使用警語:中文譯文來源為 Google 翻譯,僅供參考,實際內容請以英文原文為主
Operator
Operator
Welcome, and thank you for standing by. (Operator Instructions) Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I will turn the meeting over to Ms. Patricia Murphy with IBM. Ma'am, you may begin.
歡迎,感謝您的支持。 (操作員說明)正在錄製今天的會議。如果您有異議,此時您可以斷開連接。現在我將會議轉交給 IBM 的 Patricia Murphy 女士。女士,您可以開始了。
Patricia Murphy - VP of IR
Patricia Murphy - VP of IR
Thank you. This is Patricia Murphy, Vice President of Investor Relations for IBM, and I want to welcome you to our first quarter 2020 earnings presentation. I'm here with Arvind Krishna, IBM's Chief Executive Officer; and Jim Kavanaugh, IBM's Senior Vice President and Chief Financial Officer.
謝謝。我是 IBM 投資者關係副總裁 Patricia Murphy,歡迎大家觀看我們 2020 年第一季度的收益演示。我和 IBM 的首席執行官 Arvind Krishna 一起來的; IBM 高級副總裁兼首席財務官 Jim Kavanaugh。
We'll post today's prepared remarks on the IBM investor website within a couple of hours, and a replay will be available by this time tomorrow. Some comments made in this presentation may be considered forward-looking under the Private Securities Litigation Reform Act of 1995. These statements involve factors that could cause our actual results to differ materially. Additional information about these factors is included in the company's SEC filings.
我們將在幾個小時內在 IBM 投資者網站上發布今天準備好的評論,明天這個時候將提供重播。根據 1995 年《私人證券訴訟改革法案》,本演示文稿中的某些評論可能被視為前瞻性。這些陳述涉及可能導致我們的實際結果出現重大差異的因素。有關這些因素的更多信息包含在公司提交給美國證券交易委員會的文件中。
Our presentation also includes non-GAAP measures to provide additional information to investors. For example, we present revenue growth at constant currency throughout the presentation. In addition, to provide a view consistent with our go-forward business, we'll focus on constant currency growth, adjusting for the divested businesses for the impacted lines of total revenue, cloud and our geographic performance. We have provided reconciliation charts for these and other non-GAAP measures at the end of the presentation and in the 8-K submitted to the SEC.
我們的演示文稿還包括非 GAAP 措施,以向投資者提供額外信息。例如,我們在整個演示過程中以固定貨幣呈現收入增長。此外,為了提供與我們未來業務一致的觀點,我們將專注於持續的貨幣增長,針對總收入、雲計算和我們的地理績效受影響的業務線調整剝離業務。我們在演示文稿末尾和提交給 SEC 的 8-K 中提供了這些和其他非 GAAP 措施的調節表。
I'd like to make 2 other comments regarding this quarter's presentation. First, consistent with our last 2 quarters, IBM's revenue, profit and earnings per share reflect the impact of purchase accounting and other transaction-related adjustments associated with the acquisition of Red Hat. These adjustments and charges are primarily noncash.
我想就本季度的演示發表另外 2 條評論。首先,與我們過去兩個季度一致,IBM 的收入、利潤和每股收益反映了與收購 Red Hat 相關的採購會計和其他交易相關調整的影響。這些調整和費用主要是非現金的。
Second, our segment structure for 2020 remains consistent with 2019. So at the beginning of this year, we realigned a couple of offerings between segments, resulting in very modest adjustments. Our results reflect this realignment, and we're providing a view of first quarter 2019 on that recast basis in today's supplemental slides and 2 years of historical recast data on our website.
其次,我們 2020 年的細分市場結構與 2019 年保持一致。因此,在今年年初,我們重新調整了細分市場之間的一些產品,從而進行了非常適度的調整。我們的結果反映了這種調整,我們在今天的補充幻燈片和我們網站上的 2 年曆史重鑄數據中提供了 2019 年第一季度的視圖。
So with that, I'll turn the call over to Arvind.
因此,我將把電話轉給 Arvind。
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Hello, everyone. As you all know, we are in the midst of an unprecedented global public health crisis. I'd like to pause for a moment and say that my heart goes out to all those dealing with COVID-19. One of the first commitments I made was to be transparent and open, not just with our employees and our clients and partners, but with our investment community as well. In that spirit, I will participate, not just today, but in earnings calls from now on.
大家好。眾所周知,我們正處於前所未有的全球公共衛生危機之中。我想暫停一下,然後說我的心與所有處理 COVID-19 的人同在。我做出的第一個承諾是保持透明和公開,不僅對我們的員工、我們的客戶和合作夥伴,而且對我們的投資界也是如此。本著這種精神,我不僅今天會參加,而且從現在開始都會參加財報電話會議。
There are a few topics I'd like to cover with you today: first, I'll revisit areas I've talked about; second, I'll tell you about what we have accomplished in the last 2 weeks; and finally, I'll tell you about areas I intend to focus on in the near future, and then I'll quickly touch upon our Q1 results. Let's start with the areas I've talked about.
今天我想和大家聊幾個話題:首先,我將回顧一下我已經談過的領域;其次,我會告訴你我們在過去兩週內取得的成就;最後,我會告訴你我打算在不久的將來關注的領域,然後我會快速談談我們第一季度的結果。讓我們從我談到的領域開始。
I have told our teams, it is essential that we deepen our understanding of our clients' journey to hybrid cloud and AI, which will result in hybrid cloud as the fourth platform. We remain obsessed with continually delighting clients, and we further established IBM as the gold standard for good tech. All these are underpinned by our culture that fosters growth and an entrepreneurial mindset. I see these as our collective priorities.
我已經告訴我們的團隊,我們必須加深對客戶混合雲和人工智能之旅的理解,這將導致混合云成為第四個平台。我們仍然痴迷於不斷取悅客戶,我們進一步將 IBM 確立為優質技術的黃金標準。所有這些都以我們促進增長和創業心態的文化為基礎。我將這些視為我們的集體優先事項。
I'll move on to what's been done in the last few weeks. Despite the challenges we are facing as a result of the global crisis, we remained steadfast in our commitment to employees, clients and society at large. More than 95% of our 350,000 IBM-ers are working remotely now. In addition, about 8,000 of them remain at essential sites to carry out mission-critical work. As our clients adjust to this new normal, they need a partner they can trust. IBM is that partner. This isn't just about helping our clients navigate the crisis but to ensure that they emerge stronger and more resilient. To that end, we have taken concrete steps to bundle existing offerings to address the shifting needs of clients such as leveraging hybrid cloud, using AI for automation and enabling remote work.
我將繼續介紹過去幾週所做的事情。儘管我們面臨著全球危機帶來的挑戰,但我們仍然堅定不移地履行對員工、客戶和整個社會的承諾。我們 350,000 名 IBM 員工中超過 95% 現在都在遠程工作。此外,其中約有 8,000 人留在重要地點執行關鍵任務工作。隨著我們的客戶適應這種新常態,他們需要一個可以信任的合作夥伴。 IBM 就是這樣的合作夥伴。這不僅是為了幫助我們的客戶渡過危機,而且是為了確保他們變得更強大、更有彈性。為此,我們已採取具體步驟捆綁現有產品以滿足客戶不斷變化的需求,例如利用混合雲、使用 AI 實現自動化和實現遠程工作。
Another area we've been focusing on has been to mobilize IBM and IBM-ers to help with the global battle against COVID-19. Here are some examples: The computing power, over 360 petaflops that we have helped convene for researchers; the weather channels, COVID-19, country-by-country map, which saw more than 40 million visits in the first week of launch; the AI assistance that can answer citizens' questions about COVID-19, 21 of them live today and nearly 90 being rolled out; and the educational resources available to anyone anywhere. We are doing great work helping the city of New York and are delivering 300,000 tablets with educational software and free cellular data connections that can help students learn remotely.
我們一直關注的另一個領域是動員 IBM 和 IBM 員工幫助全球抗擊 COVID-19。以下是一些示例: 計算能力,我們幫助研究人員召集的超過 360 petaflops;天氣頻道、COVID-19、國別地圖,在發布的第一周訪問量超過 4000 萬;可以回答公民關於 COVID-19 的問題的 AI 援助,其中 21 個現在已經上線,近 90 個正在推出;以及任何人在任何地方都可以獲得的教育資源。我們正在為幫助紐約市做著出色的工作,並提供了 300,000 台裝有教育軟件和免費蜂窩數據連接的平板電腦,可以幫助學生遠程學習。
When we add this all up, we have done the math. In just a few weeks, we have already committed over $200 million in terms of contribution and volunteer time. I'm extremely proud of IBM's response to COVID-19.
當我們將所有這些加起來時,我們就完成了數學計算。在短短幾週內,我們已經承諾捐款和志願服務時間超過 2 億美元。我為 IBM 對 COVID-19 的響應感到非常自豪。
Now I want to tell you about some areas of focus for the near future. I want to be clear, the ultimate outcome that I am absolutely committed to is growth for our company as we emerge from the pandemic. A key area of focus is to ensure that IBM leads into 2 major transformational journeys our clients are on: cloud and AI. IBM has already built 3 enduring platforms: mainframe, services and middleware. The fourth one is hybrid cloud. Clients, however, need more than a platform. They need our deep industry expertise. This is why the services that clients rely on to build and manage the hybrid cloud platform is a massive opportunity for IBM. It's nearly half of the $1.2 trillion hybrid cloud opportunity.
現在我想告訴你一些近期的重點領域。我想明確一點,我絕對致力於實現的最終結果是我們公司在擺脫大流行病後實現增長。一個關鍵的關注領域是確保 IBM 引領我們的客戶進入 2 個主要的轉型之旅:雲和 AI。 IBM 已經構建了 3 個經久不衰的平台:大型機、服務和中間件。第四個是混合雲。然而,客戶需要的不僅僅是一個平台。他們需要我們深厚的行業專業知識。這就是為什麼客戶依賴於構建和管理混合雲平台的服務對 IBM 來說是一個巨大的機會。它幾乎佔 1.2 萬億美元混合雲機會的一半。
IBM, together with Red Hat, have unique sources of competitive advantage we can leverage to win the architectural battle for cloud. There's our open-source and security leadership, our deep expertise and trust, but also the fact that we give clients the unique ability to build mission-critical applications once and run them anywhere. Together with Red Hat, we are establishing Linux, containers and Kubernetes as the new standard. This is winning the architectural battle for hybrid cloud.
IBM 和 Red Hat 擁有獨特的競爭優勢來源,我們可以利用它來贏得云架構之戰。我們在開源和安全方面處於領先地位,我們深厚的專業知識和信任,還有我們為客戶提供一次構建關鍵任務應用程序並在任何地方運行它們的獨特能力這一事實。我們與 Red Hat 一起,將 Linux、容器和 Kubernetes 確立為新標準。這正在贏得混合雲的架構之戰。
Let's talk a little bit on how we take this to clients. I want IBM-ers to lead with a more technical approach. I want our teams to showcase the value of our solutions as early as possible. Likewise, there must be a relentless focus on quality. Our products must speak for themselves in terms of user experience, design and ease of use. My approach is straightforward: I am going to focus on growing the value of the company. This includes better aligning our portfolio around hybrid cloud and AI to meet the evolving needs of the market. We will continue investing, including acquisitions. As you have seen, we have divested parts of software and services that did not align with our focus areas. This will continue. The past few weeks have catapulted us into the world of virtual selling and remote delivery. These entails new ways of working. This is a reminder we should always be asking ourselves, "is there a better way to do this?" If you don't question why you're doing things, you'll never evolve into something better. What's clear is our confidence in our strategy and our portfolio, which is focused on hybrid cloud and AI.
讓我們談談我們如何將其帶給客戶。我希望 IBM 員工以更具技術性的方法來領導。我希望我們的團隊儘早展示我們解決方案的價值。同樣,必須不懈地關注質量。我們的產品必須在用戶體驗、設計和易用性方面為自己代言。我的方法很簡單:我將專注於增加公司的價值。這包括更好地調整我們圍繞混合雲和人工智能的產品組合,以滿足市場不斷變化的需求。我們將繼續投資,包括收購。如您所見,我們剝離了與我們的重點領域不一致的部分軟件和服務。這將繼續。過去幾週讓我們進入了虛擬銷售和遠程交付的世界。這些需要新的工作方式。這提醒我們應該經常問自己,“有沒有更好的方法來做到這一點?”如果你不質疑你為什麼做某事,你永遠不會演變成更好的東西。顯而易見的是,我們對專注於混合雲和人工智能的戰略和產品組合充滿信心。
Before turning to Jim, I want to comment on our results. In the first quarter, we had modest revenue growth, that's net of currency and divestitures. We entered the quarter in a good position with momentum from the end of last year. However, in the last few weeks, we faced a shift in client priorities towards the preservation of capital. This impacted software disproportionately, and Jim will comment more on this later. The other parts of our business maintained modest momentum. We're entering this challenging environment from a relative position of strength. Our clients are enterprises that run the most essential processes of the world. Our balance sheet is strong, and Jim is going to take you through that.
