Welcome, and thank you for standing by. At this time, all participants are in a listen-only mode. 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 Olympia McNerney, IBM's Global Head of Investor Relations. Olympia, you may begin. Thank you. I'd like to welcome you to IBM's First Quarter 2025 Earnings Presentation. I'm Olympia McNerney, and I'm here today with Arvind Krishna, IBM's Chairman, President, and Chief Executive Officer, and Jim Kavanaugh, IBM's Senior Vice President and Chief Financial Officer. 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. To provide additional information to our investors, our presentation includes certain non-GAAP measures. For example, all of our references to revenue and signings growth are at constant currency. We've provided reconciliation charts for these and other non-GAAP financial measures at the end of the presentation, which is posted to our Investor website. Finally, 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. With that, I'll turn the call over to Arvind. Thank you for joining us today. We're off to a strong start in 2025, exceeding our expectations for the quarter, driven by solid revenue growth, profitability, and cash flow generation. While sentiment and the operating environment have been rapidly shifting, our performance reflects the continued success of our focused strategy around hybrid cloud and AI, especially where clients are looking for cost savings, productivity gains, and trusted partners to help them move fast and scale. Those needs remain front and center in today's market. Before going deeper into our results, let me start by saying that we appreciate the administration's focus on economic growth and rational regulation, which will strengthen the U.S. competitive position. We believe this will result in long-term value creation and make it easier for technology to contribute to economic growth. I'm going to now talk about our results for the quarter and then address the macro and how we are positioning within these conditions. Our performance this quarter reflects the flywheel for growth we discussed at our Investor Day. It all starts with client trust, with a 100+ year history of delivering mission-critical solutions and navigating different operating environments. Trust is complemented by the flexible solutions we offer in hybrid cloud and AI, the innovation value we provide, our domain expertise to help clients digitally transform and scale AI, and our partner ecosystem to broaden our reach and impact. We saw these play out in the first quarter. Our growth was led by software, up 9%, with strength across Red Hat, automation, data, and transaction processing. Our early leadership in generative AI and the Consulting Advantage platform, using digital assets to deliver client value, have positioned us well in today's evolving market. In infrastructure, z16 is our most successful program in history, highlighting customer adoption and the value proposition of the mainframe. In generative AI, we continue to see strong traction. Our book of business is now over $6 billion inception to date, up over $1 billion in the quarter. Approximately one-fifth of this book of business comes from software, and the remaining four-fifths is consulting. This is similar to last quarter. The AI portfolio we have built is designed to give clients a comprehensive set of tools to deploy AI within their enterprise. In software, the ability to deploy our AI assistants and agents, as well as AI middleware, in a hybrid environment, leveraging multimodal capabilities, is resonating with clients. AI agents will accelerate the ability of many enterprises to turn the promise of generative AI into real value. Consulting is helping clients design and deploy AI strategies and use cases. We continue to see our infrastructure segment play a larger role as clients bring AI to their data. Our clients will see these solutions at length at our client conference, Think, in early May in Boston. We remain focused on accelerating innovation speed and impact. Earlier this month, we announced the upcoming launch of z17, which delivers enhanced AI acceleration through multimodal AI capabilities, new security features to protect data, and tools that leverage AI for improving system usability. z17's value proposition particularly resonated with clients, given significantly lower power requirements, higher capacity growth, and increased performance over z16. In quantum, we are proud to partner with the Basque Government to deploy Europe's first IBM Quantum System Two in Spain, a milestone in global quantum leadership. M&A remains a key enabler of our strategy. This quarter, we closed the acquisitions of HashiCorp and AST. HashiCorp brings leading automation and security tools that integrate with our hybrid cloud strategy, and we're excited about the synergy opportunities ahead. Let me now touch on the macro environment. Technology remains a key competitive advantage, allowing businesses to drive cost efficiencies, productivity, and preserve their balance sheets. In the near term, uncertainty may cause clients to pause and take a wait-and-see approach. However, the value of hybrid cloud, automation, data sovereignty, and on-premise solutions becomes even more critical in volatile windows. Recent conversations that I've had with clients reflect this view of the current environment. These conversations vary by industry, business, and geography. For example, our containerization and virtualization pipeline continues to grow, with clients focused not only on near-term costs but also longer-term savings driven by our modernization capabilities. There are also areas of our business where volatility acts as a catalyst for demand, driving increased capacity requirements, particularly across our mainframe environments. This played out over the last couple of weeks amongst our financial services