By By John Kim
Publication Date: 2026-10-21 01:45:00
IBM’s third-quarter results on Oct. 21 will test whether software growth and demand for AI services can strengthen revenue after an IBM Z revenue drop and delayed deals weighed on the second quarter.
Revenue rose 1% to $17.2 billion in the second quarter. Software revenue increased 5% to $7.8 billion, but Transaction Processing revenue fell 8%. Infrastructure revenue declined 7% as IBM Z revenue dropped 42%. The z17 launch cycle remained ahead of prior cycles overall despite the quarterly decline.
The results will show how IBM’s businesses performed after that uneven quarter. Software annual recurring revenue, a measure of revenue from continuing subscriptions and contracts, reached $24.6 billion in the second quarter, up 8% from a year earlier. That growth stood alongside the decline in IBM Z revenue and the weaker Transaction Processing result.
Generative AI accounted for about 50% of consulting signings in the second quarter and more than 30% of the consulting backlog. Those…