在轉向吉姆之前,我想對我們的結果發表評論。第一季度,我們的收入增長溫和,這是扣除貨幣和資產剝離。從去年年底開始,我們以良好的勢頭進入了本季度。然而,在過去的幾周里,我們面臨著客戶優先事項向保全資本的轉變。這對軟件的影響不成比例,吉姆稍後會對此發表更多評論。我們業務的其他部分保持適度的增長勢頭。我們正以相對優勢進入這個充滿挑戰的環境。我們的客戶是運行世界上最重要流程的企業。我們的資產負債表很強大,吉姆將帶您了解這一點。
I believe that what we are going through today, with the shift to remote work, automation, application modernization, will accelerate our client shift to hybrid cloud. This gives me immense confidence in our future. So I will turn it over to Jim to take you through the quarter, and then we'll come back at the end for Q&A.
我相信,隨著向遠程工作、自動化、應用程序現代化的轉變,我們今天正在經歷的一切將加速我們的客戶向混合雲的轉變。這讓我對我們的未來充滿信心。所以我會把它交給吉姆來帶你度過這個季度,然後我們會在最後回來進行問答。
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
Thank you, Arvind. I want to start out by expressing my sympathy to all those who have been impacted by this health crisis, and deep gratitude to the incredible people who have been helping IBM, our clients and the world to deal with this crisis, especially those on the front line.
謝謝你,阿文德。首先,我想向所有受到這場健康危機影響的人表示同情,並對一直幫助 IBM、我們的客戶和全世界應對這場危機的人們表示深深的感謝,尤其是那些在前線的人們線。
Now turning to our first quarter. We delivered $17.6 billion of revenue, with modest growth net of currency and divestitures. We had good gross margin expansion, operating earnings per share of $1.84 and continued solid free cash flow. Before I get into the specifics of the quarter, in light of the current environment, I want to take a step back and provide some perspective on a few areas. First, on our client base, our portfolio and our financial profile, which you'll see provides some stability to our business. Second, what we saw at the end of the quarter. And then finally, add on to Arvind's comments on what we're doing with our own business to address the current environment.
現在轉向我們的第一季度。我們實現了 176 億美元的收入,扣除貨幣和資產剝離後實現適度增長。我們的毛利率增長良好,每股營業收入為 1.84 美元,自由現金流持續穩定。在我進入本季度的具體細節之前,鑑於當前的環境,我想退後一步並提供一些關於幾個領域的觀點。首先,在我們的客戶群、我們的投資組合和我們的財務狀況方面,您會看到這些為我們的業務提供了一定的穩定性。其次,我們在本季度末看到了什麼。最後,添加 Arvind 對我們正在為應對當前環境所做的業務所做的評論。
IBM has always focused on the enterprise space, and within that, our business is more concentrated in large enterprises. For decades, we have run our clients' most critical processes like core banking systems, supply chains and claims processing. From an industry perspective, the majority of our revenue comes from clients in financial services, telecom and the public sector, including government and health care. We have long-term relationships with these clients in the form of multiyear services contracts, recurring software streams and financing arrangements. As a result, when you look at our business mix, about 60% of our annual revenue is in recurring businesses. While we're not immune in this environment to disruptions in the transactional content and volume reductions, our client profile and annuity base provides some level of stability, not only in our revenue, but also in profit and cash as we manage through these challenging times.
IBM 一直專注於企業空間,在這裡面,我們的業務更集中在大企業。幾十年來,我們一直在運行客戶最關鍵的流程,例如核心銀行系統、供應鍊和索賠處理。從行業角度來看,我們的大部分收入來自金融服務、電信和公共部門(包括政府和醫療保健)的客戶。我們以多年服務合同、經常性軟件流和融資安排的形式與這些客戶建立了長期關係。因此,當您查看我們的業務組合時,我們大約 60% 的年收入來自經常性業務。雖然我們在這種環境下無法避免交易內容中斷和交易量減少,但我們的客戶資料和年金基礎提供了一定程度的穩定性,不僅在我們的收入方面,而且在我們度過這些充滿挑戰的時期的利潤和現金方面.
Looking at the first quarter, through February, we were tracking roughly in line with our expectations. As we got into March, the health situation and resulting social distancing became more widespread. As you would expect, we saw a noticeable change in client priorities. With that, there was effectively a pause as clients understandably dealt with their most pressing needs. This was most pronounced in our software business, where the vast majority of transactions typically close in the last 2 weeks of the quarter. For those clients that did engage at the end of the quarter, there was a noticeable change in priorities, where focus very quickly shifted to the stability of their operations and preservation of cash. They moved ahead with spending that addressed immediate and essential needs including running mission-critical processes and securing a remote workforce.
從第一季度到 2 月份,我們的業績大致符合我們的預期。隨著我們進入三月,健康狀況和由此產生的社會距離變得更加普遍。如您所料,我們看到客戶優先級發生了顯著變化。有了這個,當客戶可以理解地處理他們最緊迫的需求時,實際上有一個暫停。這在我們的軟件業務中最為明顯,其中絕大多數交易通常在本季度的最後兩週完成。對於那些在季度末確實參與的客戶,優先事項發生了明顯變化,重點很快轉移到運營穩定性和現金保全上。他們繼續投入資金來解決緊迫和基本的需求,包括運行關鍵任務流程和確保遠程勞動力的安全。
For example, we increased infrastructure capacity and services to meet unprecedented demands on critical banking functions, for banks in countries ranging from Italy and Spain, to the United States, to Australia and Singapore. In Brazil, we developed a platform in a single week to connect patients to doctors via telemedicine. And at a major U.S. insurance company, we helped 40,000 employees to work remote when they had absolutely no work-at-home capabilities just 2 weeks earlier. At the same time, the last few weeks have only reinforced the need for clients to modernize their businesses for the new world, and cloud and AI are at the core of their digital reinventions. With our hybrid cloud and AI platforms, together with our expertise in running critical processes, we're ideally positioned to guide clients on their journeys.
例如,我們增加了基礎設施容量和服務,以滿足意大利和西班牙、美國、澳大利亞和新加坡等國家/地區的銀行對關鍵銀行功能前所未有的需求。在巴西,我們在一周內開發了一個平台,通過遠程醫療將患者與醫生聯繫起來。在美國的一家大型保險公司,我們幫助 40,000 名員工遠程工作,而就在兩週前,他們還完全沒有在家工作的能力。與此同時,過去幾週只強化了客戶為新世界實現業務現代化的需求,而云和人工智能是他們數字化重塑的核心。憑藉我們的混合雲和人工智能平台,以及我們在運行關鍵流程方面的專業知識,我們處於理想的位置來指導客戶的旅程。
Anthem is a great example of a company accelerating their digital reinvention in today's COVID-19 environment. We're helping them to operate with more agility and provide greater quality of service by leveraging data and deep insights to enhance the experience of their 41 million members. We're doing this on a secure, open platform run on Red Hat and the IBM cloud.
Anthem 是公司在當今 COVID-19 環境中加速數字化改造的一個很好的例子。我們正在幫助他們更敏捷地運營並提供更高質量的服務,方法是利用數據和深刻的見解來提升他們 4100 萬會員的體驗。我們在 Red Hat 和 IBM 雲上運行的安全開放平台上執行此操作。
Now in parallel, we've taken actions within our own business to help IBM better operate in this environment and emerge stronger. For example, we're aligning investments to the key offering areas Arvind mentioned. We took structural actions to improve the competitiveness of our Global Technology Services business and enable new ways of working across our operations. Our actions will deliver annualized gross savings of nearly $2 billion.
現在,我們同時在我們自己的業務中採取行動,幫助 IBM 在這種環境中更好地運營並變得更強大。例如,我們正在將投資調整到 Arvind 提到的關鍵產品領域。我們採取了結構性行動來提高我們全球技術服務業務的競爭力,並在我們的運營中啟用新的工作方式。我們的行動每年將節省近 20 億美元。
We are accelerating our own digital transformation from demand generation to further ramping up our digital sales capability. And in our supply chain, we are leveraging AI, blockchain and IoT technologies to drive faster and smarter decisions with our suppliers. We also enhance health and safety measures at our sites to maintain our manufacturing operations at required capacity to meet our customers' needs. This caps off a lot of work over the last few years to make our supply chain more flexible and resilient.
我們正在加速我們自己的數字化轉型,從需求生成到進一步提升我們的數字銷售能力。在我們的供應鏈中,我們正在利用人工智能、區塊鍊和物聯網技術與我們的供應商一起推動更快、更明智的決策。我們還加強了我們工廠的健康和安全措施,以保持我們的製造運營能力滿足客戶的需求。這結束了過去幾年的大量工作,使我們的供應鏈更加靈活和有彈性。
While we're supporting our clients and improving the flexibility and competitive position of our operations, we're also taking actions to enhance IBM's balance sheet strength and liquidity position. We accessed the debt market in early February with a $4 billion issuance, while reducing $4.5 billion of current and 2021 refinancing needs. In addition, while we do not rely on commercial paper for our funding needs, we thought it was prudent to take advantage of our access to the CP market. We ended the quarter with $2.5 billion of commercial paper, which increased both our debt and cash balances. As a result, we ended March with a cash balance of $12 billion, which is up $3 billion from year-end. Our total debt of $64 billion includes $22 billion of global financing debt, which is in support of IBM product and services and has a stable credit portfolio.
在我們支持我們的客戶並提高我們運營的靈活性和競爭地位的同時,我們也在採取行動來增強 IBM 的資產負債表實力和流動性狀況。我們在 2 月初以 40 億美元的發行量進入債務市場,同時減少了 45 億美元的當前和 2021 年再融資需求。此外,雖然我們不依賴商業票據來滿足我們的資金需求,但我們認為利用我們進入 CP 市場的機會是謹慎的。我們在本季度末持有 25 億美元的商業票據,這增加了我們的債務和現金餘額。因此,我們在 3 月份結束時的現金餘額為 120 億美元,比去年年底增加了 30 億美元。我們 640 億美元的總債務包括 220 億美元的全球融資債務,這些債務用於支持 IBM 的產品和服務,並擁有穩定的信貸組合。
Finally, as we discussed in January, our pension plans were well funded at the end of 2019, with worldwide qualified plans funded at 102%. While we typically don't provide a status during the year, I can say that our overall pension-funded status in March was fairly consistent with year-end, and we do not see a change to our expected plan contributions in 2020. Bottom line, we have a strong cash position and ample credit available during these uncertain times to support and invest in the business.
最後,正如我們在 1 月份討論的那樣,我們的養老金計劃在 2019 年底資金充足,全球合格計劃的資金為 102%。雖然我們通常不提供年內狀況,但我可以說我們 3 月份的總體養老金資助狀況與年底相當一致,而且我們認為 2020 年的預期計劃供款沒有變化。底線,在這些不確定的時期,我們擁有強大的現金狀況和充足的信貸來支持和投資業務。
We'll continue to be opportunistic in the capital markets, while remaining fully committed to our mid to high A credit rating and our targeted leverage ratio. I'll remind you, we also have over $15 billion of unused credit facilities. And while we have no plans to draw on the facilities, they're available as back-up liquidity, and our debt covenants are well within the required levels. And with our share repurchase program suspended since the Red Hat acquisition, our overall shareholder payout remains at a comfortable level, and we remain fully committed to our dividend.
我們將繼續在資本市場上投機取巧,同時繼續完全致力於我們的中高 A 信用評級和我們的目標槓桿率。我會提醒你,我們還有超過 150 億美元的未使用信貸額度。雖然我們沒有計劃使用這些設施,但它們可以作為備用流動資金使用,而且我們的債務契約完全在要求的水平之內。自從收購 Red Hat 以來,我們暫停了股票回購計劃,我們的整體股東支出保持在一個舒適的水平,我們仍然完全致力於我們的股息。
So with that as a backdrop, let me focus on a few highlights in the quarter before getting into the segments. We had strong cloud performance again this quarter with cloud revenue up 23%. By bringing together our technology and expertise to help our clients accelerate their journeys to cloud, our cloud revenue has grown to $22 billion over the last 12 months. Arvind talked about winning the cloud architecture of Linux, containers and Kubernetes, and the acquisition and integration of Red Hat bolsters our position in hybrid cloud.
