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Stanford, MIT, Carnegie Mellon Lead First-Ever Benchmark of AI Production Capacity Across 50 Global Universities – New 5W AI Communications Report

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5W AI Communications ranks universities on six equally weighted dimensions. Tier I set includes Stanford, MIT, Carnegie Mellon, UC Berkeley, Tsinghua, University of Toronto, Peking, and Princeton.

MIAMI, July 22, 2026 /PRNewswire/ — Stanford University, the Massachusetts Institute of Technology, and Carnegie Mellon University lead the first-ever benchmark of AI production capacity across 50 global universities, according to a report released today by 5W AI Communications. The Tier I set of eight universities is completed by the University of California, Berkeley; Tsinghua University; the University of Toronto; Peking University; and Princeton University. The full report is available at www.5wpr.com/research/ai-higher-education-index/.

The 5W AI Higher Education Index 2026 measures where AI is being produced at the university source. Six equally weighted dimensions — Frontier Lab Anchor Density, AI Research Output, AI Curriculum Depth, Founder and Capital Pipeline, Compute and Infrastructure, and modeled AI Citation Share — combine into a composite score on a 0–100 scale.

About the Report
The 5W AI Higher Education Index 2026 was produced by the 5W AI Communications research team over a four-month research window between February and May 2026. All sub-component weightings, three worked sample calculations, five-variant sensitivity checks, and confidence intervals are published in a dedicated methodology chapter.

The report is designed as a benchmark of one specific variable — AI production capacity — rather than a general university ranking. It measures the source-layer capacity of universities to produce frontier AI research, faculty, founders, and technical leadership.

Institutional endowment, undergraduate teaching quality, admissions selectivity, Nobel prize counts, athletic programs, and general research budget are explicitly outside the framework’s scope. Traditional rankings such as QS, Times Higher Education, and Shanghai Rankings measure institutional reputation across all disciplines; the 5W AI Higher Education Index is designed to complement those rankings, not replace them.

The Complete Ranking — 50 Universities

TIER I — Composite ≥ 78
1. Stanford University (USA) — composite 96.0
2. Massachusetts Institute of Technology (USA) — composite 94.7
3. Carnegie Mellon University (USA) — composite 91.3
4. University of California, Berkeley (USA) — composite 88.2
5. Tsinghua University (China) — composite 84.3
6. University of Toronto (Canada) — composite 82.3
7. Peking University (China) — composite 80.3
8. Princeton University (USA) — composite 79.2

TIER II — Composite 70 to 77.9
9. ETH Zurich (Switzerland) — composite 77.5
10. University of Oxford (UK) — composite 75.0
11. University of Cambridge (UK) — composite 74.5
12. University of Washington (USA) — composite 74.0
13. University of Illinois Urbana-Champaign (USA) — composite 72.5
14. Cornell University (USA) — composite 71.5
15. Georgia Tech (USA) — composite 71.0
16. California Institute of Technology (USA) — composite 70.0

TIER III — Composite < 70
17. Harvard University (USA) — composite 69.0
18. Columbia University (USA) — composite 68.0
19. Yale University (USA) — composite 67.0
20. Shanghai Jiao Tong University (China) — composite 66.5
21. National University of Singapore (Singapore) — composite 66.0
22. Hong Kong University of Science and Technology (Hong Kong) — composite 65.5
23. Nanyang Technological University (Singapore) — composite 64.5
24. KAIST (South Korea) — composite 64.0
25. Technion — Israel Institute of Technology (Israel) — composite 63.5
26. University of Michigan (USA) — composite 63.0
27. University of Texas at Austin (USA) — composite 62.5
28. Tel Aviv University (Israel) — composite 62.0
29. University of California, Los Angeles (USA) — composite 61.5
30. EPFL (Switzerland) — composite 61.0
31. University of Chicago (USA) — composite 59.5
32. University of Southern California (USA) — composite 58.5
33. New York University (USA) — composite 58.0
34. Duke University (USA) — composite 56.0
35. Purdue University (USA) — composite 55.0
36. University of Pennsylvania (USA) — composite 54.5
37. Northwestern University (USA) — composite 54.0
38. Vanderbilt University (USA) — composite 53.5
39. University of Wisconsin-Madison (USA) — composite 53.0
40. Technical University of Munich (Germany) — composite 52.5
41. Imperial College London (UK) — composite 52.0
42. Sorbonne / PSL (France) — composite 51.5
43. University of Edinburgh (UK) — composite 51.0
44. University of Waterloo (Canada) — composite 50.5
45. McGill / Mila (Canada) — composite 50.0
46. Seoul National University (South Korea) — composite 48.5
47. University of Tokyo (Japan) — composite 47.0
48. IIT Bombay (India) — composite 45.5
49. IIT Delhi (India) — composite 44.5
50. IISc Bangalore (India) — composite 43.0 

Stanford University — The Frontier Anchor
Stanford is the only university scoring in the top three on every one of the six dimensions. The Stanford AI Lab (SAIL) and the Institute for Human-Centered AI (HAI), co-directed by Fei-Fei Li, operate two of the largest concentrations of AI faculty at any US university. Christopher Manning, Andrew Ng, Percy Liang, Chelsea Finn, and Dan Boneh anchor a research bench that produces both foundational research and the technical alumni populating frontier AI companies. Stanford graduates include OpenAI chief executive Sam Altman and Nvidia chief executive Jensen Huang.

Massachusetts Institute of Technology — Institutional Commitment
MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL) is the largest AI research organization in the world by faculty count. The Stephen A. Schwarzman College of Computing, launched in 2019 with a US$1 billion commitment from Blackstone chairman Stephen Schwarzman, embedded AI into the broader institution’s operating structure. Regina Barzilay, Josh Tenenbaum, and Antonio Torralba anchor the current research bench. President Sally Kornbluth has positioned MIT as a reference institution on AI policy in the current cycle.

Carnegie Mellon University — The Deepest Faculty Bench
Carnegie Mellon operates the largest concentration of AI-active faculty in the world by headcount, spread across the Machine Learning Department, the Language Technologies Institute, the Robotics Institute, and the Human-Computer Interaction Institute. CMU launched the first bachelor’s degree in AI in the United States in 2018, three years ahead of every peer institution. The report finds CMU alumni populate the applied-AI staff of every major frontier lab.

UC Berkeley — The Open-Source Anchor
The Berkeley Artificial Intelligence Research Lab (BAIR), the RISE Lab, and the Sky Computing Lab produce much of the field’s most-cited work of the last five years. Pieter Abbeel, Trevor Darrell, Sergey Levine, and Stuart Russell anchor the current bench. The public-university funding structure creates a specific advantage in open-source AI infrastructure — TensorFlow’s early ties, PyTorch-adjacent research, and the reinforcement-learning frameworks now used across the industry all trace to Berkeley or its adjacent research community.

