DXC Technology (DXC) 2 Aug 232024 Q1 Earnings call transcript

Hello and welcome to the DXC Technology's Q1 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Now I'll turn the conference over to John Sweeney, VP of Investor Relations. ahead. go Please

afternoon, for Good XXXX pleased you're that call. Thank DXC everybody. Technology's us the year first joining you. I'm quarter earnings fiscal

Our DXC our slides the EVP Mike CFO. This includes will and call the being that and website, and speakers discussion webcast and is Chairman, webcast at CEO; Bene, accompany our Relations today. President be Del Rob call on the Investor will Salvino, today the

useful these provide to financial we most measures, release their These which In in in be measures. Today's with our respective webcast reconciliations GAAP presentation includes accordance found earnings believe investors. and the the certain non-GAAP provide we a measures and information SEC included rules, tables today's can slides. comparable reconciliation directly of to in

on A of make other which and risks call quarterly materially from SEC on the to in XX-Q included forward-looking. those results differ filings. report will and uncertainties, subject are our on These and to discussion we Form expressed comments the call. Certain risks statements uncertainties known is could actual cause be the

call, I'd as now our listeners the obligations to by that required remind update the like presented on Technology assumes law. information DXC to no except

I'd to that, DXC President Technology's Chairman, CEO, with And like Mike introduce and Salvino. Mike?

I call and today your well. doing and appreciate the John, everyone joining and Thanks are I hope families you

an with on overall our begin will update agenda Today's business performance.

discuss of before And call GIS focus provide our will his perspective remarks for in opening and and DXC Rob his performance guidance. I finally, some then questions. on up forward, financial GBS on the moving updated will discuss results provide the Next, closing then detail, update you I will businesses. our our and

the results to QX, Before give you I want some context. get I into of

into that free EPS, We company are delivers to flow. and growth margins, cash right a consistently and revenue expanded shape DXC the steps taking

of GIS of the and We growth high-value business, GBS the revenue business are our GBS majority challenges focusing by this changing historical of along mix that our revenue. doing fixing with the so on our represents

because As in demand delivered 'XX, stay the slowing quarters saw in saw our Also, rate the we work buying demand customer thought essential in customer work our resiliency second and year we we stability of for network 'XX, or anticipated. seeing the to a to the would we in business devices, revenue stopped hardware than PCs do some we with operations. FY because began at we customers' half is along four work, for of a we IT levels higher are 'XX either FY delayed at our late project we Currently, market. FY

our and resiliency planned see will in delivered as GBS performed GBS that You we solid held up. the growth. had business

In did had resiliency the not contrast, GIS hoped. that we show

like type major I is over and low great reduced on not dependency to is out of this our last resale few revenue shortfall was that piece would margin the news, years we conscientiously limit a of this Although, the point to revenue, revenue. which have

market this quarter improvements be in measurable to this organization proactively our more environment. made to have change competitive We

global led We bring leaders where with regional our to our margin The assures focused generalists their changed we an to for the where and skills right customers customer the engages to and led offerings deliver new work. on revenue and have were and offering market DXC This leaders are concerning coverage model a model experts growing increases us offering offerings. operating win how to XXX% moving from model by model moves the operating a model. operating

of revenue As are model, this were consistently I and mentioned offerings quarter, highest they last our our and insurance engineering offerings. adopters growth analytics and early

is other offerings. four to the this for work intent get Our to model

was growth which our GBS our lower range. let discuss is of $XX QX than the and about results of guidance Now Organic the midpoint revenue GIS our X.X%, performance minus me businesses. million and

Our was fine-tune margin our needing was lower-than-expected better new of to a operating and us result X.X%, manage the supply EBIT demand. margin model to

than our was flow $X.XX. our working continue half Our a our strong due was Non-GAAP expected as strong after X.XX EPS around book-to-bill FY management. execution 'XX, better capital to And a replenish of having pipeline. for book-to-bill to we free delivered cash second finally, we

trailing X.XX. Our XX-month now book-to-bill is

business. the provides look our QX. a at turning quarters. grew GBS scaling is Now GBS consecutive this seen upside ability in still that at but to a We will early flywheel XX.X% margins. grown longstanding for days, nine GBS It GIS GBS It of business. double-digit Also, revenue new GBS to is has our source provide sustainable business to to as overall X.X% growth sell The we've now work our DXC revenue. and customers, GBS of

are GBS respective Our offerings all in positioned their uniquely markets.

