International Business Machines Corp 10-Q for FY2026 Q1

International Business Machines Corp (IBM)

10-Q 2026-04-23 For: 2026-03-31

Added on April 23, 2026

About this 10-Q

International Business Machines Corp filed this 10-Q on April 23, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $15.92B; up 9.5% from $14.54B a year earlier
Net income: $1.22B; up 15.3% from net income of $1.06B a year earlier
Diluted EPS: $1.28; up 14.3% from $1.12 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


New York (State of incorporation)			13-0871985 (IRS employer identification number)

One New Orchard Road Armonk, New York (Address of principal executive offices)			10504 (Zip Code)


			Page

Part I - Financial Information:

Item 1. Consolidated Financial Statements (Unaudited):

Consolidated Income Statement for the three months ended March 31, 20 2 6 and 2025			3

Consolidated Statement of Comprehensive Income for the three m onths ended March 31, 202 6 and 2025			4

Consolidated Balance Sheet at March 31, 2026 and December 31, 20 25			5

Consolidated Statement of Cash Flows for the three months ended March 31 , 202 6 and 2025			7

Consolidated Statement of Equity for the three months ended March 31 , 2026 and 2025			8

Notes to Consolidated Financial Statements			9

Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition			38

Item 4. Controls and Procedures			58

Part II - Other Information:

Item 1. Legal Proceedings			59

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities			59

Item 5. Other Information			59

Item 6. Exhibits			60


	Three Months Ended March 31,
($ in millions, except per share amounts)	2026		2025
Revenue:
Services	$	7,688	$	7,280
Sales	8,009		7,070
Financing	220		191
Total revenue	15,917		14,541
Cost:
Services	5,244		5,002
Sales	1,599		1,404
Financing	124		104
Total cost	6,968		6,510
Gross profit	8,950		8,031
Expense and other (income):
Selling, general and administrative	5,089		4,886
Research and development	2,173		1,950
Intellectual property and custom development income	(172)		(253)
Other (income) and expense	(1)		(165)
Interest expense	473		455
Total expense and other (income)	7,562		6,873
Income from continuing operations before income taxes	1,387		1,158
Provision for/(benefit from) income taxes	172		103
Income from continuing operations	1,216		1,054
Income from discontinued operations, net of tax	0		1
Net income	$	1,216	$	1,055

Earnings per share of common stock:
Assuming dilution:
Continuing operations	$	1.28	$	1.12
Discontinued operations	0.00		0.00
Total	$	1.28	$	1.12
Basic:
Continuing operations	$	1.30	$	1.14
Discontinued operations	0.00		0.00
Total	$	1.30	$	1.14

Weighted-average number of common shares outstanding: (millions)
Assuming dilution	952.1		945.4
Basic	938.5		928.0


	Three Months Ended March 31,
($ in millions)	2026		2025
Net income	$	1,216	$	1,055
Other comprehensive income/(loss), before tax:
Foreign currency translation adjustments	136		(343)



Net unrealized gains/(losses) on available-for-sale securities	0		8
Unrealized gains/(losses) on cash flow hedges:
Unrealized gains/(losses) arising during the period	(175)		(58)
Reclassification of (gains)/losses to net income	342		(323)
Total unrealized gains/(losses) on cash flow hedges	167		(382)
Retirement-related benefit plans:
Prior service costs/(credits)	—		0
Net gains/(losses) arising during the period	1		0
Curtailments and settlements	2		2
Amortization of prior service costs/(credits)	9		(2)
Amortization of net (gains)/losses	198		151
Total retirement-related benefit plans	209		151
Other comprehensive income/(loss), before tax	512		(566)
Income tax (expense)/benefit related to items of other comprehensive income	(213)		259
Other comprehensive income/(loss), net of tax	299		(306)
Total comprehensive income	$	1,514	$	749