Tsinghua and Peking — The Chinese Frontier
Tsinghua University ranks fifth on the composite (84.3). Peking University ranks seventh (80.3). Tsinghua’s Institute for Interdisciplinary Information Sciences was founded in 2005 by Andrew Yao, the 2000 Turing Award recipient. Tsinghua faculty and alumni populate DeepSeek’s founding technical team, Zhipu AI’s leadership, and much of the research direction at Alibaba’s DAMO Academy. Peking University’s School of Intelligence Science and Technology anchors the second-largest concentration of AI research output in China. Both universities rank higher on Research and Compute than on Citation Share — a compression the report documents as attributable to English-language bias in Western AI engines.

University of Toronto — Origins of Modern Deep Learning
The University of Toronto, at rank 6 (composite 82.3), is the origin institution of the modern deep-learning revolution. Geoffrey Hinton — the 2018 Turing Award co-recipient with Yoshua Bengio and Yann LeCun — ran the lab that produced the 2012 ImageNet breakthrough. Ilya Sutskever, Alex Krizhevsky, and Ruslan Salakhutdinov emerged from that Toronto lab. Aidan Gomez, co-founder of Cohere, is a Toronto graduate. The Vector Institute, launched in Toronto in 2017 with initial funding of C$150 million, anchors the current ecosystem. The report finds Toronto’s per-capita AI production is the highest in the world outside the Bay Area.

Princeton University — The Ivy in Tier I
Princeton is the only Ivy League institution in Tier I on the composite (79.2). Dario Amodei, Anthropic’s chief executive, and Daniela Amodei, its president, both hold Princeton undergraduate degrees. Sanjeev Arora’s theoretical computer science group and the Center for Statistics and Machine Learning produce sustained frontier-relevant research. Princeton President Christopher L. Eisgruber has become one of the most-cited university leaders on AI policy in the current cycle.

Technion and Tel Aviv University — Israeli Anchor Density
Israel places two universities in the top 30. The Technion — Israel Institute of Technology ranks 25th on the composite (63.5). Tel Aviv University ranks 28th (62.0). Both maintain dense ties to Nvidia’s Israeli R&D operations in Yakum — the semiconductor company’s largest engineering site outside the United States — Intel’s Israeli operations in Kiryat Gat and Haifa, and the alumni pipeline from IDF Unit 8200. The report finds founder-per-capita yield at the Technion rivals Stanford’s.

“AI is being produced inside a small number of universities, and the concentration is structural,” said Ronn Torossian, Founder and Chairman, 5W AI Communications. “This benchmark exists so university leaders, prospective PhD candidates, corporate recruiters, and donors can see where AI is actually being built — with a reproducible methodology anyone can audit and reweight.”

Additional Findings from the Report

Stanford is the only university scoring in the top three on every one of the six dimensions — Frontier Lab Anchor Density, AI Research Output, AI Curriculum Depth, Founder and Capital Pipeline, Compute and Infrastructure, and modeled AI Citation Share.Stanford, MIT, Carnegie Mellon, and UC Berkeley collectively account for an estimated majority of frontier-lab founding technical leadership across OpenAI, Anthropic, Google DeepMind, xAI, and adjacent frontier labs.MIT’s CSAIL is the largest AI research organization in the world by faculty count. Carnegie Mellon operates the largest concentration of AI-active faculty in the world by headcount, distributed across four dedicated schools and institutes.Carnegie Mellon launched the first bachelor’s degree in AI in the United States in 2018 — three years ahead of every peer institution in the report’s universe.The University of Toronto ranks first in the world for per-capita AI production outside the Bay Area, reflecting the founder yield and research productivity of the Hinton lineage and the Vector Institute.China places two universities in Tier I — Tsinghua at rank 5 (composite 84.3) and Peking at rank 7 (composite 80.3). Under language-neutral citation-share normalization, both would rank higher.Princeton is the only Ivy League institution in Tier I, sustained by the Amodei alumni tie to Anthropic and the theoretical CS bench at the Center for Statistics and Machine Learning.Israel places two universities in the top 30 — the Technion at 25 and Tel Aviv University at 28. Founder-per-capita yield at the Technion rivals Stanford’s.The 50-university universe spans 13 countries and regions: the United States (25 universities), China (3), the United Kingdom (4), Canada (3), India (3), Singapore (2), Switzerland (2), South Korea (2), Israel (2), plus one each from France, Germany, Hong Kong, and Japan.The report publishes a five-variant sensitivity check showing how the ranking shifts under founder-weighted, research-weighted, language-neutral citation, and compute-weighted composite formulations.

The Six Dimensions

Frontier Lab Anchor Density. Alumni and current-faculty presence at OpenAI (25%), Anthropic (20%), Google DeepMind (20%), xAI (10%), and others including Mistral, Cohere, DeepSeek, Inflection, and Sierra (25% combined). Sourced from Crunchbase and PitchBook.AI Research Output. Publications at NeurIPS, ICML, and ICLR (40%); ACL and EMNLP (20%); h-index of top 20 AI faculty (25%); AI-related patents (15%). Sourced from CSRankings.org (2018–2025 rolling window) and the Nature Index AI subject data.AI Curriculum Depth. Named AI degree program (30%); dedicated AI school or college (25%); GEO/LLMO in required curriculum (25%); cross-disciplinary integration across CS, business, communications, law, and medicine (20%).Founder and Capital Pipeline. Alumni founder count (40%); AI venture capital raised by alumni-founded companies (30%); AI unicorn count (20%); alumni CEO and senior-technical leadership at frontier labs (10%). Sourced from Crunchbase, PitchBook, and Dealroom.Compute and Infrastructure. On-campus GPU capacity (30%); hyperscaler partnerships across AWS, Azure, GCP, and Oracle (25%); federal AI research funding from NSF, DARPA, DOE, and national equivalents (25%); institutional AI governance maturity (20%).AI Citation Share (Modeled). Modeled share of mentions across 3,600 prompt-engine runs — 60 prompts, five AI engines, three runs per wave, four monthly waves between February and May 2026. Each engine weighted equally at 20% of the dimension.

Methodology
The composite score is the simple unweighted mean of the six dimension scores on a 0–100 scale. Tier boundaries are defined as Tier I (composite ≥ 78), Tier II (composite 70 to 77.9), and Tier III (composite < 70). Tiebreaks are resolved by Dimension 6 (Citation Share). Within each dimension, sub-component weightings are published and applied consistently across all 50 universities. Raw values (paper counts, founder counts, GPU capacity, etc.) are rank-ordered across the universe and mapped to 0–100 with logarithmic smoothing where the raw distribution is heavily skewed. The full methodology chapter is published in the report.