engineering engineering our to and Analytics well due is talent. positioned

are to example team of great skilled solutions work for Our in make dashboards the code, solutions in they developed does A not bring together cars better. write Mercedes. and the engineering but the we've the things BMW code just

world's the insurers. of offering solutions, XX and working top insurance BPS insurance with global Our provider software the largest is XX of

for position the brokers platform brings the European we Lloyd's platform for run is of together This and writers unique create insurance market. to Our London. policies

modernize application will revenue important We be team which are custom believe growth. this platform, currently of another using source our we to

application estates the of custom and custom product and our like we to X, AI enterprise our have we GIS which capabilities of instances Platform many into is providers embed the our customers. unique largest with have that the application ServiceNow application team IT with of monitors run used Along fixes our We of ServiceNow ServiceNow. skills, tool one

Moving to business. GIS our now

not we and GIS, progress declined make mentioned, hoped did it in we X.X%. I the had As

quick performance of recap give GIS three you me a Let offerings. our

and path Cloud the closely themselves cloud offering the economics. improved unique pipeline to together market and resources help threats. to Drumgoole, from Our COO, share security security grew. work ITO our our to use former in customers and on I working are own, decline. centers proactively the Chris experienced and This to fix data offering protect we reactively provides our strategies dependency position valuable to against our ITO both largest security a and market move competitors underutilized develop take solid and our

of at share AT&T. taking providing we will our managed storage, market announced where better maintenance example deal, be was enterprise economics securely us to server, recently AT&T An and services backup

three in After QX. FY in revenue consistent Modern of quarters Workplace declined 'XX,

based FY to We three better have Workplace expected the that following 'XX, we them. perform Modern Cloud taken fix would ITO and in actions on

multiple out from after of First, this the year. for numbers contracts to will two fall to the that work part, we it our managed be And three disruption This ago. happened takes years off. terminated years most

delivery maintain our capability Second, and customer delivery it margins. the we at secure bolstered offshore to and revenue deliver we better

reputation. market Third, more work, to we improved win our

ranks For and example, in Modern tools a us Workplace. competitive invested Gartner leader in UPtime. We to be now as Platform X like more

to we new at the of as perform positioned we customer and it to are operations offerings essential being the workloads ourselves become in work as little expected. to bringing economics, choice a cloud. will cloud All providers that two these to time to to have get more said, better are We partner they move that bit take

and that market in capability our lead Rob, believe turning are we call a to area. GBS GIS in we our Before have this businesses comment I to the want into we built because AI position over on the both to

passion DXC in a been we focused made every you AI As passion to has brought know, I've me. for of and I year have been AI many that CEO. this investments

driving and offerings. XX,XXX six AI now capability GBS, DXC In uses over four engineering, our embedded complex robotic AI enable questions. better and and that answers cars drive analytics have insights analytics offerings. be ranging AI, have automation. assist in to and We drivers driving serve and Assure women engineering them AI providing and technology uses out customers trained capability AI our to In of both the are In to self-driving, the in insurance men we about most into to have from policy insurance, by to we full

In estates we offerings. Platform and which Workplace, to with ITO, Cloud ITO AI built Workplace business our devices. both leverage In of disruptions. platform, costly into issues detect uses avoid to Modern our million AI tool In across capability is resolve proactively bots in and our developed GIS, to we IT monitor XX,XXX Cloud UPtime have X our X one AI Modern

