“We are still expecting a full year operating tax rate consistent with last year.”

In context

“e end of January, we closed on the divestiture of The Weather Company, generating a pretax gain of $241 million in the quarter. Mitigating that benefit, we took charges of $374 million to address workforce rebalancing. Operating pretax margin was up 50 basis points, excluding the year-over-year impacts of workforce rebalancing and divestiture dynamics. We are pleased with this performance, in line with our guidance of roughly 50 basis points of operating pretax margin improvement in 2024. Margin expansion was driven by our operating leverage, product mix and ongoing productivity initiatives. This allows for continued investments to drive innovation, which you can see in our higher R&D expense. The timing of discrete tax items this quarter resulted in an operating tax rate of about 6%. We are still expecting a full year operating tax rate consistent with last year. Overall, the combination of our revenue and operating margin performance resulted in 7% growth in our adjusted EBITDA. This contributed to our free cash flow performance. For the quarter, we generated $1.9 billion of free cash flow, up $600 million year-over-year. This growth reflects the performance of our underlying business, with adjusted EBITDA up $200 million year-over-year and about $400 million from timing of balance sheet dynamics and CapEx. Over the last 12 months, we generated free cash flow of $11.8 billion. This puts us on track to deliver about $12 billion of free cash flow for the year, with the growth largely driven by adjusted EBITDA. Since our acquisition of Red Hat, excluding 2021 when we spun off Kyndryl, our operating net income to free cash flow realization aver”