# IBM Stock Q3 2026: Software Speeds Up, Cash Flow Outlook Raised
> IBM stock Q3 2026: revenue up 5% to $17.1bn, Software up 9% at constant currency, operating EPS $2.95, a higher cash outlook. Segments, valuation, risks.

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## Facts
- Ticker: IBM
- Price: $257.81 (as of 2026-10-30)
- As of: Q3 2026 results (quarter ended 2026-09-30, reported 2026-10-21 on Form 8-K; Form 10-Q filed 2026-10-22); price as of 2026-10-30 close
- Fiscal period: Q3 2026 (calendar)
- Published: 2026-11-02
- Updated: 2026-11-02
- Author: QSI Labs Research
- Canonical: https://www.quantitativesuperintelligencelabs.com/research/ibm-stock-q3-2026-earnings-software-confluent/

## Short answer
IBM stock Q3 2026 results, for the July to September quarter, showed revenue growth picking up to 5%, or 6% at constant currency, led by Software and Infrastructure. Revenue was $17.1bn, operating (non-GAAP) earnings per share rose 11% to $2.95 and GAAP EPS rose 26% to $2.31. IBM kept its forecast of 4-5% revenue growth at constant currency for 2026 and now expects free cash flow to rise by more than $1bn, from $14.7bn in 2025. Our discounted cash flow model puts IBM at $190.05 per share, about 26% below the $257.81 close on 30 October 2026. The quarter was solid and the cash flow is real; the share price assumes faster growth, or a lower cost of capital, than our model does.

## Key takeaways
- Valuation: QSILabs values International Business Machines (NYSE: IBM) at $190.05 per share as of results for the quarter ended 30 September 2026, against a $257.81 close on 30 October 2026, about 26% below the market price. Our sensitivity range is about $161-230 a share.
- Q3 2026 results: revenue was $17,103m in the quarter ended 30 September 2026, up 5% from $16,331m and 6% at constant currency; operating pre-tax income was $3,295m, a 19.3% margin, up 0.7 points; operating EPS was $2.95, up 11%, and GAAP EPS $2.31, up 26%.
- Software: Software revenue was $7,804m, up 9% at constant currency, with Red Hat up 11% and Data up 20% at constant currency, helped by Confluent. The segment profit margin was 35.0%, up from 32.9%.
- Infrastructure: Distributed Infrastructure (storage and Power servers) grew 32% at constant currency, while IBM Z mainframe revenue fell 19% against a strong year-earlier launch quarter. IBM says Storage delivered record revenue growth.
- Outlook: IBM still expects 2026 revenue growth of 4-5% at constant currency, with profit and cash anchored to a 4% base case, and now expects 2026 free cash flow to rise by more than $1bn from $14.7bn.
- Cash and returns: free cash flow was $3.0bn in the quarter, up $0.7bn, and $7.8bn in the first nine months, up $0.6bn. IBM paid $4.8bn of dividends in the nine months, declared a $1.69 quarterly dividend and bought back no shares.

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