Why did IBM (NYSE:IBM) miss Wall Street’s revenue estimate?

IBM (NYSE:IBM) said customers shifted spending toward servers, storage and memory, while several large software and infrastructure transactions did not close on schedule. Preliminary revenue of US$17.2 billion was below the US$17.86 billion analyst estimate.

What are IBM’s (NYSE:IBM) preliminary second-quarter results?

IBM (NYSE:IBM) expects revenue of $17.2 billion and adjusted earnings of $2.93 per share. Analysts had forecast $17.86 billion in revenue and adjusted earnings of US$3.02 per share.

How did IBM’s (NYSE:IBM) business segments perform?

IBM (NYSE:IBM) reported preliminary software growth of 5%, flat consulting revenue and a 7% infrastructure decline. Red Hat revenue increased 11%, while distributed infrastructure revenue rose 37%.

What does the spending shift mean for IBM (NYSE:IBM)?

The spending shift means IBM (NYSE:IBM) customers prioritised supply-constrained servers, storage and memory over some traditional software purchases. IBM said this change contributed to delayed transactions and weaker software and infrastructure performance.

What happens next for IBM (NYSE:IBM)?

IBM (NYSE:IBM) will release its complete second-quarter results and discuss its full-year expectations on July 22, 2026. The company said it is introducing and accelerating measures intended to improve future execution.

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IBM forecasts $17.2 billion second-quarter revenue

Written by Brie CarterPublished Jul 14, 2026, 11:56 AM

IBM expects preliminary second-quarter revenue of $17.2 billion, below Wall Street’s $17.86 billion estimate.
IBM shares fell as much as 17% and were down about 14% at $249.78 in later premarket trading.
IBM said it is accelerating corrective measures after several large software and infrastructure transactions missed expected closing dates.

IBM (NYSE:IBM) expects preliminary second-quarter revenue of $17.2 billion, up 1% but below analysts’ $17.86 billion estimate.

Expected adjusted earnings of $2.93 per share also missed the $3.02 Wall Street estimate by $0.09.

Software revenue increased 5%, consulting revenue was unchanged and infrastructure revenue declined 7%, although IBM said its final results could differ slightly.

Following the announcement, IBM's share price was down about 14% at $249.78 in premarket trading after falling as much as 17%.

IBM said customers redirected capital spending toward servers, storage and memory, while distributed infrastructure revenue rose 37% and ended the quarter with an approximately $500 million backlog.

Red Hat revenue increased 11%, while IBM said it will outline corrective actions and its full-year expectations during its July 22 earnings call.

IBM forecasts $17.2 billion second-quarter revenue

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