IBM Q2 revenue growth slows to 1.1% as late-quarter client spending shifts to infrastructure

Filed July 23, 2026 · Period ending June 30, 2026 · Compared to 10-Q Jul 24, 2025 · ~2 min read

Key Changes

• high

  Q2 2026 revenue grew just 1.1% vs 7.7% in Q2 2025, missing expectations as numerous large Software and IBM Z deals failed to close in late June when clients redirected budgets toward supply-constrained servers, storage, and memory ahead of expected price increases.

  MD&A: Q2 2026 revenue shortfall verify on EDGAR →
• high

  Software revenue growth nearly halved to 5.1% (vs 9.6% prior year) as Transaction Processing revenue declined 8.1% (vs 0.6% growth prior year), driven by the IBM Z shortfall. Management notes 80% of Software revenue is recurring and grew healthily, framing the issue as a timing dynamic.

  MD&A: Software and Transaction Processing verify on EDGAR →
• high

  Distributed Infrastructure revenue surged 37%, the strongest quarter on record, as clients secured supply-constrained infrastructure. This could not offset the Software and IBM Z shortfalls, and Infrastructure segment revenue swung from 13.6% growth to a 7.4% decline.

  MD&A: Infrastructure revenue verify on EDGAR →