What is a cash flow waterfall?

A cash flow waterfall is a bar chart that walks from operating cash flow through capital expenditure to free cash flow, then shows how the remaining cash is allocated — acquisitions, buybacks, dividends, debt, and other financing — ending at the net change in cash. Each step is colour-coded: green bars add to the running total, red bars subtract.

How does IBM (IBM) spend its free cash flow?

For TTM through Q2 2026, IBM generated $14.9B of operating cash flow and $14.2B of free cash flow — a free cash flow margin of 95.3% of operating cash flow. The waterfall breaks down how the remaining cash was allocated across investing and financing activities.

How much did IBM (IBM) return via buybacks and dividends?

The waterfall shows buybacks (share repurchases) and dividends paid as separate steps in the financing section. Together these represent IBM's shareholder returns for TTM through Q2 2026. You can compare these against free cash flow to assess the capital-return payout ratio.

IBM (IBM) Cash Flow Waterfall

Operating CF

$14.9B

Capex

-$694M

Free Cash Flow

$14.2B

FCF Margin

+95.3%

Cash flow waterfall for IBM (IBM) — TTM through Q2 2026

Free cash flow: $14.2B

Note: Other Investing is large — driven mainly by purchases or sales of investments.

Cash flow breakdown for IBM (IBM) — TTM through Q2 2026

Line item	Amount	Running total
Operating Cash Flow	$14.9B	$14.9B
Capital Expenditure	-$694M	$14.2B
Free Cash Flow	$14.2B	$14.2B
Acquisitions	-$3.14B	$11.1B
Other Investing	-$6.16B	$4.9B
Share Buybacks	-$1.05B	$3.85B
Dividends Paid	-$6.31B	-$2.46B
Net Debt Change	$1.59B	-$869M
Other Financing	-$3.66B	-$4.53B
Forex Effect	-$279M	-$4.81B
Net Cash Decrease	-$4.81B	-$4.81B

Operating Cash Flow$14.9B
Capital Expenditure-$694M
Free Cash Flow$14.2B
Acquisitions-$3.14B
Other Investing-$6.16B
Share Buybacks-$1.05B
Dividends Paid-$6.31B
Net Debt Change$1.59B
Other Financing-$3.66B
Forex Effect-$279M
Net Cash Decrease-$4.81B

Want to see what drove the FCF change?Free Cash Flow Bridge

Frequently asked questions

Data & methodology

IBM (IBM) Key Financials

Charts, filings, and peer comparison for every metric

Explore more

Deep-dives across the income statement, cash flow, capital return, and valuation

Overview

IBM Overview

Counters

Income Statement

Cash Flow

Capital Return

How this company returns cash to shareholders — buybacks, dividends, and stock splits.

Forecast & Valuation