IBM Sees Rebound After Execution Challenges in Q2 Software Business
IBM's CEO Arvind Krishna acknowledged that the company faced execution challenges in its software business during the second quarter of fiscal 2026, leading to a shortfall. However, he emphasized that IBM has already started to see a shift back from this sudden and dramatic change in customer spending.
The shift was attributed to clients prioritizing other capex investments, such as servers, storage, and memory purchases, ahead of expected price increases. This led to the failure to close a double-digit number of large deals on the timelines expected, accounting for the majority of the shortfall.
Krishna stated that about one-third of the shifted deals had since closed, providing an indication that this was deferral and not destruction. He expressed confidence in IBM's business and its ability to grow and drive shareholder value, despite the challenges faced in Q2.