International Business Machines NYSE:IBM is scheduled to report second-quarter results after the market closes Wednesday, with investors expected to focus on the company's outlook for the second half of 2026 after preliminary results missed Wall Street expectations.
Analysts expect management to address whether enterprise deals delayed during the second quarter have shifted into the current quarter and whether IBM will maintain its forecast for more than 5% constant-currency revenue growth and about $1 billion in free cash flow improvement this year. Options markets are pricing in a move of roughly 7% following the earnings release.
Earlier this month, IBM NYSE:IBM reported preliminary second-quarter revenue of $17.2 billion, about $660 million below consensus estimates, while adjusted earnings of $2.93 per share also missed expectations. The company attributed the shortfall to weaker software growth, declining infrastructure revenue and flat consulting performance as some enterprise customers delayed spending.
Investors are also expected to monitor updates on IBM's AI business, including Red Hat and watsonx, after the company disclosed $12.5 billion in generative AI bookings. Management's commentary on deal pipelines and capital allocation is likely to be a key focus during the earnings call.