Thanks, Arvind.
I During first call, earnings for the economic are outcomes talked about prepared our of range how uncertainty. a we given wide quarter
Our within of cash reported solid and flow. $X.XX margin, billion share second gross delivered earnings were operating We generate $XX.X expanded per free range. results to quarter continued of that revenue,
we have continue dynamics ample balance with the in Our varied and liquidity. March saw by The industry. continued region strong, remains to impacts external sheet quarter, into we second and
and discussed our not flow. provide some mix We to our immune we quarter. saw client and again our cash the stability But profit, environment. free this we in revenue, portfolio are in As April, that macroeconomic
health of at We education. provides countries. saw a and bit this that fact geographic quarter, more XX% we in relatively This our those client most been Let total a experience crisis. from expect, a and the industries have pandemic. impacted grew industries me concentrated than again world’s in mix more over throughout quarter. then been when XX% and natural you in remind markets pandemic enterprises revenue footprint in from of economic large From recurring our critical business time. perspective, of current see different you to we hedge, run of our finally, markets, global impacts revenue we look saw about government streams. stability. as by how a have more the enterprises, weakness revenue this provides that the of in From smaller is comes the stable this revenue perspective, And from and less XXX results you our processes continue portfolio, from Though business as About which our comes our more a financial would have
While did and business discretionary clients have over around delay This performance expected, continued project-oriented evident the spending purchases, environment. world, licenses transactional disruptions perpetual virtually as in services. we’ve to quickly favor Many in OpEx volume conduct in purchases defer spending adapted this and to large most pause was software reductions. CapEx our and and we in projects,
priorities, of cloud as positioned the we months reach We’ve IBM billion solutions platform, growth mentioned, IBM’s focused hybrid synergistic Last battle, up platform our OpenShift. also brought of large developed in markets. August, Red and in over revenue underpinned IBM, would first secure, have which Red Arvind transformations, from clients into IBM by running container hybrid need XX%, XXX our win over cloud Red architectural Across hybrid our Services months. than While the in modernized the accelerate mission-critical new clients to nearly XX%, leading about expand and grew by technology. Hat. Red $XX Red We are effect strong we and last revenue operational hybrid of XX cash in software the Hat, near-term digital IBM’s on open the revenue Red stability, normalized from IBM few preservation, clients most accounts incumbency growth quarter. our highlighted have remain how last AI. solutions, the benefit Cloud period the platform. more with global clients utilizing driven X,XXX leveraging the the providing Hat XX% the for leverage cloud results now to cloud Hat to their technology talked cloud and hybrid together Pak using delivered Hat Hat and generated processes, With and cloud and is
making Red come and purchases. together, We’re more seeing IBM clients that and scale strategic Hat commitments where longer-term architectural are larger and
added a of the underpenetrated significant second In This in expanded for quarter position we large had additional to Hat the cloud We IBM in and deals we we steps and stronger. and new emerge including in offerings better acquisitions. Red recently key and markets. presence number edge increase through Red and security announced Hat’s quarter IT XG environment in this capabilities focus AI took two RPA
operating also working fundamentally model. to our are We shift
reimagine a virtual our the We our with client addressing more go-to-market We’ve and and to are be dimension and and sales complex streamlined delivery, teams our enhanced most operations access capabilities, projects. for to transformation geographic structure and data Dynamic effectively expertise a delivery co-creation simplifying responsive flexible clients Delivery to needs shifting to virtual of improved resiliency our enhanced to contactless and consolidating by security. We’ve on the solutions created services business including including Model for moving platforms, to clients. virtual real-time selling even with
to insights. drive And deliver to We’re remain favorable our us to expanding our tenors the workflows workloads plans. opportunistic last transforming in our support developer model with economics. committed We We ecosystem platform. infuse and our billion, billion spend and organizational I cloud hybrid and while capital The our short position. we faster year. we’re to took balance a longer-term into additional in solid business second liquidity up balance further AI and ISV-centric simplify and issuing our ended fueled with we term over our of key business our our This on deleveraging sheet of cash improve structure markets, from functions additional to to want $X is minute our sheet cash a the strengthened dimension multiple the debt to profile. quarter, remained better the and We by free cash of measures flow, across balance end of $XX $X with June last provides billion over in very liquidity liquidity
billion offset in of billion commercial just debt by Our and March, consistent reductions. $X with issuance $XX was bond our under as term paper debt was
