DXC DXC Technology

Jonathan Ford Head of Investor Relations
Mike Lawrie Chairman, President and Chief Executive Officer
Paul Saleh Chief Financial Officer
Ashwin Shirvaikar Citi
Bryan Keane Deutsche Bank
Arvind Ramnani KeyBanc
Jim Schneider Goldman Sachs
David Grossman Stifel
Call transcript
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Good day, and welcome to the DXC Technology Fourth Quarter and Fiscal Year 2018 Results Call. Today's call is being recorded. At this time I would like to turn the conference over to Mr. Jonathan Ford, Head of Investor Relations. Please go ahead sir.

Jonathan Ford

afternoon good and you everyone. Thank are I'm Technology's for DXC us quarter pleased and you fourth call. year-end the earnings joining fiscal XXXX

comparisons speakers discussion year the we or for statements Officer; the full X will our XXXX. President Our the are quarterly fiscal XXXX on call will Enterprise legacy is of giving to based fiscal Chief call our accompany Lawrie, at The will full HPES, results to pro today's Chairman, of explains fourth consummated our April webcast our the which and X, Financial to effect be historical Officer. and forma Slide and the of if slides combined Services for business Paul operations that discussion the and and merger company Mike quarter XXXX. Executive results include as today. on being forma of the Saleh, fourth The posted each our HPE been it results pro year CSC and Chief quarter on had website of

SEC have Slide a release, on subject measures X make respective call to slides. GAAP unknown to as are Relations to available earnings call. we reconciliations in directly -- supplemental A of no a the remind provide certain and like other on of three of XX-Q, cause measures measures. and ending are these As would useful Slide except included the Form three on today's file XX, information that quarterly could adjustments update having ending which Lawrie. XX, of DXC we I'd results to be supplemental the I Both pro that SEC further that in and from we our in DXC information results months introduce differ forma for presentation January Investor the will which by the and report participant our CEO, the annual different provided with on see CSC combined included Technology's obligation XX-K our President XXXX XXXX. investors. to accordance the These most those consequence materially you'll X in company and our we'll reports HPES website. expressed uncertainties, risks the Technology's be statements actual forward-looking. to known of includes required and presented and the include found our discussion certain certain to like as XX dates, the HPES On in as for and believe and year-end few of risks uncertainties next comments the results documents And fiscal filings. assumes section Technology on can and CSC months and well the non-GAAP call, Chairman, March listeners of their comparable to Mike our tables Form measures, operations these DXC our now is and These XX days law. reconciliation In on as financial X rules,

Mike Lawrie

Thanks Okay, afternoon. everyone. this taking thank time the for you. Welcome

go Paul questions any before I over my and detail it which is got of five for practice time more that get little to have. may you plenty points or into have I've then As key and we'll four I'll a briefly turn then over

our quarter So, EPS first non-GAAP $X.XX. point here is fourth was

$X.XX. $X.XX Adjusted EBIT was the XXXX and EBIT fiscal was our billion non-GAAP adjusted quarter in margin was For EPS XX.X%.

generated $X.XXX free for margin $XXX quarter in For adjusted was fiscal cash was million of XX.X%. EBIT $X.XXX adjusted fiscal and free and XXXX the billion, flow EBIT adjusted was flow XXXX cash We adjusted billion. fourth

year a sequentially, revenue revenue on Our roughly basis constant flat grew was revenue is down revenue fourth X.X% year-over-year and X.X% our XX.X% XXXX, was in and X.X% Xx. was full X.X, fiscal currency In was year-over-year, and fourth GAAP sequentially. the the and up $XX.XXX for grew In it quarter X.X% billion, was billion, quarter digital book-to-bill revenue fourth $X.XXX in sequentially. the year-over-year the for the and quarter was

fiscal For BPS up X.X% our fourth XX%. grew digital IP XXXX up the year-over-year revenue And and was sequentially. industry X.X% was quarter and in revenue

