# International Business Machines Corp. (IBM)

> International Business Machines (IBM) sells business software, technology consulting, computers, storage equipment, and financing.

- Exchange: New York Stock Exchange · Sector: Technology · Industry: Information Technology Services
- Headquarters: Armonk, New York, United States
- Founded: 1911
- SEC CIK: 0000051143 ([filings on EDGAR](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000051143))
- Full page: https://inspectstocks.com/stocks/ibm
- Data as of: price 2026-09-28; newest filing used 2026-07-23; latest fiscal period ended 2026-06-30

## Grade

**A+** on the growth-and-cash rubric, 5 of 5 checks passed.

| Check | Result | Now | Before |
| --- | --- | --- | --- |
| Revenue growing overall | passed | $69.1B | $60.5B |
| Revenue growing recently | passed | $69.1B | $67.5B |
| Free cash flow positive | passed | $13.8B |  |
| Free cash flow growing overall | passed | $13.8B | $10.9B |
| Free cash flow growing recently | passed | $13.8B | $12.1B |

Business quality (the + / − mark): 4 of 5 checks passed.

| Check | Result | Now | Before |
| --- | --- | --- | --- |
| Profitable | passed | 15.5% |  |
| Healthy profit margin | passed | 15.5% |  |
| Good return on equity | passed | 32.9% |  |
| Debt under control | failed | 2.21 |  |
| Turns sales into cash | passed | 20.0% |  |

How the grade works: the letter counts failed checks (none → A, one → B, two → C, three → D, four or more → F). It is built from SEC filings only — the share price never enters it — and describes the business, not whether the stock is worth buying.

## Key figures

In US dollars, as filed.

| Measure | Value |
| --- | --- |
| Revenue, trailing twelve months | $69.1B |
| Net income, trailing twelve months | $10.7B |
| Free cash flow, trailing twelve months | $13.8B |
| Net margin | 15.5% |
| Return on equity | 32.9% |
| Debt to equity | 2.21 |
| Diluted EPS, trailing twelve months | $11.29 |
| Share price | $220.69 |
| Market value | $207.9B |
| Price / earnings | 19.5x |
| Price / sales | 3.0x |

## What the business does

IBM sells software for running business applications, managing data, automating work, and using artificial intelligence (AI). Its consultants help customers update applications and business processes, including work involving AI, data, and cybersecurity. IBM also sells and supports mainframe and other computer systems and storage equipment, and provides financing to help customers acquire technology.

### How it makes money

- **Software** (44.4%) — Customers pay through software subscriptions, usage-based charges, maintenance and support agreements, and purchases of software licenses. About 80% of software revenue was recurring in the second quarter of 2026 (Q2 2026, medium confidence); the rest was mainly transaction-based software sales.
- **Consulting** (31.2%) — Customers pay IBM for strategy and technology advice, application modernization, data work, cybersecurity, and help operating business processes, usually under services contracts.
- **Infrastructure** (23.3%) — Customers buy or lease IBM computers and storage equipment, including mainframes and servers, and may also pay for support and services over the equipment's life.
- **Financing** (1.1%) — IBM provides client and commercial financing for technology purchases and receives payments under those financing arrangements.

### Products

- **IBM Z z17** — A mainframe computer for large, critical workloads such as financial transactions; IBM says it is also designed to run AI work near customers' data.
- **Red Hat OpenShift** — Software businesses use to run and manage applications across different kinds of computer systems and cloud services.
- **watsonx Orchestrate** — Software for building, managing, and governing AI agents—software assistants that can carry out assigned tasks.
- **Confluent** — Software that moves and manages data in real time so it can be used by applications and AI systems.
- **IBM Power11** — A family of IBM servers used to run business applications and workloads.
- **IBM Storage** — Storage equipment, including flash, tape, and other systems that businesses use to store and manage data.

### Customers

- Businesses across industries, which buy software through subscriptions, usage charges, support agreements, or software license contracts.
- Banks and other financial institutions, which use IBM software and mainframes for critical business systems and transactions.
- Retailers and airlines, which use IBM technology for business operations and critical workloads.
- Government organizations, which buy technology and services through government contracts.
- Companies hiring consultants for application modernization, data transformation, cybersecurity, and business-process work.
- Organizations buying IBM computers or storage equipment, sometimes using IBM financing.

### Competitors

- Accenture (ACN) — Business consulting, technology projects, and application services.
- Microsoft (MSFT) — Business software, cloud services, and hybrid-cloud technology.
- Oracle (ORCL) — Business software, data systems, and cloud services.
- Dell Technologies (DELL) — Servers and storage equipment.
- Hewlett Packard Enterprise (HPE) — Servers and storage equipment.
- Alphabet (Google) (GOOGL) — Business software and cloud services.

### What it depends on

- Some software sales are tied to customers' mainframe purchases and associated software license agreements, so changes in customers' spending priorities can shift when those sales close.
- IBM relies on critical suppliers and the availability of components to build and deliver computer and storage equipment; the company described supply constraints affecting infrastructure purchases in 2026.
- IBM sells and delivers some work with technology, cloud, and services partners, and says it also competes with some of those partners.
- The business depends on employees with specialized technology and consulting skills.

### What could go wrong

- Customers may delay or redirect spending on large software and mainframe purchases. IBM said in its second-quarter 2026 discussion that customers shifted some spending toward servers, storage, and memory, delaying large deals.
- Rapid technology changes and competition could make IBM's products less appealing; the company also identifies possible legal, regulatory, security, and reputation consequences from developing and using AI.
- Supplier problems or infrastructure supply constraints could affect IBM's ability to deliver equipment, while acquisitions and alliances may bring integration challenges or fail to meet their objectives.

## More on this company

- [Overview](https://inspectstocks.com/stocks/ibm)
- [Financial statements](https://inspectstocks.com/stocks/ibm/financials)
- [Competitors](https://inspectstocks.com/stocks/ibm/peers)
- [Earnings](https://inspectstocks.com/stocks/ibm/earnings)

---

Source: InspectStocks, built from the company’s own SEC filings. This describes a business — it is not investment advice and not a recommendation to buy or sell anything.