因此,以此為背景,讓我在進入細分市場之前關注本季度的一些亮點。本季度我們的雲業務再次表現強勁,雲收入增長了 23%。通過匯集我們的技術和專業知識來幫助我們的客戶加速他們的雲之旅,我們的雲收入在過去 12 個月中增長到 220 億美元。 Arvind談到拿下Linux、容器和Kubernetes的雲架構,收購整合Red Hat鞏固了我們在混合雲的地位。
Red Hat momentum continued this quarter with normalized revenue growth of 20% and strong bookings and backlog growth. RHEL has proved to be mission-critical for many customers, particularly in this environment, and infrastructure revenue was again up double digits. Application development and emerging technologies was up nearly 40% this quarter, driven by OpenShift and Ansible. The number of Red Hat large deals was up from the fourth quarter and up about 50% over last year. Red Hat signed the 2 largest deals in its history, leveraging IBM's deep client relationships. This is a great proof point of the value of IBM and Red Hat together. We see it in the larger Red Hat deals, in the pipeline of IBM services engagements based on Red Hat's technologies and in the number of clients now using Red Hat and IBM's container solutions. This has grown to over 2,200 as Red Hat and IBM have emerged as the leading container platform. The contribution of Red Hat, together with strong margin performance in our services businesses contributed to our 150 basis points of operating gross margin expansion.
Red Hat 本季度繼續保持強勁勢頭,收入正常增長 20%,預訂量和積壓量增長強勁。 RHEL 已被證明對許多客戶來說是關鍵任務,尤其是在這種環境下,基礎設施收入再次增長了兩位數。在 OpenShift 和 Ansible 的推動下,本季度應用程序開發和新興技術增長了近 40%。紅帽大宗交易的數量比第四季度有所增加,比去年增加了約 50%。紅帽利用 IBM 深厚的客戶關係,簽署了其歷史上最大的兩筆交易。這是 IBM 和 Red Hat 共同價值的一個很好的證明。我們在更大的 Red Hat 交易中、在基於 Red Hat 技術的 IBM 服務合作管道中以及在現在使用 Red Hat 和 IBM 容器解決方案的客戶數量中看到了這一點。隨著 Red Hat 和 IBM 成為領先的容器平台,這一數字已增長到 2,200 多個。 Red Hat 的貢獻以及我們服務業務的強勁利潤率表現為我們的營業毛利率增長了 150 個基點做出了貢獻。
Our pretax income reflects charges of nearly $900 million, primarily for the structural actions to improve our competitiveness in GTS and accelerate our shift to a cognitive enterprise. The charges for these actions were more than offset by noncash discrete tax benefits. You'll recall, I mentioned both the structural actions and the discrete tax benefits back on our call in January, and so these had been planned for some time. Our cash and balance sheet strength are fueled by healthy free cash flow. This quarter, we generated $2.1 billion of cash from operations, and $1.4 billion of free cash flow, both excluding our financing receivables. There is a lot of seasonality in our free cash flow, and over the last year, we generated $11.6 billion, which is about 125% of GAAP net income. And a final comment on Red Hat's contribution to our free cash flow. When we closed Red Hat back in July, we expected Red Hat, net of interest expense, to be accretive to free cash flow by the end of the first year. With Red Hat's strong performance after 3 quarters, we've now achieved that milestone.
我們的稅前收入反映了近 9 億美元的費用,主要用於提高我們在 GTS 中的競爭力和加速我們向認知型企業轉變的結構性行動。這些行動的費用被非現金離散稅收優惠所抵消。你會記得,我在 1 月份的電話會議上提到了結構性行動和離散稅收優惠,因此這些已經計劃了一段時間。健康的自由現金流推動了我們的現金和資產負債表實力。本季度,我們從運營中產生了 21 億美元的現金和 14 億美元的自由現金流,均不包括我們的融資應收賬款。我們的自由現金流有很多季節性,去年我們產生了 116 億美元,約佔 GAAP 淨收入的 125%。最後評論一下紅帽對我們自由現金流的貢獻。當我們在 7 月份關閉 Red Hat 時,我們預計 Red Hat 在扣除利息費用後,將在第一年年底增加自由現金流。憑藉 Red Hat 在 3 個季度後的強勁表現,我們現在已經實現了這一里程碑。
Now let me turn to the segment results, starting with cloud and cognitive software, which grew 7% this quarter. We had strong performance in Red Hat, IoT and data and AI and in our security services. Just as I did for overall IBM, I'll start with a view of software dynamics as we move through the quarter.
現在讓我談談細分市場的結果,從本季度增長 7% 的雲計算和認知軟件開始。我們在紅帽、物聯網、數據和人工智能以及我們的安全服務方面表現出色。就像我對整個 IBM 所做的那樣,我將在整個季度中從軟件動態的角度開始。
We entered the year with a robust offering portfolio and solid pipeline, and we had double-digit revenue growth through February. In March, our software transaction stalled nearly overnight as our clients shifted their focus to resiliency efforts. We saw those dynamics play out most notably in cognitive applications where many transformational deals were paused, especially in the retail industry. And in transaction processing platforms, given cash concerns, clients traded off CapEx for OpEx. These are typically large engagements. And in this environment, clients elected to defer purchases, impacting perpetual license sales late in the quarter. More than offsetting that, we continue to have good growth in cloud and data platforms, led by Red Hat and the synergies we're realizing by bringing together Red Hat and IBM's software. Given the shifting software demands we've seen in some parts of the business, we are focused on a number of initiatives heading into the second quarter. We're doubling down on areas that facilitate the shift to cloud, including Red Hat and other cloud and data platform offerings, Cloud Paks for operational efficiency and QRadar on cloud for security threats. Our go-to-market teams are accelerating their shifts to digital channels, and we're now leveraging our partner ecosystem to expand our reach into critical industries and markets.
我們以強大的產品組合和穩固的產品線進入了這一年,到 2 月份我們的收入實現了兩位數的增長。 3 月,我們的軟件交易幾乎在一夜之間停滯不前,因為我們的客戶將注意力轉移到了彈性工作上。我們看到這些動態在許多轉型交易暫停的認知應用程序中最為顯著,尤其是在零售行業。在交易處理平台中,考慮到現金問題,客戶會用資本支出換取運營支出。這些通常是大型活動。在這種環境下,客戶選擇推遲購買,影響了本季度末的永久許可銷售。不僅抵消了這一點,我們在紅帽的帶領下繼續在雲和數據平台方面取得良好增長,而且我們通過將紅帽和 IBM 的軟件整合在一起實現了協同效應。鑑於我們在業務的某些部分看到的不斷變化的軟件需求,我們將重點放在進入第二季度的一些計劃上。我們正在加倍努力促進向雲遷移的領域,包括 Red Hat 和其他雲和數據平台產品、用於提高運營效率的 Cloud Paks 以及用於應對安全威脅的雲上 QRadar。我們的上市團隊正在加速向數字渠道的轉變,我們現在正在利用我們的合作夥伴生態系統將我們的影響力擴大到關鍵行業和市場。
To sum it up, our portfolio in cloud and cognitive software is aligned to the hybrid cloud and AI opportunity. We modernized our software to be cloud-native and optimized on OpenShift, which provides a compelling hybrid cloud platform for clients on their digital journeys to cloud. While we expect near-term pressure on transactions, we continue to invest in new development and innovation for our hybrid cloud and AI strategy.
總而言之,我們在雲和認知軟件方面的產品組合與混合雲和人工智能機會保持一致。我們對我們的軟件進行了現代化改造,使其成為雲原生軟件並在 OpenShift 上進行了優化,這為客戶的數字云之旅提供了一個引人注目的混合雲平台。雖然我們預計近期交易會面臨壓力,但我們會繼續投資於混合雲和人工智能戰略的新開發和創新。
Turning to Global Business Services, we entered the year with a good momentum in revenue, gross profit and signings, and our backlog returned to growth. This growing backlog and the revenue we expected to yield from it gave us confidence that GBS revenue performance would accelerate as the year progressed. We had solid performance in GBS in the first quarter, with revenue growth of 1% and gross profit margin expansion of 100 basis points. Our consulting revenue grew 5%, led by offerings that helped clients with their digital reinventions such as cloud advisory and application modernization and offerings that leverage AI to inject intelligence into business processes. These offerings enabled clients to reengineer their business processes and IT environments for speed, flexibility and efficiency to better serve their end users.
談到全球商業服務,我們以良好的收入、毛利和簽約勢頭進入了這一年,我們的積壓訂單恢復增長。這種不斷增加的積壓以及我們預計從中產生的收入使我們相信 GBS 的收入表現會隨著時間的推移而加速。我們在第一季度的 GBS 表現穩健,收入增長 1%,毛利率擴大 100 個基點。我們的諮詢收入增長了 5%,這主要得益於幫助客戶進行數字化改造的產品,例如雲諮詢和應用程序現代化,以及利用 AI 將智能注入業務流程的產品。這些產品使客戶能夠重新設計他們的業務流程和 IT 環境,以提高速度、靈活性和效率,從而更好地服務於他們的最終用戶。
We have standardized our cloud application modernization offerings on OpenShift, and built the world's largest Red Hat consulting practice. We are now working with over 100 clients on Red Hat technologies, such as Anthem, Procter & Gamble, USAA, Santander and Horizon Health Care, just to name a few. In the first quarter, we also had good growth in many of the transformational offerings like next-generation enterprise applications. But as the impact of COVID-19 intensified in March, clients began to deprioritize some of these projects.
我們在 OpenShift 上標準化了我們的雲應用程序現代化產品,並建立了世界上最大的紅帽諮詢實踐。我們現在與超過 100 家客戶就紅帽技術展開合作,例如 Anthem、寶潔、USAA、Santander 和 Horizon Health Care,僅舉幾例。在第一季度,我們在下一代企業應用程序等許多轉型產品方面也取得了良好的增長。但隨著 3 月份 COVID-19 的影響加劇,客戶開始取消其中一些項目的優先級。
In this environment, we are aligning our go-to-market and delivery resources to the near-term opportunity, addressing challenges like engaging customers virtually, modernizing and migrating applications to the cloud, empowering a remote workforce and cybersecurity and IT resiliency.
在這種環境下,我們正在根據近期機會調整我們的上市和交付資源,以應對各種挑戰,例如以虛擬方式吸引客戶、將應用程序現代化並遷移到雲端、為遠程員工提供支持以及網絡安全和 IT 彈性。
Internally, we have shifted from a predominantly face-to-face engagement model to a virtual one. Now with almost 100% of our GBS delivery resources not only working remotely but productively working to support our clients. Over the last few weeks, we've gotten questions from investors on our ability to support clients given the shutdown in some countries. I can tell you that in India, we had over 98% of our practitioners working remotely within 48 hours of lockdown. As we look forward, we have a solid base of business and a growing backlog, though in the near term, we expect customers to continue to delay and replan some projects. We're going to continue to prudently manage the business by leveraging our variable and global delivery resource model, to ensure utilization is balanced with the rate and pace of backlog consumption and new deals. And we're going to continue to build skills and practices so that as the demand returns to more normal levels, we're ready to address it.
在內部,我們已經從以面對面為主的參與模式轉變為虛擬模式。現在,我們幾乎 100% 的 GBS 交付資源不僅遠程工作,而且高效地支持我們的客戶。在過去的幾周里,我們收到了投資者關於我們在某些國家/地區關閉的情況下支持客戶的能力的問題。我可以告訴你,在印度,我們有超過 98% 的從業者在封鎖後的 48 小時內遠程工作。展望未來,我們擁有堅實的業務基礎和不斷增加的積壓,但在短期內,我們預計客戶將繼續推遲和重新計劃一些項目。我們將繼續利用我們可變的全球交付資源模型謹慎管理業務,以確保利用率與積壓消費和新交易的速度和速度保持平衡。我們將繼續培養技能和實踐,以便隨著需求恢復到更正常的水平,我們已準備好解決它。
Turning to Global Technology Services, our revenue decline of 4% was fairly consistent with last quarter's performance. And we expanded gross profit margin by 30 basis points. As I've said in the past, we are managing this business for margin and cash contribution. Last quarter, I talked about the actions to accelerate the shift to higher value segments of the market and improve our cost competitiveness, so let me start with a quick update on our progress.
