Segments (Tables)

3 Months Ended

Mar. 31, 2026

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)	Software			Consulting			Infrastructure			Financing			Total Segments
For the three months ended March 31, 2026:
Revenue	$	7,052		$	5,272		$	3,326		$	220		$	15,870
Segment cost	1,216			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 change	11.3		%	4.0		%	15.3		%	14.8		%	9.6		%
Segment profit year-to-year change	13.7		%	(0.1)		%	111.7		%	72.6		%	21.3		%
Segment profit margin	29.8		%	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 cost	1,042			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 margin	29.1		%	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

Reconciliation of segment revenue and profit to IBM as reported

Reconciliations to IBM as Reported:


($ in millions)
For the three months ended March 31:	2026		2025
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)	Software		Consulting		Infrastructure		Financing		Total 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.