clients. However, for clients with a more direct impact from current policy, the slowdown may be more pronounced. Consulting is also more susceptible to discretionary pullbacks and DOGE-related initiatives. While no one is immune to uncertainty, we enter this environment from a position of relative strength and resiliency. Our clients run the world's most essential processes. Our diversity across businesses, geographies, industries, and large enterprise clients positions us well to navigate the current climate. We have an experienced team that is focused on areas we can control around our supply chain, accelerating our productivity initiatives, and maintaining the strength of our balance sheet. With this backdrop, let me touch on our outlook. For the last several years, we have been strengthening our portfolio and building on our track record of execution, and our outperformance this quarter was another proof point. While it is still very early in the second quarter, we have not seen a material change in client buying behavior. With the caveat that the macro situation is fluid, based on what we know today, we are maintaining our four-year guidance for accelerating revenue growth to 5%+ and about $13.5 billion of free cash flow. Over the longer term, I am confident in our ability to deliver on our model presented at Investor Day for sustainable higher revenue growth and strong free cash flow. With that, I'll turn it over to Jim to walk through the financials. Jim, over to you. Thanks, Arvind. In the first quarter, we delivered $14.5 billion in revenue, $3.4 billion of adjusted EBITDA, $1.7 billion of operating pre-tax income, and operating earnings per share of $1.60. We generated $2 billion of free cash flow, our highest first quarter free cash flow in many years. Our revenue growth, scale, and accelerating productivity drove 240 basis points of adjusted EBITDA margin expansion and 12% adjusted EBITDA growth. We exceeded our expectations on revenue, profitability, adjusted EBITDA, and earnings per share. Our revenue for the quarter was up 2% at constant currency. As we discussed at our Investor Day, our mix shift towards software is driving growth. We saw this play out in the quarter with software up 9%, driven by growth of 15% in automation, 13% in Red Hat, 7% in data, and 2% in transaction processing. This performance reflects demand for our focused portfolio that provides end-to-end hybrid cloud and AI capabilities. Red Hat delivered another strong quarter, driven by bookings growth in the high teens. OpenShift is now at $1.5 billion ARR, growing about 25%. About six points of our growth in software was organic, with contribution from our generative AI products like our AI assistants and agents and watsonx platform. We also benefited from our high-value recurring revenue base, which comprises about 80% of our annual software revenue. Software's annual recurring revenue grew to $21.7 billion, up 11% since last year. Consulting revenue was flat, and a sequential growth improvement quarter to quarter with solid backlog growth of mid-single digit. Strategy and technology revenue declined 1%, and intelligent operations revenue was flat for the quarter. While we are seeing clients delay decision-making, especially in discretionary projects, which impacted our in-period signings, we had good growth in transformational offerings like hybrid cloud and data, as well as application management and cloud platform engineering services. We also continue to build our consulting generative AI book of business, which is now over $5 billion inception to date. Infrastructure revenue declined 4%. Hybrid infrastructure was down 7%, driven by IBM Z, down 14%, as we wrapped on the 12th and final quarter of the z16 program, which delivered strong performance in both revenue and capacity. Distributed infrastructure revenue was down 4%, with product cycle dynamics impacting power, while storage delivered another quarter of double-digit growth as our latest innovations continue to address the rising data demands of our clients. Now turning to profitability. In the current environment, we are focused on taking action to control things we can to protect supply chain, margin, and free cash flow. IBM has been driving a productivity mindset for many years. This quarter's margin performance reflects that intentional discipline and our flexibility of our operating model. During the quarter, operating leverage and yield from accelerated productivity initiatives drove expansion of operating gross profit margin of 190 basis points, adjusted EBITDA margin of 240 basis points, and operating pre-tax margin of 50 basis points. Excluding year-over-year divestiture dynamics and net year-to-year workforce rebalancing, operating pre-tax margin was up 180 basis points, ahead of our expectations and well above our model. We delivered very strong segment profit margin expansion in software and consulting of over 370 basis points and 280 basis points, respectively, while infrastructure was down about 150 basis points, reflecting product cycle dynamics and continued investments in innovation. Let me give you some more color on our productivity initiatives. As discussed at our Investor Day, we remain laser-focused on accelerating our productivity initiatives. We are transforming our enterprise operation, leveraging technology and embedding AI across more than 70 workflows, such as HR, IT support, procurement, finance, quote-to-cash, and more. We have built a best-in-class enterprise IT platform, leveraging our own IBM software solutions across hybrid cloud, automation, and AI, decreased our vendor spend by more than $1 billion by optimizing our supply chain and service delivery, and right-sized our physical infrastructure. We exited 2024 at $3.5 billion of annual run rate savings achieved, and we continue to see these efforts play out in our margin performance this quarter. These