International Business Machines (IBM) 20 Jul 212021 Q2 Earnings call transcript

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Now, I will turn the meeting over to Ms. IBM. with Murphy Patricia begin. may you Ma'am,

Chief Executive Thank you. welcome Presentation. President tomorrow. I'd website to prepared be and investor Officer. We'll a Murphy, here available Kavanaugh, replay will couple is to IBM's Patricia Chief Chairman you IBM's of Earnings Arvind by IBM's remarks and and post and the Second Jim with like Krishna, time on This Senior Financial Vice Officer; a this Quarter IBM I'm within today's hours, XXXX and

made in the factors results comments These Act this Some actual considered presentation materially. involve forward-looking Private of may under that statements Reform our differ be could cause Securities Litigation to XXXX.

these in is included about filings. the information factors SEC Additional company's

additional information to Our also presentation investors. provide includes non-GAAP to measures

For at revenue example, growth and currency. signings constant present we

addition, revenue, view provide on lines growth with adjusting business, the go-forward and divested cloud, a our of constant-currency our impacted we'll businesses performance. for focus for total to In consistent geographic

for other the charts the X-K reconciliation in provided SEC. these submitted and at have non-GAAP the of presentation and We to the end measures

call that, to with the over turn I'll Arvind. So

Hello, speaking all you joining It's us everyone. again. with of to pleasure Thank you my for be today.

progress this to continue We make quarter.

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is Kyndryl, We The executing which our our year. the the are by of of to senior track still recent within reinforce also support on be team end priorities. strategic and completed separation the announcements

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an microservices. on and monolithic on ecosystem, build professionals. that move to to including Meanwhile, personal observability, to Watson And CodeNet, management, IBM investments we having IT Watson to investing the acquisition we and on portfolio. Kafka transform builds of complement announced application Science of next-generation for are series simplify and to to cloud the for Data help new second we to the OpenShift, OpenShift. a ARM products to cloud Ops systems This recent how Instana expand to AI and is the move our should that apps and AI also API ever capabilities. optimize managed translate It launched In operations apps Hat native to organic decide how Engine, with it acquisitions. quarter, Orchestrate, continue it. to AutoSQL, invest includes data hybrid make our launch into helps provider enhance Cloud augments without apps. services that performance Turbonomic applications services resources. the AI. code. developers our automates which we cloud automate of of to Apache While differentiate that or with that our Cloud APM further of management any build of easier productivity MonoXMicro, the companies teaches than Pak the AI Red

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will This quarter we Tokyo the partnership in the Institute join and Fraunhofer University This the builds Centre Japan, announced with the of Cleveland UK, forces quarter in last have we STFC announced with Hartree Clinic. the on in we the Germany.

month, supercomputing In we technologies Before like CSR the research. advance support close, our as our quickly applying to I power you progress, released apply XXXX issues. of efforts to of our report. such to societal This comment will in of it, initiatives would societal resources see some around on our I COVID-XX

gas We of the carbon have by without offsets. emissions zero greenhouse XXXX, important to made reach the commitment use

in and scores, as inclusion our and see our our To We strategy. series we taking our diversity are being of to confidence close, you a reiterate are report. increase diversity actions let transparent me can my in representation, in

progress financial Our second the objectives, achieving mid-single to toward and you. strong digit sustainable generation. over revenue quarter demonstrate our results separation two are we Jim, cash post making growth

Thanks, Arvind.

with second revenue As before operating over revenue reported the and share In start financial profit quarter, gross business X% getting model dollars always, highlights position, our margin dynamics, of performance, and operating billion. grew gross to grew and $X.XX. on comment liquidity per our We and We as then segments. expanded earnings the cash into we I'll the $XX.X profit reported X%.

our free $X.X generated cash the year. strong. over remain we And $XX first sheet half, flow position and balance adjusted liquidity the Our and through billion was last billion

at We constant Global Business revenue X% and in led performance, X% by growth in both in continued growth make Services progress currency. our software, to

areas and over This transform, is Cognitive across automotive environment helping been in improvement meaningful revenue IBM's As Western and and which more and whose now where our progressing, year XX% Cloud software, We is US led infrastructure by is at and cloud in double-digit a Global spending we pandemic reopening the services up and rate. Business saw industrial Arvind revenue Canada, Europe. is like a several Globally, mentioned, the see that an we approach. quarter some and Services standpoint, countries continues respectively. industry in are in leveraging the improving. products. to platform like markets this the had transportation, this XX% by impacted of and From up enterprises $XX was last billion, Software, cloud digitally the be travel

of fundamentals margins, our solid. As up basis and expanded pre-tax basis We XX gross points margin up margin operating XX points. performance the our remain improves, model business with revenue

simplify operating We and have streamline our actions taken model. to

Services' As profit roughly one-third actions to of I've the the Technology improve structural of past, said ahead the of Kyndryl. Global in are profile separation

up are realizing margins and these gross our and We savings, GTS pre-tax this are quarter.