AI and intervention, along customers. human use at customer can and solutions for reaches bottom reduce and issues for an to with line new delivery providing employee driving footprint revenue without enhanced The are out assistance time up is the carbon with interactions for We using these predict every our capability resolve scale, of AI of those all XX% to are us. PCs are

finance predictable And trust organization pleasure I to over to I Rod, that make and to will call deliver transform he results our turn work more want financial who to the Now repeatable. complete our have with. analytics has been to a the

to over you. Rob,

where Mike, value introduction, and to and my brief well clearly rundown by short performance, part our our customers. can delivery now of of with the thanks I'll fell business. first been time culture intense the I for the impressed and expectation. long-term of where I've the the DXC you be executed opportunity you on strategic the focus thank the of excellence, we important team. of we for and quick covering see provide quarter here, a In highlights

the by PCs, is customer growth of base. sold typically than In existing segment. GIS a work. equipment, down consistent into These the servers slowdown of and being we growth that and impacted million quarter the are in as year-to-year revenue the segment mainly for size were networking are IT projects was Organic by X.X% in decline with resale offset in such GBS are project a and greater below quarter, expected the $X expenditures. This gear our account

slowdown. the we in experienced environment accounted our segment of versus what resale for consistent impacting of half miss the spending. revenue and project underperformance with The with bulk believe, place is expectation the industry resale This, in are GIS taking with bulk in in the The the projects declines the half revenues. of and economic

profitability the in was first evident until particularly not revenue quarter. late revenue impacted the quarter, In the weakness since shortfall the

provide provides bottom overhead. revenue it little resale and no profit, does the profit While gross absorb to modest line

short-term, in underrun and line resale So, profit. the bottom impacts the revenue

based the As the to focus forward. Mike resources already on and are services the the communicated on team excess services deliver a project reduce focus impact board, resale as the is The revenue profitability revenues. by to shortfall and a on revenue levels revenue be capacity higher longer term prior will calls, over strategy reducing in driving team has this greater going the

the on continued performance. collections well working million, expectations were capital for to in due our ahead with quarter in was of managed Expenses quarter flow cash our strong focus the including line expectations. Free spending negative management with $XX

software, for first the we payments as bonuses. lightest is seasonally maintenance reminder, made paid quarter our annual a and previously flow As quarter annual planned cash free vendor

Now moving metrics. to key financial our

XX.X% of year-to-year, was but Our as points by down gross up due first basis margin was down to the quarter revenue sales. flat SG&A lower a of percentage points. X.X% XX year-over-year, expectation our below and XX.X%, Depreciation basis amortization was XX spending shortfall.

EBIT EBIT margin adjusted by XX excluding was year-to-year, points sales, driven decline together, which a by assets, $XX Other reduced EBIT of asset points $XX pension lower is adjusted million the income year-over-year, basis by income XX sales level two on year-to-year. decreased year-over-year. by points, factors: down lower a pension of XX basis Taking and $XX all and this up million basis income million margin gains in

and lower by was prior sales EPS $X.XX, resulting the higher year. down year the program. mainly share to compared prior compared lower the from The The was level repurchase a EPS EPS this tax of $X.XX by share but income asset to the offset in driven fully reduction count the year. lower ongoing current non-GAAP rate our pension by Non-GAAP reduced was

Now our results. segment turning to

to Our business continues higher our GBS margin trend mix segment. to

points that percent revenue, that matter GBS anticipate will GBS now trend and continue revenue. this of basis be is up a will As XX segment our the quarters, total in the XX.X%, majority a of We sequentially. of

GBS The XX which to posted customer grew growth reflects income. the to by the deep margin of GBS basis delivered drive impact consecutive a quarter organically ninth required industry organic and capacity GBS and based profit the the reflecting value points future of lower year-over-year, growth continue declined team. X.X% pension

Organic revenue margin the by XXX GIS Modern clients GIS. by driven asset in driven cloud to year-over-year, profit services. based reduced in of and points X.X%, ITO pension and income, delaying Turning gains in declines now declines infrastructure and moderating on sales decreased reductions Workplace. declined basis project revenue impact

in rate. revenue quarter let's X.XXx number solid a The the growth look slightly our Now current offerings. expanding This book-to-bill decline. is closer The X.X%, and fourth points, the trailing up which take at X.XXx. ahead demand application Analytics trailing similar of ServiceNow. was such performance revenue declined a SAP very has as capabilities engineering book-to-bill performance is in is and XX-month was offering fourth made quarter and basis XX XX-month The team to applications the enterprise in and good our Applications is strong X.XXx. progress environment. success