actions create a flywheel that allows us to invest back in our business, both organically and inorganically, increase our financial flexibility, and deliver margin expansion. Our ability to toggle these actions up or down, depending on the operating environment, adds significant flexibility to our financial model. The combination of our revenue scale and productivity enabled solid contribution to free cash flow generation. In the quarter, we generated $2 billion of free cash flow, up $100 million year-over-year, resulting in our highest first-quarter free cash flow margin in reported history. The largest driver of this growth comes from adjusted EBITDA, up over $350 million year-over-year. Partially offsetting this, given global trade dynamics, we proactively took actions to bolster our supply chain ahead of our z17 launch, resulting in higher inventory levels. Despite these actions, we are a couple points ahead of our three-year average attainment levels through the first quarter. Let me briefly address our supply chain dynamics. As Arvind mentioned, IBM has a long track record of operating globally and managing supply chain complexity. Over the last several years, we have strategically diversified and streamlined our supply chain. Goods imported to the U.S. represent less than 5% of our overall spend, and under current U.S. tariff policy, the impact to IBM is minimal. While we have limited direct exposure outside the United States, we are tactically evaluating alternative sources and other strategies to mitigate tariffs. We continue to maintain a strong liquidity position, solid investment-grade balance sheet, and a disciplined capital allocation policy. We ended the quarter with cash of $17.6 billion, which is up $2.8 billion from the end of 2024, including spending $7.1 billion in acquisitions, driven largely by the closing of HashiCorp. In February, we accessed the debt markets, raising over $8 billion on attractive terms. Our debt balance ending the quarter was over $63 billion, including $10 billion of debt for our financing business, with a receivables portfolio that is over 75% investment grade. In addition, we returned just over $1.5 billion to shareholders in the form of dividends. Now, let me talk about what we see going forward. As everyone knows, there is a level of macro uncertainty that exists and is hard to predict. That said, we are operating from a position of relative strength. The combination of our repositioned and focused portfolio, investment in innovation, and our diversity across businesses, geographies, industries, and large enterprise clients positions us to perform in a variety of macro scenarios. Our flywheel for growth begins with the incumbency and trust we have with clients from decades on the ground in over 175 countries, which is a real point of differentiation in the current environment. Our client base is diverse, operating across almost 20 industries, spanning 95% of the Fortune 500. Based on what we know today, we are maintaining our four-year guidance for accelerating revenue growth of 5% + and about $13.5 billion of free cash flow. Let me go through the drivers of these key metrics. As discussed at our Investor Day, our mixed shift towards software is a key driver of our growth acceleration. Software is now about 45% of our business, with 80% recurring revenue. As a reminder, in the first quarter, we generated $21.7 billion of ARR, growing 11%. The combination of our portfolio strength, investment in innovation, and contribution from acquisitions should drive our full-year performance in software. We continue to expect mid-teens growth for Red Hat, underpinned by six-month revenue under contract, which is growing in the mid-teens. In consulting, we are encouraged by this quarter's sequential growth in revenue, our solid backlog up 6%, and our book of business in GenAI. Given the current environment, we are appropriately more cautious on consulting's contribution to IBM this year. With our new mainframe launch, innovation across the portfolio, and capacity dynamics that could benefit our mainframe environments and storage needs, we expect infrastructure to grow. While we feel good about the core growth drivers of our business, there are areas of our portfolio that could see greater variability in the event that the macroeconomic environment deteriorates. This includes consulting, which is more sensitive to discretionary pullbacks, and DOGE-related initiatives, consumption-based services and software, including in Red Hat, and areas of distributed infrastructure. We continue to expect IBM's full-year operating pre-tax margin to expand by over half a point, driven by productivity initiatives, revenue scale, and mix, mitigated by the impact of dilution from acquisitions. Our tax rate expectation for the year remains in the mid-teens. As always, the timing of discrete items can cause the rate to vary within the year. For free cash flow, we expect to generate about $13.5 billion in 2025, driven primarily by growth and adjusted EBITDA. The headwinds I discussed last quarter of higher cash taxes and higher CapEx remain the same. As I mentioned earlier, we have been accelerating our productivity initiatives to plan for various scenarios and to protect our profitability and free cash flow. As we look forward to the rest of the year, we will remain disciplined about managing our costs. The strength of our balance sheet and strong liquidity position allow us to make investments in our business for the longer term. As Arvind mentioned, while still early, through the first three weeks of the second quarter, we have not seen any material change in client buying behaviors. We expect revenue growth of at least 4% at constant currency. Given the increased currency volatility, a revenue range of $16.4 billion-$16.75 billion. Second quarter operating pre-tax margin expansion should be consistent