growth. flexibility roughly two-thirds address other for create the The the are from future financial investing and of actions separation which stranded targeted we costs

investments are We in ecosystem. ramping innovation our skills, and in

in of capabilities in GBS, aggressively skills across Over adding Red and the we resources been delivery the technical quarters, board. last couple Hat have go-to-market hiring,

footprint garage to selling provide to our scaling services. approach experiential are and We a skills and more consulting

AI. research areas increasing in hybrid like quantum, We are spend cloud, and

We are accelerating ecosystem investment. our

completed in strategic first the of the also in add skills GBS capabilities partners. acquisitions year, hybrid We and and AI cloud half several to software ecosystem

billion offset the by solid while cash and the flow This flow associated excludes our billion dollar liquidity and we first up half. for financial cash and in secure our from Kyndryl. Now, cash $XXX continue free We disciplined last of slightly turning paying late year. growth last $X.Xb half in initiated and These cash quarter. generated the and consistent of tax flow actions expectations our sheet impact and view transaction business [ph] performance are we to underlying $X.X structural headwind in full-year free million with adjusted the management, de-lever year-to-year, of adjusted separation modestly $X.Xb with the adjusted of first business discussed charges position. about cash the charges to generation balance With dividend. with cash beginning a growing of the was year investing This free

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our debt in per we In used now return to consecutive businesses $Xb by share year. about from increased dividend the quarter, reduced the also to peak capital half the for have we our each. acquire first second mid-XXXX. $XXb roughly We and XXth shareholders, the also cash In

across value starting now and results, importance So improved were growth Cloud Cloud of Red and automation, reflect Data growth and our growth for with the both vector. quarter. our where revenue back, Hat, X% in this vectors. offset hybrid and to I'll Cognitive performance This and segment growth turn Processing declines led by security. and investment cloud software and key data Applications, Platforms, Software, Platforms which to our including vectors was These Cognitive are Stepping Transaction strategy, areas AI by analytics

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chain. Cloud AI-powered strength which The automation Sterling as Pak Turbonomic we integration also was The clients was including offerings. Applications, Cognitive further and development. for acquisition quarter, services, automation operational for rapid strong cost-saving of and our and for management, challenges. by Automation software supply up had asset extends integration, had delivers Weather horizontal Business Pak growth to solutions in Maximo Security fueled X%. In solutions, revenue Cloud This growth solve leverage

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products, they our committed in Processing over last our clients we a in strong This Since preference purchase for to we CapEx, our putting Transaction favor clients seen renewals Our flexibility to provide consumption-like in revenue though again Platforms perpetual continues, models. have pressure Processing declined. how remain mission-critical software. software. on as this We year licenses, Transaction Platforms OpEx more of early had

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on, flow. growth clear is are cash been revenue and we have We metrics on focused the

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quarter, As last years. we second average three the to third in line be revenue we third dynamics to quarter of expects the to look quarter with

growth the currency benefits. at moderating should come from performance, profile, underlying revenue Looking by more business year-to-year mitigated

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So with turn that, to Q&A. to let's I'll over go Patricia. back it

Thank you, Jim.

Before I'd items. we a mention like begin couple the of to Q&A,

end First, questions. presentation. the supplemental of we I'd at have refrain finally, as multi-part from ask always, included you the to And information

it for let's please open So up questions. operator,

this Thank of Our session Katy Stanley. first At you. conference. Morgan Huberty begin [Operator question-and-answer the question time, the Instructions] we'll from with comes

open. is line Your

factors mix shortages services any and in are Software Cognitive the from the Thank also increases, Cloud well can business? as lot are impact particularly and are groups? I into you guess playing Jim, any other margins walk the that PTI coming of a GBS that about investments down you. you seeing afternoon. through. you But is I wage talk for margin Question as imagine that those Good And year-on-year. labor Thanks. performance in from like

you that Software two model. our GBS business growth within Thank chose for of Katy. and much important you two are the Obviously, very Sure, vectors segments our those very question.

