Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
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 (Diluted)
$1.28
+14.29% YoY
Gross Margin
56.2%
+1.0 pts YoY
Source: SEC XBRL
IBM reported Q1 FY2026 revenue of $15.92B, up 9.5% year over year. Operating cash flow was $5.17B, up 18.3% year over year. IBM's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 2.93 | 3.00 | Miss -2.3% |
| Mar 2026This filing | 1.91 | 1.82 | Beat +4.7% |
| Dec 2025 | 4.52 | 4.36 | Beat +3.6% |
| Sep 2025 | 2.65 | 2.47 | Beat +7.3% |
Adjusted (non-GAAP) EPS of $1.91 versus the $1.82 analyst consensus — a +4.7% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $1.28.
Compiled by AI from this SEC 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: 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: 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: 10-Q Income Statement
Operating cash flow surged 18.3% YoY to $5.17B, significantly outpacing net income growth of 15.3%, suggesting high-quality earnings and effective working capital management during the quarter.
Source: 10-Q Cash Flow Statement
Long-term debt stands at $57.7B with a debt-to-equity ratio of 3.74x, while the current ratio of 0.80x (current assets of $31.9B vs. current liabilities of $40.1B) indicates short-term liabilities exceed short-term assets, a structural characteristic common in IBM's financing model but worth monitoring.
Source: 10-Q Balance Sheet
Compiled by AI from this SEC filing · 1 high, 3 medium, 1 low
IBM 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: 10-Q Balance Sheet
IBM's current ratio of 0.80x reflects current liabilities of $40.1B exceeding current assets of $31.9B by over $8B, a deterioration driven by a 14.2% YoY increase in current liabilities alongside a 9.7% decline in current assets. While IBM has historically managed this through strong cash generation, it represents a near-term liquidity risk if operating cash flows were to weaken.
Source: 10-Q Balance Sheet
SG&A expenses of $5.09B and R&D of $2.17B together total $7.26B, representing a significant portion of revenue. Combined SG&A and R&D grew 4.2% and 11.4% respectively, and if revenue growth moderates, these cost structures could pressure operating margins meaningfully.
Source: 10-Q Income Statement
Cash and equivalents declined 2.0% YoY to $10.8B while investing cash outflows remained heavily negative at -$10.5B, suggesting ongoing large capital deployment through acquisitions or investments. Sustained heavy investing outflows without proportional returns could strain future liquidity.
Source: 10-Q Cash Flow Statement
IBM's ROA of 0.78% on a total asset base of $156.2B highlights relatively thin asset productivity, partly reflecting the large intangible and goodwill balances from acquisitions. If acquired assets fail to generate expected returns, impairment charges could negatively impact future earnings.
Source: 10-Q Balance Sheet / Key Ratios
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 15.92 $B | 14.54 $B | +9.46% |
Cost of Revenue $B | 6.97 $B | 6.51 $B | +7.04% |
Gross Profit $B | 8.95 $B | 8.03 $B | +11.44% |
Net Income $B | 1.22 $B | 1.06 $B | +15.26% |
EPS (Basic) $ | 1.30 $ | 1.14 $ | +14.04% |
EPS (Diluted) $ | 1.28 $ | 1.12 $ | +14.29% |
R&D Expense $B | 2.17 $B | 1.95 $B | +11.44% |
SG&A Expense $B | 5.09 $B | 4.89 $B | +4.15% |
Answers draw on this SEC filing and the data on this page
IBM’s Q2 FY2026 revenue grew 1.1% to $17.2B, but an IBM Z-related Infrastructure shortfall and lower gross margin contributed to a 1.3% decline in net income to $2.2B. Source: 10-Q Item 2 MD&A, pp.46-47.
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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