with the full year, with our tax rate in the mid to high teens. Let me conclude by saying that we have a durable and differentiated business model that positions us well to navigate a range of economic environments. While there is uncertainty, we remain laser-focused on taking actions to control what we can and executing our strategy to accelerate revenue growth and free cash flow. We believe our focused portfolio, disciplined investments in innovation, a diverse set of businesses and clients, and relentless focus on productivity and strong liquidity drive the durability of our performance. Arvind and I are now happy to take your questions. Olympia, let's get started. Thank you, Jim. Before we begin the Q&A, I'd like to mention a couple of items. First, supplemental information is provided at the end of the presentation. Second, as always, I'd ask you to refrain from multi-part questions. Operator, let's please open it up for questions. Thank you. At this time, we'll begin the Q&A session of the conference. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Jim Schneider with Goldman Sachs. Please state your question. Good afternoon. Thanks for taking my question. I was wondering if we could maybe start off with sort of framing the macro impact that you're seeing on both software and consulting. You talked about some of the potential drivers, but I'm sort of curious at this point, are you seeing any kind of significant softening in, say, the consumption portion of the portfolio, either Red Hat or otherwise? Do you see any slowdown in specifically transaction processing for the year that would allow you to not sort of hit the target that you laid out at the investor day? Similarly, on consulting, are you seeing the DOGE impact sort of significantly impacting the near-term results, or is this more of an expectation of a slowdown in a broader sort of enterprise mix of business? Just broadly speaking, if you could address the sort of subsegment guidance you had provided at investor day approaching double digits in software and low single digits in consulting and whether we'd expect either of those to change very much. Thank you. Okay, Jim, I'm hoping I can remember. I think it was five parts to your question. Let me address the macro pieces, and then I'm going to ask Jim Kavanaugh to address the last piece on the subsegment guidance. If we look at what happened in the first quarter and then if you project forward, there's a difference. We did not really see much of a slowdown in 1Q on the consumption parts of the software business, whether it's in TPS or whether it's in Red Hat, just to be straightforward. We are projecting, though, that if there is a slowdown in global GDP, there could be a small slowdown, not a big slowdown, in the Red Hat part of the consumption business. Just to remind you, it's only between 10% and 20% of the total business. If I look at transaction processing, if anything, we see tailwinds right now, not headwinds. We expect that part of the portfolio to remain strong unless we approach a recession or negative GDP, which we are not projecting from everything that we can see and read. Going to consulting and DOGE, yes, we are not immune from all those activities, just like everybody else. We had a couple of contracts that were impacted in the first quarter. You would expect USAID, where we did some work, was impacted, but not really in most other cases. The work we tend to do is much more mission-critical, is much more about building the government systems, which make them more efficient, and so we see them carry on. Now, it's hard to predict where that goes over the rest of the year, so I'm not going to try and make that prediction on consulting, except to caution, as Jim said in his prepared remarks, if there is pressure in the economy, consulting tends to see headwinds before other parts of the business. I think there were three or four of your five parts and subsegment compared to investor day. Jim, I'll leave it to you. All right. Thanks, Jim, for the question overall. If you go back to investor day, what did we talk about? We talked about the strategic repositioning of our portfolio and our company overall to a much more software-centric, platform-centric model. We laid out a financial investment thesis. We called it our shareholder value creation thesis that said we would take this business from a no-growth profile to the last three years, kind of low single-digit profile, to an accelerating revenue growth profile, a mid-single-digit plus. That is how we guided 2025. Underpinning that was an accelerating revenue growth profile of software. Right now, when you look at us maintaining our guidance in 2025, we are right on path to that. I'm sure we could talk about the underpinnings of software a little bit later. Second, what was a big change we made? We said with the new innovation investments and the repositioning of infrastructure that we were moving that business from a cyclical business to a secular grower. In our guidance for 2025 of the 5%+, we are the first instantiation in 2025 of a secular grower, as we're very excited about the new innovation of our mainframe that was just launched here in the beginning of April. We said consulting, over time, the market, which we have confidence in, that's been growing on average 5%-6% over a decade long. Yeah, are there some years up and down? Absolutely. We have confidence in a long-term growth factor of consulting and, more importantly, the integrated value of what consulting brings to our portfolio. The tip of the spear, driving and pulling our technology and driving that attractive economic multiplier effect. You look at 2025, we started the year out this year and we said, given the demand environment, we were prudently cautious at the low end of low single digits. We started out first quarter here, we stabilized the business flat. We see that pretty