second those we guided both revenue cash the first were entering said and see on we to going from the I As we is within investments see continue into going quarter year, starting we've flow second quarter, that growth to -- And significantly what said, vectors to you the in quarter here invest out we think as and on move forward. up playing I ramp that the forward. and

in the investing our because that is see you said demand demand macro and that in and home, front what of actually see profile to the out acceleration we base already with through levels base just of in see business quarter margins our revenue dissipating deferred the the and second software pre-remarks our out software and very dynamics you what Labor We're the in are we to ecosystem for is margin back business base and about invest we investing, level overall. move bring revenue in and we're of at [ph] yes, overall. We a software. of overall. continue comfortable an business. in playing the strong on. business quarter-to-quarter two, year we going good war high encouraging GBS in feel talent it We play Red the going very GBS GBS and our way, is have and as of by really between But feel expectations there exceeded got to in pressures, to innovation skills pre-pandemic Hat the one our we really

first of good that the we're the we of practitioners through pretty about half profile and is forward. going GBS significantly, thousands business feel in investing are and bringing We thousands what

Thanks, Sheila, next Katy. please? can the question take we

will question next of Bank with come Our Wamsi from America. Mohan

proceed. may You

profit to It's see you. nice thank row. quarters in gross Yes, a dollars in the growth two

but growth margins in through full growth. leverage points gross amplify margin expansion with strong alluded, XX basis be year-on-year see just as growth would comprised had and You the growth profit GBS the a It both GBS. to dollar Jim in to very the model gross consulting revenue come nice and

you in we it growth GBS? margin see coming expansion or is longer When do in is question in would how quarters And both Thank come and we that see investment the revenue be the really, years? much actually model to possible in into my need GBS? mode So you.

Wamsi, thanks for question. the

question So upfront. just building on Katy's

effect every for $X that of that a dollar creates platform software of revenue. on both platform centric this GBS driving from if to demand platform as the of the spear, business the an want land continue an services $X architectural we about get are $X talked strategy. in our hybrid flywheel view in then $X cloud essential We is to call point that that it, and tip invest will to the to we our and of It we you part is to

So to going we're significantly. invest

Now off with of quarter. we said, second rebounded that

when year get our out the going second into pandemic levels last we expectations. very points and about adjusted and X we our good We six hybrid play half. headwind cloud And free importance of But much place and continue ago last the on days we'll dropped to forward. contribution down XX account platform to us taken to cash you first this feel where return exceeded cash more quarter flow. metric posted that GBS that key profit behind give dollar pretty growth in tax We and it importantly going we're because in about see hit up of year we Second cash year-to-year pre-pandemic talked is It's really at revenue GBS. adjusted guidance through quarter-to-quarter. the invest in part is most our we flow the that's back free

our So which attainment acceleration forward. flow, and going be and a reflection revenue to move adjusted line is of as cash free we wise really leverage top both on operating margin

we next please? Thanks, go Wamsi. the to Can question,

Toni question comes from with Sacconaghi Our Bernstein. next

open. is line Your

if thank bit you. ask wondering could I little Yes, acquisitions. about I was a you

to contribute you sustained acquisitions, I billion about growth acquisitions expect $X.X said the inorganic basis and XXX a on points over XXX year. basis think points spent last on basis of Arvind, per that to year, you you've

be generating the you. figure reported growth impacted acquisition mental could how XXX rate sort points that please? businesses should spend we us that's of remainco reported $XXX about inorganic contribution basis should on about? then for XXX each Or what of give million acquisition [ph] billion GBS' a acquisitions that Thank framework is those specifically million, rate basis in and much comment model about, quarter? points apps of we $X just Cognitive to the growth So, to you the dollar thinking And is think to in $XXX

Great Toni. Thanks, question.

the So let's start with first part.

So if remember last are cash generating correctly we of -- year, I for year XXXX. flow $XX.X the billion free

We billion $XX billion to $XX this have year. said

[ph]. do you billion dividends, and $X to So you if billion the between get the to capital expenditures, acquisitions, $X.X math

year-over-year. inorganic given increase free go a to If to you $X.X and that say number that now cash expect to going we billion billion $X by in on are year you up activities can our flow

increase [ph] billion go number as fair $X.X to we to year. our it It begin this a billion cash $X up would is -- could for the So flow.

