thanks you us. the billion earnings we realization $XX.X per for with over quarter, the XX all Patricia, over In last pretax $XX.X to billion billion months, flow of generated we $X.XX joining delivered of XXX%. $X.X of cash operating Thanks, third revenue, of operating and and of income share. free And
which pretax best services We at performance the currency we of Gross share. and improvement our impact margin The profit earnings was operating profit As dollar. and compared year, by per was is overall year-to-year expanded led down though the to last the with operating grew X% expansion. years. revenue flat, margin constant in was our stronger flat margin
technologies digital, revenue with these see security, industry. over in growth value to our ability driven to imperatives differentiated cloud, the testament our implement and to the in months. the skills strong emerging, deliver AI, and our We the this clients offerings by segments XX in in innovative results hybrid client strategic in analytics of XX% quarter and performance the expertise a through demand We last the in to IT high-value And continue to see our was of technologies.
per and We areas see long-term consistent we over our investment higher out margins Coming this last operational quarters, services in remain half. playing shareholders. success improve on and earnings share also track which to and on to flow. we focus we With in free the for return said into revenue of the the cash our second delivering our both, higher performance, operating to value our and these total expectations half, expand to few our full-year supports margin services trajectory expected
also We wrap the quarter some said mainframe year. the new strongest face of launch on we headwinds and performance our in third as we last software
our processing the and solution offerings same horizontal their areas data services, in I driven performance we should this launch, hybrid At applications our into segments, clients Watson and software, security, solution then, despite offerings. in And enable history. program of several is cloud And challenges had revenue the our XX%. be our we in digital growth. implementations. third good revenue will within accelerated, In and software grew, here which based on help spans revenue over now rate is both months. as key of AI revenue software, exited integration tougher so the in which currency. our Cloud a transformations. we run wrap Z had what transaction comments at that most our with science, as help our more we time, annual services of expansion health my we a a verticals, now billion, like resulting cloud revenue our billion, few and which billion to throughout software compare Z embed driven in we and successful growth imperatives constant analytics In quarter continue mainframe grown Platforms, areas and impacted by systems, in adoption. in quarter, software, revenue Technology with $XX.X segments. IBM modernize revenue, growth on looking including we deal new again strategic offerings last our cloud $XX.X margin growth again was that, hybrid up consulting and business Services as-a-service in Within In global overall by gross segments, $XX driven revenue mention clients And to grew by we And and delivered XX has Across that our the revenue both
in high-value the technologies. in While these it’s adoption emerging, of cloud a industry the that’s as already of revenue segments and AI, significant base the early such still IT
about are to cloud lack that ability into environments. privacy it’s environments cloud with For in data the enterprises interoperability multiple journey, by and security XX% estimated manage cloud slow across concerns the only progress XX% example, their to of and
Already, Private, they manage environments. a business clients partner competitive a embraced processes to is all workloads and XXX data months we global that secure Cloud sensitive as a cloud and have platform the cloud a strategy. multi-cloud launched cloud companies to in cloud embrace starting need these point cloud, workloads nearly that for mission-critical so, open this are cut IBM across more multi-cloud wins. companies hybrid, than and private which of many can complex, ago, hybrid public, And XX and highly for run a offer for an traditional, mission-critical
to will applications yesterday, cyber scale a security Manager, help AI clients These service IBM and cloud, we first industry’s is cloud deploy and manage series Multicloud any their innovations announced Just complete of in that initiatives. environment. the include which
issues and AI innovations to all with and models technology and and we’re are clients This data IBM’s scaling OpenScale examples interoperable security management AI These the applications help with of AI. provenance includes and expertise journey AI lifecycle enterprises models. the security a the are manage enterprise. of few of to platform forms announced their on building are which industry also the the AI We to technology, our open, first in of facing bias, to just and cloud how trust of
Before our getting into per the financial lay metrics, I’ll earnings the share operating drivers out of growth.
