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SEC filingIBM reported Q1 2026 revenue of $15.9 billion, up 9% year-over-year, with double-digit growth in Software and Infrastructure, strong margin expansion, and raised full-year revenue growth and free cash flow guidance.
IBM's Q1 2026 results demonstrated robust performance across key segments, with total revenue reaching $15.9 billion, a 9% increase year-over-year (6% at constant currency). Software revenue grew 11% to $7.1 billion, fueled by double-digit gains in Data (+19%), Hybrid Cloud/Red Hat (+13%), and Automation (+10%). Infrastructure surged 15% to $3.3 billion, led by Hybrid Infrastructure (+28%) and IBM Z mainframes (+51%), though Infrastructure Support declined 2%. Consulting rose 4% to $5.3 billion. CEO Arvind Krishna highlighted broad-based growth and AI as a tailwind, reflecting client trust in IBM's hybrid AI orchestration capabilities. CFO James Kavanaugh noted productivity initiatives driving double-digit profit growth. Margin expansion was notable: GAAP gross margin improved 100 basis points to 56.2%, with Non-GAAP operating gross margin up 110 basis points to 57.7%; pre-tax margins expanded 80 bps (GAAP) and 140 bps (Non-GAAP). GAAP net income rose 15% to $1.2 billion, with diluted EPS at $1.28 (+14%). Free cash flow increased $0.3 billion to $2.2 billion, supporting $1.6 billion in dividends and the Confluent acquisition. Balance sheet shows $11.8 billion in cash and equivalents, with debt at $66.4 billion after acquisition-related increases. Guidance reaffirms >5% constant currency revenue growth and ~$1 billion free cash flow improvement for 2026. The board raised the quarterly dividend to $1.69 per share, marking 31 consecutive years of increases, signaling confidence in cash generation.