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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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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
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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.
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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
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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.
View original content to download multimedia:https://www.prnewswire.com/news-releases/ibm-releases-second-quarter-results-302832559.html
SOURCE IBM
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