much the same. There's a lot of dynamics going on in the year, but we're kind of confident in that stat, flat, stabilized area overall. Hopefully it gives you some perspective. Great. Operator, let's take the next question. The next question comes from Wamsi Mohan with Bank of America. Please state your question. Yes, thank you so much. Maybe just to follow on in terms of just the way to get to your 5%+ guide for the full year, it'd be helpful if maybe it'd be helpful if you could maybe just give us some sense both on Red Hat, which is going to face tougher comps and transaction processing, which is starting off at 2%, how we get to sort of this double-digit software or approaching double-digit software contribution. Jim, you noted maybe it's prudent to be a little more cautious on the contribution from consulting. Is that largely going to be offset maybe by better expectations on infrastructure as well? Thank you so much. Yes, thanks, Wamsi. I'll take this. Let's take a step back. You go through what we talked about in January, and then we played out to Jim's question around our strategic investment thesis for a long-term perspective, which aligned overall about how we accelerate this company and leverage all the work we've done on building a durable, sustainable, inflecting higher growth business. We talked entering the year. One, we were coming into the year with a position of strength. That was centered around our software portfolio, our high-value recurring revenue, and our investment in innovation. Two, Red Hat momentum. The opportunity in front of us on virtualization, AI, was going to grow mid-teens. Three, our next-generation mainframe that was coming out late in the first half that would fuel second half. Four, our early leadership position in GenAI. Five, our disciplined capital investment allocation and what we've seen with regards to M&A growth and synergies. I would tell you right now, coming out of first quarter, I'm actually feeling more confident on each one of those five. Let me put some numbers to it. We just exited it as a strong 2% growth here in the first quarter. We maintained our full year at 5%+. How do you get there? Embedded in that 2%, we got about four points of contribution from software. We had a one-point headwind given we were at the last 12-quarter cycle of our infrastructure business, and consulting stabilized was flat. What goes forward? Number one, that new innovation in our infrastructure turns a point headwind in 2Q to a point tailwind for the full year. That's a full two-point change. You go from 2% already to 4%. Number two, we are very excited. We closed HashiCorp at the end of February. Our actual contribution around inorganic in the first quarter, give or take, was about a point and a half. To IBM for the full year of 2025, it's going to be north of two and a half. We get another point of M&A. Now you're up to 5% growth. Now you get to, okay, how do we get north of that 5% growth, which is what our guide is? Three, Red Hat, seventh consecutive quarter of high teens ACV bookings. We are seeing great demand around virtualization, around automation, around our Linux capability. By the way, all three grew double digits here in a quarter, pervasive and grew share. Our acceleration in Red Hat coming off of roughly 13.5% in the first quarter, we're going to commit and we maintain mid-teens for the year. We get another half a point out of Red Hat. I haven't even went to our annuity profile, which is in a strong position with strong renewal rates, etc. We will see how the consulting backlog plays out. I think to your question, we are being very prudent on cautiously prudent on consulting and not expecting any contribution. That is kind of a walk from a first quarter to full year. Great. Operator, let's take the next question. Our next question comes from Amit Daryanani with Evercore ISI. Please state your question. Yep. Thanks a lot. Yeah, I guess I was hoping you'd talk a bit more on the consulting side. You've talked about there's a lot of noise happening on consulting, especially from the federal and DOGE exposure. I'd love to understand how big is the federal business for you folks, and how do you think about the discretionary part of your consulting business stacking up in the back half of the year, given some of the macro noise? Just anything on the consulting side would be really helpful. Jim, if I could just follow up, you folks normally don't give a quarterly explicit revenue guide. You're doing it this time around for June quarter. I'm just curious, what led to the decision to give a more explicit June quarter guide other than you were afraid we were all going to mismodel it? Yeah. Let me, first of all, thanks, Amit. Let me take the second question first, and then I'll go into the DOGE specifics to ground us in numbers, and then if Arvind has any of the client pieces back as we've been actively engaged with the administration, as you can quite imagine. Let's take a look at on currency in particular and given a quarterly guide. Why did we do that? Full transparency, we feel obligated with our credibility on what we see in the near term, given we're operating, as we talked about, in a very dynamic and uncertain macroeconomic environment. Our best visibility right now is probably in the next 90 days. And given that credibility and transparency to investors, and also in light of the significant U.S. dollar devaluation that's happened over the last three weeks, let's put that in perspective. The rate, the magnitude, and the breadth of the US dollar depreciation, we have not seen in quite some time, like 8%-9% devaluation. What did we do? We gave you both. We always guide on constant currency, and we guided on constant currency. We could talk about the underpinnings a little bit later. Second, just given the extreme volatility in the market, we guided on an absolute dollar range