談到全球技術服務,我們的收入下降了 4%,與上一季度的表現相當一致。我們將毛利率提高了 30 個基點。正如我過去所說,我們管理這項業務是為了保證金和現金貢獻。上個季度,我談到了加速向更高價值的市場轉移和提高我們的成本競爭力的行動,所以讓我先簡單介紹一下我們的進展情況。
A significant portion of the first quarter structural actions address GTS. This improves our position for the future but impacted our PTI in the first quarter. In this dynamic environment, we're going to continue to evaluate the cost competitiveness of this portfolio and we'll take further actions as required. We also advanced our joint offerings and go-to-market capabilities with GBS. As clients shift their mission-critical workloads to the cloud, they are looking for integration across the application and infrastructure stack. By more tightly integrating GBS and GTS, we're providing a differentiated solution. While we are in the initial stages of this work, we see some early indications of progress in our signings this quarter. Both total signings and our cloud signings grew at a double-digit rate. This includes significant engagement at CaixaBank and Anthem. Strong signings contributed to an improved total services backlog, which is now roughly flat year-to-year. Within that, cloud now represents over 40% of our outsourcing backlog. This fuels our GTS cloud revenue, which was up 12% this quarter. In the current environment, enterprises are focused on infrastructure solutions, which enhance IT resiliency and business continuity, address new cybersecurity risk and reconfigure their IT environments for cost efficiency and business agility. We are prioritizing our resources and our management system to these opportunities, focusing on offerings like unified communications, business continuity and resiliency, workplace virtualization and enabling remote working.
第一季度結構性行動的很大一部分涉及 GTS。這改善了我們未來的地位,但影響了我們第一季度的 PTI。在這種動態環境中,我們將繼續評估該產品組合的成本競爭力,並將根據需要採取進一步行動。我們還通過 GBS 提升了我們的聯合產品和上市能力。隨著客戶將他們的關鍵任務工作負載轉移到雲端,他們正在尋求跨應用程序和基礎架構堆棧的集成。通過更緊密地集成 GBS 和 GTS,我們提供了差異化的解決方案。雖然我們處於這項工作的初始階段,但我們在本季度的簽約方面看到了一些早期跡象。簽約總數和我們的雲簽約都以兩位數的速度增長。這包括在 CaixaBank 和 Anthem 的重要參與。強勁的簽約有助於改善總服務積壓,目前與去年同期大致持平。其中,雲現在占我們外包積壓的 40% 以上。這推動了我們的 GTS 雲收入,本季度增長了 12%。在當前環境中,企業專注於基礎架構解決方案,以增強 IT 彈性和業務連續性,應對新的網絡安全風險並重新配置其 IT 環境以實現成本效益和業務敏捷性。我們正在將我們的資源和管理系統優先用於這些機會,專注於統一通信、業務連續性和彈性、工作場所虛擬化和支持遠程工作等產品。
At the same time, we're adopting alternative delivery models as we continue to support mission-critical workloads without service interruption. In fact, almost 100% of our employees in our GTS global delivery centers are now working remotely. While in this environment, we expect to have some impact due to lower business volumes. This will ultimately lead to an acceleration in the shift of mission-critical workloads to the cloud. And as I've said, this will be a hybrid multi-cloud environment built on open standards. IBM services will leverage our incumbency, our industry, regulatory and business process expertise and, of course, Red Hat, to capture this opportunity.
與此同時,我們正在採用替代交付模式,因為我們會繼續支持任務關鍵型工作負載而不會中斷服務。事實上,我們 GTS 全球交付中心幾乎 100% 的員工現在都在遠程工作。在這種環境下,我們預計會因業務量減少而產生一些影響。這最終將加速關鍵任務工作負載向雲端的轉移。正如我所說,這將是一個基於開放標準構建的混合多雲環境。 IBM 服務將利用我們的在職人員、我們的行業、監管和業務流程專業知識,當然還有 Red Hat,來抓住這個機會。
And so now looking at Systems, revenue was up 4% this quarter, and gross margin expanded over 400 basis points. In an environment where client behavior shifted at the end of the quarter, our hardware portfolio held up well. This reflects the importance of IBM Z and high-end storage for mission-critical operations as well as product cycle dynamics. These are high-end systems, and client value in this segment is driven by new innovation. We see that in the z15 mainframe. And we see it in storage, with the high-end DS8900 introduced at the end of 2019. And more recently, a new and simplified distributed storage portfolio, which supports hybrid multi-cloud deployments. In the second full quarter of availability, z15 proved to be a crucial backbone of enterprise operations, providing a stable, secure and scalable platform.
所以現在看看系統,本季度收入增長了 4%,毛利率增長了 400 多個基點。在客戶行為在本季度末發生變化的環境中,我們的硬件產品組合表現良好。這反映了 IBM Z 和高端存儲對於關鍵任務操作以及產品週期動態的重要性。這些是高端系統,這一領域的客戶價值是由新的創新驅動的。我們在 z15 大型機中看到了這一點。我們在存儲中看到了它,高端 DS8900 於 2019 年底推出。最近,一個新的簡化的分佈式存儲產品組合支持混合多雲部署。在第二個完整的可用性季度,z15 被證明是企業運營的關鍵骨幹,提供了一個穩定、安全和可擴展的平台。
Our financial services clients were able to scale up their capacity to meet the significant demands from unprecedented spikes in market volatility without touching their physical infrastructure. And in high-end storage, which is tightly integrated with the mainframe, we had a good quarter, especially in support of mission-critical banking workloads. The growth in Z and storage was partially offset by a decline in power. This reflects where we are in our product cycle as well as the fact that power is more skewed to smaller enterprises, which were more impacted by the dynamics in March.
我們的金融服務客戶能夠在不影響其物理基礎設施的情況下擴大他們的能力,以滿足前所未有的市場波動高峰帶來的巨大需求。在與大型機緊密集成的高端存儲中,我們有一個很好的季度,特別是在支持關鍵任務銀行工作負載方面。 Z 和存儲的增長部分被功率下降所抵消。這反映了我們在產品週期中所處的位置,以及權力更偏向小型企業的事實,這些企業受 3 月份動態的影響更大。
We're continuing to adapt our operations to meet the needs of clients most effectively, especially in this changing environment. We're expanding the digital sales channel for both the storage and power business, and we're leveraging technology to proactively manage our globally diversified supply chain.
我們將繼續調整我們的運營以最有效地滿足客戶的需求,尤其是在這個不斷變化的環境中。我們正在擴展存儲和電力業務的數字銷售渠道,我們正在利用技術主動管理我們的全球多元化供應鏈。
Now after going through the segments, I want to bring it back up to the IBM level and talk about what this means going forward. First and foremost, we have confidence in our strategy and our portfolio, which is focused on hybrid cloud and AI. Nothing we've seen over the last 2 months causes us to waver from these priorities. In fact, as Arvind said upfront, we believe the challenges clients are facing today will speed their transitions to digital. That bodes well for us. But there is obviously some dislocation in the near term. In this environment, we've taken quick and prudent actions to manage our cost and expense, further improve our liquidity position and focus on opportunities to emerge stronger. Since the crisis began, we've been stress testing our model and running a number of scenarios based on various assumptions. Given the level of uncertainty around the duration of the health crisis and the rate and pace of economic recovery, there's a wide range of outcomes for the year, which we are prepared for. But to assign probabilities to the assumptions during these unprecedented times just isn't valuable. As a result, it is prudent to withdraw our expectations for full year 2020, and we will reassess at the end of the second quarter. Though to be clear, under the various scenarios we ran, we have ample free cash flow and liquidity to support our business and secure our dividend.
現在,在經歷了這些細分之後,我想把它帶回 IBM 層面,並談談這對未來意味著什麼。首先,我們對專注於混合雲和人工智能的戰略和產品組合充滿信心。在過去 2 個月裡,我們所看到的一切都沒有讓我們對這些優先事項產生動搖。事實上,正如 Arvind 前面所說,我們相信客戶今天面臨的挑戰將加速他們向數字化的過渡。這對我們來說是個好兆頭。但在短期內顯然存在一些錯位。在這種環境下,我們採取了迅速而審慎的行動來管理我們的成本和費用,進一步改善我們的流動性狀況,並專注於變得更強大的機會。自危機開始以來,我們一直在對我們的模型進行壓力測試,並根據各種假設運行多種情景。鑑於健康危機的持續時間以及經濟復甦的速度和步伐的不確定性程度,今年會出現各種各樣的結果,我們已經做好了準備。但是,在這些前所未有的時期為假設分配概率是沒有價值的。因此,謹慎的做法是撤回我們對 2020 年全年的預期,我們將在第二季度末重新評估。需要明確的是,在我們運行的各種情景下,我們有充足的自由現金流和流動性來支持我們的業務並確保我們的股息。
Before turning back to Arvind, I want to provide some perspective on how we're entering the second quarter. Over the last few years, our software transactional content in the second quarter is about 20% to 25% of our software revenue. We have a solid pipeline of deals, but in the end, our software performance will depend on how we yield against that pipeline. If we continue to see the same client buying behavior, it's reasonable to expect the second quarter will be more challenging. Systems hardware is essentially all transactional. Here, too, we have a good pipeline in IBM Z and storage. While the current environment is expected to impact closure rates, I would expect less of an impact to Z and storage, given the essential nature of the purchases and the additional capacity requirements, especially in certain industries.
在回到 Arvind 之前,我想就我們如何進入第二季度提供一些看法。在過去幾年中,我們第二季度的軟件交易內容約占我們軟件收入的 20% 至 25%。我們有可靠的交易渠道,但最終,我們的軟件性能將取決於我們如何從該渠道中獲利。如果我們繼續看到相同的客戶購買行為,則有理由預計第二季度將更具挑戰性。系統硬件基本上都是事務性的。在這裡,我們在 IBM Z 和存儲方面也有很好的管道。雖然當前環境預計會影響關閉率,但考慮到採購的基本性質和額外的容量需求,我預計對 Z 和存儲的影響較小,尤其是在某些行業。
In services, we made real progress in the backlog. And for the first time in a while, we ended the quarter with services backlog essentially flat versus last year. That's with GBS up and GTS down modestly. About 80% of the GBS revenue and 90% of the GTS revenue in a quarter has historically come from the opening backlog, though our contracts adjust for flexible volumes in our clients' businesses. As mentioned earlier, close to 100% of our people in our service delivery centers are working remotely.
在服務方面,我們在積壓方面取得了真正的進展。一段時間以來,我們第一次在本季度末的服務積壓與去年基本持平。這是在 GBS 上升和 GTS 適度下降的情況下。歷史上,一個季度大約 80% 的 GBS 收入和 90% 的 GTS 收入來自期初積壓,儘管我們的合同會根據客戶業務的靈活數量進行調整。如前所述,我們服務交付中心近 100% 的員工都在遠程工作。
Looking at our cost and expense, we're closely managing our spending and capitalizing on new and efficient ways of operating. The savings from structural actions will start to yield in the second half. We are likely to take additional actions in the second quarter. I'll remind you that we are well positioned from a liquidity perspective and remain focused on driving our free cash flow, including robust working capital management.
查看我們的成本和費用,我們正在密切管理我們的支出並利用新的高效運營方式。結構性行動所節省的資金將在下半年開始見效。我們可能會在第二季度採取更多行動。我會提醒您,從流動性的角度來看,我們處於有利地位,並將繼續專注於推動我們的自由現金流,包括穩健的營運資本管理。
For years, we have been talking about our high-value portfolio and business model. And in times like these, that really matters. This is why our liquidity position is naturally strong, and our pension plan is well funded coming into this environment. So we're prepared for this environment, have a strong financial position and compelling value propositions for clients. But our near-term performance will ultimately be influenced by client buying patterns in this economic environment.
多年來,我們一直在談論我們的高價值產品組合和商業模式。在這樣的時代,這真的很重要。這就是為什麼我們的流動性狀況自然很強,我們的養老金計劃在這種環境下資金充足。因此,我們已為這種環境做好準備,擁有強大的財務狀況和對客戶具有吸引力的價值主張。但我們的近期表現最終將受到這種經濟環境下客戶購買模式的影響。
Arvind, I'll turn it back over to you.
