IBM's third-quarter revenue rose 5% to $17.1 billion, or 6% at constant currency. In its earnings release, IBM reported operating (non-GAAP) EPS of $2.95 and raised its full-year free cash flow outlook.
The numbers
Q3 2026 revenue by segment, with growth against a year earlier.
| Segment | Revenue | Growth | Constant currency |
|---|---|---|---|
| Software | $7.8B | +8% | +9% |
| Consulting | $5.3B | flat | +2% |
| Infrastructure | $3.7B | +4% | +5% |
| Financing | $0.2B | -4% | n/a |
| Total | $17.1B | +5% | +6% |
What drove growth
Software supplied most of the increase, growing 8% to $7.8 billion, or 9% at constant currency. Within it, Red Hat grew 11% and data grew 19%.
Infrastructure rose 4%, but its parts moved in opposite directions. IBM Z fell 20%, while distributed infrastructure grew 31%. Consulting was flat as reported and grew 2% at constant currency. Financing slipped 4% on a small base of $0.2 billion.
What lifted net income
GAAP net income was $2.19 billion, up 26%. GAAP diluted EPS from continuing operations was $2.31.
Most of that rise comes from tax, not from operations. IBM's tax rate was 11.9%, against 28.2% a year earlier.
Cash and outlook
Free cash flow was $3.03 billion, against $2.37 billion in Q3 2025. For the first nine months it was $7.8 billion, up $0.6 billion.
IBM spent $11.4 billion on acquisitions so far this year, and debt stood at $63.8 billion.
For 2026, IBM kept its constant-currency revenue growth outlook at 4% to 5%. It now expects free cash flow to rise by more than $1 billion year over year, up from its previous outlook.
In the release, CEO Arvind Krishna said clients are deploying what IBM calls "Super Intelligence".
The quarterly dividend is $1.69 per share, payable Dec. 10 to holders of record on Nov. 10. Figures also appear in IBM's 8-K exhibit.
Related reading: Tesla's Q3 profit fell 43% on flat revenue as costs and capex surged and Meta's Q3 2026 results.
