“we see this business profile moving from about a mid-single-digit free cash flow margin business to about a 30% to 40% free cash flow margin business in a handful of years, free cash flow accretive by the end of year 2.”

In context

“more excited about the powerful combination of HashiCorp with IBM and Red Hat together. We talked about it in the prepared remarks, we've been very disciplined in our set of criteria around M&A. And this fits strategically. It has tremendous synergistic value to our hybrid cloud and AI portfolio and it has an attractive financial return overall. And Hashi meets all three: One, it's a higher revenue growth profile company, so it accelerates IBM's revenue growth over time; two, to your question, adjusted EBITDA accretive in the first 12 months; and three, levered free cash flow accretive by the end of year 2. We think there are a potential for meaningful synergies overall and, when we look at it, significant near-term operating efficiencies, cost synergies. And to put that in perspective, we see this business profile moving from about a mid-single-digit free cash flow margin business to about a 30% to 40% free cash flow margin business in a handful of years, free cash flow accretive by the end of year 2. Now the multiple we paid on that, fully supported by, one, the stand-alone revenue growth and the cost synergies that come out. All of the IBM revenue synergies around Red Hat, around data security, around watsonx, around consulting and IT automation are all upside potential. So let's talk and conclude on the cost synergy. Cost synergies are where you would fully expect. IBM runs a global operations in 175 countries. We run a very disciplined G&A-efficient structure. We see significant G&A operating efficiencies that we're going to go capitalize on. Second, running the playbook on how we expand it globally, our go-to-market model that we did with Red Hat, and that has both global incumbency, global scale, global breadth and ecosystem leverage overall. And when you look at that, those”