Software (hybrid cloud, automation, data, transaction processing)
Q2 2026 Software revenue rose 5% to $7.8B, led by Red Hat hybrid cloud (+11%) and data (+19%).
The numbers
What it is
IBM's largest segment, covering Red Hat hybrid cloud, the automation portfolio, data software (including watsonx.data), and transaction processing. Most of the revenue is recurring subscription and support. Software gross margin was about 83.5% in FY2025.
Why it matters to the stock. Software produced about 44% of FY2025 revenue and most of the gross profit, so its growth rate sets the direction of the stock.
News
IBM and Red Hat's Lightwell fix more than 400 open-source Java vulnerabilities
IBM and Red Hat said their Lightwell service found and fixed more than 400 previously unknown vulnerabilities in widely used Java libraries.
IBM adds self-hosted deployment for Bob, including air-gapped environments
IBM made its Bob AI development platform available for on-premises, private-cloud, sovereign-cloud and air-gapped environments.
IBM Q2 2026 confirms revenue of $17.2B and cuts 2026 growth outlook to 4% to 5%
IBM's full second-quarter 2026 report matched the July 14 preliminary figures: revenue of $17.2B, up 1%, with GAAP EPS of $2.27 and operating EPS of $2.93.
IBM declares $1.69 quarterly dividend, payable September 10, 2026
IBM's board approved a regular quarterly cash dividend of $1.69 per share, with a record date of August 10 and payment on September 10, 2026.
IBM warns Q2 results will miss, citing a weak mainframe cycle and delayed deals
IBM released preliminary second-quarter 2026 results showing revenue of $17.2B, up 1%, and non-GAAP EPS of $2.93, up 5%, both below analyst expectations.
IBM upgrades Bob AI development platform with multi-agent tools and premium packages
IBM upgraded Bob, its AI software-development platform, with subagents, parallel tool calling, automatic model matching and a built-in tool for tracking AI usage and cost.
IBM raises quarterly dividend to $1.69, its 31st consecutive annual increase
IBM's board raised the quarterly dividend to $1.69 per share from $1.68, marking the 31st consecutive annual increase.
IBM completes $11B Confluent acquisition at $31 per share in cash
IBM completed its acquisition of Confluent, the Apache Kafka data-streaming company, for $31 per share in cash, about $11B in enterprise value.
IBM Q4 2025 revenue rises 12% to $19.7B; 2026 guidance calls for 5%+ growth
IBM reported fourth-quarter 2025 revenue of $19.7B, up 12% (9% at constant currency), with Software up 14% and Infrastructure up 21%.