Arvind,我會把它還給你。
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Thank you, Jim. We have taken the importance of transparency seriously, and so it was a tough decision to withdraw guidance. But these are unprecedented times, and this quarter is not the time to declare that we have clarity. That does not benefit us, and it does not benefit you as investors and analysts. With better clarity on the economic recovery, we will provide an update at the end of the second quarter. But please note, there's a difference between the ability to accurately predict near-term revenue or earnings per share number and confidence in our business over the longer term. And I have confidence in our business.
謝謝你,吉姆。我們認真對待透明度的重要性,因此撤回指導是一個艱難的決定。但現在是前所未有的時代,本季度不是宣布我們已經清楚的時候。這對我們沒有好處,對作為投資者和分析師的您也沒有好處。隨著經濟復甦更加明朗,我們將在第二季度末提供最新情況。但請注意,準確預測近期收入或每股收益數字的能力與我們對長期業務的信心之間存在差異。我對我們的業務充滿信心。
On the different scenarios, we have ample free cash flow and liquidity to support the business and secure our dividend. We are entering this environment from a position of strength. So over to Patricia for the Q&A.
在不同的情況下,我們有充足的自由現金流和流動性來支持業務並確保我們的股息。我們正以優勢地位進入這個環境。那麼請帕特里夏進行問答。
Patricia Murphy - VP of IR
Patricia Murphy - VP of IR
Thank you, Arvind. Before we begin the Q&A, I'd like to mention a couple of items. First, you'll notice we updated our chart format to streamline the information presented during the webcast. The content no longer presented in the mainline charts is now included in our supplemental information, which is at the end of the slide deck. (Operator Instructions)
謝謝你,阿文德。在我們開始問答之前,我想提幾個問題。首先,您會注意到我們更新了圖表格式以簡化網絡廣播期間提供的信息。不再出現在主線圖表中的內容現在包含在我們的補充信息中,位於幻燈片的末尾。 (操作員說明)
So operator, let's please open it up for questions.
那麼接線員,讓我們打開它來提問。
Operator
Operator
(Operator Instructions) Our first question will cover Amit Daryanani with Evercore.
(操作員說明)我們的第一個問題將涉及 Evercore 的 Amit Daryanani。
Amit Jawaharlaz Daryanani - Senior MD & Fundamental Research Analyst
Amit Jawaharlaz Daryanani - Senior MD & Fundamental Research Analyst
Arvind, congrats on the spot and nice having you in the Q&A session. You guys -- Arvind, you spent a fair amount of time kind of talking about the areas where you want to focus on as you go forward, and maybe to put aside the COVID discussion, how do you think about the investments the company needs to do? And how do you go about that organic versus inorganic? Would just love to understand, when you think of investments, which way you're going to skew as you go forward. And maybe on the flip side of the coin, are there things that you want to focus less on, other things and opportunities to divest to further potentially a healthy balance sheet.
Arvind,當場祝賀你,很高興你能參加問答環節。你們 - Arvind,你花了相當多的時間來談論你在前進過程中想要關注的領域,也許拋開 COVID 討論,你如何看待公司需要的投資做?你如何看待有機與無機?很想知道,當你想到投資時,你會在前進的過程中偏向哪種方式。也許在硬幣的另一面,您是否希望減少對其他事情和機會的關注,以進一步建立健康的資產負債表。
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Okay. Thanks, Amit. Let me start with talking about the portfolio and your questions on investment. So look, obviously, the portfolio is something I evaluate deeply. We do it all the time and continuously. But I do want to caution that in the immediate period, which is right now, we've got to focus and put our priority on supporting our employees and clients.
好的。謝謝,阿米特。讓我先談談投資組合和您對投資的問題。所以看,顯然,投資組合是我深入評估的東西。我們一直在不斷地這樣做。但我確實想提醒大家,在近期,也就是現在,我們必須集中精力,優先支持我們的員工和客戶。
Now investment to us encompasses both. It encompasses both organic investments and inorganic or acquisitions. We've been clear that we will acquire when we find properties that are both attractive but that fit our strategy. And hybrid cloud and AI are the focus of our business moving forward. But when we talk about hybrid cloud, it is an all-in. And I'll just give a quick reflection on Red Hat. We had Linux at the core. We had OpenShift surrounding it. We put all of our middleware on OpenShift. We have hundreds of GBS projects already leveraging both the Cloud Paks and OpenShift to make application modernization. And then eventually, we'll find services also running those modernized applications for our clients. You'll find there are many, many properties in that -- in my broader definition of hybrid cloud that will fit that, and did too data on AI, where AI should be looked upon as the way to get the value out of the data that people collect, both their internal data and external data.
現在對我們的投資包括兩者。它包括有機投資和無機或收購。我們很清楚,當我們發現既有吸引力又符合我們戰略的房產時,我們就會收購。混合雲和人工智能是我們業務發展的重點。但是當我們談論混合雲時,它是一個全面的問題。我將快速回顧一下 Red Hat。我們以 Linux 為核心。我們有 OpenShift 圍繞它。我們將所有中間件都放在 OpenShift 上。我們有數百個 GBS 項目已經利用 Cloud Paks 和 OpenShift 來實現應用程序現代化。最終,我們會發現服務也為我們的客戶運行那些現代化的應用程序。你會發現其中有很多很多屬性——在我對混合雲的更廣泛定義中,這將符合這一點,並且在 AI 上也有數據,AI 應該被視為從數據中獲取價值的方式人們收集的內部數據和外部數據。
Now I don't want to over comment on big or small. Size is not a strategy. It's about being thoughtful and strategic. And so you should expect that over time, more time meaning just that it get passed the next few months, we will get back to an acquisitive strategy. Jim?
現在我不想過分評論大小。規模不是戰略。這是關於深思熟慮和戰略性的。所以你應該期待隨著時間的推移,更多的時間意味著它在接下來的幾個月里通過,我們將回到收購戰略。吉姆?
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
Yes. The only thing I would add, Arvind, is our capital allocation strategy, obviously, is there to support the business design and the business and portfolio strategy that we have chosen. To your point around hybrid cloud, data AI, we've got enough firepower with regards to a strong balance sheet, solid free cash flow generation, solid investment grade, a good access to market, which we talked about in the prepared remarks, that gives us ample free cash flow and flexibility to invest in our business while also returning value to our shareholder and securing that dividend that we talked about upfront. And that acquisition component is a very big, important part of our capital allocation strategy, and that hasn't changed.
是的。 Arvind,我唯一要補充的是我們的資本配置策略,顯然是為了支持我們選擇的業務設計以及業務和投資組合策略。關於混合雲、數據人工智能的觀點,我們在強大的資產負債表、穩定的自由現金流生成、可靠的投資等級、良好的市場准入方面擁有足夠的火力,我們在準備好的評論中談到了這一點,為我們提供充足的自由現金流和靈活性來投資我們的業務,同時還為我們的股東回報價值並確保我們預先談到的股息。收購部分是我們資本配置戰略中非常重要的一部分,這一點沒有改變。
Operator
Operator
Our next question will come from Wamsi Mohan with Bank of America.
我們的下一個問題將來自美國銀行的 Wamsi Mohan。
Wamsi Mohan - Director
Wamsi Mohan - Director
Arvind, congrats on the new role as well. You mentioned some changes in go-to-market in your prepared remarks, leading perhaps with a more technical bend. I wonder if you can elaborate there a bit. And Jim, I appreciate you're not providing explicit guidance at this point, but maybe can you address the levers the company has in responding to the pandemic in the context of preserving cash flows. You alluded to a few things in your prepared comments as well. But last call, you had mentioned several puts and takes to the cash flows, those tailwinds and headwinds. And just wondering if you could maybe recast those again.
Arvind,也祝賀你擔任新角色。您在準備好的發言中提到了上市方面的一些變化,可能以更技術性的方式領先。我想知道你是否可以詳細說明一下。吉姆,我感謝你此時沒有提供明確的指導,但也許你能解決公司在保持現金流的背景下應對大流行的槓桿。您在準備好的評論中也提到了一些事情。但最後一次通話,你提到了現金流量的幾個看跌期權和收益,那些順風和逆風。只是想知道你是否可以再次重鑄這些。
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Wamsi, good to hear from you. With respect to a more technical approach to selling, it's a journey we have been on -- well actually, the current crisis, in effect, catapulted us or accelerated what we are doing. And I'll touch on sort of 3 elements. We have always wanted to have our product teams do a lot of demonstrations and proof of concepts that we are now going to do them virtually where we stand the properties up on our public cloud and then allow the clients to sort of play around with them. And so you take away the weeks of doing it in a more traditional manner.
Wamsi,很高興收到你的來信。關於更技術性的銷售方法,這是我們一直在進行的旅程——實際上,當前的危機實際上推動了我們或加速了我們正在做的事情。我將涉及 3 個要素。我們一直希望讓我們的產品團隊做大量的演示和概念驗證,我們現在將在我們將屬性放置在我們的公共雲上的地方虛擬地進行它們,然後允許客戶與它們一起玩。因此,您可以用更傳統的方式省去數週的時間。
Second, in our services teams, they're doing a lot of what they call virtual garages. So a garage used to be that we would have our consultants and our implementers sit side-by-side with a client and go do those. But when you do have social distancing, and it's not just us, our clients don't really want us on-premise either, we have now become -- begun virtual garages, but there's an advantage there, by the way. A bigger advantage is it allows you to actually get access to skills that are around the globe, not just those that may be physically coresident at a client. And that is, again, a much more technical approach.
其次,在我們的服務團隊中,他們正在做很多他們稱之為虛擬車庫的事情。所以車庫曾經是我們讓我們的顧問和我們的實施者與客戶並排坐在一起去做的地方。但是當你確實有社交距離時,不僅僅是我們,我們的客戶也不真的希望我們在內部部署,我們現在已經成為 - 開始虛擬車庫,但順便說一句,那裡有一個優勢。一個更大的優勢是它可以讓你真正獲得全球範圍內的技能,而不僅僅是那些可能與客戶共存的技能。這又是一種更具技術性的方法。
And then third, with a lot of remote delivery happening in the GTS part of the business, they're also bringing a much more technical solution to bear through this. So those are the elements that I mentioned. But you can expect us to do more and more of this as we go along. And Jim, I'll give it to you for the second part.
第三,隨著業務的 GTS 部分發生大量遠程交付,他們還帶來了更多的技術解決方案來解決這個問題。這些就是我提到的要素。但是你可以期待我們在前進的過程中做越來越多的事情。吉姆,我會在第二部分給你。
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
Yes. Hello, Wamsi, thanks for the question. I mean, because this is important. As you can imagine, given the unfortunate and unprecedented situation, everyone around the world is dealing with right here with COVID 19, we have been spending a lot of time on our business profile, our business model, stress testing it, running multiple scenarios, as I said in the prepared remarks. But when you look at it, it's always been done around, one, the long-term sustainability of the IBM company to deliver value for our clients and for our investors. And that means you've got to have a strong balance sheet. You've got to have ample liquidity to give you flexibility to continue to invest so that we emerge stronger as we get through this pandemic when we move forward. And that really, simplistically, if you take a step back, is 2 levers. One is on the top line and revenue, and the other is on the fundamentals of your operating leverage in the business. Both of those deliver that free cash flow and net cash. And in that latter part, I would put in there optimization of your balance sheet. And we've looked at our revenue portfolio. As we talked about in our prepared remarks, we believe we are differentiated. Although we're not immune from what's happening in the marketplace, we do have some level of stability in our revenue, our profit, our cash, and that's driven by all of the work that we've done over time to transform this company transform and optimize our portfolio. We went from -- in 2008 at the last recession, we were only about 45%, 47% annuity. We are now north of 60%.
是的。你好,Wamsi,謝謝你的提問。我的意思是,因為這很重要。可以想像,鑑於不幸和前所未有的情況,世界各地的每個人都在這里處理 COVID 19,我們一直在我們的業務概況、業務模型上花費大量時間,對其進行壓力測試,運行多個場景,正如我在準備好的發言中所說的那樣。但是當你審視它時,它總是圍繞著,一個,IBM 公司的長期可持續性來為我們的客戶和投資者創造價值。這意味著您必須擁有強大的資產負債表。你必須有充足的流動性才能讓你有繼續投資的靈活性,這樣我們才能在前進的過程中度過這場大流行病,變得更加強大。如果你退後一步,那真的很簡單,就是 2 個槓桿。一個是收入和收入,另一個是您在業務中的經營槓桿的基本面。兩者都提供自由現金流和淨現金。在後一部分,我會優化你的資產負債表。我們已經查看了我們的收入組合。正如我們在準備好的發言中所說,我們相信我們與眾不同。儘管我們不能倖免於市場上正在發生的事情,但我們的收入、利潤和現金確實有一定程度的穩定性,這是由我們長期以來為轉變這家公司所做的所有工作所推動的並優化我們的產品組合。我們從——2008 年上一次經濟衰退時,我們只有大約 45%,47% 的年金。我們現在超過 60%。
We have always been focused on large enterprise versus consumer SMB, and that is playing out well. Our industry concentration, as I said on the prepared remarks, over 70% of our revenue sits in industries, based on IDC and Gartner, that are going to be either moderately or minimally impacted by COVID-19. So we are diversified along geographic dimensions, market dimensions, industry dimensions, client dimensions that gives us that strong annuity content to move forward.