constant at revenue headwind said, I share flat was dollar, revenue per As to this And is of a profit margin, our the and the continued down with currency, strengthening constant at was X%. earnings growth. but
from despite resulted drive Our actions cost efficiencies operating in XX a expansion margin mix. to headwind reposition and of base pretax basis our points,
our we in modest had pretax income. growth so, And
our down, a Our EPS X%. benefit was lower by discrete count growth. it quarter, driven contributed the tax a through Year-to-date in all up rate together, and Putting share was operating finally, how our share EPS to with September, growth contributors consistent the over three earnings X%. presented is the also And operating can up per quarters. last chart it this you on we see to
Looking metrics. cash at our and profit underlying
to in XX As XXX solid headwinds gross last in gross about mix discussed year, capital business, is trajectory. human was offset we the the margin. improvement services, flat up in was days an based quarter, talked the mainframe ago, as zXX is improvement a I instantiated which is value by segments, and in This points. software. compared I our which together last said, services in basis had gross And margin year-to-year margin We
deliver to efficiencies, leveraging half by areas and operational income. to hybrid year-to-year to while top-line, also of AI, like Within using hurts level helps and our both net operating the we way the up in points cyber expense Our a net operating blockchain, automation, This to performance. translation agile expanded operating currency line base due currency to line. the half including investment acquisition across absorbed due and and productivity it expense When and and pretax down by dropping IP innovations deliver was reduction provides we the income expense X% also margins, the generally due with was processes expense We benefit to changing was X both security X%. bottom our of hedging driven income lower flexibility some contracts. synergies. We decline, The of cloud, the business work. base increase
points is of underline Our from operating last rate rate year, slightly. XX% was down X tax up while our
year-to-year the the in discrete benefit driven said quarter. is I As by dynamic
$X.X our cash free at in billion $X.X cash through and We quarter billion of September, the flow Looking metrics. year-to-year. generated is which
by headwind growth As tax decline and driven is cash CapEx. expected, our year-to-date in
flow As our capital the $XX.X realization. performance. XX% always, we cash months flow returned We best a while to our investment. trailing is XX way look shareholders cash about basis, that to increasing of And free billion, XXX% which that at generated on
offerings. X%. segments. was $X.X The our of to billion of had Cognitive a segment which broad Turning revenue, down is comprised of solutions set
emerging verticals performance strategic these this break let take down. I’ll a back as to minute technologies So, to and security, capabilities, includes as We and well across health, blockchain. and like and of it software in good quarter, come had minute. me these solutions our AI offerings domain-specific a areas analytics like
offerings address and of the with commerce in offerings, actions been dealing challenges the specifically talent in a AI, We’ve also few areas, market. the infusing taking about Solutions digital including modernizing we’re talking been experience. that three quarters, domains. And our horizontal includes over last secular enhancing collaboration, I’ve these and where shifts
While performance, on segment’s these progress. three overall to some weigh made we’ve areas continue the
very this and experience analytics, in to reaction positive mobile quarter. and AI like the which double introduction in Notes/Domino we had customer example, where JavaScript grew commerce, of infused For Version supports into for we’ve optimized offerings digits is signings XX, Node.js. And recent collaboration, SaaS
is leveraging play we’re get platforms. processing out to see Cognitive Solutions workloads, seeing So, because start XXXX. software But our SaaS, includes as time in This shoots. mission-critical green transaction some includes also will to we hardware value we runs that software. this the into starting longer
While reflects of much the buying cycles. tied the timing quarter, performance transactions revenue annuity-based, to is are the that in larger of client any
transaction processing enter good we a as in fourth software We growth. have supports return a which pipeline to quarter, the
where turn now, a few areas platforms me So, of back to our we and high-value to continue scale solutions. new high-value let
our verticals been payer, had health, patient intelligence Sugar.IQ we’ve growth live, had underlying analytics we provider, Private In broad-based security. working the leverage monitors. Medtronic data and are we In we for This area in glucose and sciences. to Cloud In imaging analytics very their and had June, science Watson life life infusing the IBM with of apply the into our with AI we’ve platform, data quarter, industry and including In key and and been like Medtronic areas strong. initial demand longest, results health, of data sciences, in in offerings. growth went growth where
offerings and introduced AI in in the and orchestration, to advancing cloud as new announced by We Watson continue management. detection clients growth Security Private in and on benefits their Cloud data security behind the services bias of quarter AI. endpoint data platform invest IBM services the We and was seek the led firewall.
driven went Trust our differentiation momentum for market retailers the our comprehensive the Our unique portfolio position, IBM emerging area integrated of live, network this leading food is safety network. Food by and In AI. with Carrefour, world’s and the one of joined quarter blockchain,
technologies with blockchain global over up have We XX ecosystem in chain, Maersk. active also we we XX to and jointly Together apply address over inefficiencies networks. now will signed announced TradeLens and the participants, supply blockchain
quarter. key expanded this levels over strategic at a profit while margin in continuing including acquisition efficiencies, We at operational This point driven by to was pre-tax year-to-year. invest synergies, areas. by Looking high
Looking at services.