year next not $XX to $XX billion $XX generate said, billion expect to already have [ph]. $XX We to we billion billion,

sense one the just you number. on gives that absolute So Toni,

The second on in GBS. question the had there you

and XXX XXX have from points is basis acquisitions. the would GBS say I top we So to said growth before that that as number. of points in of end offset basis right

second Cognitive at net, I tens the very, any, applications you and think you because if quarter mean a yet. more in, would maybe acquisitions, low look be nothing a the Cognitive at Cognitive Software, there the if [ph] at applications significant If number number. few very product all was basis actually I points, from look of

acquisitions those XX grow a an in Now and the number, Think then nice the because the to obviously a the but But GBS begin return less over there. deferred give months. is in, acquisitions software of come acquisition, side, give it very at but immediate revenue they you revenue grow lot contributing fast. they you model some do

actually just on contribution goes growth from the years to for multiple a rate. for acquisitions those overall the year single not So

a difference. years GBS software that time, provides about three build over it [ph], points XXs, that basis to immediately all imagine that's the slight XXX then but over tailwind And two up smaller those much pretty of nice so years. few

the for Thanks Toni. question

the please. to question go Let's next

from Evercore. next Daryanani Amit Our with question will come

line is open. Your

afternoon, taking on a I question. hybrid Arvind, Good everyone. for my question have Thanks potential. cloud the

hybrid cloud IBM maybe the you bit is hybrid the investments to You've fair customers you talked is free is flow? a, of And extent does for cash a to to it think profitability misperception get that reality, today Because what your think to mean versus some and really why enable positioned negative IBM's there touch cloud past your the about I is there I a margins. your and but most think on-prem some shift secondly, then better hybrid on. from do peers? in and for could agree perhaps perception that

thanks. Amit, Hi

but you, correctly it, I our pointed repeat believe cloud I is for as obviously wouldn't clients. I reality hybrid the you have So out, mean

question. to meaty of parts the Now get into your more

and our look to has to go If say hybrid only IBM Microsoft I Amazon important the on-premise you for has The us hyperscaler, public some integrate credibility is drive not their and me competitors play clouds, many, in cloud. that always is an at operate multiple as public done are partners, public people clients we across onto hear our that's goal that means. and Who -- both our why that where decades in. many given prefer across you and environments a for cloud they'll do would look maybe own If workload why hybrid large the cloud? at

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as Rule you XX% far going running base IBM today. separation already one to has composition model EBITDA today. to as of of to the it our north Kyndryl. The Yes, a CFO, When of look I into I example, built point. overall. your mix. be as Hat around with growth carries it love look at the of build today subscription is would XX when just to at one roughly business post add Red company profile well thing Arvind software just you ARR in as on company That IBM that of that. And XX% That high already It's that

we and help that line more bottom based So software more as will to us shift mix also. in cash contribution effect

Sheila, next question. take the Amit. you, Thank let's

from Next, with Credit we Matt hear will Suisse. Cabral

You may proceed.

with of Cloud a Can just and software about far? maturity Paks on going of if financial talk of could Cloud segment in dig you terms Paks, you and contribution you was from the little about integration you're more wondering Cloud thank here? the Yes, seeing the Cognitive, hoping talk OpenShift. And the so forward, and you. just adoption Within from performance where to the broadly Cloud Paks impact where in I bit portfolio are into the customer the more

for thanks question. Matt, the Yes.

architectural elements I'll Let me part of the the to the on financials I'll use then to Jim first it call it it answer answer cases. and the, your on listing. And the question give

starting maturity We So, October at of onto the you deploying in tell if Paks that year move year every the 'XX. Cloud is way of made Paks, Kubernetes OpenShift. selling been this have would this and we from I Cloud you look other platforms on OpenShift

XXXX have to yes, let's prior purchased so And course, people bought would of have platforms. other might Kubernetes that acknowledge

all going last OpenShift. was And XXXX, so by year, it onto

is I think maturity that complete.

of version the do day they Now if prior the new people years move within observe from we typically have deployed one, to versions. some software three

year, and expect So I fully end the done. prior the would of by even deployed moved have this that's would

strong look of you at mentioned. very adoption, Paks. that half customer If Cloud them to clients we come Paks Cloud through XXXX are a the over contributor Well

talk COVID-XX XX for Pak. on hear top another Watson handled data. use That's of the work with is a case, quarter use calls in Assistant Assistant about Paks a runs the which Cloud Palantir a for doing Watson of Look, what top over that so are million we're vaccines has us When example. you the great And Palantir doing. CVS of we're on the in Cloud great what cases. example runs

other workload other end deploying with well. use day is of helps then mature purposes great comfortable very and as would OpenShift well for the OpenShift So cases. for comfortable, is. deploy OpenShift the of get how adoption at these really clients I It's clients and a are you as both technology might the it tell we get complete reinforce as for the maturity examples as it OpenShift of

