IBM · News · 20261022N

Operating Margin Expansion

INTERNATIONAL BUSINESS MACHINES CORP · 2026-10-22 · Importance 25 · Surprise 32 · In source text

IBM's third-quarter adjusted gross margin was 58.5%, below the 59.3% analyst estimate. Operating pre-tax margin expanded 70 basis points year over year, while operating margin was reported at 16.8%, unchanged from the prior-year quarter. Productivity initiatives, improved transaction execution, and cost savings supported profitability and offset pressure from the weaker gross-margin result. Adjusted EBITDA was $4.98 billion, representing a 29.1% margin and exceeding the $4.67 billion consensus estimate.

Key facts

• Adjusted EBITDA for Q3 2026: $4.98 billion (29.1% margin), beating estimates by 6.5%. source
• IBM reported adjusted earnings rose 11% year over year to $2.95 per share in Q3 2026, beating the Zacks Consensus Estimate of $2.88 by 2.4%. source
• IBM reported adjusted operating earnings of $2.95 per share, up 11% year over year and 2.4% above the Zacks Consensus Estimate. source
• Adjusted earnings per share (non-GAAP) for Q3 2026: $2.95, 2.7% above analysts' consensus estimates of $2.87. source
• GAAP EPS for Q3 2026 was $2.30 versus the $2.45 estimate. source
• Operating pretax margin expanded 70 basis points year over year in Q3 2026. source
• Adjusted gross margin for Q3 2026: 58.5%, below the 59.3% estimate. source

Impact estimates