Insurance with of The points. impacted and in SaaS reduction decline, infrastructure grew The software is XX.X%. grow Cloud project revenue insurance accounted almost for accounted and while project resale by declined and significantly our based up skills outsourcing a to both slowdown resale strong performance team business insurance of revenue component portfolio of IT services software X.X%. based for five in X.X year-to-year. BPS revenue resonating the and Security revenue industry revenue. This The insurance was services up continued points BPS X.X%. the the had X.X% market. deep

is terminated will high and year. some Also ago. headwinds contracts revenue contracts impacting the digit continue several remainder range year resale in single the of The revenue reduced that the for ITO down these will throughout combined of the with the the result negative time in from wind

Workplace. Modern Based forward. going last declines performance we fiscal year, to turning our moderating anticipated Now on

However, services infrastructure project ITO, and slowdown experienced based like we impacted a revenue. cloud in that

We several drove impacting in-house, revenue. back we for have XQ year. continued a moving virtual the anticipating year-on-year work the model clients factors are declines and also two further the These of in from decline remainder X% and taking experienced

consistently our team to has which the Turning managed. foundation, financial

levels the first in increased to debt As modestly quarter months billion. ago, three $X.X anticipated

$XX to continue tightly expense, in restructuring the million first manage and was We which quarter. TSI

and year-to-year. expenses million, payments lease $XX related the down Operating were $XX million

renewals. our to footprint. ticked to Capital We estate continue software impacted to $XXX quarter, million effort reduce an annual the expenditures commitments manage new planned by first lease in in real up

progress cash capital has Going forward, drive been and we the requirements our expect continue that lowering to made flow. free

the Financing we another lease commitments. by were originations first that reduced quarter, year-to-year future $XX in lowering indication million are

a expenditures percentage to software the of revenues due and X.X% with lease revenue, of As increase capital increased originations the annual to renewal.

continued repurchase asset be during Turning our billion note share full aggregate, that to by sales. XXXX repurchase the important free cash on $XXX our quarter. It in made latest to flow will We our year program capital is deployment. in self-funded $X progress additional of share million program

repurchase $X earnings completed in call, program our you'll from remember last As our we previous billion share April.

DXC presents We continue attractive to believe valuation. an

on remaining current share shares. would from of the of price, this And share base. please equate the shares billion XX% the $XXX approximately the $X removed to program the million Assuming approximately of XX% we've is from removing outstanding the top current remember, already

of earlier, guidance. areas result our are of I discussed a that As lowering weakness we the

to quarter impacting X.X% We most organic projects environment decline expect the economic difficult Modern minus second continued ITO Workplace. X.X%, significantly minus revenue and resale and in reflecting to

to impact of with margin shortfalls continuing EBIT Adjusted X.X% to revenue profitability. the X%,

efforts EPS take of $X.XX We cost optimization $X.XX. year margins the our expect Non-GAAP second to hold. of improve to adjusted half in EBIT as the diluted

Turning our full year to guidance.

spending. organic negative growth cost to estate lower X% by X% offset EBIT on reducing now in and to real continuing successful year. our of the the by contractor the Adjusted margin and impacted negative focusing third-party half XXXX, footprint reducing optimization, to revenue X%. second reductions our is year We're X.X%, and fiscal revenue from are initiatives staff the We partially

per earnings diluted $X.XX. Non-GAAP to share of $X.XX

and guidance of our repurchase our Our expectations rate for a non-GAAP EPS initiative. of share timing reflects tax XX% the

reflect guidance sales non-GAAP we evaluating. potential that Our losses on EPS does asset are not

million, of previous free noncash book million. $XXX have may While from cash, guidance And they of potential lastly, cash flow an loss. $XXX sales our down drive associated

my drive the comment the to enhancements analytics, processes to to and the turn I the will and Mike, align model produce I results. systems. immediate to and and led to before metrics over headlights offering teams on drive back call meaning is financial priority, which to the support allow Now me repeatable financial predictable our

financial our of with targeted this progress finance performance give returns will make confirm and focused transparency management, to us model expect the us strategy. management financial operational I help investments, offerings portfolio transformation. offering steady supported fully led of enabling The and us

And with final turn that, to back let for call Mike over thoughts. the me his

Rob and quality proud me high is performing you is you, a with GBS leave growth tough a environment. of and few our let business are that Thank takeaways. project we key in based