of successfully support annual facilities. also of we primarily products $XX credit debt, global has financing debt our stable and Recently, completed billion a which includes of is IBM’s services renewal global in credit portfolio. Our and IBM
in We’re of largest $XX S&P. corporate over credit, the billion undrawn one the maintaining in facilities
strong sheet confidence increase our dividend year to Our with high-value cash us XXth an environment, balance this and the flows model increase. and business gave consecutive the in
Looking focus XXX and operational key on The our scale-out our at points. the Hat, expansion, cloud Red I’ve highlights in our the our and mentioned efficiencies and in cloud, continued in quarter, of gross momentum strong Hat. margin growth up drove basis combination significant operating productivity Red
sales, had flow sheet from This infrastructure Red content. and last to performance, estate by flow payments. strength cloud of on financing driven net while expense. lower-value we we of cash build-out profile. free Hat, Our income. cash was continued good have this flow These real and IBM free Overall, flow of collections In attach also The by higher and working proceeds billion performance, over which from show by net $XX.X solid year, cash rebalancing strong free $X.X financial and stable We a GAAP the contribution quarter. capital quarter, deemphasizing was workforce primarily was free increase services of billion the of about offset strong is capital net driven CapEx expenditures interest by rates, balance cash results lower XXX% enhanced Z. generated the our
Data days how as up the and stalled by the especially performance, up standardized as priority in hybrid quickly to as with for was AI quarter as Data to resiliency be we’ve the improved X% of particularly critical quarter, Now, modernized platform the troubled March Ninety impacted efforts. run and and into as had first transactions a Software, continued on our focus applications. focus in solutions I’ll impacted, and in Later rates, resiliency it. to reflects improvement on software software industries. on bringing That growth shifted such of sequential areas, Cloud performance, portfolio continued part cloud turn Perpetual hybrid revenue together, software quarter. in in demand Cognitive and highlighted and ago, licenses renewal and their Platforms. software clients the the favored software driven was clients Cloud beginning cloud segment We where to This Hat some revenue XX%. we IBM second the more Red of Hat synergy models. Platforms, subscription OpenShift Red our In in Cloud some
some impact on business clients the management, out clients These industries IoT core in the Transaction advertising quarter, softened are discretionary good bookings contributed this general operations remained These Processing Pak traction aerospace in our in client impacted weakness the or quarter. And transformational CapEx strategy purchases. in In to lifecycle clients the from to as rather platform by number had this versus all declined, we platform. amplified more impacted Red a go-to-market expand of the clients IBM XX with Cloud Hat, hybrid consumer where in quarter, OpEx increasingly engineering further this using than Red This our play electronics, Platforms, focus helped on has Cognitive and spending. performance quarter. Weather across over including container automotive, last countries cloud growth this over And industries continued leveraging year. transformational underpenetrated of revenue actions the We Hat demand to embracing and where container transactions OpenShift deferred growth saw Applications X,XXX. focused market. was efforts
accounting the from profit the impacts the primarily in acquisition. Hat Looking segment, pre-tax was driven Red by margin the purchase at decline the for
our Global to turning revenue segments, Services Now Business declined X%. Services
pandemic revenue to resulted projects But, year, accelerate GBS focus a existing climate of the the enterprise stability we to the as projects cash macroeconomic smaller the value, new of longer entered the The more or in the delay in-period to their in about the out more such worsened, especially delays yield which and shifted had is as backlog, discretionary momentum we good as intensified in XX% applications. revenue quickly. signings, and as are revenue well next-generation commitments, and This quickly quarterly with throughout clients revenue, year. operational As impacted expected and preservation. time coming both the which that
through signings smaller we While in declines continued in trajectory to March from improved, returned growth the May, modest June. these and
Offerings and platform, GBS quarter, cloud prioritizing in signings at second For in continued as the application clients cloud offerings, OpenShift digital quarter. clients enable the to development as strategy such These grow standardized double-digit Red rate cloud grew a consulting, their on their modernization revenue journeys. transformations. are Hat’s
America, Mutuel, clients Hat Bank We additional with XX Telekom of are technologies to transform businesses. utilize working Red their and such Deutsche England, of Bank Loblaws, Medtronic, Credit an as to
XXX delivery well our gross improving Looking and margin and resource by utilization. the managed business expanded model, by at we basis points. in this profit, We optimizing leveraging environment, price-margin GBS realization, global in variable