Data Sources and Freeze Dates
Research output is drawn from CSRankings.org (2018–2025 rolling window) and Nature Index AI subject rankings. Faculty h-index data is drawn from institutional bio pages and Google Scholar. Founder-pipeline data is drawn from Crunchbase, PitchBook, and Dealroom. Unicorn counts come from CB Insights. Federal AI funding is drawn from public awards data at NSF, DOE, and DARPA. Hyperscaler partnership data is drawn from Synergy Research and institutional disclosures. All institutional data was frozen as of May 15, 2026. Citation-share modeling ran between February and May 2026 across four monthly waves.

Confidence Intervals and Sensitivity Checks
Composite scores carry an approximate ±2.5 point uncertainty band at the 95% confidence level, driven primarily by Dimension 6 (Citation Share) modeling variance. The report notes that rank differences smaller than five composite points may not be statistically distinguishable, and that tier assignments are more reliable than exact positional rank within a tier. The report publishes a five-variant sensitivity check demonstrating what happens under founder-weighted, research-weighted, language-neutral citation, and compute-weighted composite formulations.

The 60-Prompt Universe
The modeled Citation Share dimension is drawn from 60 prompts distributed across six sub-categories:

General AI universities (10 prompts) — questions about the leading AI universities globally and by regionFaculty and Research (10 prompts) — questions about leading AI researchers, faculty, and research labsStudents and Careers (10 prompts) — questions about undergraduate, graduate, and career-track AI programsFounders and Alumni (10 prompts) — questions about the universities that produced AI founders and CEOsCurriculum and Degrees (10 prompts) — questions about AI courses, ethics programs, and degree structuresIndustry and Funding (10 prompts) — questions about AI research funding, hyperscaler partnerships, and applied specialization

Each prompt is run three times per engine per monthly wave, across four waves — producing 3,600 total prompt-engine executions. Prompt order is randomized within each engine session to control for context-window bias. The full 60-prompt list is published in the report’s methodology appendix.

About 5W AI Communications
5W is the AI Communications Firm, building brand authority across the platforms where decisions now happen — ChatGPT, Claude, Perplexity, Gemini, and Google AI Overviews — alongside earned media, digital, and influencer channels. 5W combines public relations, digital marketing, Generative Engine Optimization (GEO), and proprietary AI visibility research to help clients measure and grow their presence in AI-driven buyer research. Founded in 2003, 5W is recognized as a Top U.S. PR Agency by O’Dwyer’s, named Agency of the Year in the American Business Awards®, honored as a 2026 Top Place to Work in Communications by Ragan, and named to Digiday’s WorkLife Employer of the Year list. 5W serves clients across B2C sectors — Beauty & Fashion, Consumer Brands, Entertainment, Food & Beverage, Health & Wellness, Travel & Hospitality, Technology, and Nonprofit — and B2B specialties including Corporate Communications, Reputation Management, Public Affairs, Crisis Communications, and Digital Marketing across Social, Influencer, Paid Media, GEO, and SEO. Learn more at 5wpr.com.

Media Contact
press@5wpr.com

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Resideo To Release Second Quarter 2026 Financial Results on August 12, 2026

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SCOTTSDALE, Ariz., July 22, 2026 /PRNewswire/ — Resideo Technologies, Inc. (NYSE: REZI), a leading global manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions for residential and commercial end-markets, will release second quarter 2026 financial results after the close of the New York Stock Exchange on Wednesday, August 12, 2026. A webcast to discuss the results will be held on Wednesday, August 12, 2026, at 5:00 p.m. EDT.

Event: Resideo Second Quarter 2026 Financial Results Conference Call
Date: Wednesday, August 12, 2026
Time: 5:00 p.m. EDT / 2:00 p.m. PDT
Webcast link: REZI Q2’26 Call

About Resideo
Resideo is a leading global manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions for residential and commercial end-markets. We are a leader in the home heating, ventilation, and air conditioning controls markets, smoke and carbon monoxide detection home safety and fire suppression products markets, and security products markets. Our solutions and services can be found in over 150 million residential and commercial spaces globally, with tens of millions new devices sold annually. For more information about Resideo and our trusted, well-established brands including First Alert, Honeywell Home, BRK, Control4, and others, visit www.resideo.com.

Contacts:

Investors:

Media:

Christopher T. Lee

Garrett Terry

Global Head of Strategic Finance

Corporate Communications Manager

chris.lee@resideo.com

garrett.terry@resideo.com

 

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SOURCE Resideo Technologies, Inc.

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Synopsys Announces Earnings Release Date for Third Quarter Fiscal Year 2026

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Registration Now Open for September Investor Day

SUNNYVALE, Calif., July 22, 2026 /PRNewswire/ — Synopsys, Inc. (Nasdaq: SNPS) today announced it will report results for the third quarter fiscal year 2026 on Wednesday, August 26, 2026, after market close. The company will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to review its financial results and business outlook.

Financial and other statistical information to be discussed on this conference call will be available on the corporate website at www.investor.synopsys.com immediately before the call. A live webcast will also be available on this site. Participants should access the live webcast at least 10 minutes prior to the start of the call. A webcast replay will be available beginning August 26, 2026, at approximately 5:00 p.m. PT. The replay will be available until Synopsys announces its fourth quarter and fiscal year 2026 results.

The company will hold an Investor Day in New York City on September 30, 2026, featuring presentations and a question-and-answer session. Registration for in-person and virtual attendance is now available on the corporate website at www.investor.synopsys.com. 

About Synopsys

Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com

© 2026 Synopsys, Inc. All rights reserved. Synopsys, Ansys, the Synopsys and Ansys logos, and other Synopsys trademarks are available at https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or product names may be trademarks of their respective owners.

Investor Contact:
Christine Salvi-Sullivan
Synopsys, Inc.
(650) 584-1901

Editorial Contact:
Cara Walker
Synopsys, Inc.
650-584-5000
corp-pr@synopsys.com

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IBM RELEASES SECOND-QUARTER RESULTS

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Company provides updated full-year expectations

ARMONK, N.Y., July 22, 2026 /PRNewswire/ — IBM (NYSE: IBM) today announced second-quarter 2026 earnings results.