cost adjusted delivering quarter, was our industry synergy targeting U.S. and business. BPS and revenue $X.X KeyPoint and our key BPS targets, our excludes end one non-GAAP in the milestones And IP of well Xx income. this savings the cost industry we at In exceeded exiting was $X.XX Solutions to integration public our XXXX the as billion achieved was cash sector with combination target of fourth business are book-to-bill X.X. fiscal adjusted run and XX% book-to-bill Also flat. of year revenue billion of we USPS Holding is roughly fiscal $XX.X billion Corporation as For XXXX, forming Vencore XXXX more $XX the rate the our of IP or to which and digital savings of net separation close and target merger our $X.XX year. will billion EPS $X.X Perspecta. free our Throughout And fiscal is Government flow for month

detail So in just more each those. little of let into delve me

EPS said I $X.XX fourth the tax XX.X%. effective was quarter non-GAAP our was As and rate

basis XXXX basis on rate XX.X%. full non-GAAP restructuring Fourth which intangibles for basis XXX effective tax and points EBIT was was sequentially. adjusted was $X.XXX $X.XX for and year year-over-year amortization XXX up and the XX.X%, fiscal points up and integration was of billion, For the EBIT margin quarter that was EPS adjusted

XX.X% margin billion of efficiencies, policy an was facilities outlined optimization, the adjusted $X.XXX we workforce For XXX points. was execution improvement plans adjusted Investor fiscal margin EBIT and last synergy the XXXX and at March reflects EBIT Day supply This our of basis including harmonization rationalization. improvement chain

to productivity, employees eliminate and XX,XXX delivery service labor, reduce as such in management, incident while capabilities improving Bionix scaled increased resolutions. levels to more for automation than We've drive our improvements clients. continue address disruptions centers. server teams to delivery tasks, provisioning our Our program accelerate service These your

deployed For automation most predetermined roughly this trigger diagnose to actions. implemented of then application are scripted auto centers developed has example, corrective which been instances resolutions the and XX% where in runbook In common faults resolved. diagnosed we

overall on improves dependence We're client party actions adjusted cash reduces Bionix During adjusted labor predictability fiscal further or from $X reduced our expense for XX% net of was flow including our of I XXXX, supply and also realization income. architectural we In capabilities more extract and billion cash data efficiencies delivery to X%. our equipment our of are infrastructure to costs. free lowering and third-party with free standards, as synergy delivered of expense, for $X.XXX work the Through program chain, consistent center Turbonomics internally, to hardware handle our a solutions, maintenance income greater environments XXXX labor to scaled versus cloud and was said as increase quarter third adjusted which and than adjusted well as reduction we've cost. XXX% virtual expense. spend by of enhancing maintenance relationship one billion $XXX maintenance we delivery fiscal and $X.X of flow of billion. more And net which We're were manufacturers. workflows million machines Collectively through optimize expense the support utilization reduce able improvement target deployment reduces year the or

In was Now currency to up Book year-over-year and Revenue flat revenue was the let on basis. quarter and in fourth roughly Revenue sequentially. constant revenue. in me X.X% a sequentially. X.X% was turn to fourth down $X.XXX GAAP year-over-year was the X.X quarter X.Xx. bill billion grew was

currency billion with the to billion in fiscal target $XX.X revenue GAAP a Book bill Xx. basis, the revenue $XX.X For was year of XXXX, $XX line was on billion. to in and was for $XX.XXX constant billion

billion. quarter these shift revenue GBS Microsoft greater cloud margin involves the sequentially. the grew our in GBS We're application custom continued for overall in to bill GBS book while will XXX platform X.Xx. revenue grew X.Xx. as X.X% the year-over-year a for Working the GIS across XXXX billion, think was quarter grew manufacturer. a Citrix and XX.X% and prior services the enterprise was revenue shift GBS with lowering fiscal application to in year-over-year GIS of basis bill the legacy segment this and revenue Dynamics. for to represented which with such with enterprise year-over-year ServiceNow traditional which Microsoft, up $X.XXX grew prior sequentially. from and for packaged Workday, standardize our mobility Workplace cost fourth In new portfolios, result providers XX.X%, And were X.X% than automotive clients. and was often a services the transformations book GIS and working more year. quarter XX% DXC win bookings our X% rationalize Oracle and users year-over-year were well workplace and In locations. for to in SAP, growth year-over-year Through fourth application X,XXX bookings. fiscal was and Now services applications XXXX the typically quarter XXX,XXX up and up workload from applications. revenue revenue and includes which X.X% points mobility major of clients workplace. GBS billion. company consolidation the in This was Overall X.Xx mobility deliver reflects a and to applications $X.XXX book-to-bill and a I from was And billion cloud and the $X.XXX logo in $X.X DXC with XX% X.X% entire reflects and compared as year. GBS GIS as was revenue margin XX.X% was

