- International Business Machines Corp (NASDAQ: IBM) reported second-quarter FY21 revenue growth of 3% year-on-year to $18.75 billion, beating analyst consensus of $18.29 billion. The revenue was flat, adjusting for divested businesses and currency.
- Non-GAAP EPS of $2.33 beat the analyst consensus of $2.29.
- Revenue from Cloud & Cognitive Software grew 6.1% Y/Y to $6.1 billion, Global Business Services rose 11.6% Y/Y to $4.3 billion, Global Technology Services increased 0.4% Y/Y to $6.3 billion, and Systems declined 7.3% Y/Y to $1.7 billion. Global Financing revenue decreased 8.6% Y/Y to $242 million.
- Red Hat revenue was up 20% (up 17% adjusting for currency), normalized for historical comparability.
- GAAP gross margin remained flat at 48%. Cloud & Cognitive Software and Global Technology Services noted margin expansion while the rest observed margin contraction.
- Non-GAAP operating margin expanded 30 basis points to 49.3%.
- It generated $2.6 billion in operating cash flow and $1.04 billion in free cash flow.
- IBM held $8.2 billion in cash and equivalents. Debt, including Global Financing debt of $17.5 billion, totaled $55.2 billion.
- "In the first half of the year, we increased adjusted free cash flow, invested in strategic acquisitions to strengthen our hybrid cloud and AI capabilities, continued to deleverage and, consistent with our commitment, again increased our dividend," said SVP and CFO James Kavanaugh.
- Outlook: IBM expects to grow revenue for FY21 and anticipates adjusted free cash flow of $11 billion to $12 billion.
- Price action: IBM shares closed lower by 0.72% at $137.92 on Monday.
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