Modern ITO We making the offerings and have impacted keeping Cloud are progress market GIS been IT Workplace slowing and the actioning desire. of are we from the which by us

will two we that confident these still offerings. performance of are We the stabilize

in more improvements and leadership operating our our even company be made model have to We and to competitive. both grow

TSI that cash deliver we and focused allow areas that results. control are more in us and his on free repeatable very flow well and analytics team and can will the We are predictable restructuring managing financial building Rob like to

of buyback We our can we creating investment we to on the will while deliver are grade continue our And because see in DXC. value billion profile. credit this, $X maintaining

any the position that making a success. long-term transformation While journey execution straight for line, feel we decisions to are right DXC is we of the never strongly

call for With that, open operator, up please the questions.

Thank you. Instructions] [Operator

Your line Please Cowen. ahead. of first the question of from Bergin Bryan comes go

thanks. is Zack Ajzenman This on for Hi, Bryan.

On and to months what demand a kind higher here two guidance this framework, the in issue as also, that quarter, cut? how further to has cause in is think played the half there, just given we just at lower about as magnitude of here changed environment? about the an guidance a anything so of And you think into looking current the seemingly visibility the quickly changed dig level, out,

So Zack, thanks for the question.

we that revenue just of draw stayed The the began environment business. 'XX QX when last stable the quarters guided would specifically, first in four our I FY we and but the when QX saw stable. of year, came revenue. we resiliency saw slowing And during And we fact delivering we to would thing highlight back I off

The this throughout essential is around the go of key maintaining hardware, second these FY do situation we levels thing spend estates the that's of the PCs the we because that, maintenance fact for terms that really 'XX. our whole projects IT that saw in And of in is customers. and work also continue

So, when slowing to had that we guided through could IT revenue stay 'XX, we around because environment, expected was. and stable FY we facts the continue what could we play a revenue that the

is will So, happy back, dig offerings We're was. it. when the basically, full year, the take I a as we've well. it that we see at GBS with just also and way done, you doing when the if be It the look thought you And grew QX what step offerings, exactly into fine. seem to you

So, actually the Cloud haven't issue when And basically look here at when GIS. of ITO that changed we're is And And single now thought towards I contained, reasons the and us, numbers, heading heard negative to Workplace talking that would the say much. numbers digits. about contained numbers around there's Modern I you've the stick We will mid digits. that. for negative from single two high they start

is through that one We've low is through that's PCs of revenue. the the the with resale. $XX the we we we've is plan we The And revenue. service rest rest down. accelerated. million, carried consistently in And we by get that of we And at the if to in down, was selling resale margin And that everybody now being the And don't revenue of that of midpoint strategy as look it hardware chase And the Half margin. low then was the it seen year. the thinking way year told so forth the quarter. revenue revenue why it replace all because reason the that's clearly and you carried half the take take miss is happened to that quarter, and revenue. what's first resale that the our

sense, to we to makes better sure it, if going sales making do at So, these deals goes And do chase but it whole try we've that. that of a that that to economics. all new had we're the we'll not around philosophy sudden back

So that's revenue. resale

of what services be projects to what The maintenance IT as project work. that needs looking like half what the seen project that have of we the and is is will this they spend these it been is to done essential pushed referred we're miss we've we, clients the what work And back said second to piece to typically did with -- what in spend we all, at those this the work in that's we the QX. of need and it is seeing look, looks project And year. the -- first estates. other And half is

operating you recover literally the that of potentially operating so model, these to and risk. was year. half the sit client model thing that this out I second change adjusted will to the To what benefits model this is looking that the getting of the year. back operating the was think we projects, of or towards half And the mean some in coverage. got see move we adjustment that the operating back the the so we customer The I'm with describe model by of will And forward the the value in sell

So, hopefully, account takes your questions? that into Zach,

does. It even I flow not surprised the cash just follow-up cut margins. a given cash free on guess, revenue guess, and the further. I was free we're flow related reduced view earnings, on on and And

partly free cutting what And bone. maybe inflating expenses to can you flow So, support the that without you're here? maybe cash are into levels speak the to doing

