“Our second quarter operating tax rate should be in the mid-teens.”

In context

“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 continue to expect to grow about $1 billion for the full year, driven primarily by growth in adjusted EBITDA. The headwinds I discussed heading into the year of higher cash taxes, higher CapEx and higher net interest expense remain the same. Looking to the second quarter, we expect our constant currency revenue growth rate to be similar to the full year. And for operating pretax margin, we expect about 50 basis points of expansion as software mix and productivity are offset by dilution from the early closing of Confluent. Our second quarter operating tax rate should be in the mid-teens. AI is fundamentally reshaping our clients' operating environments, increasing complexity, risk and the need for flexibility. IBM's flywheel for growth built on trust, security and governance, a portfolio that helps enterprise put AI to work on their terms and sustained productivity that fuels rapid innovation, positions us to deliver value for our clients. We feel confident in our outlook and are excited about what's ahead. Arvind and I are now happy to take your questions. Olympia, let's get started. Olympia McNerney: Thank you, Jim. Before we begin Q&A, I'd like to mention a couple of items. First, supplemental information is provided at the end of the presentation. And then second, as always, I'd ask you to refrain from multipart questions. Operator, let's please open it up for questio”