Revenue Recognition

3 Months Ended

Mar. 31, 2026

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition:

Disaggregation of Revenue

The following tables provide details of revenue by major products/service offerings and revenue by geography.

Revenue by Major Products/Service Offerings

($ in millions)
For the three months ended March 31:	2026		2025
Hybrid Cloud	$	1,905	$	1,687
Automation	1,741		1,584
Data	1,474		1,236
Transaction Processing	1,932		1,828
Total Software	$	7,052	$	6,336
Strategy and Technology	2,896		2,782
Intelligent Operations	2,376		2,286
Total Consulting	$	5,272	$	5,068
Hybrid Infrastructure	2,108		1,646
Infrastructure Support	1,218		1,240
Total Infrastructure	$	3,326	$	2,886
Financing (1)	220		191
Other (2)	48		61
Total revenue	$	15,917	$	14,541

(1)Contains lease and loan financing arrangements which are not subject to the guidance on revenue from contracts with customers.

(2)Includes reductions in revenue for 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.

Revenue by Geography

($ in millions)
For the three months ended March 31:	2026		2025
Americas	$	7,861	$	7,206
Europe/Middle East/Africa	5,242		4,552
Asia Pacific	2,814		2,783
Total	$	15,917	$	14,541

Remaining Performance Obligations

The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed, such as certain as-a-service, governmental, term software license and services offerings. The customer is not considered committed when they are able to terminate for convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the company does not include contracts that have an original duration of one year or less. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.

At March 31, 2026, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was approximately $69 billion. Approximately 69 percent of the amount is expected to be recognized as revenue in the subsequent two years, approximately 28 percent in the subsequent three to five years and the balance thereafter.

Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods

For the three months ended March 31, 2026, revenue recognized for performance obligations satisfied or partially satisfied in prior periods was not material.

Reconciliation of Contract Balances

The following table provides information about notes and accounts receivable — trade, contract assets and deferred income balances.

($ in millions)	At March 31, 2026		At December 31, 2025
Notes and accounts receivable — trade (net of allowances of $102 in 2026 and $99 in 2025)	$	6,493	$	8,112
Contract assets (1)	$	551	$	482
Deferred income (current)	$	17,034	$	16,101
Deferred income (noncurrent)	$	4,195	$	4,271

(1)Included within prepaid expenses and other current assets in the Consolidated Balance Sheet.

The amount of revenue recognized during the three months ended March 31, 2026 that was included within the deferred income balance at December 31, 2025 was $4.9 billion and was primarily related to software and services.

The following table provides roll forwards of the notes and accounts receivable — trade allowance for expected credit losses for the three months ended March 31, 2026 and the year ended December 31, 2025.

($ in millions)
January 1, 2026	Additions / (Releases)	Write-offs (1)	Foreign currency and other	March 31, 2026
$99	$6	$(3)	$0	$102

January 1, 2025	Additions / (Releases)	Write-offs (1)	Foreign currency and other	December 31, 2025
$114	$5	$(31)	$10	$99

(1)The majority of the write-offs during the period related to receivables which had been previously reserved.

The contract assets allowance for expected credit losses was not material in any of the periods presented.