Bene. is this Yeah. Zach, Rob Del

of for altogether, question. that this year, at the are achieve confident remainder we we have adjusted thanks EBIT So, capital we of we for $XXX margin Look, at take when take a could a the that level look at the level perform the look we million. the levers taken to that working expect

and margin actions line to to have million. So, that EBIT, the and capital $XXX capital of and cost reductions we the operational get working deliver expenditure plans sight have margin to support -- the we reduced the reduction

we we'll to seen we've So, there. focused Zach, have still our room think been there's focus to you expenses. because more And and me add that, let that continue on

Remember, will deliver of at at levels takeout generated deliver we same levels 'XX XXX. that, we think In if of FY addition FY the our initiatives that 'XX. the same they cost to

So, we're be going there. to right

guide. we So, that's a think good

thanks So, that for question.

Thanks.

question. next JL,

Please question line next the go comes Bourgeois Research. from ahead. DeepDive Your Equity of of Rod

guys. you. Okay, Hey, thank

I project any So, quarter part into cyclical to since seen and based Have maybe you maybe seeing of closed later the the that more linearity move ask the work question improvement of you're business, gives as your stages this encouraged the more work. want you in the a about what this of you outlook year? resale

I that, expect indicated guess said to businesses on And that will more work year. back that the you it you the do project of workplace take essentially return to you earlier some But specifically you in track. the on also half the back think time ITO think I and get

of So, meaningfully guidance Thank updated question about project the your you the of whether have in the back the you. that assumes issue cyclical your half work based that linearity guidance my is and improve this will demand -- year.

Okay.

didn't all, So, revenue, resale we both expect pieces, you of Rod, them that. take first if the in

to get you that didn't if throughout the expect better So, year.

it's guide, So, We see revenue. but you the didn't to adjustment is we've seen in I through around that it Because said, have of majority XX% the in that we QX, in play been the typically resale will to that down. seem definitely like QX, been able do that around QX.

that carry through. all we So, way the

impact work ITO, always stuff, project and Workplace. ITO doesn't just the project Modern the Cloud On

in work work offerings the Workplace, are project And expect Cloud that in increase go the can to and that we performing So, we're project going the that that hard there's other but back we year. ITO project well. of half Modern after work,

the So that's basically guide.

in all of the should resale half what So the through project should doing the year. year we're in uptick you QX stuff, and see for and based way then services push the take back for you it an the and

And of want heels kind I of that I'm this that seeing you've given. Okay. ask question another update to on the

definitely have guidance big other reductions. and Infosys Accenture saw for industry because year had both of players lower big to guidance the cyclical challenges. in the You their

also, that a You CFO transition. had quarter, during same

all transition make track to in able shortfall and and in ASAP be to the asking it's expectations, these So, of things at them the that about I front of kind if perhaps CFO stay ways the to to guess, learned adjustments. something if worth was then recognize to contributed

I'm the whether also do these And on challenging impact really that transition learned. I want questions but to was were the lessons think some had get macro, CFO and asking a quarter investor in whether because it there I any about

I Rod, long had operating time. well, changed would regional long, impact. industry model, you operating What from in I a for that say went know And tell model would model, been you the the is right? a zero So, it we You've in quarter. which the we the

leaders any So, six will the to know sell they the regional model allows best. sell our the and of offerings they offerings typically

and of done. global model, what which engineering talked two four offerings the you're offerings model get we do is get same to other along that you They is driving see best the want the them our is with is about a can And trying and if revenue what really sort these flagship, growth way. analytics So, working. -- offering to what drive can the intent have insurance literally to then to we And this to margin. our and we've move, the change offerings the go way embraced being working to it model, in is

the you When the the back working half still in to the see I model, as project guide, through, also I get to that softness at of we're else. work that look we nothing in challenge at out as some making the the But year adjustments. benefits look operating of the expect the of

Got it.

JL, next question.