Cognitive being factory Process mitigated development. such services Digital X%, a application building the business Strategy by X%, progress well in Consulting offerings application in managed as accelerated first Transformation. iX, decline revenue by from as in strength areas the grew cloud continued enterprise to is as migration strength half. the and global application And and services led traditional in growth cloud within revenue Our on management,
to Our to attract clients’ consulting enterprises transformation talent, enable transformation. undergoing leveraging IBM’s fact their to turning performance best transform reflects uniquely improve expertise GBS leading-edge to the with they the our to as Customers reinvention, the operate, are industry customers. partnerships we are with and a engagements technology positioned and digital way infuse digital are that and to technology
customer in-store For partnering industry. provide example, and and understanding retail innovative to are deep Sally Beauty influenced consumer, it of by experience, brand, the we with digital
a creating GBS they Banking with communicate Lloyds and virtual are fan U.S. the and several most team the We Open, assistance the for to concierges Group digital match AI or topics. to features. the find virtual experience, exciting fans’ range AI serve enabled digital for shot the customers. answered and which day enhance And provided way powered distribution, the innovative included on highlights questions of the view at tournament’s of
Turning to points gross margin XXX gross profit. expanded basis year-to-year. GBS
price for as such revenue cognitive, and capturing value offering We are shifting value. our towards digital higher mix that and
revenue we Services Additionally, all delivered solid aligned strategic and well clients GBS it delivered skill benefits. executing seeing quarter. They Technology value And we value second In Platforms, reflects Growth delivering have as-a-service quarter. to the to of a for Cloud billion utilization by productivity XX%. rate. our the together, exited revenue and quarter resources differentiated billion grew proposition areas was and hybrid are annual enterprise. for with a cloud run up implementations are key IBM’s key Putting to $X.X with areas. cloud consecutive address and $X.X in led This cloud the we and
real and of enter on-prem apps to journey renting clients I across business applications earlier, the economics public, are cloud It’s workloads focused and IT note blockchain, that and the launch markets. that and of globe. services are proprietary leader complexity will results at our infrastructure the and we’re mission-critical our model also want growth to to open of this Initial approaches cloud This mentioned both XX and lock-in. to where with technology help infrastructure we in heritage cloud IBM’s Private, open new help recognize As Kubernetes clients Within be areas. as approach strong Hyperledger this cloud on value is open. I we many IBM which these quarter this and software their new, evolving. early alone of and needs those the can in needs And remain. with to to rapidly days bringing earlier and of in of cloud governance. and and said open is yesterday. vendor contributing beyond and move in drive This Linux mentioned announcements to new and see the for cloud They important segment, to secure approach processes scale. why interoperable to private the this are hybrid, the adoption I start new however, strong all more of business integration is standards overcome projects to processes, that clients optimized same productivity companies performance cloud. shift early and in cloud. shift their with Cloud From the Java revenue AI, consistent around bringing More a will
which revenue services. supply modest financial Intelligence X%, to manufacturing, will processes technical across solutions development sales and IBM its down was a And business trusting is chain, a adopted to turning now, Private transform marketing, and support Fidelity services, Cloud operations. its and speed improvement in is IBM to Private sequential multi-vendor by of products continued our Cloud the processing in streamline National offerings. help new core services to the credit from Brazil’s charge moderated Artificial leader last card in goods has Japan and be to second in backs business Aflac our cycle, help Services, for the impacted product Brazilian hardware IBM to by Cloud global Similar area example, And quarter. For dynamics services. quarter, sector growth leader Watson this Information CNH continued of capital use Industrial, a payment
segment. on gross the scale driven Moving efficiencies points. as initiatives. by in productivity in well expanded basis to our as profit cloud a improvement This Margin our lift business for XXX was
footprint cloud to in expanding the As Platforms, the well opportunity to as we to investments around in the data our and continue capabilities drive Cloud our Technology as by we shifts making are capitalize and capacity hybrid. capture value expanding on Services go-to-market to world adding center
cloud in development public to that and private innovation investing both hybrid also means We’re technologies. drive
Cloud also Manager Private OpenScale. in we’re and And this functionality IBM to of and IBM the Cloud. enhancements AI see adding Multicloud and introduction IBM You
services on some let me to perspective combined on you give moving Systems, Before business. our