我們一直專注於大型企業與消費者 SMB,而且效果很好。正如我在準備好的發言中所說,我們的行業集中度基於 IDC 和 Gartner,我們超過 70% 的收入來自行業,這些行業將受到 COVID-19 的中度或最小影響。因此,我們在地理維度、市場維度、行業維度、客戶維度方面實現了多元化,這為我們提供了強大的年金內容以向前發展。
And then on the margin and balance sheet, we're going to optimize, as we've always done, the portfolio shift in the higher value, the structural actions we just got done here in the first quarter, $900 million that impacted our PTI in the first quarter. That, by the way, will give us an annualized return of over 2x, and we'll keep watching our credit portfolio on the quality, our deferred revenue and also our DPO and DSO, which is in very good shapes. So net of that is, we feel confident around ample financial flexibility, ample liquidity to continue to invest in our business as we move forward and secure that dividend.
然後在保證金和資產負債表上,我們將一如既往地優化投資組合向更高價值的轉變,我們剛剛在第一季度在這裡完成的結構性行動,影響我們 PTI 的 9 億美元在第一季度。順便說一下,這將使我們的年化回報率超過 2 倍,我們將繼續關注我們的信貸組合的質量、我們的遞延收入以及我們的 DPO 和 DSO,它們都處於非常好的狀態。因此,除此之外,我們對充足的財務靈活性和充足的流動性充滿信心,可以在我們前進並獲得紅利的同時繼續投資於我們的業務。
Operator
Operator
Our next question will come from Toni Sacconaghi with Bernstein.
我們的下一個問題將來自 Toni Sacconaghi 和 Bernstein。
A.M. Sacconaghi - Senior Analyst
A.M. Sacconaghi - Senior Analyst
Arvind, welcome, and great to have you on the call. I was wondering if you could maybe define or articulate on a scale of 1 to 10, how different do you think IBM's portfolio of businesses will be 2 years from now. I recognize change is not going to happen imminently. But 1 to 10, with 10 being extremely different, where would you place that? And then, Jim, if you could just very quickly, you talked a lot about the stability of IBM's portfolio, but it looks like, year-over-year, pretax income went from over $2.2 billion to under $1.6 billion if I back out the restructuring and charge. So even though revenues weren't impacted, PTI, adjusted for the restructuring, was down nearly 30%, and this is your lowest transactional quarter. Is that how we should be thinking about changes to profit going forward? Or was there something unique about this quarter where we saw more negative leverage?
Arvind,歡迎,很高興你能接聽電話。我想知道您是否可以定義或闡明 1 到 10 的等級,您認為 IBM 的業務組合在 2 年後會有何不同。我認識到變化不會立即發生。但是 1 到 10,其中 10 非常不同,你會把它放在哪裡?然後,吉姆,如果你能很快的話,你談到了很多關於 IBM 產品組合的穩定性,但看起來,如果我退出重組和收費。因此,即使收入沒有受到影響,PTI 經過重組調整後也下降了近 30%,這是您交易量最低的季度。我們應該如何考慮未來利潤的變化?或者本季度有什麼獨特之處讓我們看到更多的負槓桿?
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Thanks, Toni. Look, Toni, if you look at our industry, it's a fast-moving industry with a lot of change that goes on all the time. If I look at where we were 5 years ago, and if I fast forward to today, Red Hat was not there, Cloud Paks were not there, our cloud backlog inside services was a tiny fraction of what it is today. And I would look at all of that and say, it looks like, in aggregate, likely about half our business has changed in the last 5 to 7 years. That's, I think, the hallmark of a successful company, where you begin to change it. It takes advantage of the relationship, the value, the incumbency we have with our clients, but it also takes advantage of the fast-moving nature of technology.
謝謝,托尼。看,托尼,如果你看看我們的行業,這是一個快速發展的行業,一直在發生很多變化。如果回顧 5 年前我們所處的位置,如果我快進到今天,Red Hat 不存在,Cloud Paks 不存在,我們服務內部的雲積壓只是今天的一小部分。我會看看所有這些,然後說,總的來說,在過去的 5 到 7 年裡,我們的業務可能大約有一半發生了變化。我認為,這就是一家成功公司的標誌,即您開始改變它的地方。它利用了我們與客戶之間的關係、價值和責任,但它也利用了技術快速發展的特性。
Now the question you didn't ask, but I'll sort of put in there, is the question of the focus. I think the focus is going to be much more around what we've been talking about, is going to be around, in the near term, is going to be around hybrid cloud and AI, with likely quantum coming down the road, which I do believe has $0.5 trillion worth of value to give back to our clients since you gave me the 5-year horizon, not just a 1- or 2-year horizon. So let me sort of begin with that and say -- and that -- and it's hard to put that on a scale of 1 to 10 because you didn't tell me how much of a change is in 10, but I gave you the sense that probably half the things change. Jim?
現在你沒有問的問題,但我會放在那兒,是焦點問題。我認為重點將更多地圍繞我們一直在談論的內容,在短期內,將圍繞混合雲和人工智能,可能會出現量子,我相信有 0.5 萬億美元的價值可以回饋我們的客戶,因為你給了我 5 年的期限,而不僅僅是 1 年或 2 年的期限。所以讓我從那個開始說——然後——很難把它放在 1 到 10 的等級上,因為你沒有告訴我 10 有多少變化,但我給了你感覺可能有一半的事情發生了變化。吉姆?
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
Yes. And Toni, thank you very much for the question because operating leverage is obviously one of the core fundamental pillars of our high-value based thesis and high-value based business model overall. But let me just cut to the chase with regards to your question overall. You asked about it from a pretax income, I'll take it down to an EPS level, which was similar to net income. We were down 18% overall. That EPS was down $0.41 year-to-year. Yes, it includes the $900 million worth of restructuring. And the structural charges also includes, as we guided back in January, a discrete tax event. But the thing that you're missing in that equation is all of the Red Hat integration and noncash-related purchase accounting implications that are in our EPS and in our profit number.
是的。托尼,非常感謝你提出這個問題,因為經營槓桿顯然是我們基於高價值的論文和整體基於高價值的商業模式的核心基本支柱之一。但是,讓我就您的整體問題切入正題。你問的是稅前收入,我會把它降到每股收益水平,這與淨收入相似。我們整體下降了 18%。每股收益同比下降 0.41 美元。是的,它包括價值 9 億美元的重組。正如我們在 1 月份指導的那樣,結構性費用還包括一個離散的稅收事件。但是你在這個等式中遺漏的是我們的每股收益和利潤數字中的所有 Red Hat 集成和非現金相關的採購會計影響。
Now as we close that transaction, by the way, less than 3 quarters ago, and we feel very confident about the health and the profile of our Red Hat business overall, we took a substantial write-down with regards to that deferred revenue, $2.2 billion overall. And we talked about Red Hat being free cash flow accretive year 1 and being operating EPS accretive at the end of year 2. We already hit the milestone on the first metric, and we're well on our way delivering the progress on the second metric.
順便說一下,現在我們完成了那筆交易,不到 3 個季度前,我們對 Red Hat 業務的整體健康狀況和概況非常有信心,我們對遞延收入進行了大幅減記,為 2.2 美元億。我們談到 Red Hat 在第 1 年實現自由現金流增長,並在第 2 年年底實現 EPS 增長。我們已經達到了第一個指標的里程碑,並且我們正在努力實現第二個指標的進展.
And just to bring this all home, the EPS of $1.84, down $0.41 year-over-year, about $0.35 to $0.38 of that $0.41 is the Red Hat noncash deferred revenue and integration. Why do I bring that up? Because as we said, that will diminish over time. And as we continue to replenish the backlog, which we are and we'll talk about, and we wrap around those expenses, that's where you're going to get even more substantial operating leverage going forward in the future.
只是把這一切帶回家,每股收益為 1.84 美元,同比下降 0.41 美元,其中 0.41 美元的 0.35 美元到 0.38 美元是紅帽非現金遞延收入和整合。我為什麼要提這個?因為正如我們所說,這會隨著時間的推移而減少。隨著我們繼續補充我們正在討論的積壓工作,並且我們將解決這些費用,未來您將在這些方面獲得更大的運營槓桿。
Operator
Operator
Our next question will come from Matt Cabral with Crédit Suisse.
我們的下一個問題將來自 Crédit Suisse 的 Matt Cabral。
Matthew Normand Cabral - Research Analyst
Matthew Normand Cabral - Research Analyst
Welcome to the call, Arvind. I appreciate the commentary in the prepared remarks about what you guys saw during the month of March. I wonder if you can extend that a little bit, and just talk about what you've seen so far across the first few weeks of April across the segments. And just the extent to which, if any, you've had customers asking for price concessions, new concern -- new terms even on the more recurring pieces of your business?
歡迎致電,Arvind。我感謝準備好的評論中關於你們在 3 月份看到的內容的評論。我想知道您是否可以稍微擴展一下,並談談到目前為止您在 4 月的前幾週在各個細分市場中看到的情況。如果有的話,您的客戶在多大程度上要求價格優惠、新的關注點——甚至是您業務中經常出現的部分的新條款?
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Okay. Thanks, Matt. Let me start with that because, look, from -- April tends to be a month where, as Jim pointed out, it's not just in the first quarter. In every quarter, larger transactions do tend to get bunched up near the end of the quarter. I'd say that probably is more June than April. And you also asked a question on the annuity side of the business or what I would call subscription. We haven't seen, at least so far, any big change in the subscription side coming into April. Now there is no doubt because as both of us have pointed out, we do tend to run our clients' mission-critical workload. It's not the workload that will be the first to turn off. If anything, it will be amongst the last to get impacted. And so the subscription side, we feel quite good about.
好的。謝謝,馬特。讓我從那開始,因為,從四月開始,正如吉姆指出的那樣,四月往往不僅僅是第一季度。在每個季度,較大的交易往往會在季度末聚集在一起。我會說六月可能比四月更多。你還問了一個關於企業年金方面的問題,或者我稱之為訂閱的問題。至少到目前為止,我們還沒有看到 4 月份訂閱方面有任何重大變化。現在毫無疑問,因為正如我們倆都指出的那樣,我們確實傾向於運行客戶的關鍵任務工作負載。最先關閉的不是工作負載。如果有的話,它將是最後一個受到影響的人。所以訂閱方面,我們感覺很好。
Now on the transaction side, so far, things are holding up, but it's too early to tell. That's one of the reasons you heard both Jim and I talked about withdrawing guidance because a little bit of progress is not enough to give us a full view into what will happen this quarter. Jim?
現在在交易方面,到目前為止,事情進展順利,但現在下結論還為時過早。這就是你聽到吉姆和我都談到撤回指導的原因之一,因為一點點進展不足以讓我們全面了解本季度會發生什麼。吉姆?
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
Yes. Matt, thank you very much for the question. So Arvind kind of gave a perspective of what we're seeing here for the first couple of weeks. And as he stated, just given the one transactional versus annuity nature, second quarter, like fourth quarter, is our highest transactional quarter, particularly in our software base of business overall. But let me give you a little perspective around the month of March versus February quarter-to-date because I think it's important for investors to understand the value of our high-value based business model and integrated business model because the unfortunate COVID-19 situation that's impacting economies around the world has a very different profile across our business, whether it's hardware, software and services. And as we've seen coming through February, the IBM company was growing revenue through February, led by strong double-digit growth in software overall.