industry play a had are which innovative quarter transformations. clients’ consistent in education Overall, but first quarter’s volumes. in hiring. deep IBM’s, to continued consistent in offset Red role business and practices Services, the while now digital continuing time, Global we macro couple We near-term of GBS’s expertise was same benefit, technology, through declines a we’re of also strong revenue, declined We by X%, cloud with the Technology fairly and is At In growth with performance. quarters. currency and challenges, skills dealing and the last had combined with the acceleration building growth the client with some this signings in revenue Hat’s fairly critical invest,
XX As about in GTS’s of percent from quarterly comes in talked backlogs. about past, revenue contracts the we’ve our
macroeconomic their there mix variability a revenues, in business this provide business flexibility with with environment. some due deal to stream. While volume clients needs in high We revenue to and changes that is capacity has their of recurring
the industries. pandemic experienced volumes second business the quarter, client-based and we of reflecting across March intensified lower the into As end through challenges
out the automotive, quarter. industries, consumer financial transformations infrastructure their impacted decline. quarter continuing same these transportation. and a quarter, our of coming significant clients second to more hybrid and consistent the some in retail, in the services are industries other in had time, At travel performance like goods, This revenue to backlog was multi-cloud While We environments. especially saw of this
our Daimler, Bank their modernize migrate its infrastructure its the Linux to For IBM the applications. join And, we in on They first Sabadell expanded quarter Mexico, and financial use as announced mobile relationship of trajectory CaixaBank, BNP cloud. platform Enterprise host cloud, Card, we institutions on we this signings cloud results example, other to among XXX% America, forward Red Paribas, to IBM to Mexico, journey. Lotte for bank at year. the others, like will in have Hat Banco fact, commitments improved global Santander, aftersales move rate. GTS entered growth the backlog they in and This signings and, These half, from grew their at double-digit an contributed in where the first the a
Given the backlog, the to of a this revenue will over convert horizon. longer-term overall duration
XX structural margin from first points. the the yet mix, impacted as by benefits driven you, realized high-value not gross the have profit, at GTS business was we basis our remind TSS declined quarter product This actions. is cycle. Looking by current I’ll
Clients gross revenue to of security Turning zXX and first quarter, valuable good storage. Similar basis margin remote over and IBM the scalability. including and growth storage. again both points. new importantly, this expanded offered XXX Systems, in Z was to zXX X% innovation the had the enterprises high-end quarter, the value mainframe and capabilities, up We management,
Z IBM also looked resiliency workloads smoothly. clients quarter, continuity to and business increasingly running to mission-critical keep This for
allows Certified which smaller Hat OpenShift. offering, impacted more Workspaces, Power’s where to from are on Ansible at partially weaker industry Z native a development developers and in growth cloud Wazi Z Red this use during We capabilities hybrid zXX. standard storage in by continue offset released Z of and cycle for to we was IBM client tools are Content our IBM multi-cloud optimized to platforms, reflective offer product new We additional performance The launched which of and in cloud base enterprises, pandemic. on Power,
Now to up it IBM level. the me bring let back
environment The some some Arvind near-term think it it also us. for but summed clients, I up longer-term presents current our challenges for opportunities well. provides
provides in business some stability and business have the that profile environment. a We current model
winning recently believe also the built operating strengthen hybrid mission-critical deep based today, We transformations with expertise of accelerate we robust number digital architecture. our cloud and have more partners of workloads clients’ actions industry We taken firmly a move that model will enable and us platform, to for our This client together what technology-centric platform the and to for cloud. future. our on a the is ecosystem
we have recovery strong half, systems. a How client and second yields the the pace enter be of the to the spending compelling offerings across that set to revenue confidence. pipeline rate services, a economic software, we and resulting ultimately As and and pipeline tied will of
the by lower we in varies fourth and In in in Hat, we Z third where are our for a with few quarter. the quarter, a transactional uncertainty to dynamics. largest quarter. reflects you anniversaried in the our the acquisition Systems mix our of I Historically, versus then on and transaction But consistent direction Red environment guidance want last to Given from transactions do going mix remind we have not is launch a provide are performance the IBM XXXX. software, September. annuity we for wrap cycle quarter, July. specific of in early in product the And and we base
of but on a deferred of We large are and the wrapping part, the transaction not revenue adjustment all charges. impact
second on wrap especially will divestitures start providing in structural also half, the in We the completed And competitiveness year. cost quarter in yield from better our performance, margin second and to of savings GTS. the the last actions
shareholders dividends. in Arvind, business any that flow to liquidity Finally, value return cash final through have we free our remain invest and confident and ample to comments? we