($ in millions)	At March 31, 2026		At December 31, 2025
Assets:
Current assets:
Cash and cash equivalents	$	10,819	$	13,587
Restricted cash	45		54
Marketable securities	964		830
Notes and accounts receivable — trade (net of allowances of $102 in 2026 and $99 in 2025)	6,493		8,112
Short-term financing receivables:
Held for investment (net of allowances of $100 in 2026 and $106 in 2025)	5,767		7,344
Held for sale	743		1,131
Other accounts receivable (net of allowances of $37 in 2026 and $37 in 2025)	1,242		1,052
Inventory, at lower of average cost or net realizable value:
Finished goods	268		230
Work in process and raw materials	1,208		990
Total inventory	1,476		1,220
Deferred costs	1,157		1,084
Prepaid expenses and other current assets	3,209		2,530
Total current assets	31,914		36,944
Property, plant and equipment	17,765		17,874
Less: Accumulated depreciation	11,985		11,975
Property, plant and equipment — net	5,781		5,899
Operating right-of-use assets — net	3,219		3,129
Long-term financing receivables (net of allowances of $27 in 2026 and $34 in 2025)	7,014		7,708
Prepaid pension assets	7,578		7,544
Deferred costs	831		825
Deferred taxes	8,552		8,610
Goodwill	74,709		67,717
Intangible assets — net	14,624		11,391
Investments and sundry assets	2,009		2,112
Total assets	$	156,229	$	151,880


($ and shares in millions, except per share amount)	At March 31, 2026		At December 31, 2025
Liabilities:
Current liabilities:
Taxes	$	2,053	$	2,347
Short-term debt	8,655		6,424
Accounts payable	4,039		4,756
Compensation and benefits	3,941		4,114
Deferred income	17,034		16,101
Operating lease liabilities	798		800
Other accrued expenses and liabilities	3,582		4,116
Total current liabilities	40,101		38,658
Long-term debt	57,706		54,836
Retirement and nonpension postretirement benefit obligations	8,763		9,018
Deferred income	4,195		4,271
Operating lease liabilities	2,643		2,547
Other liabilities	9,767		9,810
Total liabilities	$	123,174	$	119,139
Equity:
IBM stockholders’ equity:
Common stock, par value $0.20 per share, and additional paid-in capital	63,936		63,318
Shares authorized: 4,688
Shares issued: 2026 — 2,294
2025 — 2,291
Retained earnings	155,327		155,648
Treasury stock - at cost	(170,874)		(170,605)
Shares: 2026 — 1,354
2025 — 1,354
Accumulated other comprehensive income/(loss)	(15,415)		(15,713)
Total IBM stockholders’ equity	32,974		32,648
Noncontrolling interests	81		93
Total equity	33,056		32,740
Total liabilities and equity	$	156,229	$	151,880


($ in millions, except per share amount)	Common Stock and Additional Paid-in Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Income/(Loss)		Total IBM Stockholders' Equity		Non- Controlling Interests		Total Equity
Equity - January 1, 2026	$	63,318	$	155,648	$	(170,605)	$	(15,713)	$	32,648	$	93	$	32,740
Net income plus other comprehensive income/(loss):
Net income			1,216						1,216				1,216
Other comprehensive income/(loss)							299		299				299
Total comprehensive income									$	1,514			$	1,514
Cash dividends paid — common stock ($1.68 per share)			(1,576)						(1,576)				(1,576)
Common stock issued under employee plans	618								618				618
Purchases and sales of treasury stock under employee plans — net			39		(269)				(230)				(230)
Changes in noncontrolling interests											(11)		(11)
Equity – March 31, 2026	$	63,936	$	155,327	$	(170,874)	$	(15,415)	$	32,974	$	81	$	33,056




($ in millions)
For the three months ended March 31:	2026		2025
Hybrid Cloud	$	1,905	$	1,687
Automation	1,741		1,584
Data	1,474		1,236
Transaction Processing	1,932		1,828
Total Software	$	7,052	$	6,336
Strategy and Technology	2,896		2,782
Intelligent Operations	2,376		2,286
Total Consulting	$	5,272	$	5,068
Hybrid Infrastructure	2,108		1,646
Infrastructure Support	1,218		1,240
Total Infrastructure	$	3,326	$	2,886
Financing (1)	220		191
Other (2)	48		61
Total revenue	$	15,917	$	14,541


($ in millions)
January 1, 2026	Additions / (Releases)	Write-offs (1)	Foreign currency and other	March 31, 2026
$99	$6	$(3)	$0	$102


January 1, 2025	Additions / (Releases)	Write-offs (1)	Foreign currency and other	December 31, 2025
$114	$5	$(31)	$10	$99


($ 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		%


($ in millions)	Amortization Life (in years)	Confluent
Current assets (1)		$	2,483
Property, plant and equipment/noncurrent assets		95
Intangible assets:
Goodwill	N/A	7,225
Client relationships	12	2,122
Completed technology	7	1,590
Trademarks	5	122
Total assets acquired		$	13,638
Current liabilities (2)		1,798
Noncurrent liabilities		249
Total liabilities assumed		$	2,047
Total purchase price		$	11,590


