“This includes investments in both AI and hybrid cloud as well as infrastructure ahead of our Nexi program in 2025, which we expect to accelerate our organic growth profile over time.”

In context

“IBM Z and distributed infrastructure. Consulting was up 2% and continued to be impacted by a pullback in discretionary spending. Looking at our profit metrics, we expanded operating gross margin by 190 basis points and operating pre-tax margin by 220 basis points over the last year, inclusive of about a 30 basis-point currency headwind to pre-tax margin. Margin expansion was driven by our operating leverage, product mix and ongoing productivity initiatives. Driving productivity is core to our operating and financial model. This includes enabling a higher-value workforce through automation and AI, streamlining our supply-chain, aligning our teams by workflow and reducing our real-estate footprint. These actions allow for continued investment in innovation with R&D up 9% in the first-half. This includes investments in both AI and hybrid cloud as well as infrastructure ahead of our Nexi program in 2025, which we expect to accelerate our organic growth profile over time. Our results this quarter reflect broad-based growth and the strength in the fundamentals of our business with revenue up about $300 million, operating pre-tax income up about $400 million, adjusted EBITDA up more than $350 million and free cash flow up about $500 million. For the first-half, we generated $4.5 billion of free cash flow, up $1.1 billion year-over-year. The largest driver of this first-half growth comes from adjusted EBITDA, up about $550 million year-over-year and timing of CapEx. We are a few points ahead of our two-year average attainment levels through the first-half. In terms of cash uses, we returned $3.1 billion to shareholders in the first half in the form of dividends. From a balance sheet perspective, we have a very strong liquidity position with cash of $16 billio”