Your from Bachman next Keith the comes ahead. go of of question line BMO Capital Please Markets.

play improved been in haven't next about said And half context, your management happens turn to to an in it, something over to about what without asset like to value it's turn sales something but it It it struggling. Mike, is think off the I enough able much your around, you if part you. particular, And I going growth decided what's still area maybe on, to you of Thank And on look workforce essentially sell. of would that Hi. really wanted for quarters. seem workforce management. being business, couple of you get put around. be could like doesn't you

the a more some despite sense So, been theme. last more turn or on areas getting less just of broader could in to to wanted I to of do is more? that the Is having underperforming rid so financial of over opportunity Is try able around do some revisit the broader condition say, or assets the so there there to to you that on, DXC. help year you haven't

to always offerings. So, of Keith, -- now, would new the that thing starting is GBS all And an looking we're that. on really uptick to of the can thanks we that longstanding the we're for and see think look, is, So that GIS at customers, key the sell What offerings work right? right say I we all to question.

not best So, of that's anytime get you an rid for asset, customers. the thing our

be DXC collectively So, if that think we keep we off better everything will together.

not centers. we're adjust back able cloud. and an we're And now to last we to the providers not business. like we move question which Now ability the customers we those to thing us And assets, providers is years, cloud set ITO cloud is the partner And what data it's as they're these that customers moving way these to work, about to for trying do have got customers, doing. that being critical and data we've we're and looking choice sold the several Modern essential one so your like over Cloud want of the Workplace what things. because the the to our and not delivered the second One, things haven't last to I of is our into because fact entry then is to of calling two out sell keep those centers, the be

where that's we're headed. So

come. just I at not we But to time would and of a more here do, it they do these about take little tell to you looking bit to things done. but not are numbers get sitting other thinking

the a one? that Keith, to you Do So, that's have second question. answer

Thank go you. to -- wanted do. yes, just I sir, I

year's things you the versus by from ask doing it associated to borrowing degradation in tweaks. with cash is capital support the EBIT more to On of want to free cash on working context I cash why the generation a tweaks? target some the those sort working performance capital flow question significant some potential free answer flow the you're to are the I of, next Are a And free heard that better, XXX previous line? flow the of EBIT,

no. savings Keith, the Rob. future answer long-term, that is over the receivables the The and will drive is this capital to sustainable us improvements operational to we get there over help us time what think is think level. which that we I will benefit mean, right are

accelerate anything to on operational we said, not the as We're more So, levels, basis. temporarily. and getting just I trying focused a to discipline right are sustained on

All right. much. very Thank you

question. next JL,

[Operator Instructions]

of Your Please Moffett of next from line Nathanson. Lisa the ahead. Ellis go question comes

transformational I considering not taking for you may adjustments. DXC Thank of sort you're just and DXC's really the done the on guess, they maybe level, creative here obviously, thinking et divestitures, additional an on the here are trajectory kind portfolio you've have types just other client at of revenue kind be be more, table, bend acquisition changes about at to looking or answer more bit. side, there you Maybe, little I'm structuring, a to the Terrific. my evolution deal strategic of curve any to higher whether question. at lot But a of what of Mike, a of this. year, the start cetera. things know, might I help

you. the Thank considering a things at types level, you might at what Just higher yeah, point? are be of this

Okay.

more all with And time. right, things looked for And we And this is mean, Modern at it's taking lost these we've longer, there bit all can continue Workplace. four-step we Yes, understand two progress ITO, with do I Keith's that's -- and businesses, the achieve the a will not we But that shows it I are me value right? that with Cloud making on and I'll thanks I four as taken steps our Lisa, through team. on are strategic where not that's process. we those at lost look a with So, in question. little along question. went and although

these. four So, the steps are

our three You of those terminated those contracts back with two, know And from terminated revenue had out take to terminated that contracts. Both the Lisa, disruption years remember we businesses of contracts. you business. when come have deal to had the

great in that, is terms our So, that we've that's give customer continued have say, this should on delivery. revenue and last a thing stuff business, do right? out can else coming the to is you that -- delivery, that's also be score that we've industry which because the look that all the a year benchmark. in all that and we second that of what of accomplishment is we can of is customer done revenue with see score And stick, to customer delivery, it an going from And of you Because really the at standpoint, we customer NPS we've work. focused that

thing was the So, model. we the next offshore did

definitely that it. of we've customer offshore model scaled our our work increase delivery for of also So, to and satisfaction

And then is final thing the deals.