“We are confident in IBM’s strategy and portfolio, and in our ability to capture growth opportunities ahead. We fundamentally believe that we are in the early innings of a structural shift for business, and that our portfolio – across software, infrastructure, and consulting – is well-positioned to help our clients tap the value, and manage the challenges, of an AI-driven future,” said Arvind Krishna, IBM chairman, president and chief executive officer. “In addition, we are taking action to accelerate our revenue growth and profitability, driving productivity across the company with AI and automation, and heavily investing in commercializing innovation at speed and scale. We now expect constant currency revenue growth in the range of four-to-five percent, and we continue to expect free cash flow to increase by about $1 billion year-over-year for the full year.”

Full-Year 2026 Expectations

Revenue: The company now expects full-year constant currency revenue growth in the range of four-to-five percent. At current foreign exchange rates, currency is expected to be neutral to growth for the year
Free cash flow: The company continues to expect full-year free cash flow to increase by about $1 billion year-over-year

Operational Focus Areas

High-Growth Portfolio: Areas of IBM’s software business that help clients manage, deploy and build AI-ready solutions, like Red Hat, the watsonx portfolio, HashiCorp, and Confluent continue to deliver strong performance. Within Distributed Infrastructure, Power and Storage grew at a record pace in the second quarter, now having built up an order backlog of nearly $500 million. Together, these offerings closely map to where client demand is strongest. To capture these growth opportunities, IBM is accelerating changes to its go-to-market model by expanding sales coverage across thousands of additional clients where there is significant opportunity. As AI adoption moves from experimentation to enterprise-scale deployment, the company is also investing in more specialized technical and client-facing talent, including Forward Deployed Engineers.

Rapid Innovation at Scale: IBM is acting decisively to capture new opportunities as they arise. Lightwell, a new capability to address open source security vulnerabilities, leverages IBM and Red Hat’s trust within the open source community, unique approach to AI, and global scale. In the first two weeks of availability, Lightwell has already made more than 7,500 open source patches available to help clients secure vulnerabilities. Additionally, quantum computing continues to be an investment priority for the company. In May, with the U.S. Department of Commerce, IBM announced a letter of intent to build Anderon, the world’s first pure-play quantum wafer foundry. IBM will invest more than $10 billion in quantum over the next five years, and remains on track to deliver the first large-scale fault-tolerant quantum computer by 2029.

Productivity Enables Investment and Value: IBM is accelerating productivity by scaling software development leveraging AI, increasing the effectiveness of its sales and marketing organization, and optimizing its supply chain. These efforts help enhance margin and free cash flow, and strengthen the company’s ability to capture significant growth opportunities. The company now expects improved pre-tax income margin expansion for the full year.

“Although we faced revenue headwinds late in the second quarter, we continued to focus on the fundamentals of our business, including driving productivity, strengthening our portfolio, and generating free cash flow,” said James Kavanaugh, IBM senior vice president and chief financial officer. “In a quarter like this, it is critical that our financial and operational discipline remains strong and that we continue to invest for growth while returning value to shareholders through our dividend.”

 

SECOND-QUARTER 2026 INCOME STATEMENT SUMMARY

 

Revenue

 

Gross

Profit

 
 

Gross

Profit

Margin

 
 

Pre-tax

Income

 

Pre-tax

Income

Margin

 

Net

Income

 

Diluted

Earnings

Per Share

GAAP from

Continuing

Operations

$ 17.2 B

 
 

$  9.9  B

 
 

57.7

%

 

$  2.5  B

 
 

14.4

%

 

$  2.2  B

 
 

$   2.27

 

Year/Year

1

%

 

(1)

%

 

(1.0)

Pts

 

(5)

%

 

(0.9)

Pts

 

(1)

%

 

(2)

%

Operating

(Non-GAAP)

 
 
 

$ 10.2 B

 
 

59.4

%

 

$  3.3  B

 
 

19.2

%

 

$  2.8  B

 
 

$   2.93

 

Year/Year

 
 
 

0

%

 

(0.7)

Pts

 

3

%

 

0.3

Pts

 

5

%

 

5

%

Segment Results for Second Quarter

Software — revenues of $7.8 billion, up 5 percent:
– Hybrid Cloud (Red Hat) up 11 percent
– Automation up 4 percent, up 3 percent at constant currency
– Data up 19 percent, up 18 percent at constant currency
– Transaction Processing down 8 percent, down 9 percent at constant currency

Consulting — revenues of $5.3 billion, flat, up 1 percent at constant currency:
– Strategy and Technology flat, up 1 percent at constant currency
– Intelligent Operations flat, up 1 percent at constant currency

Infrastructure — revenues of $3.8 billion, down 7 percent:
– Hybrid Infrastructure down 10 percent
      — IBM Z down 42 percent
      — Distributed Infrastructure up 37 percent
– Infrastructure Support down 1 percent

Financing — revenues of $0.2 billion, up 12 percent, up 11 percent at constant currency

Cash Flow and Balance Sheet

In the second quarter, the company generated net cash from operating activities of $2.6 billion, up $0.9 billion year to year. IBM’s free cash flow was $2.5 billion, down $0.3 billion year to year. The company returned $1.6 billion to shareholders in dividends in the second quarter.

For the first six months of the year, the company generated net cash from operating activities of $7.8 billion, up $1.7 billion year to year. IBM’s free cash flow was $4.8 billion, flat year to year.

IBM ended the second quarter with $8.2 billion of cash, restricted cash and marketable securities, down $6.3 billion from year-end 2025. The company invested $10.5 billion in acquisitions this year. Debt, including IBM Financing debt of $13.0 billion, totaled $62.0 billion, up $0.7 billion year to date.

Dividend Declaration

The IBM board of directors approved a regular quarterly cash dividend of $1.69 per common share, to stockholders of record on August 10, 2026. With payment of the September 10, 2026 dividend, IBM will have paid consecutive quarterly dividends every year since 1916.

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to, the following: a downturn in economic environment and client spending budgets; a failure of the company’s innovation initiatives; damage to the company’s reputation; risks from investing in growth opportunities; failure of the company’s intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; the company’s ability to successfully manage acquisitions, alliances and divestitures, including integration challenges, failure to achieve objectives, the assumption or retention of liabilities and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the company’s failure to meet growth and productivity objectives; ineffective internal controls; the company’s use of accounting estimates; impairment of the company’s goodwill or amortizable intangible assets; the company’s ability to attract and retain key employees and its reliance on critical skills; impacts of relationships with critical suppliers; product and service quality issues; the development and use of AI, including the company’s increased AI solutions and use of AI technologies; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data protection considerations; adverse effects related to climate change and other environmental matters; tax matters; legal proceedings and investigatory risks; the company’s pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company’s Form 10-Qs, Form 10-K and in the company’s other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference.

Any forward-looking statement in this release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.

