News

IBM
2026-07-22 21:10:28

IBM cuts full-year sales growth outlook as mainframe revenue drops 42%

IBM lowered its full-year revenue growth forecast to 4% to 5% after reporting second-quarter results on July 22 Eastern Time, citing weaker demand for mainframes and related system software. The company had previously guided for growth above 5%. In the second quarter, IBM posted revenue of $17.2 billion, up about 1% from a year earlier, while mainframe sales in its infrastructure unit fell 42% as the current product cycle neared its end. IBM said enterprise spending is shifting toward AI hardware, adding pressure to its traditional hardware and software businesses. The company is responding with a faster cost-saving plan that includes cutting third-party technology spending, improving supply chain management, and streamlining administrative functions. Chief Financial Officer Jim Kavanaugh said IBM still expects full-year free cash flow to increase by about $1 billion from last year. The report also noted investor attention on whether generative AI tools could disrupt traditional software business models, with recent market discussion around Starbucks potentially replacing IBM software with internally developed tools.

00
IBM cuts full-year sales growth outlook as mainframe revenue drops 42%