IBM · 10-Q · 2026Q3 · Full report
Operating Expense Trends
INTERNATIONAL BUSINESS MACHINES CORP · 2026-10-22 · Importance 49 · Surprise 32 · No source text
Third-quarter total expense and other income increased 4.1% to $7.2 billion, driven by portfolio innovation investments and higher non-operating retirement-related costs, partly offset by productivity savings and currency effects. Nine-month total expense increased 4.8% to $22.2 billion, while operating expense excluding non-operating items increased 3.0% to $20.7 billion. Third-quarter SG&A decreased 2.7% to $4.6 billion and operating SG&A decreased 4.6% to $4.2 billion, primarily because of productivity and operational transformation actions. Nine-month SG&A was essentially flat at $14.7 billion, as productivity savings offset higher acquired-business expenses, amortization, acquisition-related charges, and currency effects.
Key facts
- At September 30, 2026, total gross carrying amount of intangible assets: $26,357 million; accumulated amortization: $(12,754) million; net carrying amount: $13,603 million. source
- The net carrying amount of intangible assets increased $2,211 million during the first nine months of 2026. source
- Total expense and other (income) for the three months ended September 30, 2026 was $7,217 million, an increase of 4.1% versus the prior-year period; operating (non-GAAP) expense and other (income) was $6,708 million, up 2.3%. source
- Total expense and other (income) for the nine months ended September 30, 2026 was $22,208 million, an increase of 4.8% versus the prior-year period; operating (non-GAAP) expense and other (income) was $20,669 million, up 3.0%. source
- At December 31, 2025, total gross carrying amount of intangible assets: $22,218 million; accumulated amortization: $(10,827) million; net carrying amount: $11,391 million. source
- Total SG&A expense for the nine months ended September 30, 2026 was $14,691 million, up 0.2% versus the prior-year period; operating (non-GAAP) SG&A was $13,435 million, a 1.3% decrease year to year. source
- Aggregate intangible asset amortization expense for the nine months ended September 30, 2026: $2,363 million. source
- Total selling, general and administrative expense for the three months ended September 30, 2026 was $4,620 million, a decrease of 2.7% versus the prior-year period; operating (non-GAAP) SG&A was $4,193 million, a 4.6% decrease. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | committed | -12.4% | Total unrecognized compensation cost related to non-vested awards at September 30, 2026: $2.5 billion and is expected to be recognized… |
| operating_income | negative | realized | -6.0% | Total expense and other (income) for the nine months ended September 30, 2026 was $22,208 million, an increase of 4.8% versus the… |
| operating_income | negative | realized | -3.5% | Total expense and other (income) for the nine months ended September 30, 2026 was $22,208 million, an increase of 4.8% versus the… |
| operating_income | negative | realized | -1.7% | Total expense and other (income) for the three months ended September 30, 2026 was $7,217 million, an increase of 4.1% versus the… |
| assets | positive | realized | +1.4% | The net carrying amount of intangible assets increased $2,211 million during the first nine months of 2026. |
| operating_income | positive | realized | +1.2% | Total selling, general and administrative expense for the three months ended September 30, 2026 was $4,620 million, a decrease of 2.7%… |
| operating_income | positive | realized | +1.0% | Total SG&A expense for the nine months ended September 30, 2026 was $14,691 million, up 0.2% versus the prior-year period; operating… |
| operating_income | negative | realized | -0.9% | Total expense and other (income) for the three months ended September 30, 2026 was $7,217 million, an increase of 4.1% versus the… |
| operating_income | positive | realized | +0.8% | Total selling, general and administrative expense for the three months ended September 30, 2026 was $4,620 million, a decrease of 2.7%… |
| operating_income | negative | realized | -0.2% | Total SG&A expense for the nine months ended September 30, 2026 was $14,691 million, up 0.2% versus the prior-year period; operating… |
| operating_income | negative | realized | — | Aggregate intangible asset amortization expense for the nine months ended September 30, 2026: $2,363 million. |