Presentation of Information in this Press Release

In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information, which management believes provides useful information to investors:

adjusting for currency (i.e., at constant currency);
presenting operating (non-GAAP) earnings per share amounts and related income statement items;
free cash flow;
net cash from operating activities excluding IBM Financing receivables;
adjusted EBITDA;
adjusted EBITDA margin.

The rationale for management’s use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.

Conference Call and Webcast

IBM’s regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. ET, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-2q26. Presentation charts will be available shortly before the Webcast.

Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).

Contact:      IBM
                    Tim Davidson, 914-844-7847
                    tfdavids@us.ibm.com 
    
                    Erin McElwee, 347-920-6825
                    erin.mcelwee@ibm.com

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

COMPARATIVE FINANCIAL RESULTS

(Unaudited; $ in millions except per share amounts)

 
 

Three Months Ended
June 30,

 
 

Six Months Ended
June 30,

 
 

2026

 
 

2025

 
 

2026

 
 

2025

 

REVENUE BY SEGMENT

 
 
 
 
 
 
 
 
 
 
 

Software

$        7,761

 
 

$        7,387

 
 

$       14,813

 
 

$       13,722

 

Consulting

5,327

 
 

5,314

 
 

10,599

 
 

10,382

 

Infrastructure

3,835

 
 

4,142

 
 

7,161

 
 

7,027

 

Financing

186

 
 

166

 
 

406

 
 

357

 

Other

52

 
 

(31)

 
 

100

 
 

30

 

TOTAL REVENUE

17,162

 
 

16,977

 
 

33,079

 
 

31,519

 
 
 
 
 
 
 
 
 
 
 
 
 

GROSS PROFIT

9,907

 
 

9,977

 
 

18,857

 
 

18,008

 
 
 
 
 
 
 
 
 
 
 
 
 

GROSS PROFIT MARGIN

 
 
 
 
 
 
 
 
 
 
 

Software

82.6

%

 

83.9

%

 

82.7

%

 

83.7

%

Consulting

28.9

%

 

27.5

%

 

28.2

%

 

27.4

%

Infrastructure

58.4

%

 

61.5

%

 

57.7

%

 

57.9

%

Financing

42.5

%

 

45.7

%

 

43.0

%

 

45.8

%

 
 
 
 
 
 
 
 
 
 
 
 

TOTAL GROSS PROFIT MARGIN

57.7

%

 

58.8

%

 

57.0

%

 

57.1

%

 
 
 
 
 
 
 
 
 
 
 
 

EXPENSE AND OTHER INCOME

 
 
 
 
 
 
 
 
 
 
 

SG&A

4,981

 
 

5,027

 
 

10,071

 
 

9,913

 

R&D

2,311

 
 

2,097

 
 

4,485

 
 

4,047

 

Intellectual property and custom development income

(166)

 
 

(215)

 
 

(338)

 
 

(468)

 

Other (income) and expense

(185)

 
 

(39)

 
 

(186)

 
 

(204)

 

Interest expense

486

 
 

510

 
 

959

 
 

965

 

TOTAL EXPENSE AND OTHER INCOME

7,428

 
 

7,380

 
 

14,991

 
 

14,253

 
 
 
 
 
 
 
 
 
 
 
 
 

INCOME FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES

2,479

 
 

2,597

 
 

3,866

 
 

3,755

 

Pre-tax income margin

14.4

%

 

15.3

%

 

11.7

%

 

11.9

%

Provision for/(benefit from) income taxes

313

 
 

404

 
 

484

 
 

507

 

Effective tax rate

12.6

%

 

15.5

%

 

12.5

%

 

13.5

%

 
 
 
 
 
 
 
 
 
 
 
 

INCOME FROM CONTINUING OPERATIONS

$        2,166

 
 

$        2,193

 
 

$         3,382

 
 

$         3,248

 
 
 
 
 
 
 
 
 
 
 
 
 

DISCONTINUED OPERATIONS

 
 
 
 
 
 
 
 
 
 
 

Income/(loss)  from discontinued operations, net of

taxes

(1)

 
 

1

 
 

(1)

 
 

1

 
 
 
 
 
 
 
 
 
 
 
 
 

NET INCOME

$        2,165

 
 

$        2,194

 
 

$         3,381

 
 

$         3,249

 
 
 
 
 
 
 
 
 
 
 
 
 

EARNINGS PER SHARE OF COMMON STOCK

 
 
 
 
 
 
 
 
 
 
 

Assuming dilution

 
 
 
 
 
 
 
 
 
 
 

Continuing operations

$          2.27

 
 

$          2.31

 
 

$           3.55

 
 

$           3.43

 

Discontinued operations

$          0.00

 
 

$          0.00

 
 

$           0.00

 
 

$           0.00

 

TOTAL

$          2.27

 
 

$          2.31

 
 

$           3.55

 
 

$           3.43

 
 
 
 
 
 
 
 
 
 
 
 
 

Basic

 
 
 
 
 
 
 
 
 
 
 

Continuing operations

$          2.30

 
 

$          2.36

 
 

$           3.60

 
 

$           3.49

 

Discontinued operations

$          0.00

 
 

$          0.00

 
 

$           0.00

 
 

$           0.00

 

TOTAL

$          2.30

 
 

$          2.36

 
 

$           3.60

 
 

$           3.50

 
 
 
 
 
 
 
 
 
 
 
 
 

WEIGHTED-AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING (M’s)

 
 
 
 
 
 
 
 
 
 
 

Assuming dilution

953.3

 
 

948.0

 
 

952.7

 
 

946.7

 

Basic

941.2

 
 

930.8

 
 

939.9

 
 

929.4

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

 

($ in millions)

 

At June 30,
2026

 

At December 31,
2025

ASSETS:

 
 
 
 

Current assets:

 
 
 
 

Cash and cash equivalents

 

$             7,172

 

$              13,587

Restricted cash

 

45

 

54

Marketable securities

 

960

 

830

Notes and accounts receivable – trade, net

 

6,044

 

8,112

Short-term financing receivables

 
 
 
 

  Held for investment, net

 

5,782

 

7,344

  Held for sale

 

874

 

1,131

Other accounts receivable, net

 

1,348

 

1,052

Inventories

 

1,746

 

1,220

Deferred costs

 

1,238

 

1,084

Prepaid expenses and other current assets

 

3,188

 

2,530

Total current assets

 

28,398

 

36,944

 
 
 
 
 

Property, plant and equipment, net

 

5,736

 

5,899

Operating right-of-use assets, net

 

3,068

 

3,129

Long-term financing receivables, net

 

7,126

 

