v3.26.1
Segments
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
Segments Segments:
The following tables reflect the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company. Performance measurement is based on segment profit. The chief operating decision maker (CODM) considers budget-to-actual results of segment profit, both when evaluating the performance of and allocating resources to each of the segments as well as in developing certain compensation recommendations. The CODM reviews segment revenue, cost and profit information related to each segment, which is included in the tables below, but does not regularly review total assets by segment and therefore, such information is not presented.
Management System Segment View
($ in millions)
SoftwareConsultingInfrastructureFinancingTotal
Segments
For the three months ended March 31, 2026:
     
Revenue$7,052 $5,272 $3,326 $220 $15,870 
Segment cost1,216 3,822 1,435 124 6,598 
Other expenses and (income) (1)
3,737 891 1,366 (23)5,971 
Segment profit
$2,099 $558 $524 $118 $3,300 
Revenue year-to-year change11.3 %4.0 %15.3 %14.8 %9.6 %
Segment profit year-to-year change13.7 %(0.1)%111.7 %72.6 %21.3 %
Segment profit margin29.8 %10.6 %15.8 %53.8 %20.8 %
For the three months ended March 31, 2025:
     
Revenue$6,336 $5,068 $2,886 $191 $14,480 
Segment cost1,042 3,686 1,363 104 6,195 
Other expenses and (income) (1)
3,447 823 1,275 19 5,564 
Segment profit
$1,847 $558 $248 $69 $2,721 
Segment profit margin29.1 %11.0 %8.6 %35.8 %18.8 %
(1)Other expenses and (income) by segment primarily includes:
Software – Selling, general and administrative (SG&A) expense, Research and development (R&D) expense
Consulting – SG&A expense
Infrastructure – R&D expense, SG&A expense, Other expense, Intellectual property and custom development income
Financing – Intercompany financing net other income which reflects IBM Z product cycle dynamics, SG&A expense
Reconciliations to IBM as Reported:
($ in millions)
  
For the three months ended March 31:20262025
Revenue:  
Total reportable segments$15,870 $14,480 
Other revenue (1)
48 61 
Total revenue from continuing operations$15,917 $14,541 
Pre-tax income from continuing operations:  
Total reportable segment profit
$3,300 $2,721 
Amortization of acquired intangible assets(570)(495)
Acquisition-related charges(76)(63)
Non-operating retirement-related (costs)/income
(96)(23)
Stock-based compensation (2)
(503)(401)
Net interest excluding the Financing segment (338)(265)
Workforce rebalancing charges (2)
(336)(316)
Other‒divested businesses
(2)(7)
Unallocated corporate amounts and other
9 5 
Total pre-tax income from continuing operations
$1,387 $1,158 
(1)Includes reductions in revenue for the estimated residual value less related unearned income on sales-type leases, which reflects the z17 launch in June 2025. Refer to note A, "Significant Accounting Policies," in the company's 2025 Annual Report for additional information.
(2)Excludes certain acquisition-related charges.
Other Reportable Segment Items
($ in millions)
SoftwareConsultingInfrastructureFinancingTotal
Segments
For the three months ended March 31, 2026:
Depreciation (1) /amortization of non-acquired intangibles
$134 $21 $278 $1 $433 
Interest Income— — — 205 205 
Interest Expense— — — 111 111 
For the three months ended March 31, 2025:
Depreciation (1) /amortization of non-acquired intangibles
$121 $21 $266 $1 $409 
Interest Income— — — 176 176 
Interest Expense— — — 90 90 
(1)Where several segments share leased or owned assets, landlord ownership of these assets is assigned to one segment. Depreciation expense in this table is presented consistently with this ownership view. However, from a segment profit perspective, depreciation expense is allocated to each user segment. Therefore, there is no precise correlation between the depreciation expense presented above and segment profit.
Immaterial Items
The resulting gains and (losses) from equity method investments that are attributable to the segments did not have a material effect on the financial results of the segments.