($ in millions)	Total Consideration (1)
Cash paid for outstanding Confluent common stock	$	11,268
Cash paid for Confluent equity awards	269
Cash consideration	$	11,537
Fair value of stock-based compensation awards attributable to pre-acquisition services	53
Total consideration	$	11,590


	Fair Value Hierarchy Level	At March 31, 2026				At December 31, 2025
($ in millions)		Assets (4)		Liabilities (5)		Assets (4)		Liabilities (5)
Cash equivalents: (1)
Time deposits, certificates of deposit and other (2)	2	$	3,066	N/A		$	7,072	N/A
Money market funds	1	1,934		N/A		413		N/A
Total cash equivalents		$	5,000	N/A		$	7,485	N/A

Debt securities — current (2) (3)	2	964		N/A		830		N/A
Debt securities — noncurrent	2,3	9		N/A		9		N/A
Derivatives designated as hedging instruments:
Interest rate contracts	2	1		195		2		171
Foreign exchange contracts	2	738		399		545		325
Derivatives not designated as hedging instruments:
Foreign exchange contracts	2	11		37		12		14
Equity contracts	2	0		62		34		3
Total		$	6,724	$	693	$	8,916	$	513


	Client Financing Receivables
	Client Loan and Installment Payment Receivables		Investment in Sales-Type and Direct Financing
					Commercial Financing Receivables
($ in millions)					Held for		Held for
At March 31, 2026	(Loans)		Leases		Investment		Sale (1)		Total
Financing receivables, gross	$	8,822	$	4,165	$	574	$	743	$	14,304
Unearned income	(679)		(456)		—		—		(1,136)
Unguaranteed residual value	—		482		—		—		482
Amortized cost	$	8,143	$	4,191	$	574	$	743	$	13,651
Allowance for credit losses	(64)		(59)		(5)		—		(128)
Total financing receivables, net	$	8,079	$	4,132	$	569	$	743	$	13,523
Current portion	$	3,920	$	1,277	$	569	$	743	$	6,509
Noncurrent portion	$	4,158	$	2,855	$	—	$	—	$	7,014


	Three Months Ended March 31,
($ in millions)	2026		2025
Cash flows from operating activities:
Net income	$	1,216	$	1,055
Adjustments to reconcile net income to cash provided by operating activities:

Depreciation (1)	555		536
Amortization of capitalized software and acquired intangible assets	719		641
Stock-based compensation	506		401
Net (gain)/loss on divestitures, asset sales and other	(11)		(22)
Changes in operating assets and liabilities, net of acquisitions/divestitures	2,185		1,759
Net cash provided by operating activities	5,169		4,370

Cash flows from investing activities:
Payments for property, plant and equipment	(232)		(244)
Proceeds from disposition of property, plant and equipment/other	8		74
Investment in software	(159)		(151)
Purchases of marketable securities and other investments	(1,612)		(6,486)
Proceeds from disposition of marketable securities and other investments	1,971		927
Acquisition of businesses, net of cash acquired	(10,465)		(7,098)
Divestiture of businesses, net of cash transferred	1		(1)
Net cash provided by/(used in) investing activities	(10,489)		(12,979)

Cash flows from financing activities:
Proceeds from new debt	7,437		8,378
Payments to settle debt	(2,928)		(1,257)
Short-term borrowings/(repayments) less than 90 days — net	0		(29)
Common stock repurchases for tax withholdings	(350)		(284)
Proceeds from issuance of shares	178		216
Financing — other	(42)		(32)
Cash dividends paid	(1,576)		(1,549)
Net cash provided by/(used in) financing activities	2,719		5,443

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(177)		167
Net change in cash, cash equivalents and restricted cash	(2,777)		(2,999)

Cash, cash equivalents and restricted cash at January 1	13,640		14,160
Cash, cash equivalents and restricted cash at March 31	$	10,864	$	11,161


($ in millions)
At March 31, 2026:	Americas		EMEA		Asia Pacific		Total
Amortized cost	$	6,761	$	3,998	$	1,575	$	12,334
Allowance for credit losses:
Beginning balance at January 1, 2026	$	69	$	60	$	7	$	136
Write-offs	(5)		0		—		(5)
Recoveries	0		0		—		0
Additions/(releases)	1		(8)		0		(7)
Other (1)	0		(1)		0		(1)
Ending balance at March 31, 2026	$	66	$	51	$	7	$	123