7,708

Prepaid pension assets

 

7,645

 

7,544

Deferred costs

 

835

 

825

Deferred taxes

 

8,709

 

8,610

Goodwill

 

74,599

 

67,717

Intangibles, net

 

13,955

 

11,391

Investments and sundry assets

 

2,028

 

2,112

Total assets

 

$          152,099

 

$            151,880

 
 
 
 
 

LIABILITIES:

 
 
 
 

Current Liabilities:

 
 
 
 

Taxes

 

$              2,023

 

$                2,347

Short-term debt

 

5,775

 

6,424

Accounts payable

 

4,395

 

4,756

Compensation and benefits

 

3,364

 

4,114

Deferred income

 

16,160

 

16,101

Operating lease liabilities

 

770

 

800

Other liabilities

 

3,425

 

4,116

Total current liabilities

 

35,912

 

38,658

 
 
 
 
 

Long-term debt

 

56,212

 

54,836

Retirement-related obligations

 

8,603

 

9,018

Deferred income

 

4,272

 

4,271

Operating lease liabilities

 

2,515

 

2,547

Other liabilities

 

10,044

 

9,810

Total liabilities

 

117,558

 

119,139

 
 
 
 
 

EQUITY:

 
 
 
 

IBM stockholders’ equity:

 
 
 
 

Common stock

 

64,600

 

63,318

Retained earnings

 

155,937

 

155,648

Treasury stock – at cost

 

(170,934)

 

(170,605)

Accumulated other comprehensive income/(loss)

 

(15,151)

 

(15,713)

Total IBM stockholders’ equity

 

34,452

 

32,648

 
 
 
 
 

Noncontrolling interests

 

89

 

93

Total equity

 

34,541

 

32,740

 
 
 
 
 

Total liabilities and equity

 

$          152,099

 

$            151,880

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

STATEMENT OF CASH FLOWS

(Unaudited)

 
 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

($ in millions)

 

2026

 

2025 (1)

 

2026

 

2025 (1)

Cash flows from operating activities:

 
 
 
 
 
 
 
 

Net income

 

$     2,165

 

$     2,194

 

$     3,381

 

$     3,249

Adjustments to reconcile net income to cash provided by operating

activities:

 
 
 
 
 
 
 
 

Depreciation (2)

 

533

 

578

 

1,088

 

1,114

Amortization of capitalized software and acquired intangible assets

 

817

 

687

 

1,535

 

1,328

Stock-based compensation

 

498

 

441

 

1,004

 

842

Net (gain)/loss on divestitures, asset sales and other

 

(67)

 

(18)

 

(78)

 

(40)

Changes in operating assets and liabilities, net of

acquisitions/divestitures

 

(1,349)

 

(2,180)

 

836

 

(421)

Net cash provided by operating activities

 

2,597

 

1,701

 

7,766

 

6,071

 
 
 
 
 
 
 
 
 

Cash flows from investing activities:

 
 
 
 
 
 
 
 

Payments for property, plant and equipment

 

(229)

 

(209)

 

(461)

 

(454)

Proceeds from disposition of property, plant and equipment/other

 

23

 

37

 

31

 

111

Investment in software

 

(154)

 

(164)

 

(313)

 

(314)

Purchases of marketable securities and other investments

 

(1,259)

 

(1,255)

 

(2,871)

 

(7,740)

Proceeds from disposition of marketable securities and other

investments

 

1,152

 

4,036

 

3,123

 

4,962

Acquisition of businesses, net of cash acquired

 

(15)

 

(747)

 

(10,480)

 

(7,845)

Divestiture of businesses, net of cash transferred

 

 

 

1

 

(1)

Net cash provided by/(used in) investing activities

 

(481)

 

1,698

 

(10,970)

 

(11,281)

 
 
 
 
 
 
 
 
 

Cash flows from financing activities:

 
 
 
 
 
 
 
 

Proceeds from new debt

 

0

 

7

 

7,437

 

8,385

Payments to settle debt

 

(4,213)

 

(1,308)

 

(7,141)

 

(2,565)

Short-term borrowings/(repayments) less than 90 days – net

 

1

 

0

 

0

 

(29)

Common stock repurchases for tax withholdings

 

(116)

 

(153)

 

(465)

 

(437)

Proceeds from issuance of shares

 

240

 

186

 

418

 

401

Financing – other

 

(49)

 

(22)

 

(91)

 

(54)

Cash dividends paid

 

(1,590)

 

(1,563)

 

(3,166)

 

(3,112)

Net cash provided by/(used in) financing activities

 

(5,728)

 

(2,855)

 

(3,008)

 

2,589

 
 
 
 
 
 
 
 
 

Effect of exchange rate changes on cash, cash equivalents and restricted

cash

 

(35)

 

320

 

(211)

 

487

Net change in cash, cash equivalents and restricted cash

 

(3,646)

 

865

 

(6,423)

 

(2,134)

 
 
 
 
 
 
 
 
 

Cash, cash equivalents and restricted cash at the beginning of the period

 

10,864

 

11,161

 

13,640

 

14,160

Cash, cash equivalents and restricted cash at the end of the period

 

$     7,217

 

$   12,026

 

$     7,217

 

$   12,026

_____________________

(1) Reclassified to align with the Consolidated Statement of Cash Flows presentation.

(2) Includes operating lease right-of-use assets amortization.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

($ in billions)

 

2026

2025

Yr/Yr

 

2026

2025

Yr/Yr

Net income as reported (GAAP)

 

$   2.2

$   2.2

$  0.0

 

$   3.4

$   3.2

$  0.1

Less: income from discontinued operations, net of tax

 

0.0

0.0

0.0

 

0.0

0.0

0.0

Income from continuing operations

 

2.2

2.2

0.0

 

3.4

3.2

0.1

Provision for/(benefit from) income taxes from continuing ops.

 

0.3

0.4

(0.1)

 

0.5

0.5

0.0

Pre-tax income from continuing operations (GAAP)

 

2.5

2.6

(0.1)

 

3.9

3.8

0.1

Non-operating adjustments (before tax)

 
 
 
 
 
 
 
 

Acquisition-related charges (1)

 

0.7

0.6

0.1

 

1.4

1.1

0.2

Non-operating retirement-related costs/(income)

 

0.1

0.0

0.1

 

0.2

0.0

0.1

 
 
 
 
 
 
 
 
 

Operating (non-GAAP) pre-tax income from continuing ops.

