IBM · 10-Q · 2026Q3 · Full report

Software Product Demand

INTERNATIONAL BUSINESS MACHINES CORP · 2026-10-22 · Importance 43 · Surprise 32

Software revenue increased 8.2% year over year in the third quarter and 8.1% in the first nine months of 2026, supported by strong new business, pipeline closures and an approximately 80% recurring-revenue base. Hybrid Cloud revenue grew 10.6% in the quarter, with OpenShift annual recurring revenue reaching approximately $2.4 billion. Data revenue grew 19.1%, driven by strong performance from Confluent, while Transaction Processing grew 9.3% on demand for mission-critical software. Automation revenue declined 3.3% in the quarter, reflecting a strong prior-year comparison partly offset by growth from HashiCorp.

Key facts

• The company stated that its high-value recurring revenue base is approximately 80% of Software revenue, with the remaining 20% transactional in nature. source