IBM's Annual Recurring Revenue Grew Despite Weak Q2 Performance
International Business Machines (IBM) reported that its annual recurring revenue reached $24.6 billion in fiscal Q2 2026, growing by 8% year-over-year despite a weak quarter overall. This segment accounts for nearly 45% of IBM's total revenue and continued to rise even as the company missed expectations due to delayed large deals and reduced spending on transaction processing software. IBM stock has fallen about 10% over the past year, underperforming the S&P 500 which gained around 19%. Management noted that one-third of the delayed Q2 deals closed in early Q3. The company now forecasts at least 6%, and up to 8%, software revenue growth for fiscal 2026. Investors are watching IBM's upcoming Q3 report closely, as weaker-than-expected recurring revenue growth could signal broader slowdowns beyond the delayed transactions.
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Topics: annual recurring revenue IBM software growth stock performance