 

3.3

3.2

0.1

 

5.4

4.9

0.5

 
 
 
 
 
 
 
 
 

Net interest expense

 

0.4

0.3

0.1

 

0.7

0.6

0.1

Depreciation/amortization of non-acquired intangible assets

 

0.7

0.7

0.0

 

1.4

1.4

0.0

Stock-based compensation

 

0.5

0.4

0.1

 

1.0

0.8

0.2

Workforce rebalancing charges

 

0.0

0.0

0.0

 

0.4

0.3

0.0

Corporate (gains) and charges (2)

 

(0.1)

0.0

(0.1)

 

(0.1)

0.0

(0.1)

 
 
 
 
 
 
 
 
 

Adjusted EBITDA

 

$   4.8

$   4.7

$  0.1

 

$   8.8

$   8.1

$  0.7

 
 
 
 
 
 
 
 
 

Revenue

 

$ 17.2

$ 17.0

1 %

 

$ 33.1

$ 31.5

5 %

GAAP net income margin

 

12.6 %

12.9 %

(0.3)pts

 

10.2 %

10.3 %

(0.1)pts

Adjusted EBITDA margin

 

27.8 %

27.6 %

0.2pts

 

26.5 %

25.7 %

0.8pts

___________________

(1) Primarily consists of amortization of acquired intangible assets.

(2) Primarily consists of unique corporate actions such as gains on divestitures and asset sales.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)

 
 
 

Three Months Ended June 30, 2026

 
 
 
 
 
 
 
 
 
 
 
 
 
 

($ in millions)

 

Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$          7,761

 
 

$          5,327

 
 

$           3,835

 
 

$           186

 

Segment profit

 

$          2,502

 
 

$             647

 
 

$              835

 
 

$           108

 

Segment profit margin

 

32.2

%

 

12.1

%

 

21.8

%

 

58.0

%

Change YTY revenue

 

5.1

%

 

0.2

%

 

(7.4)

%

 

12.2

%

Change YTY revenue – constant currency

 

4.6

%

 

1.1

%

 

(7.4)

%

 

11.3

%

 
 
 

Three Months Ended June 30, 2025

 
 
 
 
 
 
 
 
 
 
 
 
 
 

($ in millions)

 

 Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$          7,387

 
 

$          5,314

 
 

$           4,142

 
 

$           166

 

Segment profit

 

$          2,296

 
 

$             562

 
 

$              965

 
 

$           179

 

Segment profit margin

 

31.1

%

 

10.6

%

 

23.3

%

 

107.9

%

 
 
 

Six Months Ended June 30, 2026

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$        14,813

 
 

$        10,599

 
 

$           7,161

 
 

$           406

 

Segment Profit

 

$          4,601

 
 

$          1,205

 
 

$           1,360

 
 

$           226

 

Segment Profit Margin

 

31.1

%

 

11.4

%

 

19.0

%

 

55.8

%

Change YTY Revenue

 

7.9

%

 

2.1

%

 

1.9

%

 

13.6

%

Change YTY Revenue – Constant Currency

 

6.1

%

 

1.0

%

 

0.5

%

 

10.7

%

 
 
 

Six Months Ended June 30, 2025

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

 Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$        13,722

 
 

$        10,382

 
 

$           7,027

 
 

$           357

 

Segment Profit

 

$          4,143

 
 

$          1,121

 
 

$           1,213

 
 

$           248

 

Segment Profit Margin

 

30.2

%

 

10.8

%

 

17.3

%

 

69.3

%

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; $ in millions except per share amounts)

 
 

Three Months Ended June 30, 2026

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-

GAAP)

 

Gross profit

$  9,907

 
 

$                    287

 
 

$                    —

 
 

$         —

 
 

$       10,194

 

Gross profit margin

57.7

%

 

1.7

pts

 

pts

 

pts

 

59.4

%

SG&A

$  4,981

 
 

$                   (421)

 
 

$                    —

 
 

$         —

 
 

$         4,560

 

Other (income) & expense

(185)

 
 

1

 
 

(96)

 
 

 
 

(280)

 

Total expense & other (income)

7,428

 
 

(429)

 
 

(96)

 
 

 
 

6,903

 

Pre-tax income from continuing operations

2,479

 
 

716

 
 

96

 
 

 
 

3,290

 

Pre-tax income margin from continuing

operations

14.4

%

 

4.2

pts

 

0.6

pts

 

pts

 

19.2

%

Provision for/(benefit from) income taxes (3)

$     313

 
 

$                    167

 
 

$                   20

 
 

$          (2)

 
 

$            498

 

Effective tax rate

12.6

%

 

2.3

pts

 

0.2

pts

 

(0.1)

pts

 

15.1

%

Income from continuing operations

$  2,166

 
 

$                    548

 
 

$                   76

 
 

$           2

 
 

$         2,792

 

Income margin from continuing operations

12.6

%

 

3.2

pts

 

0.4

pts

 

0.0

pts

 

16.3

%

Diluted earnings per share: continuing

operations

$    2.27

 
 

$                   0.58

 
 

$                0.08

 
 

$      0.00

 
 

$           2.93

 
 
 

Three Months Ended June 30, 2025

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-

GAAP)

 

Gross profit

$  9,977

 
 

$                    225

 
 

$                    —

 
 

$         —

 
 

$       10,202

 

Gross profit margin

58.8

%

 

1.3

pts

 

pts

 

pts

 

60.1

%

SG&A

$  5,027

 
 

$                   (348)

 
 

$                    —

 
 

$         —

 
 

$         4,679

 

Other (income) & expense

(39)

 
 

(1)

 
 

(25)

 
 

 
 

(65)

 

Total expense & other (income)

7,380

 
 

(350)

 
 

(25)

 
 

 
 

7,005

 

Pre-tax income from continuing operations

2,597

 
 

575

 
 

25

 
 

 
 

3,197

 

Pre-tax income margin from continuing

operations

15.3

%

 

3.4

pts

 

0.1

pts

 

pts

 

18.8

%

Provision for/(benefit from) income taxes (3)

$     404

 
 

$                    132

 
 

$                     9

 
 

$         —

 
 

$            545

 

Effective tax rate

15.5

%

 

1.3

pts

 

0.2

pts

 

pts

 

17.0

%

Income from continuing operations

$  2,193

 
 

$                    443

 
 

$                   17

 
 

$         —

 
 

$         2,652

 

Income margin from continuing operations

12.9

%

 

2.6

pts

 

0.1

pts

 

pts

 

15.6

%

Diluted earnings per share: continuing

operations

$    2.31

 
 

$                   0.47

 
 

$                0.02

 
 

$         —

 
 

$           2.80

 

____________________

(1) Includes amortization of acquired intangible assets and acquisition-related charges such as in-process research and development, transaction

      costs, applicable retention, restructuring and related expenses, tax charges related to acquisition integration, and pre-closing charges, such as

      financing costs.

