IBM Software Growth Slows: Will Recurring Revenue Support Recovery?

IBM's Software segment revenues grew 5% to $7.8 billion in Q2 2026, but organic growth was flat due to customers shifting spending toward infrastructure. However, Hybrid Cloud revenues grew 11% with OpenShift ARR reaching $2.2 billion, and the Data business surged 19%. Despite revenue headwinds, IBM expanded Software segment profit by 9% to $2.5 billion with margin expansion of 110 basis points.