($ in millions)
At December 31, 2025:	Americas		EMEA		Asia Pacific		Total
Amortized cost	$	7,278	$	4,440	$	1,610	$	13,328
Allowance for credit losses:
Beginning balance at January 1, 2025	$	69	$	45	$	9	$	123
Write-offs	(16)		(1)		(5)		(22)
Recoveries	0		0		0		1
Additions/(releases)	10		10		2		22
Other (1)	7		6		0		13
Ending balance at December 31, 2025	$	69	$	60	$	7	$	136


	At March 31, 2026
($ in millions)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount (1)
Intangible asset class:
Capitalized software	$	1,419	$	(455)	$	963
Client relationships	13,352		(5,878)		7,474
Completed technology	8,953		(4,302)		4,651
Patents/trademarks	2,143		(698)		1,445
Other (2)	139		(49)		90
Total	$	26,006	$	(11,382)	$	14,624


($ in millions)	Capitalized Software		Acquired Intangibles		Total
Remainder of 2026	$	389	$	2,035	$	2,424
2027	377		2,668		3,046
2028	186		2,363		2,549
2029	11		1,680		1,691
2030	—		1,240		1,240
Thereafter	—		3,674		3,674


($ in millions)	Balance		Goodwill Additions		Purchase Price Adjustments				Foreign Currency Translation and Other Adjustments (1)		Balance
Segment	1/1/2026						Divestitures				3/31/2026
Software	$	52,987	$	7,136	$	1	$	—	$	(175)	$	59,950
Consulting	10,341		89		(18)		—		(36)		10,376
Infrastructure	4,389		—		1		—		(6)		4,383
Other	—		—		—		—		—		—
Total	$	67,717	$	7,225	$	(17)	$	—	$	(217)	$	74,709


($ in millions)	Before Tax Amount		Tax (Expense)/ Benefit		Net of Tax Amount
For the three months ended March 31, 2026:
Other comprehensive income/(loss):
Foreign currency translation adjustments	$	136	$	(116)	$	20



Net unrealized gains/(losses) on available-for-sale securities	$	0	$	0	$	0
Unrealized gains/(losses) on cash flow hedges:
Unrealized gains/(losses) arising during the period	$	(175)	$	42	$	(133)
Reclassification of (gains)/losses to:
Cost of services	15		(4)		11
Cost of sales	(1)		1		0
Cost of financing	1		0		1
SG&A expense	1		0		1
Other (income) and expense	320		(80)		240
Interest expense	6		(1)		4
Total unrealized gains/(losses) on cash flow hedges	$	167	$	(43)	$	124
Retirement-related benefit plans: (1)
Prior service costs/(credits)	$	—	$	—	$	—
Net gains/(losses) arising during the period	1		0		1
Curtailments and settlements	2		0		1
Amortization of prior service costs/(credits)	9		(2)		7
Amortization of net (gains)/losses	198		(52)		146
Total retirement-related benefit plans	$	209	$	(54)	$	155
Other comprehensive income/(loss)	$	512	$	(213)	$	299


($ in millions)	Foreign Currency Translation Adjustments (1)		Net Unrealized Gains/(Losses) on Available- For-Sale Securities		Net Unrealized Gains/(Losses) on Cash Flow Hedges		Net Change Retirement- Related Benefit Plans		Accumulated Other Comprehensive Income/(Loss)
January 1, 2026	$	(3,956)	$	0	$	(157)	$	(11,600)	$	(15,713)
Other comprehensive income before reclassifications	20		0		(133)		1		(113)
Amount reclassified from accumulated other comprehensive income	—		—		258		154		412
Total change for the period	$	20	$	0	$	124	$	155	$	299
March 31, 2026	$	(3,936)	$	(1)	$	(32)	$	(11,445)	$	(15,415)


($ in millions)	March 31, 2026		December 31, 2025
Short-term debt:
Carrying amount of the hedged item	$	(493)	$	—
Cumulative hedging adjustments included in the carrying amount — assets/(liabilities)	7		—
Long-term debt:
Carrying amount of the hedged item	(6,136)		(6,656)
Cumulative hedging adjustments included in the carrying amount — assets/(liabilities) (1)	58		36


($ in millions)	(Gains)/Losses of Total Hedge Activity

Three Months Ended March 31,	2026		2025

Cost of services	$	15	$	2
Cost of sales	(1)		(8)
Cost of financing	(1)		0
SG&A expense	67		31
Other (income) and expense (1)	423		(442)
Interest expense	(5)		(2)


