Overview
- A mid-July preannouncement that missed Q2 targets triggered a record one-day share drop and flagged large mainframe and upfront software deals that failed to close on time.
- IBM reported Z mainframe hardware revenue fell about 42 percent in Q2 and that decline pulled down transaction-processing software sales.
- CEO Arvind Krishna said roughly one-third of the large deals that slipped have already returned and he expects about 75 percent to come back before year-end.
- The company trimmed full-year revenue growth guidance to 4–5 percent while noting software revenue still rose about 5 percent and distributed infrastructure and Red Hat showed strong growth.
- IBM is increasing bets on new products including the $5 billion Lightwell security initiative, expanded quantum investment and the HRL Laboratories deal as offsets to near-term timing risk.