IBM · 10-Q · 2026Q3 · Full report
Operating Income and Margins
INTERNATIONAL BUSINESS MACHINES CORP · 2026-10-22 · Importance 54 · Surprise 40 · No source text
Nine-month gross profit increased 4.4% to $28,571 million from $27,369 million, while gross margin declined to approximately 56.9% from 57.2% because total costs increased 5.5% to $21,611 million. Nine-month income from continuing operations before taxes increased 2.9% to $6,363 million, and income from continuing operations increased 11.8% to $5,581 million. Total segment profit increased 9.9% to $11,601 million, with segment profit margin expanding to 23.2% from 22.1%. Software segment margin increased to 32.4% from 31.1%, and Infrastructure segment margin increased to 19.1% from 17.5%, while Financing margin declined to 55.9% from 66.5%.
Key facts
- Operating (non-GAAP) income from continuing operations for the first nine months of 2026 was $7.4 billion, an 11.1% increase versus the prior-year period, with an operating (non-GAAP) income margin of 14.8% (up 0.8 points). source
- Net income for the three months ended September 30, 2026 was $2,190 million, a 25.6% increase versus the prior-year period; diluted earnings per share from continuing operations was $2.31 (up 25.5%). source
- Operating (non-GAAP) pre-tax income from continuing operations for the first nine months of 2026 was $8.7 billion, an increase of 9.4% compared to the prior-year period, with an operating (non-GAAP) pre-tax margin of 17.4% (up 0.7 points). source
- Software segment profit for the three months ended September 30, 2026 was $2,734 million, up 15.2% year to year, with a segment profit margin of 35.0% (up 2.1 points). source
- Income from continuing operations for the three months ended September 30, 2026 was $2,199 million, a 26.1% increase versus the prior-year period. source
- Total reportable segment profit for the three months ended September 30, 2026: $4,209 million. source
- Operating (non-GAAP) earnings from continuing operations for the three months ended September 30, 2026 were $2,812 million, an 11.7% increase versus the prior-year period; diluted operating (non-GAAP) EPS was $2.95, up 11.3%. source
- Infrastructure segment profit for the three months ended September 30, 2026 was $715 million (implied from text), an increase of 10.9% with a segment profit margin of 19.3% (up 1.2 points). source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | positive | realized | +4.3% | Operating (non-GAAP) income from continuing operations for the first nine months of 2026 was $7.4 billion, an 11.1% increase versus the… |
| net_income | positive | realized | +2.7% | Income from continuing operations for the three months ended September 30, 2026 was $2,199 million, a 26.1% increase versus the prior-year… |
| net_income | positive | realized | +2.6% | Net income for the three months ended September 30, 2026 was $2,190 million, a 25.6% increase versus the prior-year period; diluted… |
| operating_income | positive | realized | +2.1% | Software segment profit for the three months ended September 30, 2026 was $2,734 million, up 15.2% year to year, with a segment profit… |
| margin | positive | realized | +2.1% | Software segment profit for the three months ended September 30, 2026 was $2,734 million, up 15.2% year to year, with a segment profit… |
| margin | positive | realized | +0.8% | Operating (non-GAAP) income from continuing operations for the first nine months of 2026 was $7.4 billion, an 11.1% increase versus the… |
| margin | positive | realized | +0.7% | Operating (non-GAAP) pre-tax income from continuing operations for the first nine months of 2026 was $8.7 billion, an increase of 9.4%… |