBITDA margin

  27.8 %

  27.6 %

  26.5 %

  25.7 %

____________________

(1) Reclassified to align with the presentation of similar line items in the Statement of Cash Flows.

(2) Mainly consists of Changes in operating assets and liabilities, net of acquisitions/divestitures in the Statement of Cash Flows chart,

      workforce rebalancing charges, non-operating impacts, and corporate (gains) and charges, less the change in Financing receivables.

SOURCE IBM

Item 1 of 2 IBM logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration

[1/2]IBM logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab

SummaryCompaniesIBM now expects 2026 revenue growth of 4% to 5%, down from prior expectation of more than 5% growthZ mainframe revenue slumped 42% in the ​second quarterSecond-quarter adjusted profit was $2.93 per share, below $2.97 estimateJuly 22 (Reuters) - IBM cut its annual revenue ‌growth forecast on Wednesday, days after shocking Wall Street with a warning that corporate spending was shifting toward AI-focused data-center gear at the expense of its software and mainframe computers.

The company (IBM.N), opens new tab also missed profit and revenue expectations for the second quarter ended June 30. ​Executives sought to reassure shareholders that customers prioritized spending on AI in the quarter but were not ​looking to move away from mainframes in the longer term.

The Reuters Daily Briefing newsletter provides all the news you need to start your day. Sign up here.

Shares of the Armonk, New York-based ⁠company were up over 2% in extended trading.

CEO Arvind Krishna said last week IBM had "faltered" in adapting and "numerous large ​deals" had slipped, sending the company's shares down 25%, its steepest one-day fall in more than a century.

The forecast spotlights ​how the scramble for AI hardware has stoked investor fears that companies rushing to secure scarce servers, chips and networking gear could be cutting back on spending on the wider software sector.

IBM now expects 2026 revenue growth between 4% and 5%, down from its ​previous expectations of more than 5% growth. The midpoint of the forecast is below analysts' average estimate of a ​4.8% rise to $70.77 billion in revenue, according to data compiled by LSEG.

However, some analysts have said the impact on the rest ‌of the ⁠software industry might be limited as Big Blue had attributed much of the weakness to its mainframe business, which processes millions of daily transactions across industries such as banking and airlines.

"For the broader software sector, this should be treated as a positive print, with IBM's software woes more likely to reflect specific IBM-related hardware issues, as management outlined ​in its investor letter last ​week," CFRA analyst Brooks ⁠Idlet said.

Revenue from IBM's Z mainframe slumped 42% in the second quarter, dragging infrastructure revenue down 7% to $3.84 billion.

"That mainframe stack of hardware and transaction processing software impacted IBM's ​growth by over five points in the quarter," IBM finance chief James Kavanaugh told ​Reuters. "We were only ⁠expecting about a point or two of an impact."

He said IBM sees "no evidence of clients moving off a mainframe," adding that it expects "significant outperformance in the program to continue through the second half."

Software revenue in the second quarter rose 5% ⁠to $7.76 billion ​but missed an average estimate of $7.88 billion.

The company's second-quarter revenue ticked ​up 1% to $17.16 billion, missing estimates of $17.58 billion. IBM reported a net profit of $2.17 billion, a dip from a year earlier, while adjusted profit ​of $2.93 per share missed an average estimate of $2.97.

Reporting by Anhata Rooprai in Bengaluru; Editing by Pooja Desai and Rod Nickel

Our Standards: The Thomson Reuters Trust Principles., opens new tab

HomeIndustriesSoftwareEarnings ResultsEarnings ResultsIBM’s official earnings report comes after a bruising profit warning last weekUpdated July 22, 2026, 4:42 p.m. ET

International Business Machines warned last week that its quarterly revenue had come up short as customers drained their budgets on artificial-intelligence hardware, leaving less room to invest in software. Now the company is cutting its outlook for the full year.

