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International Business Machines (IBM) Q3 2026 earnings results (third quarter 2026)
10-Q filed Oct 22, 2026
International Business Machines (IBM) reported revenue of $17.1B for the third quarter 2026 (Q3 2026), +5% from a year earlier and -0.3% from the quarter before. Operating margin was 14.5%, net earnings $2.2B (12.8% of revenue).
International Business Machines, Q3 2026: revenue $17.1B (+5% year over year), operating margin 14.5%, net earnings $2.2B, operating cash flow $4.0B. The chart follows the revenue to costs, profit and cash.
| Q3 2026 | Amount | Q/Q | Y/Y |
|---|---|---|---|
| Revenue | $17.1B | -0.3% | +5% |
| Gross profit | $9.7B | -2% | +4% |
| Operating profit | $2.5B | +0.4% | +2% |
| Net earnings | $2.2B | +1% | +26% |
| Operating cash flow | $4.0B | +55% | +31% |
| Free cash flow | $3.7B | +56% | +31% |
What changed
Revenue was $17.1B in Q3 2026, up 5% year over year and roughly flat from the previous quarter. Sales was the largest line at 52% of revenue. Sales added $0.51B year over year (up 6%), 65% of the total change. Financing declined 4%.
Gross margin was 56.8%, down 0.5 points from Q3 2025. Operating profit was $2.5B, a 14.5% margin (down 0.3 points year over year). Of the extra revenue versus Q3 2025, 8% reached operating profit, below the 15% margin then. Operating expenses grew 4% against revenue growth of 5%. The fastest-growing cost line was Other operating costs (+128%). Net earnings were $2.2B, up 26% year over year. The effective tax rate was 12.0%.
Operating cash flow was $4.0B (up 31% year over year), 184% of net earnings. Non-cash charges added back $1.4B of depreciation and amortization and $0.54B of share-based compensation. Capital expenditures of $0.33B left free cash flow of $3.7B.
Questions
What was International Business Machines' revenue in the third quarter 2026?
International Business Machines (IBM) reported revenue of $17.1B for the third quarter 2026 (Q3 2026), +5% from a year earlier and -0.3% from the quarter before.
Was International Business Machines profitable in the third quarter 2026?
Operating profit was $2.5B (14.5% of revenue) and net earnings $2.2B.