(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan

      curtailments/settlements and pension insolvency costs and other costs.

(3) The tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to

      the GAAP pre-tax income.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; $ in millions except per share amounts)

 
 
 
 

Six Months Ended June 30, 2026

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 

Tax

Reform

Impacts

 
 

Operating

(Non-

GAAP)

 

Gross Profit

$ 18,857

 
 

$                  524

 
 

$                    —

 
 

$         —

 
 

$   19,380

 

Gross Profit Margin

57.0

%

 

1.6

pts

 

pts

 

pts

 

58.6

%

SG&A

$ 10,071

 
 

$                (829)

 
 

$                    —

 
 

$         —

 
 

$     9,242

 

Other (Income) & Expense

(186)

 
 

1

 
 

(192)

 
 

 
 

(378)

 

Total Expense & Other (Income)

14,991

 
 

(838)

 
 

(192)

 
 

 
 

13,961

 

Pre-tax Income from Continuing Operations

3,866

 
 

1,361

 
 

192

 
 

 
 

5,419

 

Pre-tax Income Margin from Continuing

Operations

11.7

%

 

4.1

pts

 

0.6

pts

 

pts

 

16.4

%

Provision for/(Benefit from) Income Taxes (3)

$      484

 
 

$                 305

 
 

$                   23

 
 

$         (6)

 
 

$        806

 

Effective Tax Rate

12.5

%

 

2.5

pts

 

0.0

pts

 

(0.1)

pts

 

14.9

%

Income from Continuing Operations

$   3,382

 
 

$              1,056

 
 

$                 169

 
 

$           6

 
 

$     4,613

 

Income Margin from Continuing Operations

10.2

%

 

3.2

pts

 

0.5

pts

 

0.0

pts

 

13.9

%

Diluted Earnings Per Share: Continuing

Operations

$     3.55

 
 

$                1.11

 
 

$                0.18

 
 

$     0.01

 
 

$       4.84

 
 
 

Six Months Ended June 30, 2025

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-

GAAP)

 

Gross Profit

$ 18,008

 
 

$                  426

 
 

$                    —

 
 

$         —

 
 

$   18,434

 

Gross Profit Margin

57.1

%

 

1.4

pts

 

pts

 

pts

 

58.5

%

SG&A

$   9,913

 
 

$                (701)

 
 

$                    —

 
 

$         —

 
 

$     9,212

 

Other (Income) & Expense

(204)

 
 

(1)

 
 

(48)

 
 

 
 

(253)

 

Total Expense & Other (Income)

14,253

 
 

(706)

 
 

(48)

 
 

 
 

13,499

 

Pre-tax Income from Continuing Operations

3,755

 
 

1,132

 
 

48

 
 

 
 

4,935

 

Pre-tax Income Margin from Continuing

Operations

11.9

%

 

3.6

pts

 

0.2

pts

 

pts

 

15.7

%

Provision for/(Benefit from) Income Taxes (3)

$      507

 
 

$                 260

 
 

$                    (3)

 
 

$           2

 
 

$        766

 

Effective Tax Rate

13.5

%

 

2.2

pts

 

(0.2)

pts

 

0.0

pts

 

15.5

%

Income from Continuing Operations

$   3,248

 
 

$                 872

 
 

$                   51

 
 

$         (2)

 
 

$     4,169

 

Income Margin from Continuing Operations

10.3

%

 

2.8

pts

 

0.2

pts

 

0.0

pts

 

13.2

%

Diluted Earnings Per Share: Continuing

Operations

$     3.43

 
 

$                0.92

 
 

$                0.05

 
 

$     0.00

 
 

$       4.40

 

____________________

(1) Includes amortization of acquired intangible assets, and acquisition-related charges such as in-process research and development, transaction

      costs, applicable retention, restructuring and related expenses, tax charges related to acquisition integration, and pre-closing charges, such as

      financing costs.

(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan

      curtailments/settlements and pension insolvency costs and other costs.

(3) The tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to

      the GAAP pre-tax income.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO FREE CASH FLOW RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

($ in millions)

 

2026

 

2025

 

2026

 

2025

Net cash provided by operating activities per GAAP

 

$     2,597

 

$     1,701

 

$     7,766

 

$     6,071

 
 
 
 
 
 
 
 
 

Less: change in IBM Financing receivables

 

(302)

 

(1,480)

 

2,264

 

606

 
 
 
 
 
 
 
 
 

Net cash from operating activities excl. IBM Financing receivables

 

2,899

 

3,182

 

5,503

 

5,465

 
 
 
 
 
 
 
 
 

Capital expenditures, net

 

(359)

 

(336)

 

(743)

 

(657)

 
 
 
 
 
 
 
 
 

Free cash flow

 

$     2,540

 

$     2,845

 

$     4,760

 

$     4,808

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

($ in billions)

 

2026

 

2025

 

2026

 

2025

Net cash provided by operating activities

 

$   2.6

 

$   1.7

 

$   7.8

 

$   6.1

 
 
 
 
 
 
 
 
 

Add:

 
 
 
 
 
 
 
 

Net interest expense

 

0.4

 

0.3

 

0.7

 

0.6

Provision for/(benefit from) income taxes from continuing operations

 

0.3

 

0.4

 

0.5

 

0.5

 
 
 
 
 
 
 
 
 

Less change in:

 
 
 
 
 
 
 
 

Financing receivables

 

(0.3)

 

(1.5)

 

2.3

 

0.6

Net (gain)/loss on divestitures, assets sales and other (1)

 

(0.1)

 

0.0

 

(0.1)

 

0.0

Other assets and liabilities/other, net (1,2)

 

(1.1)

 

(0.7)

 

(2.0)

 

(1.5)

 
 
 
 
 
 
 
 
 

Adjusted EBITDA

 

$   4.8

 

$   4.7

 

$   8.8

 

$   8.1

 
 
 
 
 
 
 
 
 

Revenue

 

$ 17.2

 

$ 17.0

 

$ 33.1

 

$ 31.5

Net cash provided by operating activities margin

 

15.1 %

 

10.0 %

 

23.5 %

 

19.3 %

Adjusted EBITDA margin

 

27.8 %

 

27.6 %

 

26.5 %

 

25.7 %

____________________

(1) Reclassified to align with the presentation of similar line items in the Statement of Cash Flows.

(2) Mainly consists of Changes in operating assets and liabilities, net of acquisitions/divestitures in the Statement of Cash Flows chart,

      workforce rebalancing charges, non-operating impacts, and corporate (gains) and charges, less the change in Financing receivables.

 

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SOURCE IBM

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