Acquisitions & Divestitures

3 Months Ended

Mar. 31, 2026

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions & Divestitures

Acquisitions & Divestitures:

Acquisitions

Confluent, Inc. (Confluent) — On March 17, 2026, the company completed the acquisition of all of the outstanding shares of Confluent. IBM's and Confluent's combined portfolios enable enterprises to deploy generative and agentic AI better and faster by providing trusted communication and data flow between environments, applications and APIs.

The following table reflects the purchase price and the resulting purchase price allocation as of March 31, 2026.

($ in millions)	Amortization Life (in years)	Confluent
Current assets (1)		$	2,483
Property, plant and equipment/noncurrent assets		95
Intangible assets:
Goodwill	N/A	7,225
Client relationships	12	2,122
Completed technology	7	1,590
Trademarks	5	122
Total assets acquired		$	13,638
Current liabilities (2)		1,798
Noncurrent liabilities		249
Total liabilities assumed		$	2,047
Total purchase price		$	11,590

(1)Includes $1,165 million of cash and cash equivalents and $917 million of short-term marketable securities acquired from Confluent at the acquisition date. Short-term marketable securities were sold by March 31, 2026.

(2)Includes $1,100 million of short-term debt related to convertible notes acquired from Confluent that were recognized at fair value on the acquisition date. The notes were settled on April 15, 2026.

N/A – not applicable

The goodwill generated is primarily attributable to the assembled workforce and the expected synergies from the integration of the acquired business. The identified intangible assets are amortized on a straight-line basis over their useful life which approximates the economic life of the assets.

The valuation of the assets acquired and liabilities assumed is subject to revision. If additional information becomes available, the company may further revise the purchase price allocation as soon as practical, but no later than one year from the acquisition date. Any such revisions or changes may be material.

Confluent's shareholders on record immediately prior to the effective time on the closing date received $31 per share in cash, representing a total equity value of approximately $11.3 billion. Purchase consideration was paid primarily in cash and is reported in the Consolidated Statement of Cash Flows, net of acquired cash and cash equivalents. The following table reflects the consideration paid related to the acquisition.

($ in millions)	Total Consideration (1)
Cash paid for outstanding Confluent common stock	$	11,268
Cash paid for Confluent equity awards	269
Cash consideration	$	11,537
Fair value of stock-based compensation awards attributable to pre-acquisition services	53
Total consideration	$	11,590

(1)As part of the assets acquired, the company received $1,165 million of cash and cash equivalents and $917 million of short-term marketable securities from Confluent at the acquisition date.

Goodwill of $7,136 million and $89 million was assigned to the Software and Consulting segments, respectively. It is expected that 1 percent of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 9.7 years. In connection with the acquisition, the company issued and assumed 3.0 million stock awards with a fair value of $665 million. Refer to note 17, "Stock-Based Compensation," for additional information. The acquisition was integrated into the Software segment.