IBM IBM said Wednesday that it expects constant-currency revenue growth in the range of 4% to 5% for 2026, below a prior forecast that called for growth of over 5%.

While Alphabet (GOOGL) and Tesla (TSLA) will take up most oxygen on the earnings front after Wednesday's close, Andy Swan from @LikeFolio points to IBM Corp. (IBM) as another name to watch. He examines upward consumer demand trends for Big Blue, which he believes suggests its customer base remains strong long-term.

International Business Machines Corporation (NYSE:IBM) will release its second quarter earnings report after the closing bell on Wednesday, July 22.

Analysts expect the Armonk, New York-based company to report quarterly earnings of $2.92 per share, up from $2.80 per share in the year-ago period. The consensus estimate for IBM’s quarterly revenue is $17.33 billion. It reported $16.98 billion last year, according to Benzinga Pro.

On July 14, the company said it expects second-quarter revenue of $17.2 billion, up 1% from a year earlier but below the Wall Street consensus estimate of $17.86 billion.

IBM shares fell 1.2% to close at $210.50 on Tuesday.

Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.

Let’s have a look at how Benzinga’s most-accurate analysts have rated the company in the recent period.

Considering buying IBM stock? Here’s what analysts think:

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© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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NEW YORK, July 21, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of International Business Machines Corporation (“IBM” or the “Company”) (NYSE: IBM).  Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether IBM and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On July 14, 2026, IBM released its financial results for the second quarter of 2026.  IBM announced a disappointing quarter that it attributed to “a shortfall in our Z performance and the associated software stack, primarily in Transaction Processing.”  IBM also disclosed that it had “faltered,” and “did not adapt and move quickly enough” so that “numerous large deals failed to close on the timelines we expected, driving the majority of our shortfall.” 

On this news, IBM’s stock price fell $73.16 per share, or 25.21%, to close at $217.07 per share on July 14, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes.  

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

International Business Machines (NYSE: IBM) is approaching its next earnings report – scheduled for Wednesday, July 22 – in a highly unorthodox position, as it had already offered a rather concerning preview of the figures to its investors.

Specifically, IBM made an announcement last week revealing that both its revenue and earnings per share (EPS) are likely to come below expectations, with the former hitting $17.2 billion – $17.86 billion was expected – and the latter $2.93 – $3.02 was anticipated.

The disappointing figures might have, however, also turned the equity into a ‘Buy’ as it already suffered a massive selloff on the news, making it unlikely there is much potential for a further downside after the Wednesday filing.

IBM stock price one-month chart. Source: Google Still, the ground remains shaky for IBM stock investors considering the company also warned that the ongoing memory shortage and the prevailing focus on artificial intelligence (AI) are significantly harming its business.

Is IBM a good stock to buy? Nonetheless, Wall Street remains surprisingly optimistic regarding International Business Machines shares. 

Specifically, the majority of analyst notes issued during the previous week were bullish, with the company receiving four ‘Hold,’ one ‘Sell’ – coming from HSBC’s Stephen Bersey and accompanied by a $231-to-$191 price target downgrade – and five ‘Buy’ recommendations.

Notably, the most recent forecast update – provided by JPMorgan’s (NYSE: JPM) Brian Essex on July 17 – was positive even after the bloodbath triggered by the earnings preview and featured a ‘Buy’ rating and a forecast downgrade from $291 to $250: from a 36.52% upside to 17.37%.

Lastly, the overall attitude on Wall Street is that IBM stock is a ‘Moderate Buy,’ while the average 12-month price target stands at $295.76 for a 38.86%  predicted rally, per the data Finbold retrieved from TipRanks on July 21.

Wall Street sets IBM stock price for the next 12 months. Source: TipRanks Thus, International Business Machines shares appear worth investing in following the preview plunge and ahead of the official filing, though the fact that nearly every non-positive expert recommendation was assigned within the last week gives ample room for caution.

Featured image via Shutterstock

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