	(Gains)/Losses Recognized in Consolidated Income Statement
($ in millions)	Consolidated Income Statement Line Item	Recognized on Derivatives				Attributable to Risk Being Hedged (1)
For the three months ended March 31:		2026		2025		2026		2025
Derivative instruments in fair value hedges: (2)
Interest rate contracts	Cost of financing	$	7	$	(11)	$	(5)	$	14
	Interest expense	30		(59)		(23)		72
Derivative instruments not designated as hedging instruments:
Foreign exchange contracts	Other (income) and expense	103		(120)		N/A		N/A
Equity contracts	SG&A expense	66		34		N/A		N/A

Total		$	206	$	(156)	$	(29)	$	86


	Effects of Derivatives Recognized in Consolidated Income Statement and OCI
						(Gains)/Losses
($ in millions)	Gains/(Losses) Recognized in OCI				Consolidated Income Statement Line Item	Reclassified from AOCI				Amounts Excluded from Effectiveness Testing (3)
For the three months ended March 31:	2026		2025			2026		2025		2026		2025
Derivative instruments in cash flow hedges:
Interest rate contracts	$	—	$	—	Cost of financing	$	1	$	1	N/A		N/A
					Interest expense	3		3		N/A		N/A
Foreign exchange contracts
Amount included in the assessment of effectiveness	(129)		42		Cost of services	15		2		N/A		N/A
					Cost of sales	(1)		(8)		N/A		N/A
					Cost of financing	1		1		N/A		N/A
					SG&A expense	1		(3)		N/A		N/A
					Other (income) and expense	289		(348)		N/A		N/A
					Interest expense	3		3		N/A		N/A
Amount excluded from the assessment of effectiveness	(46)		(101)		Other (income) and expense	N/A		N/A		32		26
Instruments in net investment hedges: (4)
Foreign exchange contracts
Amount included in the assessment of effectiveness	450		(820)
Amount excluded from the assessment of effectiveness	14		12		Cost of financing	N/A		N/A		(4)		(4)
					Interest expense	N/A		N/A		(18)		(22)

Total	$	289	$	(867)		$	311	$	(350)	$	10	$	0


($ in millions)	U.S. Plans				Non-U.S. Plans
For the three months ended March 31:	2026		2025		2026		2025
Service cost	$	86	$	88	$	44	$	41
Interest cost (1)	180		187		290		251
Expected return on plan assets (1)	(266)		(268)		(363)		(345)
Amortization of prior service costs/(credits) (1)	—		—		16		5
Recognized actuarial losses (1)	122		70		76		81
Curtailments and settlements (1)	—		—		2		2
Multi-employer plans	—		—		3		3
Other costs/(credits) (1)	—		—		11		8
Total net periodic pension (income)/cost of defined benefit plans	$	122	$	77	$	78	$	47
Cost of defined contribution plans	15		14		103		96
Total defined benefit pension and defined contribution plans cost recognized in the Consolidated Income Statement	$	137	$	90	$	180	$	143


($ in millions)	U.S. Plan				Non-U.S. Plans
For the three months ended March 31:	2026		2025		2026		2025
Service cost	$	0	$	0	$	0	$	0
Interest cost (1)	25		28		12		10
Expected return on plan assets (1)	—		—		0		0
Amortization of prior service costs/(credits) (1)	(7)		(7)		0		0
Recognized actuarial losses (1)	1		—		0		0
Total nonpension postretirement plans cost recognized in the Consolidated Income Statement	$	19	$	22	$	12	$	11


($ in millions)	Plan Contributions
For the three months ended March 31:	2026		2025
U.S. nonpension postretirement benefit plan	$	70	$	70
Non-U.S. DB and multi-employer plans (1)	19		1
Total plan contributions	$	90	$	70


($ and shares in millions, except per share amounts)							Yr.-to-Yr. Percent/ Margin Change
For the three months ended March 31:	2026			2025
Revenue (1)	$	15,917		$	14,541		9.5	%
Gross profit margin	56.2		%	55.2		%	1.0	pts.
Total expense and other (income)	$	7,562		$	6,873		10.0	%
Income from continuing operations before income taxes	$	1,387		$	1,158		19.8	%
Provision for/(benefit from) income taxes from continuing operations	$	172		$	103		65.8	%
Income from continuing operations	$	1,216		$	1,054		15.3	%
Income from continuing operations margin	7.6		%	7.3		%	0.4	pts.
Income from discontinued operations, net of tax	$	0		$	1		nm
Net income	$	1,216		$	1,055		15.2	%
Earnings per share from continuing operations - assuming dilution	$	1.28		$	1.12		14.3	%
Consolidated earnings per share - assuming dilution	$	1.28		$	1.12		14.3	%
Weighted-average shares outstanding - assuming dilution	952.1			945.4			0.7	%