all in. Why did we do that? Because at 4% constant currency growth, if you just dial back to where the FX rates were as we entered April 1, that would put you at $16.4 billion. If you actually take that same 4% and you look at today's, actually, today's spot rate devalued or actually appreciated about a point, so we already gave a point back. If you look at it from yesterday, we'd be at $16.75 billion. We're not in the business of predicting the FX volatility. We're giving you a range, but we're saying, as always, what we can control, which is the underlying dynamics of the operational performance of our business, we feel confident of at least 4%. Hopefully that gives you that. On DOGE, let me ground some data and facts here. One, as Arvind said, no one's going to be immune from this. Our U.S. federal business is less than 5% of IBM's total annual revenue. About 60% of that is consulting, which is more susceptible to discretionary efficiency-type programs. 40% of it is technology, which is all high-value annuitized revenue under contract. Let's put that off to the side. In consulting, our U.S. federal is less than 10% of the total. By the way, we have less than 3% market share overall. Now, when you look at it, Arvind indicated, and by the way, all this data is public, we've had a handful of contracts, either statement of work that have or canceled. On our annualized backlog of over $30 billion in total consulting, this is like less than $100 million of backlog over a duration of multiple years. While no one's immune, we are absolutely focused on monitoring the dynamic process. I think back to Wamsi's question, we're prudently cautious around consulting for the year. Look, Jim, I think the best thing for you to understand, Amit, federal consulting is less than 10% of consulting. I think that's statement number one. Within that, the vast majority is critical work. We actually process veterans' benefit claims. We help process how the GSA does procurement. We help implement payroll systems. I don't think of these as optional. Now, are there some areas around the edges which could be viewed as discretionary? Yes. In our case, that is the minority of our business, not the majority. Operator, let's take the next question. The next question comes from Ben Reitzes with Melius Research. Please state your question. Ben Reitzes, your line is open. Please unmute yourself. Yeah, thanks. Sorry about that. If you can hear me now, I wanted to talk about the Red Hat business. It decelerated, I guess, 300 basis points sequentially. I was wondering if we could just talk a little bit more about the dynamics, why that occurred. I think you said the consumption business didn't get hit. It looks like it's going to re-accelerate because of the great bookings. You mentioned virtualization. I don't know if you've mentioned that before in the conference calls, but I'm wondering how much of a driver that is for Red Hat, given some of the changes going on at VMware. Thanks a lot for that. Thanks, Ben. Let me take some of the numbers around Red Hat, and then Arvind can add some of the color around the portfolio, etc. I would tell you we're very pleased with our Red Hat performance entering the year. Very different profile than where we were a year ago, by the way, when we were trying to accelerate to get the double digits for the year. Yes, it decelerated, but let me unpack some of this for you. One, we grew 13.5%. I think well within our guidance range of where we wanted to start the year. Underpinning that, the most important thing, as you called out, Ben, thank you, our seventh consecutive quarter of strong ACV signings bookings, high teens overall. The way I like to look at this business, you got to break it out between the different compositions. One, 80% of our portfolio is subscription-based businesses. We continue to see strong performance, high mid-teens level overall. Pervasive double-digit growth across the portfolio, as I stated earlier, and gaining share. RHEL up 13%. Red Hat OpenShift up 23%. Oh, by the way, $1.5 billion ARR business overall, capitalizing on virtualization, hybrid cloud application modernization. Ansible up strong mid-teens overall, capitalizing on clients, cost efficiency, productivity agenda. Oh, by the way, very strong synergistic value of the IBM portfolio overall. A very healthy profile. Within that, as we always do, we give you a cRPO next six months. We only see that actually accelerating overall. Now, to Arvind's earlier point, the 20% of the business on consumption base, we did not see a decline. We saw a moderation. Remember, 90 days ago, we actually were surprised to the upside. We grew our consumption-based services, low mid-teens. In first quarter, that moderated to high single digits. By the way, our model can take high single digits. It's just when you look at the quarter-to-quarter growth, that had about a point and a half plus deceleration overall. Growing high single digits on consumption, given the acceleration of our Red Hat portfolio overall, we feel pretty good. To your point, excited about the portfolio and growth process around the growth factor of virtualization, around AI, around automation, around containerization, and the moderations happening there. Just to put some numbers to it, virtualization already, just the last couple of quarters, we've already notched in over $200 million of annualized bookings. We've been building a pipeline that is well north of $500 million worth of virtualization. That gives us the confidence as we go through the remainder of 2025 and why we feel confident in guiding mid-teens. Yeah, thanks, Jim. Let me just add a little bit of color on the portfolio. OpenShift has become the leading platform, which clients were using for both containerization, but also how you run a collection of servers on-premise and in private clouds. Now, as they look forward, it's not just