“We now expect revenue growth for the full year in a range of 4% to 5%.”

In context

“Arvind Krishna : Thank you for joining us today. As you saw in our pre-announcement, our second quarter performance fell short of expectations. Consistent with our commitment to transparency, we shared the results as soon as our financial close process was substantially complete. I won't revisit the details from the pre-announcement as Jim will provide additional context. Instead, I will focus on the positioning of our business, the growth opportunities we see ahead and actions we are taking to address execution in the quarter. Our conviction in the strength of our business and our ability to grow and drive shareholder value remains unchanged. We recognize that the technology spending environment remains dynamic, and we must continue to evolve how we engage clients, bringing the full breadth of IBM's innovation to bear on their most important priorities. As clients determine how and where to deploy AI, we believe our portfolio is well positioned to help them realize value in a secure, cost-effective and scalable way. Over the last 5 years, we have transformed our business, improved the durability of our revenue growth and strengthened our operating model. Those fundamentals remain intact. Software is nearly 45% of our total revenue and has been repositioned to higher growth end markets across hybrid cloud, data, automation and mission-critical transaction processing software running on mainframe. Our offerings help clients build and run applications and AI anywhere, unlock the value of their data, orchestrate and govern AI at scale and operate more efficiently, securely and resiliently. Our second quarter software shortfall was limited to a CapEx-sensitive area of the portfolio. The vast majority of our software business, about 80% of that revenue is recurring in nature and delivered healthy growth in the quarter, reflecting the demand for our offerings and giving us confidence in our growth opportunity. Our AI strategy is the right one for IBM and aligns to what we are known for: hybrid, sovereignty and trust. We have held the view for a while that the unprecedented investment in AI infrastructure and models will increase pressure on enterprises to generate meaningful returns from that spend. Value will increasingly shift towards the orchestration and data layers so that clients can optimize outcomes, cost and governance across multiple models and agents and keep control of their proprietary data. IBM's differentiation lies in our neutrality and enterprise-grade operational control, the ability to orchestrate agents across models, clouds and on-premises environments while also providing built-in observability, evaluation, governance, identity management and security. Watsonx Orchestrate is the control plane that helps clients build, manage and govern agents, which combined with Red Hat gives clients a foundation to run inference and applications on any infrastructure. BOB is our entry point into the developer ecosystem, helping clients build enterprise-ready AI applications and agents while creating a natural pathway to adoption of watsonx Orchestrate and IBM's broader AI platform. Confluent delivers real-time governed data to models and agents across our control plane. Concert provides enterprises with a unified view of application health, security, compliance and operational performance. Clients remain in the early stages of AI adoption, making our combination of consulting expertise and technology a key differentiator. We are helping move clients to deployment, and that's translating into growing demand across Consulting led by generative AI. In Infrastructure, despite challenges this quarter, z17 is having the best refresh cycle in reported history. Transaction volumes, cyber requirements and resilience continue to drive growth for the mainframe. While clients continually evaluate workload placement, we see no evidence of clients moving off the mainframe. z17 remains at nearly 130% program to program, well ahead of z16, which was our strongest on record. IBM Z runs over 70% of the world's transaction volume in terms of value. To give you a perspective on our reach, there are over 140 million installed MIPS running mission-critical transactions across every industry. Clients representing 85% of these installed MIPS are either maintaining or growing capacity. Earlier this month, we introduced a smaller LinuxONE system that allows clients to address data center space and cost constraints while offering the security, resiliency and real-time inferencing Z platform can deliver. This innovation expands our addressable market. Distributed Infrastructure just delivered its best quarter of revenue growth on record, growing 37%. We see this as an increasingly important growth vector for IBM, driven by AI adoption and the rapid growth of enterprise data. We have been investing across power and storage AI infrastructure to position ourselves for this market opportunity. Power continues to gain momentum as the value proposition of Power11, resiliency, performance and Linux modernization resonates with clients. We are gaining share in storage through differentiated offerings across flash, fusion and tape, including AI-enabled capabilities that help clients scale and manage data for AI. Demand remains strong, driving a robust pipeline and positioning us well for the second half of the year. We are acting decisively to capture new market opportunities as they arise. The [ Meta's ] release in early April has accelerated the discovery of security vulnerabilities for clients. This creates a multibillion dollar TAM for IBM and Red Hat to help clients secure their open source software through our new capability, Lightwell. IBM offers a differentiated value proposition as a leader in open source through Red Hat and also recent acquisitions of Confluent and Hashi. Clients can subscribe to Lightwell for $1 million per year to access open source packages that have been remediated or validated. In the first 2 weeks of availability, we have already made more than 7,500 package versions available. Early adopters of Lightwell include organizations like Bank of America, BNY, Citi, Goldman Sachs, JPMorgan Chase, Mastercard, Morgan Stanley, Royal Bank of Canada, State Street, Visa, Wells Fargo and more. Finally, quantum computing is no longer decades away. It is upon us, and we are investing aggressively. Recently, with the U.S. Department of Commerce, we announced a letter of intent to build Anderon, the world's first pure-play quantum foundry, supported by $1 billion in chips incentives provided by the Department of Commerce and $1 billion cash contribution by IBM. Shortly after that, we disclosed plans to invest more than $10 billion in Quantum over the next 5 years, spanning R&D, CapEx, manufacturing scale-up, M&A and ecosystem expansion. This supports our road map to installing in 2029, the world's first large-scale fault-tolerant quantum computer. Recently, IDC evaluated 11 quantum computing vendors and ranked IBM first overall, citing our ecosystem readiness for Quantum Advantage, our track record of delivering the road map on time and our quantum classical integration. With the portfolio we have and the opportunities ahead, it comes down to execution. That is where we fell short in the second quarter. We have engaged with clients on the transactions that slipped and have a clear understanding of what needs to change. We are adapting to deliver greater business value to clients around our innovation and greater economic value to better align with client priorities. At the same time, we are accelerating productivity actions across the company, spanning both spend reduction initiatives and actions designed to drive growth. These include leveraging AI to improve software development productivity, increasing the effectiveness of our sales and marketing organization and accelerating our supply chain. Together, these actions help enhance our margin and free cash flow commitments while improving our ability to capture the growth we see ahead. For this growth, we are also accelerating changes to our go-to-market model. The goal is to expand coverage across thousands of additional clients where our portfolio is highly relevant and where we see significant wallet share opportunities. While IBM has a strong presence within the Fortune 1000, there is a lot of opportunity beyond this. These changes are aligned with the areas of our business demonstrating strong momentum, including Red Hat, HashiCorp, Confluent, watsonx and Storage. As AI adoption moves from experimentation to enterprise scale deployment, we are also investing in more specialized technical and client-facing talent, including forward deployed engineers. Our conviction in the strength of our business and our ability to capture the growth opportunities ahead remains unchanged. We now expect revenue growth for the full year in a range of 4% to 5%. We continue to expect to grow free cash flow by about $1 billion this year as we accelerate our productivity initiatives. With that, let me hand it over to Jim to go through the financials.”