IBM, SAP and TI post strong Q3 updates

IBM (IBM), SAP (SAPd) and Texas Instruments (TXN) each released third-quarter 2026 results on October 21, highlighting continued strength across software, cloud and semiconductor markets. The three companies reported year-on-year revenue growth in their key businesses and, in several cases, raised or framed guidance toward the upper end of prior outlooks.

The updates showed growth in recurring and cloud-based revenue at SAP (SAPd), expanding software and infrastructure contributions at IBM, and a rebound in demand for Texas Instruments’ (TXN) analog and embedded products. Together, the results offered a snapshot of resilient enterprise and industrial technology spending.

IBM reported third-quarter 2026 revenue of $17.10 billion and adjusted earnings per share of $2.95, exceeding market expectations for both metrics. Software revenue reached $7.8 billion, up about 8% year-on-year, while infrastructure revenue was $3.7 billion, up about 4% year-on-year.

The company generated roughly $3.03 billion of free cash flow in the quarter. Management stated that full-year free cash flow is now expected to increase by more than $1 billion year-over-year, signaling stronger cash generation than previously anticipated.

Within IBM’s portfolio, software and infrastructure were the main growth drivers, while consulting revenue was described as flat on a reported basis but higher at constant currency. Overall, the company pointed to accelerated revenue growth in the period.

SAP’s third-quarter 2026 performance was led by continued expansion in its cloud business. Total revenue came in at €10.27 billion, up 13% year-on-year, while cloud revenue rose 26% to €6.668 billion.

The company’s current cloud backlog reached €24.144 billion, an increase of 28% from a year earlier, indicating a larger base of contracted future cloud business. Non‑IFRS operating profit was about €3.03 billion, up roughly 18% year-on-year, and IFRS operating profit also increased.

SAP said it now expects full-year 2026 cloud revenue toward the upper end of its previously stated outlook range of €25.8 billion to €26.2 billion. It also forecast cloud and software revenue toward the upper end of the €36.3 billion to €36.8 billion range, reflecting confidence in ongoing demand.

Texas Instruments posted third-quarter 2026 revenue of $6.06 billion, up about 28% year-on-year, alongside earnings per share of $2.62. The company described growth as broad-based across industrial, automotive and data-center end markets.

Management highlighted strong demand for analog and embedded processing products and continued cash generation. For the fourth quarter of 2026, Texas Instruments guided revenue in a range of $5.8 billion to $6.3 billion, a midpoint above prevailing Street estimates at the time of the announcement.

The guidance suggested expectations for sustained demand into the next quarter, following the sharp year-on-year revenue increase in Q3. Together with IBM and SAP’s updates, the results underscored ongoing spending on core technology infrastructure and components.