是的。馬特,非常感謝你提出這個問題。因此,Arvind 對我們在前幾週在這裡看到的情況給出了一些看法。正如他所說,僅考慮到交易與年金的性質,第二季度與第四季度一樣,是我們交易量最高的季度,尤其是在我們的軟件業務整體基礎上。但是讓我給你一些關於 3 月份與 2 月份季度至今的看法,因為我認為投資者了解我們基於高價值的商業模式和綜合商業模式的價值很重要,因為不幸的 COVID-19 情況影響全球經濟的因素在我們的業務中有著截然不同的概況,無論是硬件、軟件還是服務。正如我們在整個 2 月份所看到的那樣,IBM 公司在整個 2 月份的收入都在增長,這得益於軟件整體強勁的兩位數增長。
In the month of March, as I said in the prepared remarks, as the health crisis intensified, that's where we saw the fundamental shift in client buying behavior, appropriately so, by the way, as we've done in IBM where, first and foremost, you wanted to focus on the operational stability and business continuity of your enterprise and second around the preservation of cash. But when you look at it, it was more pronounced in our software and our GBS business. We actually substantially grew in the month of March in our hardware portfolio, but I would align that more around bring in new innovation to market. We're in the cycle of mainframe, and we did very well with the attach of storage overall.
在 3 月份,正如我在準備好的發言中所說,隨著健康危機的加劇,我們看到了客戶購買行為的根本轉變,順便說一下,正如我們在 IBM 所做的那樣,首先和首先,您希望關注企業的運營穩定性和業務連續性,其次是現金的保存。但是當你看它時,它在我們的軟件和我們的 GBS 業務中更為明顯。實際上,我們的硬件產品組合在 3 月份大幅增長,但我認為更多的是將新的創新推向市場。我們處於大型機的周期中,我們在整體存儲附加方面做得很好。
And our GTS business, remember, is a strong annuity base and it's running mission-critical work. Our outsourcing IS business actually got better by 1 point quarter-to-quarter. So that's pretty stable. But within GBS and software, interesting around software, our cloud and data platform, 34% growth. Yes, driven by Red Hat. But even on a normalized organic basis, we grew over 3%. And that's really the instantiation of our hybrid cloud thesis with Red Hat overall. So that part of the portfolio is still executing well. And I think that's part of what Arvind said, clients are now even faster, more accelerating their journeys to cloud, and it plays right to that.
請記住,我們的 GTS 業務是一個強大的年金基礎,並且它正在運行關鍵任務工作。我們的外包 IS 業務實際上每個季度都好轉了 1 個百分點。所以這很穩定。但在 GBS 和軟件中,有趣的軟件、我們的雲和數據平台增長了 34%。是的,由 Red Hat 驅動。但即使在正常化的有機基礎上,我們也增長了 3% 以上。這確實是我們與 Red Hat 整體的混合雲論文的實例化。因此,這部分投資組合仍然表現良好。我認為這是 Arvind 所說的一部分,客戶現在更快,更加速他們的雲之旅,並且它正在發揮作用。
Now where we got hit was in cognitive applications and in transaction processing platform. Two different phenomenons across that portfolio. Our cog apps is much more centered around industry-related content where industries that are getting more impacted disproportionately like retail, like industrial, like automotive. And in TPP, that was a function of just a preservation of cash shifting away from CapEx and OpEx.
現在我們受到打擊的地方是認知應用程序和事務處理平台。該投資組合中存在兩種不同的現象。我們的 cog 應用程序更多地以與行業相關的內容為中心,在這些內容中,受到更大影響的行業不成比例地受到影響,例如零售業、工業業和汽車業。在 TPP 中,這只是一種保護現金從 CapEx 和 OpEx 轉移的功能。
And just concluding, GBS, although we're very pleased, remember, 90 days ago, we talked about accelerating momentum in GBS, we turned that business back to backlog growth. We actually delivered growth in the quarter. Strong growth in consulting, strong signings in consulting, but we did see a pullback in the latter part of March, particularly in many European countries, around project-based, transformational-based activity in next-generation applications like S/4HANA, Oracle, Workday, and other people are delaying, and we expect that to continue here in the second quarter.
最後,GBS,雖然我們很高興,但請記住,90 天前,我們談到了 GBS 的加速勢頭,我們將該業務恢復到積壓增長。我們實際上在本季度實現了增長。諮詢業務強勁增長,諮詢業務簽約強勁,但我們確實看到 3 月下旬有所回落,尤其是在許多歐洲國家,圍繞下一代應用程序(如 S/4HANA、甲骨文、工作日和其他人都在推遲,我們預計第二季度會繼續這樣。
Operator
Operator
Our next question will come from Katy Huberty with Morgan Stanley.
我們的下一個問題將來自摩根士丹利的 Katy Huberty。
Kathryn Lynn Huberty - MD and Research Analyst
Kathryn Lynn Huberty - MD and Research Analyst
Arvind, I'll add my welcome. It's great to have you on the call. I wonder if you could start out by just commenting on what the 1 or 2 metrics are that you would like us to measure you and your team on over the next couple of years? And then I wanted to follow-up and ask, either you or Jim can comment, you talked about scenario -- a range of scenarios for this year. Obviously, the most bearish would be social distancing through the remainder of the calendar year, and the most optimistic would be a reopening of economies over this month. What does that translate to in terms of sort of the bearish scenario on EPS and free cash flow and a more optimistic scenario. Just any color as to how wide that range may look like.
Arvind,我會表示歡迎。很高興你能接聽電話。我想知道您是否可以先評論一下您希望我們在未來幾年內衡量您和您的團隊的 1 或 2 個指標是什麼?然後我想跟進並詢問,你或 Jim 可以發表評論,你談到了場景——今年的一系列場景。顯然,最悲觀的是在日曆年剩餘時間內保持社交距離,最樂觀的是本月經濟重新開放。就 EPS 和自由現金流的看跌情景以及更樂觀的情景而言,這意味著什麼?關於該範圍看起來有多寬的任何顏色。
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Thanks, Katie. Look, let me start. You said what KPIs or what metrics should you use. Look, I think I've been clear, we should look at growth as the metric, albeit once we begin to emerge from the pandemic. And it's impossible for me to predict how long this is going to be. You mentioned 2 scenarios, but I listened to all of you and your peers, and I don't have any particular crystal ball on this. The estimates are all over the place in both the depth and the length of the impact.
謝謝,凱蒂。看,讓我開始。你說了你應該使用什麼 KPI 或什麼指標。看,我想我已經很清楚了,我們應該將增長視為衡量標準,儘管一旦我們開始擺脫大流行。我無法預測這會持續多久。你提到了 2 個場景,但我聽取了你們所有人和你的同行的意見,對此我沒有任何特別的水晶球。對影響的深度和長度的估計無處不在。
Now the other one that I think you should hold us to in metric other than revenue or a pure financial metric, is the number of clients on which we are engaged on hybrid cloud engagements. We talk about it from a product perspective, we talked about 2,200 clients to date. But as you begin to wrap those also with services engagements, I think that's the second metric that is effectively a leading indicator towards the overall revenue metric because that's the pre conditioner for that. And that's where we're driving the entire company to. That's what I'm focused on. I run a war room on that every week, and that's what our sales forces are incented to go get done.
現在,我認為除了收入或純財務指標之外,您應該讓我們保持另一個指標,那就是我們從事混合雲業務的客戶數量。我們從產品的角度談論它,迄今為止我們談論了 2,200 個客戶。但是,當您開始將這些也與服務約定聯繫起來時,我認為這是第二個指標,它實際上是總體收入指標的領先指標,因為這是它的先決條件。這就是我們推動整個公司前進的方向。這就是我所關注的。我每週都會為此開設一個作戰室,這就是我們的銷售人員被激勵去完成的事情。
So Jim, I don't know whether you want to add something. You know the answer to the question (inaudible)
吉姆,我不知道你是否想補充一些東西。你知道問題的答案(聽不清)
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
James J. Kavanaugh - Senior VP and CFO of Finance & Operations
Those are the 2 that are aligned to our business model. But to your second question, Katie, I'm not going to talk to specificity around there. As I said in the prepared remarks, we have done a tremendous amount of work on stress testing, running these scenarios. There's a wide range of outcomes. The key here for investors, I think, are 2 questions. One, in any of those scenarios, do you still have the strength of your cash, your liquidity position to ensure that you can, one, invest in your business to make sure as you come out of this, you can emerge stronger. And two, can you maintain your capital allocation and your commitment to our investors with regards to the dividend. And both of those, emphatically, yes. The second question is around each of these scenarios, how are we actually managing our businesses across the board. And I would tell you, if you break this into a product-based business, in a services-based business, starting with services, it is the safety around having an annuitized based model. GBS entering a quarter is about 80%, GTS is about 95%-plus. That does come down as quarters n plus 1, n plus 2, n plus 3 go out, but it provides us a very solid base to work with as far as stability that drives that profit, that cash and that flexibility.
這些是與我們的業務模型一致的 2 個。但是對於你的第二個問題,凱蒂,我不會在那裡談論具體問題。正如我在準備好的發言中所說,我們在運行這些場景的壓力測試方面做了大量工作。結果範圍很廣。我認為,投資者的關鍵是兩個問題。第一,在任何一種情況下,您是否仍然擁有足夠的現金和流動性狀況來確保您可以,一,投資於您的業務以確保當您走出困境時,您可以變得更強大。第二,你能否維持你的資本配置和你對我們投資者的股息承諾。強調地說,是的。第二個問題是圍繞這些場景中的每一個,我們實際上如何全面管理我們的業務。我會告訴你,如果你把它分解成一個基於產品的業務,在一個基於服務的業務中,從服務開始,這是基於年金模型的安全性。進入一個季度的GBS約為80%,GTS約為95%以上。隨著季度 n 加 1、n 加 2、n 加 3 的退出,這確實有所下降,但它為我們提供了一個非常堅實的基礎,可以在推動利潤、現金和靈活性的穩定性方面開展工作。
But what are we looking at and how we manage our services business right now is where Arvind and I are looking at daily is, one, what's happening to the rate and consumption of our backlog. What are clients doing around projects, around offerings? What's happening to our utilization? Our chargeable billable rates? Our price realization? Each of those are fundamental KPIs that we're looking at in this environment right now to the health of the indicator around a services-based business. Around a product-based business, much more transactional. As Arvind said, software is about 20% to 25% transactional here in the second quarter. Has a strong annuity base. By the way, Red Hat's a subscription-based model, strong annuity base. But the dynamics of how we're managing that are looking at our pipeline, our volume, our deal sizes, our yields, our progression, our renewal rates, our demand capacity for our hardware products and where they're at within their cycle. So we are driving the operational discipline you would expect in this company as we move forward. But at the end, we have enough of that financial flexibility, and cash and liquidity, which I think is the most important message for the investor.
但是我們現在關注的是什麼以及我們如何管理我們的服務業務是 Arvind 和我每天關注的是,一個,我們積壓的速度和消耗發生了什麼。客戶圍繞項目和產品做什麼?我們的利用率發生了什麼變化?我們的收費收費標準?我們的價格實現?每一個都是我們現在在這個環境中關注的基本 KPI,以了解基於服務的業務的指標的健康狀況。圍繞基於產品的業務,交易性更強。正如 Arvind 所說,第二季度這裡的軟件交易量約為 20% 至 25%。擁有雄厚的年金基礎。順便說一下,Red Hat 的訂閱模式,強大的年金基礎。但是,我們如何管理的動態正在查看我們的管道、我們的數量、我們的交易規模、我們的收益率、我們的進展、我們的續訂率、我們對我們的硬件產品的需求能力以及它們在他們的周期中所處的位置。因此,在我們前進的過程中,我們正在推動您在這家公司中期望的運營紀律。但最後,我們有足夠的財務靈活性、現金和流動性,我認為這是對投資者最重要的信息。
Operator
Operator
And our next question will come from Tien-Tsin Huang with JPMorgan.
我們的下一個問題將來自摩根大通的 Tien-Tsin Huang。
Tien-Tsin Huang - Senior Analyst
Tien-Tsin Huang - Senior Analyst
Good to have you on the call, Arvind. I wanted to ask just a quick one, acquisitions for you, Arvind. Just looking beyond the pandemic. I know that's hard to do, but criteria, size, thinking on accretion, dilution you're willing to accept there as you want to move quicker to hybrid cloud and AI. Can you share your thoughts on that?
很高興你接聽電話,Arvind。我想問一個簡短的問題,Arvind,你的收購。只是放眼大流行之外。我知道這很難做到,但是標準、規模、對增長的思考、你願意接受的稀釋,因為你想更快地轉向混合雲和人工智能。你能分享一下你的想法嗎?
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Hello, Tien-Tsin, good to hear from you. So you asked about criteria, size, accretion and this thing. Look, I think, on all 3, one that is easiest, size. Size is not a criteria, so I'm just going to put that to the side. As Jim has said a couple of times, we have enough inflex to do a fair number of things. And most things that we might eye, I think, are possible for us to be able to get done. So I'll put size aside and say that's not really an issue.