	At 3/31/2026			At 12/31/2025
Assets	$	156,229		$	151,880		2.9	%
Liabilities	$	123,174		$	119,139		3.4	%
Equity	$	33,056		$	32,740		1.0	%


($ in millions, except per share amounts)					Yr.-to-Yr. Percent Change
For the three months ended March 31:	2026		2025
Net income as reported	$	1,216	$	1,055	15.2	%
Income from discontinued operations, net of tax	0		1		nm
Income from continuing operations	$	1,216	$	1,054	15.3	%
Non-operating adjustments (net of tax):
Acquisition-related charges	$	508	$	429	18.4
Non-operating retirement-related costs/(income)	94		35		169.4
U.S. tax reform impacts	4		(2)		nm
Operating (non-GAAP) earnings (1)	$	1,821	$	1,517	20.1	%
Diluted operating (non-GAAP) earnings per share (1)	$	1.91	$	1.60	19.4	%


($ in millions)							Yr.-to-Yr. Percent/Margin Change		Yr.-to-Yr. Percent Change Adjusted For Currency
For the three months ended March 31:	2026			2025
Revenue:
Software	$	7,052		$	6,336		11.3	%	7.9	%
Gross margin	82.8		%	83.6		%	(0.8)	pts.
Consulting	5,272			5,068			4.0	%	0.9	%
Gross margin	27.5		%	27.3		%	0.2	pts.
Infrastructure	3,326			2,886			15.3	%	11.7	%
Gross margin	56.9		%	52.8		%	4.1	pts.
Financing	220			191			14.8	%	10.2	%
Gross margin	43.4		%	45.8		%	(2.4)	pts.
Other (1)	48			61			(21.4)	%	(37.4)	%
Gross margin	nm			(416.6)		%	nm
Total revenue	$	15,917		$	14,541		9.5	%	6.1	%
Total gross profit	$	8,950		$	8,031		11.4	%
Total gross margin	56.2		%	55.2		%	1.0	pts.
Non-operating adjustments:
Amortization of acquired intangible assets	237			200			18.3	%
Operating (non-GAAP) gross profit	$	9,187		$	8,232		11.6	%
Operating (non-GAAP) gross margin	57.7		%	56.6		%	1.1	pts.


($ in millions)
January 1, 2026	Additions / (Releases) (1)	Write-offs (2)	Foreign currency and other	March 31, 2026
$276	$(1)	$(8)	$(1)	$267


($ in millions)							Yr.-to-Yr. Percent Change/Margin Change		Yr.-to-Yr. Percent Change Adjusted For Currency
For the three months ended March 31:	2026			2025
Revenue	$	220		$	191		14.8	%	10.2	%
Segment profit (1)	$	118		$	69		72.6	%
Segment profit margin	53.8		%	35.8		%	18.0	pts.


($ in millions, except per share amounts)	GAAP			Acquisition- Related Adjustments			Retirement- Related Adjustments			U.S. Tax Reform Impacts			Operating (non-GAAP)
For the three months ended March 31, 2026:
Gross profit	$	8,950		$	237		$	—		$	—		$	9,187
Gross profit margin	56.2		%	1.5		pts.	—		pts.	—		pts.	57.7		%
SG&A	$	5,089		$	(408)		$	—		$	—		$	4,682

Other (income) and expense	(1)			—			(96)			—			(98)
Total expense and other (income)	7,562			(409)			(96)			—			7,057
Pre-tax income from continuing operations	1,387			646			96			—			2,129
Pre-tax margin from continuing operations	8.7		%	4.1		pts.	0.6		pts.	—		pts.	13.4		%
Provision for/(benefit from) income taxes (1)	$	172		$	137		$	3		$	(4)		$	308
Effective tax rate	12.4		%	2.7		pts.	(0.4)		pts.	(0.2)		pts.	14.5		%
Income from continuing operations	$	1,216		$	508		$	94		$	4		$	1,821
Income margin from continuing operations	7.6		%	3.2		pts.	0.6		pts.	0.0		pts.	11.4		%
Diluted earnings per share from continuing operations	$	1.28		$	0.53		$	0.10		$	0.00		$	1.91