International Business Machines Corporation stock research
FY2026 Q1
International Business Machines (IBM) Gross Margin — Quarter Ended Mar 31, 2026
Revenue and gross profit declined from the prior quarter but increased from the same quarter last year. Cost of revenue also decreased sequentially and increased year-over-year, resulting in a gross margin that weakened sequentially but improved year-over-year.
Gross margin takeaway
Quarter ended Mar 31, 2026 · FY2026 Q1
Revenue and gross profit declined from the prior quarter but increased from the same quarter last year. Cost of revenue also decreased sequentially and increased year-over-year, resulting in a gross margin that weakened sequentially but improved year-over-year.
- The primary driver of the gross margin change is the relative movement of cost of revenue compared to revenue. Sequentially, cost of revenue decreased less proportionally than revenue, compressing margin; year-over-year, revenue grew faster than cost of revenue, expanding margin.
- Compared to the prior quarter, gross margin was lower. Compared to the same quarter last year, gross margin was higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
56.2%
Gross profit
$8.9B
Revenue
$15.9B
Cost of revenue
$7.0B
Quarter-over-quarter change
-4.4 pts
Year-over-year change
+1.0 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2025 | $17.0B | $10.0B | $7.0B | 58.8% |
| Sep 30, 2025 | $16.3B | $9.4B | $7.0B | 57.3% |
| Dec 31, 2025 | $19.7B | $11.9B | $7.8B | 60.6% |
| Mar 31, 2026 | $15.9B | $8.9B | $7.0B | 56.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2025
-4.4 pts
Year-over-year change
Mar 31, 2025
+1.0 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The primary driver of the gross margin change is the relative movement of cost of revenue compared to revenue. Sequentially, cost of revenue decreased less proportionally than revenue, compressing margin; year-over-year, revenue grew faster than cost of revenue, expanding margin.
Compared to the prior quarter, gross margin was lower. Compared to the same quarter last year, gross margin was higher.
Monitor the company's net cash from operating activities and available credit facilities as disclosed in the filing.
Peer context
Latest available gross margins for related public companies.
| Company | Gross margin |
|---|---|
| International Business Machines Corporation (IBM) | 56.2% |