and optimization we’ve scale the to we performance, gross revenue are remix we As profit workforce an value, revenue combined backlog, actions improve trajectory. and been higher And improved entered cloud year, saw the the revenue taking adoption. introduced in is X% revenue a and which price basis improving for improve, expanding XXX margins the human opening points. pointed revenue designed margins POWERX the instantiated. to with combined of quarter to continued offerings with and to we our third a combination in by again quarter, this trajectory In where capital-based from realization services, productivity zXX, Systems, gross a grew gross driven business which strong up a is value In improve efficiencies to newly drive the
zXX terms of margins year-to-year most and successful program platform’s The to our IBM program XX% quarter on revenue in it’s key Z be to-date ahead The X% continued encryption continues track to pervasive expanded. the differentiator. in in shipped long cycle. growth, grew history. the This And capacity, a prior zXX’s fact, MIPs
For large clients spans many The this instance, the industries data, sensitive the governments for U.S. zXX countries. And a new specifically cloud government our new new are quarter, and selecting to to environments. we zXX zXX including single-frame quarter. to added designed again this several adoption including agency protect clients platform
digits, driven next-generation our data Our strong we by systems, the and high-end These and in and Power across intensive quarter, are up for a POWERX-based and revenue third designed in released environments, we’ve processors and adoption. double cloud handling In POWERX workloads strong growth traction was HANA Linux, AI, advanced architecture. analytics, a our markets. seen for UNIX systems new mid-range
pressures. pricing Storage Energy with all-flash mid-range and is continued hardware will PowerAI U.S. offerings new environment optimizing in by both Storage an mitigated we adoption. with for hardware introduced new high-end, drive increasingly to also Vision Department quarter AI. to software in and was Offering strong the supercomputers customer We our deploy declines arrays. at growth and PowerAI Enterprise quarter. labs competitive continued of such in help as this And down
releasing for new additional our And of this in quarter. environment we client bank generation Safeguarded investment next quarter. differentiate requires NVMe this earlier new large been data with was to deployment protect a from cybersecurity announced like And our We’ve functionality to Copy technology with cyber attack. this critical in this signed first So, innovation. major technology FlashSystems
the to out NVMe across continue will roll We portfolio.
X Turning brands. down over to to reflecting across margin IP pretax lower was mixed and drive and investment income points, profit. Systems of the innovation ongoing a level headwind
year-to-date to and $X.X driven is Turning decline cash The operations cash and receivables and $XXX free balance combination quarter. We is free the year-to-year. to down cash higher expenditures our billion This generated flow flow by flow. from cash capital a of in excluding which financing brings our cash of $X.X million billion $X.X of billion, sheet taxes.
You’ll at of year, line The recall of this at by end headwinds cash what performance three working we from year, taxes, cash and point. the we combined with the we the driven at said is the growth last expected higher taxes Z our higher beginning free CapEx, introduction. capital investments strong in cash and our to IBM capital impact year, expected flow this
So, a in we more on and little cash CapEx spent a little less taxes.
billion cash And Looking billion million remaining three the authorization $X.X shares in including XX returned shareholders, at $X.X in uses of end dividends. our quarters. with at the to September. bought back we $X.X over billion last We of our buyback
to non-financing support $XX ended just in of business, the financing We We leveraged at cash continues at highlights. which in and billion of X. September $XX.X about over balance debt billion. sheet debt of be X to Looking our billion $XX.X with had
year better ago. That’s XX% investment Our grade. December than better remained a than at a strong two and financing point points portfolio
of returning as by increases. dividend the invest, in continue consecutive balance got while shareholders years evidenced confident of of flexibility plenty to XX to our our strength We’ve sheet. I’m value So, to
let So, up. it wrap me
last efficiencies. that an to cloud AI, to hybrid IT skill in the pipeline and through our the innovation actions the like rebuilding security and quarters Our actions we’ve reordering, environments. the opportunity business. has been our our And blockchain, technologies We’ve this taken further three to enterprise industry to we’ve first drive value reflects cyber been align what clients reposition over address rapidly in making delivered couple operating investments to years performance been base
then so, And has been flat third is our quarter our was on the a trajectory now, up, improving, revenue year-to-date and margin basis, year-to-year. gross
modestly up company. fact Our operating we’re to value and These profit returned a lot the of all shareholders. reinforce we high-value a that is
continue three we of quarter expect on least As look do. to operational share. consistent as a the fourth the quarters base. performance has $XX.XX transaction work seasonally forward to always, large to first earnings in at the But operating more execution, with deliver focus and And per our there’s we
us, about Regarding our of we me our which flow And the we the get capital cash is with maintaining Q&A. started year, free turn over for on cash free realization. let XXX% so expected cash to taxes in and we billion that, can with behind headwinds of are $XX largely flow expenditures Patricia, back it view