not doing good we that have economics. don't believe will be So, we deals

last Lisa, hygiene customers to of any not gone the it, bringing solid the we're be at partner let's being not for gone. call cloud And delivered. So, makes then We've then to desirable right? an meaning in us with. offshore hyperscalers should if the you think business, the that is new about The work revenue very, model, are runoff very, all economics, thing

centers, at last we this data in look cloud utilized. sitting that fully it's are piece where has go, go you not own. centers if that's So, to work the sitting centers the data those and data those it's all of And essential

the So, ball doing our GIS in move deals around definitely strategic that will business.

about that's Lisa. as can that, with So far I go as

where all in definitely we're good on state. not sitting situation the But actually resale we're us. a to Like in pretty accelerated yeah, in think And In that We a state. come. a here we're I more revenue thinking you when FY in X.X down year below X.X 'XX. now billion will for that three done $X honesty, XXXX taken look fiscal from FY the it revenue years, we've to at what And the we've resale be in 'XX. now in to weakened actually we're like last said,

that means calls we on. about should That mean? what revenue quarter get higher So, be on that we're that our should good margins revenue can these quality, be talking does every

the think Hopefully, and about a way that you that's little more context color. that we bit Lisa, anyhow, business. So, gives

clients little Very an now And of you they're of own sounded Could initiatives you engage maybe AI ongoing I'll on things Yeah. with what to initiatives it at their helpful. your I around highlight -- doing the guess, AI. you're little looking -- at follow-up, made then, right primarily you're bit are are like around on maybe some AI doing more a terms just starting you doing -- kind you the give internally? these Are DXC, a passion. comment of activities in the Just to on a as with about your operations elaborate centered opportunity business? call bit as seeing

All of driving real our and more business, scaled offerings. apply customers business of it, take look, the we that GIS is to business than that capabilities revenue GBS the any that this can Lisa, and GBS we and is showing focused are us on a in we've our them

mentioned the on through the go I four that me let So, call.

do with by them out innovative right, So, look you, the dominating top business. XX our doing keep want we to business at market if continue have when you When Assure, with of have you play insurance -- to XX you DXC things. a

to DXC able questions. policies, it, able of their when a insurance us this I and lot tool answer questions. of complex, know I around So, about look answer at this I've complex literally those to most to Assure insurance questions be And but allows some got don't is you, my

generate us helps again, So, revenue.

we is that The fantastic. of drive will wave second give that I and the it car. when a leading to we the fact driver on can a assist wave help Robotic to driving is car are driving only none. recognition things. that self-driving does a And vehicles, but AI type are not help there forth It two automatically so facial literally drive or said

again, full our So, go. that's talent engineering

about estates AI we and very And launch been because that launch human right one current. about that. something And it, ever here, to we've needs is GIS The is mean, a lot Platform outdated. talked tools detect XX,XXX It's It capability as Clients happy IT use intervention. little we're very there's And we then X there. our capability these that are the of X. love got we monitoring talking be since and resolved. allows clients into on I've of see AI bots. about X I've these put I Platform us allows to to us our Platform

UPtime. is one And then the final

deflect and in standpoint, And manage coming key center is the doing questions. tool, up to you've what said thing verbal volume So, in, written sort UPtime seen us the also that us their XX% I and then stuff an from to to AI everybody also helps both call, agents helps carbon deflect going when got it can predict customers is PCs ESG of where type the we've ability help but call our are I down that these of like mean, the UPtime is the footprint.

I've spent I call. a the So, on it. it's Like you Lisa, of said, know before got appreciate mine. a passion lot here really, I of I time

And see value going we not to can't think not scale. do drive anything cusp We're industry. is way about we're that us that that doesn't the it obviously, leading will the we do customer think to revenue. a anything are on basically I then of and help it going in, we

So, Lisa, thanks for that call.

by this. And look, saying let close me

the time. we And that revenue. business. see still look we over very that confident think call going longer. business to will not services in do we prepared resale momentum It's be that market. revenue I've GBS also improve can I improve GBS, will and continue just the based in tough We little in growth think the at the we performance, GIS project performance with when we that a a take our in that revenue you can believe discussed this remarks, with on are actions in bit When we along that mostly And

the that, call. So, close please operator, with

today's call. concludes This conference

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