Jim. I'll of pass to terms financials, the it In

More much for very quickly pleased and our the thank call all, of back, but just with we're is and the where making about Taking our work portfolio. question. progress. very remind to on And do, first Yes, of investors a progression the software that's step we're our portfolio our C&DP, Paks Matt, you software within everyone Cloud XX% which of sit. share I'll lion's overall overall our

growth given back years quarter. ago, year And churn you that our seeing ELA trough first quarter. client return through second here quarter, Now We the know, look in client the improve two we're base growth second normalized second our basis, announced time really And We nice way our very we that Paks had to to we of XX nice as Cloud We really Cloud start to the months the in in base. ELA X% half Paks. and historical attributed plays in in inflection cycle manage is accelerated the that XXXX, look ELA that cycle. when historical to to C&DP when here acceleration. takes ago, was but momentum the last we the see performance, it that you in business at out we a on on actually later that renewal at we a on

revenue NRR, on Paks Cloud net Our were north renewal of XXX%.

where shift and we there we've going have myself now higher be to Paks to to Paks. mix So, that's encouraging be trend. Paks Cloud shift Arvind contribution is see lift that we're a starting going and along of NRR said north XXX% to Cloud an perspective we're getting and there's And all see on and with we're Cloud to do starting of

Matt. you, Thank

the to next question, go please. Let's

with Huang Morgan. J.P. question comes next Our from Tien-Tsin

open. is line Your

you Hey, to talk thanks. Good all.

follow-on making? but on waiting monitoring of a just for there side, strong be here. or better a great And is front, there. to to given see we Thanks. on see you could it double-digit, the that transition? little the overall other out what reach performance you're had some some services of feel for that get bit you signings to backlog there services the -- the transaction areas were on better pretty you should a some like plus you growth consulting better then are starting potentially from it to look unit the Patricia, just that question and Do infection pipeline Was get The we the separately, Just that issue comps that obviously performance platforms that. just TPP perspective forgive are investments processing

three overall. Arvind. that, you base you in see actual GBS rate. up digit very in of take billion strong improvement large our of performance, I'll really prepared thank signings It's in in see strong we as did question. out Through the it's half, tried signings backlog, at trailing space this business, roughly deals remarks. all and continued growth at you and $X.X good us had our saw improvement quarter we We in comfort. and deals moving that quarter, quarter, our in here the services and momentum very When of we our our book-to-bill revenue, gives When have first XX revenue backlog we double business. months for our the we in X.X. sub-segments. look we playing have double-digit in momentum the delivered small our dynamics across is Very in Tien-Tsin, forward signings much We at our realization look to say the very in different growth

to logos. they a engaging position and but were incumbency we driving business overall. and client project-based Leveraging seeing quarter GTS, that that the we're out accelerating in quarter the actually expect incumbency what turnaround an with up our really see GBS point second from -- We probably growth another remarks, As we seeing seasonality encouraging good are overall. finally XX% the new base position said normal the volumes strong In performance is services a overall. about expected with project-based a and services as accounts on incumbency trend in from our prepared quarter, renewals. in quarter the second We're here

as logos the elongated remarks. the While in in we said very prepared have new cycles healthy sales are out we pipeline there, a

profit and the points, GTS, it's profile in gross So that good the seen overall on a I fundamentals cash with progress focus dollar second growth, quarter, profit XXX very margins we in with dollars and in up some points again continuing made dollars. overall, think XXX you've profit see a up of the basis means both margins we margin pretax business acceleration basis GBS and pretax but and some nice profit

XXXX come shifted to --cash-rich We're environment, headwind 'XX. it see revenue year clients a the a or annuity shift as going consumption healthier and and versus in we and more going 'XX, and to very regards purchasing to on XXXX do times to been the we base, TPP. much seeing 'XX portfolio 'XX the you're back out about the to base, Yes, transition environment, happening many as back with in we've we that as in more play last continue a macroeconomic licenses. played and this upside We that's In Lastly so. to over see catch then perpetual talked where had more saw saying.

growth come normal market that expect XXXX rates trend in We overall. back back to to