containerization. They're saying, "If I'm doing containerization, why wouldn't I also do virtualization on that environment?" Since that set of products is sold by the number of cores or processes managed, then as they add virtualization, that adds to the footprint. Now, of course, as we all know, once they make a platform decision, then most new applications, most migrated applications tend to come onto that infrastructure. Their skills around that platform grow, and you get a flywheel that over time will then, we believe, include both HashiCorp and Ansible that will come in there. That is the way I think you should think about virtualization, not so much as vis-à-vis competitors only. It's going to be much more about a platform, and people are making a decision, "Which platform can I depend upon for the next 10 to 20 years?" Great. Operator, let's take the next question. Our next question comes from Erik Woodring with Morgan Stanley. Please state your question. Hey, guys. Thanks so much for taking my question. Jim, I just wanted to dig into your free cash flow guide. You reiterated the full-year revenue guide and constant currency, but FX just went from a two-point headwind to a one and a quarter point tailwind. An incremental, call it $2 billion of revenue from FX alone, you maintained your full-year PTI margin expansion target. Obviously, really strong flow through to the bottom line. I guess my question is, why aren't we seeing that necessarily show up in a higher free cash flow guide for the year? Are we just being conservative because it's early in the year, or are there any new kind of incremental free cash flow offsets that we now need to think about? Thanks so much. Yes, thanks, Erik. I really appreciate the question. As we talk about, we've got two key measures in this company. One is to continue to accelerate the top-line growth profile of this company, which we committed to 5% +. Second is that free cash flow generation engine. We're very pleased about the start to the first quarter, $2 billion free cash flow print, highest free cash flow margin in a first quarter in the history of our company overall. By the way, historically, compared to where we're at attainment-wise, we're a few points ahead. Now, to your point, we're 15% of our free cash flow attained through first quarter. I think it's prudent for us right now. We feel even stronger about our position around the $13.5 billion. Why take that up right now in this environment? Doesn't benefit us at all. We're focused on the durability, resiliency, and driving the discipline execution overall. Now, with regards to currency overall, as you know, we spent a lot of time, both through the last recession of COVID, about when we see fundamental unprecedented rate magnitude and breadth changes in currency. It's always good to refresh our investors about how we handle currency. Number one, per GAAP, you can't hedge revenue. That revenue is going to flow whether the dollar is appreciating or devaluing. I think of a couple of important points overall. We have a very robust hedging program. Around that, we hedge only cash flows as a proxy for earnings. That's all you can do. We don't hedge all 100 + currencies we operate in today. We only hedge about 30 because it's not economically viable to hedge more than 30. When you take a look at it today, we do not also hedge out more than 12 months because we do not speculate. When you look at it, the interesting thing is we have to overcome an operating pretext margin headwind when the dollar actually devalues because we have to wrap around on the hedges from last year. You will get absolute profit dollars, yes, but it is mitigated because we try to hedge as much as we can in quarter. Read that about 100%. In outer quarters, we hedge about 75%. Around that, do we have some tailwinds on free cash flow? Absolutely. The biggest driver of our free cash flow continues to be the same thing we talked about 90 days ago. The driver of high-quality adjusted EBITDA, which, by the way, we grew 12% in the first quarter, up 240 basis points of margin and adjusted EBITDA in the first quarter. Our free cash flow is going to be driven by double-digit EBITDA for the year, and it's going to be driven by 100 + basis point margin overall. That hasn't changed. Nothing changed overall. I would say net more conservative, but prudently given we have 85% of our free cash flow to go. Operator, let's take the next question. The next question comes from Brian Essex with J.P. Morgan. Please state your question. Hi, good afternoon. Thank you for taking the question. Arvind, I know it's super early here with regard to the mainframe cycle, but given the experience that you have with previous cycles, what do you anticipate from a macro perspective for an impact on the mainframe cycle? Would you consider taking on more balance sheet risk, maybe to ease the pain of any customer CapEx for that business this year? Okay. Brian, thanks for the question. Actually, the last part of the question, Jim can add more, but it's actually pretty straightforward. We've been happy to lease our own hardware and software where our client wants it for decades. If they do not want to spend the CapEx, if they prefer to lease it, that is in our financing business, it is in the model, and it is surprising how many people, even those with great balance sheets of their own, often choose to do that in order to maximize it. It does not really impact our balance sheet because in that case, we have a receivable against the debt that we take on to do that. We would happily do that for any credit-worthy client. Let me just put that one caveat. That is it. That is across all countries that we operate in. We do not do this only in the United States. Okay. The other part of your question, as you can imagine, we start testing very early with our clients, a good six to nine months in sort of more