AI Takeaway
IBM delivered strong Q1 2026 results with revenue of $15.9B (+9.5% YoY) and net income of $1.2B (+15.3% YoY), driven by gross margin expansion to 56.2% and robust operating cash flow growth of 18.3%.
Revenue
$15.92B
++9.46% YoY
EPS (Basic)
$1.30
++14.04% YoY
Gross Margin
56.2%
++1.00% YoY
Filed · Source: SEC EDGAR 10-Q filing
IBM posted Q1 2026 revenue of $15.92B, up 9.5% year-over-year from $14.54B, reflecting broad-based demand across its business segments and continued momentum in hybrid cloud and AI-related offerings.
Source: Source: 10-Q Income Statement
Gross profit rose 11.4% YoY to $8.95B, pushing gross margin to 56.2% from 55.2% in Q1 2025, indicating IBM is improving the profitability mix of its revenue base and managing cost of revenue growth (7.0%) below revenue growth (9.5%).
Source: Source: 10-Q Income Statement
R&D expense increased 11.4% YoY to $2.17B, outpacing revenue growth, signaling IBM's continued commitment to investing in next-generation technologies including AI and quantum computing to sustain long-term competitiveness.
Source: Source: 10-Q Income Statement
2 more insights available
Upgrade to unlockIBM carries $57.7B in long-term debt and a debt-to-equity ratio of 3.74x, leaving the company exposed to rising interest rate environments and refinancing risk. The elevated leverage limits financial flexibility and could constrain future capital allocation decisions including acquisitions and shareholder returns.
Source: Source: 10-Q Balance Sheet
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $1.91 versus the $1.82 analyst consensus — a +4.7% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $15.92B | $14.54B | +9.46% |
Cost of Revenue | $6.97B | $6.51B | +7.04% |
Gross Profit | $8.95B | $8.03B | +11.44% |
Net Income | $1.22B | $1.05B | +15.26% |
EPS (Basic) | $1.30 | $1.14 | +14.04% |
EPS (Diluted) | $1.28 | $1.12 | +14.29% |
R&D Expense | $2.17B | $1.95B | +11.44% |
SG&A Expense | $5.09B | $4.89B | +4.15% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $156.23B | $145.67B | +7.25% |
Current Assets | $31.91B | $35.34B | -9.68% |
Total Liabilities | $123.17B | $118.71B | +3.76% |
Current Liabilities | $40.1B | $35.11B | +14.23% |
Stockholders' Equity | $32.97B | $26.88B | +22.67% |
Cash & Equivalents | $10.82B | $11.04B | -1.96% |
Long-Term Debt | $57.71B | $56.37B | +2.37% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $5.17B | $4.37B | +18.28% |
Investing Cash Flow | $-10.49B | $-12.98B | +19.18% |
Financing Cash Flow | $2.72B | $5.44B | -50.05% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 56.2% | 55.2% | +1.00% |
Net Margin | 7.6% | — | — |
ROE | 3.7% | — | — |
ROA | 0.8% | — | — |
Current Ratio | $0.796 | — | — |
Debt to Equity | $3.735 | — | — |
IBM delivered strong FY2025 results with revenue growing 7.6% to $67.5B and net income surging 75.9% to $10.6B, driven by gross margin expansion to 58.2% and likely boosted by the HashiCorp acquisition, though elevated debt and a current ratio below 1.0 warrant monitoring.
IBM delivered a strong Q1 2024 with net income surging 73.1% YoY to $1.6B on modest 1.5% revenue growth to $14.5B, driven by improved margins and significantly higher operating cash flow.
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IBM reported Q1 2026 revenue of $15.92B, up 9.5% year-over-year, and net income of $1.22B, up 15.3% YoY. Diluted EPS came in at $1.28, compared to $1.12 in Q1 2025, reflecting broad-based growth and margin improvement.
The key highlights were revenue growth of 9.5% to $15.92B, gross margin expansion to 56.2%, and operating cash flow growth of 18.3% to $5.17B. IBM also increased R&D spending by 11.4% to $2.17B, signaling continued investment in AI and next-generation technologies.
IBM's financial health shows strong cash generation with $5.17B in operating cash flow, but the balance sheet carries elevated leverage with $57.7B in long-term debt and a debt-to-equity ratio of 3.74x. The current ratio of 0.80x indicates current liabilities exceed current assets, which is a structural feature of IBM's model that requires sustained cash flow to manage.
Yes, IBM's gross margin improved to 56.2% in Q1 2026 from 55.2% in Q1 2025, a gain of approximately 100 basis points. Net margin also stood at 7.6%, and net income growth of 15.3% outpaced revenue growth of 9.5%, indicating positive operating leverage.
Based on the financial data, key risks include IBM's high debt load of $57.7B (debt-to-equity of 3.74x), a negative working capital position with current liabilities exceeding current assets by over $8B, and heavy investing cash outflows of -$10.49B. Rising R&D and SG&A costs could also pressure operating margins if revenue growth slows.