Tien-Tsin. Thanks,

next the question, go Sheila. to Let's

Our will from question come Grossman David with Stifel. next

open. is line Your

Actually most my just you. follow-up have question. I answered. questions one Thank have of been

can of and you mentioned, sure share within XXX% you data I was Cognitive point than about think reference the you have unit points and the business revenue Jim retention in greater segment? retention incremental whether I quite by what any software revenue wasn't

the a penetration the second client are much middleware the the at only over of and upsell, of all the clients' transition our that making said see dollar we Paks our containerize share traditional Not David. we Sure, dollar to the we can how middleware within progresses look retention. of definitely from And Paks, dashboard top we're of Hopefully our solution, more we're cloud-based able cloud mix Paks containerized measure Cloud more composition same I progress quarter platform capturing like overall, moving as come much we're and Paks versus move see with clients to revenue that a of an on overall. enterprise also making to can more essential and to we and Paks manage, we how for Cloud a take we've as When Cloud able in we David. we a significantly those that but traditional we forward. a in track top and have of deployment Thank Cloud and deployment overall. we're Arvind progress, on OpenShift at very more today dollar to part helps much. to are optimize not wallet making cross-sell our you do, progress as hybrid dollar Cloud whether each software clients as to invested and they look that and net it time transition measure yesterday we large of on multiple of our our I only

you what use they terms is which beginning business become more a that real a the it's estate, to technology larger renew, to real buying client. a or part into it that Jim, make of case, when volume, a are actually tells they at estate means

you, David. good. Thank Very

top Sheila. You know, at the take one of the we're hour, let's but more question,

Thank you.

will Our Keith last question Montreal. come from with of Bachman Bank

open. Your line is

so a go some you And team. ask and your this reach revenue benefit reference growth X% to particularly particular are to line of and the target. was quarter within longer-term particularly but good growth Cognitive it compare the still on -- it's growth, you had ways of items our not to -- a many to question revisiting what question Hi, you thanks Cognitive. the or on point around wanted assumptions roughly generated my I on targets Arvind,

about is that on change happens declining within Cognitive the positive in declining face B revenue what you to DbX still over stream I think market think about of Red but remain longer-term of the time. and Cognitive talked we a backdrop arc next trends Part processing even battle Hat the So pretty improves the Hat Red you've years, and past of if over is couple uphill the as is the I platforms probably transaction also

growth So term within Cognitive? you. could revisit just you longer rates reach your Thank if how do you on

forward. element Thanks, our Right. and important question, Keith, of important going pieces

And medium and XX% growing of XX% become clear going important today possible? Hat it quarter, mid-single-digit and to is Red up total questioning to and longer forward. Cognitive over business, we've at going a going more. most numbers let's in Cloud XX% that to and first So Keith, to that about rough XX% is this the in term are element our the XX% being But been software is about of So be will call sitting at even term. the as you opposed go grow how up

example get mid-maybe in have is of acquiring above one-third as that we contribution into on High-single you high transparent. there Paks kind both we are significant. to the on bit well there. from Cloud turbocharge, we Turbonomic, the we management are of for business on cyber-security, as portfolio? are We going digits. digit our of quite businesses of low-double Also, which expect very Will growth see some the organically the the that, that and XX% innovating to So pun very well as a business declines see both rates parts is been in

but mid expect We high and the term, to smaller the portion to in total. between it a smaller [ph] decline DPP single-digit mid and of becomes long be

So it has portfolio. not there, in the has from to we smallest the drag -- a there. expect be portfolio, right part it Cognitive it's but it's applications; the of biggest of part the

decline mixture mid-single the model. DPP of or mid-single-digit contribute above bigger to And the so contributor in probably platform becomes the in both growing it bigger data total. Hat just to The a a on [ph], at mid-teens digits line cloud with as and a one, medium is and then Red rest organic term. going of acquisitions [ph] that the recap the innovation inorganic to right in number with the -- absolute growth

hopefully you into pieces. you Keith way DBX that much breakdown inside is mentioned By the [ph]. So declining of a that gives DPP the the a very lot

questions. are are different same. really [ph] DpX DPP the So those one mainframe and not and

acknowledge wrap progress of couple again more to to We a make the we comments just call. this have made in me let still but we So, do. up quarter,

second actions, into which half, are execute continuing includes separation As and the the Kyndryl. you invest move of to on we our

I the this path you. sustainable with and continuing in dialog growth to year positions look forward exit position to to of a the IBM a strong All on

Sheila, Great. close the back turn call? it I can out to you to

now has Thank The Absolutely, participating thank call. today's ended. on you. you conference for

at disconnect time. this may You