private confidential gatherings on what their reaction is going to be. Given what we showed them around security, around AI, and around increased capacity, almost all of them resonated very positively to the mainframe. The ones I would expect to be early have already come and said to me that, "Yes, we are extremely interested." I actually expect the volatility plays in our favor because those who are thinking about capacity expansion in the end of the year are wondering whether it's more advantageous to them to do it earlier because there is a financial benefit if you have it as opposed to pay for overages, which is certainly possible. I expect that through this year, 2025, and the first half of 2026, it will be a very strong cycle. If we see any weakness at all compared to the previous cycle, just one is to one, maybe it will be in late 2026 or early 2027, where some clients in smaller geographies, smaller countries, may choose to say, "Should I wait another six months or nine months?" I do not expect that. Let me be clear. I think that is the only caution I would put. In the first year, I expect this to be very much like the previous cycle. Yeah. Brian, on your question on the balance sheet and capital structure, let me take it up a level. Yes, mainframe is an integral part of our business portfolio overall, and it is an enduring platform that we are going to ensure that we prudently but aggressively manage both the client value equation, which is very important because remember, we run 45 of the top 50 banks around the world, 9 of the top 10 retailers, 4- 5 top 10 airlines of the world. We are going to protect those clients and what the mainframe brings to the table. I want to take a step back. We are confident in our capital structure overall and our liquidity position. I think over the last four or five years, hopefully all our investors agree, we have a proven track record around being disciplined allocators of capital. We take that very seriously in this company overall. In times of uncertainty around dynamic macro environment, which is what we're operating in today in a very fluid environment, I would tell you as a CFO, as I tell Arvind all the time, our job is to preserve the balance sheet, is to make sure we have enough liquidity. Why? Because we have to continuously invest in bringing new innovation, both organically and inorganically, to this business to create long-term sustainable competitive advantage. I would tell you, we are very comfortable. We have over $17.5 billion of cash on the balance sheet. We got a free cash flow engine. We just talked about what Erik's question. We feel very confident in $13.5 billion of free cash flow. We got the capital structure and a solid investment grade that gives us optionality to ensure we continue that durability and resiliency of our performance going forward. Operator, let's take our next question. The next question comes from Matt Swanson with RBC Capital Markets. Please state your question. Yeah. Thank you, guys, so much for taking my questions. Arvind, across 2024, every time we had new GenAI product announcements, it was always really centered on this ROI-focused approach, and that was in a much better macro. Now we're in a more challenging macro. I'm just interested, are you seeing in any spaces, whether it be through the consulting arm or just more customer interest in this ROI-driven approach, whether it be to hybrid or to GenAI? Does that make your product set a bit more defensive? Matt, thanks for that question. If you don't mind, I'm going to go up a few feet and then come back to answer your question explicitly. Every time there's a new technology, you kind of see three waves. The first wave typically lasts one, two, or three years, which is around the semiconductors that enable that new wave. Think PC and the microprocessor was, think mobile phone and the hardware was. You then switch to the system. Pretty quickly, if I think about the PC, people stop caring about the microprocessor. Yes, it was Intel as the winner, but they cared about a Compaq or a Dell or an HP or take your favorite pick of PC. You go to the system. That kind of lasts a year or two. You get a long tail of 20 years where people worry about the application because that is what gives them value. I think we're exactly at that point in AI. The client conversations have shifted from, well, which GPU, which cloud, which model. I think of that all as the lower two layers too. Is this going to improve customer experience? Is this going to improve enterprise operations? I'll reflect on one yesterday from a mid-size client. They're a $4 billion-$5 billion client. They're not a massive so-called mid-size. Their question was, if we believe that we can get 30% savings in our back-office finance process, and they meant procurement and payments and receivables, we're all in. I think it is right at this moment, it is shifting to those conversations. I believe that that is where the next two to three years of success in AI is going to go. Operator, let's take one last question. Thank you. This question comes from Param Singh with Oppenheimer & Company. Please state your question. Param Singh, your line is open. Please unmute yourself. Param Singh, your line is open. Please unmute yourself. No response from that caller. I think we can end. Let me turn it back to Arvind to close. Thank you, Olympia. Look, as I mentioned earlier, the diversity across our business positions us well to navigate the current climate. Our portfolio and track record of execution reinforce my confidence on this next chapter of our growth. I look forward to sharing our progress as we move through the rest of the year. Thank you all for listening. Thank you, Arvind. Operator, let me turn it back to you to close out the call. Thank you for participating in today's call. The conference is now ended. You may disconnect at this time.