你好,Tien-Tsin,很高興收到你的來信。所以你問了標準、大小、增生和這件事。看,我認為,在所有 3 個中,最簡單的一個是尺寸。大小不是標準,所以我只是把它放在一邊。正如 Jim 多次說過的那樣,我們有足夠的 inflex 來做很多事情。我認為,我們可能會關注的大多數事情對我們來說都是有可能完成的。所以我會把大小放在一邊,說這不是真正的問題。
You asked about accretion and decretion. Jim and I are clear, we manage the business for the long term. So if it becomes accretive after a year or 2, as we described about Red Hat, that's more than sufficient for us. It doesn't have to be accretive on month 1 or day 1. As long as it's a healthy business, provides us the current growth profile and provides us the ability to get sufficient synergy, both for IBM and for the property itself. Both have to be winners. It cannot just be one of us. Otherwise, it's not that attractive.
你問的是增減。吉姆和我很清楚,我們長期管理業務。因此,如果它在一兩年後變得增值,正如我們對 Red Hat 所描述的那樣,這對我們來說已經足夠了。它不必在第 1 個月或第 1 天增加。只要它是一個健康的業務,為我們提供當前的增長概況,並為我們提供足夠的協同效應的能力,無論是對 IBM 還是對財產本身。雙方都必須是贏家。它不能只是我們中的一員。否則,它就沒有那麼吸引人了。
And then you said about criteria. The criteria is those things that make our clients value us even higher. And the areas we have chosen to be their trusted partner on is hybrid cloud and AI. So that's sort of the criteria, but please take a wide stance on hybrid cloud. Hybrid cloud encompasses how we connect private and public, it connects -- it includes how we might secure them. It might include the data that is inside those properties, provides more visibility. And as we shift that out over time, that will widen even more because the definition of what is the cloud market also tends to change over time. So hopefully, that answered your question. But it's something we give a lot of thought to.
然後你談到了標準。標準是那些讓我們的客戶更加重視我們的東西。我們選擇成為他們值得信賴的合作夥伴的領域是混合雲和人工智能。所以這就是標準,但請對混合雲採取廣泛的立場。混合雲包含我們如何連接私有和公共,它連接——它包括我們如何保護它們。它可能包括這些屬性中的數據,提供更多可見性。隨著時間的推移,我們將其移出,這將進一步擴大,因為雲市場的定義也會隨著時間的推移而發生變化。希望這能回答您的問題。但這是我們深思熟慮的事情。
Operator
Operator
Our next question comes from David Grossman with Stifel.
我們的下一個問題來自 Stifel 的 David Grossman。
David Michael Grossman - MD
David Michael Grossman - MD
Arvind, congratulations. Nice to have you on the call. This is, I guess, for both of you. Are there any components of the business that are in transition, whether that's GTS or certain legacy software segments where the current pandemic creates an opportunity to accelerate that transformation. And perhaps you can tie that into the comments, I think in your prepared remarks, that telegraph that there may be some additional rebalancing actions in the June quarter.
阿溫德,恭喜你。很高興你接電話。我想,這對你們倆都是。是否有任何業務組成部分正在轉型,無論是 GTS 還是某些遺留軟件領域,當前的大流行創造了加速轉型的機會。也許你可以將其與評論聯繫起來,我認為在你準備好的評論中,電報表明 6 月季度可能會有一些額外的再平衡行動。
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
I think, David, we're always looking at this and always looking at portfolio optimization. I would not say because of the pandemic or COVID-19 as we look at this. As you saw last year, we divested in the software portfolio, quite a few things that weren't core to hybrid cloud. They were around marketing properties and as-a-service properties around many of our retail clients. It didn't really necessarily fit or pull along or have synergy with the core hybrid cloud portfolio, so it made sense to divest them. I think we are done with that round, just to be upfront.
我認為,大衛,我們一直在關注這個問題,並且一直在關注投資組合優化。當我們看這個時,我不會說是因為大流行或 COVID-19。正如你去年看到的那樣,我們剝離了軟件產品組合,其中有很多不是混合雲的核心內容。他們圍繞著我們許多零售客戶的營銷屬性和即服務屬性。它不一定真正適合或與核心混合雲產品組合相結合或具有協同作用,因此剝離它們是有意義的。我想我們已經完成了那一輪,只是為了提前。
Now as we always look and say, does this or does this not bring value? Is it a reason for a client to have both, the core hybrid cloud portfolio and something because we reevaluate that all the time. But I don't have something to name for you that we are trying to do right now. As the quarters go along, as the months go along, we will do it. But I also want to be clear that for the next few months, we have to be focused on the stability of the business, and we have to be focused on making sure that we preserve our liquidity and our balance sheet. So that's what we're kind of focused on for the very near term.
現在,正如我們總是看和說的那樣,這是否帶來價值?這是客戶同時擁有核心混合雲產品組合和其他東西的原因嗎,因為我們一直在重新評估它。但我沒有什麼可以為你命名的,我們現在正在嘗試做。隨著季度的推移,隨著月份的推移,我們會這樣做。但我也想明確一點,在接下來的幾個月裡,我們必須專注於業務的穩定性,我們必須專注於確保我們保持流動性和資產負債表。所以這就是我們近期關注的重點。
Operator
Operator
Our last question will come from Keith Bachman with BMO.
我們的最後一個問題將來自 BMO 的 Keith Bachman。
Keith Frances Bachman - MD & Senior Research Analyst
Keith Frances Bachman - MD & Senior Research Analyst
Arvind, congratulations on your promotion as well as Jim Whitehurst, congratulation on your promotion as well. I wanted to ask a little higher-level question. As I think about IBM, there's many constituents, but probably 3 broad ones, shareholders, employees and then customers. And as you think about the stock performance over the last, I don't know, 5 to 7 years, I think, shareholders would conclude that they've been disappointed with IBM's performance. And even from a customer's perspective, if you look at IBM's revenues relative to growth of the many markets you participate in, probably some disappointment there. So as you think about your new leadership and perhaps focusing on the investor side, what do you think you really need to do differently for IBM and its shareholders versus what's happened over the last 5 to 7 years?
Arvind,祝賀你晉升,Jim Whitehurst,也祝賀你晉升。我想問一個更高層次的問題。在我看來,IBM 有很多組成部分,但可能有 3 個廣泛的組成部分,即股東、員工和客戶。當你考慮過去 5 到 7 年的股票表現時,我認為,股東們會得出結論,他們對 IBM 的表現感到失望。甚至從客戶的角度來看,如果您將 IBM 的收入與您參與的許多市場的增長相關聯,您可能會感到有些失望。因此,當您考慮您的新領導層並可能關注投資者方面時,與過去 5 到 7 年發生的情況相比,您認為您真正需要為 IBM 及其股東做哪些不同的事情?
Arvind Krishna - CEO & Director
Arvind Krishna - CEO & Director
Maybe I'll start, Keith, and begin to do it. Look, I think that -- I think we had acknowledged that the markets value growth above other things. So while we have always selected on high value. And to your point on clients, we measure our Net Promoter Score, or NPS, which I think is widely regarded as being one of the best metrics of how clients value what they're getting from you. And that has actually improved substantially. I think over 10 points, if I remember, over the last 2 years. So given that the NPS is improving, our clients are much more delighted with what they get from us.
也許我會開始,基思,然後開始做。看,我認為 - 我認為我們已經承認市場重視增長高於其他事物。所以雖然我們總是選擇高價值。至於你對客戶的看法,我們會衡量我們的淨推薦值或 NPS,我認為它被廣泛認為是衡量客戶如何評價他們從你那裡得到的東西的最佳指標之一。這實際上已經有了很大的改善。如果我記得的話,在過去的 2 年裡,我認為超過 10 分。因此,鑑於 NPS 正在改善,我們的客戶對他們從我們這裡得到的東西更加滿意。
Now that said, the overall portfolio has to be able to grow to return -- to make investors happier. And that's why we are clear. You noticed me announced a lot of our management team at the beginning. I think this is a team that's going to be able to deliver growth back to the market. As Jim Kavanaugh, of course, and you heard him talk about capital allocation and how he's going to use that twin flex to enable both organic and inorganic investment. Jim Whitehurst, who many of you know well, who has dealt really well, both crises when he was at Delta and a growth when he was at Red Hat. Bridget van Kralingen, who has a strong record of understanding client needs, and we're going to drive some of the go-to-market changes we mentioned. Howard Boville that we're bringing in, who was at Bank of America, who has a deep empathy and understanding for some of our largest clients, but also who drove a lot of efficiency when he was at the bank, and he can bring those attributes to the clients as well. And Mark Foster, who has services and who has a real penchant for growth and for making sure that he brings value to our clients and services. We put all that together, and I think it is a team that can go deliver growth.
話雖如此,整體投資組合必須能夠增長才能獲得回報——讓投資者更快樂。這就是為什麼我們很清楚。你注意到我一開始就宣布了很多我們的管理團隊。我認為這是一個能夠將增長帶回市場的團隊。當然,作為吉姆卡瓦諾,你聽到他談論資本配置以及他將如何使用這種雙重靈活性來實現有機和無機投資。吉姆·懷特赫斯特,你們中的許多人都很了解,處理得非常好,既有他在 Delta 時的危機,也有他在 Red Hat 時的成長。 Bridget van Kralingen,他在了解客戶需求方面有著良好的記錄,我們將推動我們提到的一些上市變化。我們要請來的霍華德博維爾,他曾在美國銀行工作,他對我們的一些最大客戶有著深刻的同理心和理解力,而且他在銀行工作時提高了很多效率,他可以帶來那些客戶的屬性也是如此。還有 Mark Foster,他提供服務,真正熱衷於增長,並確保他為我們的客戶和服務帶來價值。我們把所有這些放在一起,我認為這是一個可以實現增長的團隊。
But let's also be clear. We can talk about which is important. Is it growth? Or is it only EPS? Or is it only liquidity? Look, liquidity is essential. Without that, no company is going to survive through the next period. And I don't know how long that period is going to be. So I think our obsession with that is going to serve us well in this period. But what you're hearing me say is that growth has to be an equal obsession to other metrics that are there, and we are going to go do that. So it may not be a completely full answer, Keith, but we'll probably get there as the months go on and we get more clarity.
但我們也要清楚。我們可以談談哪個重要。是成長嗎?還是只有EPS?還是只是流動性?看,流動性是必不可少的。否則,沒有公司能夠在下一個時期生存下來。我不知道那段時間會持續多久。所以我認為我們對此的痴迷將在這個時期為我們提供良好的服務。但是你聽到我說的是,增長必須與現有的其他指標同等重要,我們將這樣做。所以這可能不是一個完全完整的答案,基思,但隨著時間的推移,我們可能會到達那裡,我們會變得更加清晰。
So I think that was the last question, if I remember. So let me make a few comments to wrap up the call. These are truly unprecedented times. Over the coming weeks and months, we're going to continue to focus on our employees, our clients and how we can help broader society. As difficult as this crisis is, it presents an opportunity for IBM as a technology leader and as a trusted partner. Personally, it's an interesting and exciting time to be taking on this role. I look forward to continuing this dialogue with all of you, and we'll update you at the end of the second quarter. Thank you.
所以我想這是最後一個問題,如果我沒記錯的話。所以讓我發表一些評論來結束電話會議。這是真正前所未有的時代。在接下來的幾周和幾個月裡,我們將繼續關注我們的員工、我們的客戶以及我們如何幫助更廣泛的社會。儘管這場危機非常艱難,但它為 IBM 作為技術領導者和值得信賴的合作夥伴提供了機會。就個人而言,擔任這個角色是一個有趣而激動人心的時刻。我期待與大家繼續對話,我們將在第二季度末向您通報最新情況。謝謝。
Patricia Murphy - VP of IR
Patricia Murphy - VP of IR
Great. Thanks, Arvind. Thanks, Jim. Thanks for all of your questions. Sheila, let me turn it back to you to wrap up the question -- wrap up the call.
偉大的。謝謝,阿文德。謝謝,吉姆。感謝您提出的所有問題。希拉,讓我把它轉回給你來結束這個問題——結束電話。
Operator
Operator
Thank you. Thank you for participating on today's call. The conference has now ended. You may disconnect at this time.
謝謝。感謝您參加今天的電話會議。會議現已結束。此時您可以斷開連接。