The short answer
IBM (IBM) is DOUBTFUL on ZakatInvest's qualitative business assessment. The qualitative verdict is DOUBTFUL because IBM Global Financing provides client loans, installment financing, leases and working-capital financing, and its net financing receivables are material. IBM's software, consulting and infrastructure businesses are generally permissible technology commerce, but the latest filing does not support the older claim that financing was only a small, fully quantified revenue line.
This is a reproducible research screen, not a fatwa or investment recommendation. Scholars and screening providers can differ on debt, receivables, lease treatment, government work and how conventional financing should be classified.
Current quantitative Sharia screen
Based on 10-Q figures for the period ended 2026-03-31; calculated 2026-07-13.
66,361 / 156,229
11,783 / 156,229
32,078 / 156,229
357 / 15,917
- Financial
- Fails
- Overall
- Fails
Debt is 42.48%, above the examined FTSE 33.333% asset limit. Identifiable liquidity is 7.54%, receivables plus cash are 20.53%, and disclosed interest income is 2.24%; those other ratios are below the examined limits, but the debt failure is decisive.
- Financial
- Fails
- Overall
- Fails
Debt is 42.48%, above the examined MSCI total-assets limit of 33.33%. Liquidity is 7.54% and receivables plus cash are 20.53%. This is a calculation against the named method, not an index-membership claim; business allocation is also incomplete.
- Financial
- Fails
- Overall
- Fails
Debt is 42.48%, above the examined Malaysia SAC 33% financial limit; identifiable liquidity is 7.54%. This is a calculation against SAC ratios, not an official SAC classification of a U.S.-listed security; contract-level financing activity remains unresolved.
- Financial
- Not calculated
- Overall
- Not calculated
A properly licensed and reproducible historical market-cap series is not stored, so these methods are not estimated from a current spot price.
Business-activity disclosure
IBM provides enterprise software, hybrid-cloud tools, consulting, mainframe and infrastructure products, and related services, which are generally permissible technology commerce. IBM Global Financing also provides client loans, installment-payment receivables, sales-type and direct-financing leases, and working-capital financing, making the qualitative verdict DOUBTFUL for investors who treat conventional lending or material interest-based finance as disqualifying.
Limitation: The filing discloses financing receivables, financing revenue and interest income but does not isolate every loan, lease, fee, customer end use or prohibited-revenue category into a universal numerator.
Purification
IBM discloses $357 million of interest income, or 2.24% of quarterly revenue, but the filing does not allocate every Global Financing loan, lease and fee into a fixed purification percentage. Readers should follow the scholar or methodology they use; no fixed percentage is prescribed here.
Inputs, assumptions and primary sources
- Debt uses IBM's reported short-term debt of $8.655 billion and long-term debt of $57.706 billion. Operating lease liabilities are not entered as conventional interest-bearing debt here.
- Cash uses $10.819 billion of cash and cash equivalents. Current marketable securities of $964 million are separately identified as interest-bearing securities for the liquidity calculation.
- Receivables use $6.493 billion of trade receivables, $1.242 billion of other accounts receivable, $6.510 billion of short-term financing receivables and $7.014 billion of long-term financing receivables. Including IBM Global Financing's material loan and lease portfolio avoids hiding it in a narrow trade-receivable numerator.
- Revenue uses $15.917 billion for the three months ended March 31, 2026: $7.052 billion software, $5.272 billion consulting, $3.326 billion infrastructure, $220 million financing and $48 million other revenue.
- The $357 million disclosed-interest input combines $205 million of IBM Financing segment interest income and $152 million of corporate interest income reported in other income. It is not combined with investment gains or interest expense.
- IBM reports $13.523 billion of net financing receivables, including client loans, sales-type and direct-financing leases, and commercial financing receivables. The filing does not provide a universal scholar-approved prohibited-revenue numerator for every financing contract.
This is a reproducible financial screen, not a fatwa. A failed total-assets screen can coexist with a pass under a market-cap methodology. ZakatInvest keeps the qualitative assessment separate so numerical thresholds do not erase material context.
Current quantitative screen
The calculations above use IBM's official filing (Form 10-Q for the quarter ended March 31, 2026). Amounts are in USD millions and use total assets as the denominator so the inputs can be reproduced.
- Interest-bearing debt / assets: 42.48%, using $66.361 billion of short- and long-term debt. This fails each examined total-assets debt limit.
- Cash plus separately identified marketable securities / assets: 7.54%, using $10.819 billion of cash and $964 million of marketable securities.
- Receivables plus cash / assets: 20.53%, using trade, other and financing receivables plus cash. Including IBM Global Financing's loan and lease portfolio is a conservative choice because the financing operation is material.
- Disclosed interest income / revenue: 2.24%, using $205 million of IBM Financing interest income plus $152 million of corporate interest income against $15.917 billion of quarterly revenue.
FTSE Yasaar, MSCI total-assets and Malaysia SAC financial screens all fail on debt. Liquidity, receivables-plus-cash and disclosed interest income are below the examined limits, but they do not offset the debt failure. Market-cap denominator methods are not calculated because ZakatInvest does not store a licensed, reproducible historical market-cap series.
What IBM does now
IBM's first-quarter 2026 revenue was $15.917 billion: $7.052 billion software, $5.272 billion consulting, $3.326 billion infrastructure, $220 million financing and $48 million other revenue. Software included hybrid cloud, automation, data and AI, and transaction processing. Infrastructure included hybrid infrastructure and infrastructure support.
Enterprise software, cloud tools, consulting, mainframes and infrastructure services are ordinary technology commerce at the activity level. The filing does not quantify every government, defense, surveillance or customer end use, so the segment mix is not a universal prohibited-revenue numerator.
The IBM Global Financing concern
IBM Global Financing provides client loans and installment-payment receivables for IBM hardware, software and services; sales-type and direct-financing leases principally tied to infrastructure products; and commercial financing for IBM business partners and distributors. The filing says loan terms can run up to seven years and lease terms up to five years.
- Net financing receivables: $13.523 billion
- Client loans, net: $8.079 billion
- Sales-type and direct-financing leases, net: $4.132 billion
- Commercial financing receivables, net: $1.312 billion
- Financing-segment interest income: $205 million in the quarter
This is why the qualitative verdict is DOUBTFUL even though disclosed interest income is below a 5% income threshold. A low income ratio does not erase a material conventional lending and leasing operation when the filing does not allocate every contract and fee.
Other qualitative considerations
- Debt and acquisitions: Debt is $66.361 billion. The Confluent acquisition, pension obligations, operating leases, derivatives and supplier arrangements remain relevant capital-structure questions.
- AI and cybersecurity: IBM's AI, automation, data and cybersecurity products are generally permissible software services, while customer end use, surveillance and government contracts require context.
- Cash and investments: Marketable securities are included in the liquidity input rather than silently treated as zero-interest assets. Corporate interest income is separately disclosed.
- Operations: Open-source licensing, data handling, export controls, supply-chain labor, service quality and cross-border government work remain continuing diligence questions.
Bottom line
IBM is presented as DOUBTFUL on ZakatInvest's qualitative assessment. The core enterprise-technology business is generally permissible, but all three examined total-assets financial methodologies fail on debt at 42.48%, and IBM Global Financing is a material conventional lending and leasing operation. No fixed purification percentage is prescribed here because the filing does not provide a complete contract-level allocation.
Use the quantitative screen alongside the qualitative Global Financing analysis and consult a qualified scholar for your chosen methodology.
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