“We are off to a great start with z17. And 4 quarters into z17's launch, we prudently continue to expect infrastructure revenue to be down low single digits for the year, representing about a 0.5 point impact to IBM.”

In context

“drives our confidence in delivering constant currency revenue growth of 5-plus percent in 2026 and free cash flow growth of about $1 billion year-over-year. Given where we are in the year, we believe it is prudent to maintain our guidance even as the underlying performance and execution are off to an encouraging start. The combination of our focused portfolio, investment in innovation and our diversity across businesses drives the durability of our performance. Our revenue expectations are underpinned by our accelerating software business, which we now expect to grow 10-plus percent this year. In consulting, the quality of our backlog and momentum in GenAI with backlog penetration at about 30%, continue to support an acceleration in revenue growth to low to mid-single digits for the year. We are off to a great start with z17. And 4 quarters into z17's launch, we prudently continue to expect infrastructure revenue to be down low single digits for the year, representing about a 0.5 point impact to IBM. We remain confident this will be our strongest cycle given the AI innovation value we are delivering to clients. The momentum in our productivity flywheel is fueling margin expansion, while enabling investment in innovation. Last quarter, we disclosed that we anticipated absorbing about $600 million of dilution from Confluent in 2026, driven largely by stock-based compensation and interest expense. While we are absorbing incremental dilution given the early closing of Confluent, actions we are taking to accelerate our cost synergies enable us to stay on track to expand operating pretax margins by about 1 point this year. Our operating tax rate for the year should be in the mid-teens and the timing of discrete items can cause the rate to vary within the year. For free cash flow, we continu”