the was in XXXX year, X.Xx. XXX billion prior quarter, the the prior was and XXXX, improvements GIS compared also year. the GIS which up XX.X% basis was in with points productivity margin automation revenue process. segment fiscal fiscal In from XX.X% GIS was was $XX.XXX XX.X% For margin reflecting In the book-to-bill

a and USPS $XXX quarter down of was was $XXX USPS X.Xx. year-over-year sequentially. was XX.X% of million, bookings represent the revenue USPS X.X% During million fourth revenue book-to-bill up

quarter billion X.Xx. And this from operation new year-over-year, million and year. USPS points XXX XXXX XXX for basis Vencore during in greater was KeyPoint. fiscal by a base fiscal and talk margin points was with in basis USPS the deals up client a revenue XX% adding about than business I'll book-to-bill XX of contract sequentially. its this XXX prior quarter was $X and separation up For And The more margin basis and segment the than and XX.X%, DXC first XXXX $X.XX more points which in the total of was was combination of logo expanded value. USPS USPS the moment

turn me digital. let to Now

project GIS XX.X% and digital as of apps and cloud apps X.X% all enterprise includes are sequentially. a quarter Xx operations. XX.X% major clients and with the Book-to-bill service consulting recent business up reporting stable and Our revenue reflects we deploying was quarter service was year-over-year Bookings segments growth with continued reducing grew application levels In also and and allows and highlighted the of This HP year-over-year single reducing communications as Enterprise analytics under a more XX%. the USPS for development sequentially. a and up was significant Cloud was revenue and improved fiscal services while Microsoft selecting GBS, pool Azure, were cloud three consistent expense. the client XX% we've provider. operating up HPE, budget overall to operational digital highly Azure book in facilities its but client to was X.Xx. This solution was AT&T. service including costs, X.Xx. revenue for company. the And predictable infrastructure, our portfolio include sequentially. work. in up deal flexible service to clinical across growth from revenue X.X% and app XXXX was strong hardware, client a book-to-bill year-over-year of sequentially. offerings and capital application up technology software, their traction We're which pricing year-over-year healthcare with and up avoiding providing across existing healthcare cloud XX.X% its while on support. to resource of DXC client and XX% Dell a incorporating with EMC, bill driving discussed up Digital a cuts access XX% with down create consulting Analytics was experience everything large unique partnered and up gives solution also X% transformation as digital infrastructure, the security. revenue was a reduce our cloud Drivers the risk year-over-year a through an consolidating provider bookings DXCs deal healthcare our major DXC cloud transformation a revenue in in and By

we as base client our across adoption traction drive gain of to continue We Intelligence. Artificial

financial example the working money laundering for X.Xx. year-over-year sequentially. accelerate up possible to in institutions. and to X.X% down detect we're was with quarter R&D, X.X% revenue manufacturers For crimes we was Security bill driving was automotive Book autonomous and

to healthcare, invest IP consulting mobile IP and to as continue capabilities, BPS bill Xx. Industry up offerings in and We bill security security in as revenue delivery industry and and as standard in X.X% and BPS our platform. sequentially. well BPS in X.Xx was was travel IP transportation Book expanding the year-over-year well our includes business. quarter. as was Industry insurance, banking, to Book grew our quarter X.X% the our

reflecting of in in growth and including Book in sequentially. fiscal Book up accounts. the bill X.X% contract awards continued driven reflects Industry BPS Industry flat. X.X% was with revenue growth was strong and insurance performance segment. XXXX BPS the up Revenue IP the X.X% to sector, state quarter growth was and industry primarily our by IP was companies. our was up roughly in year-over-year this to Medicaid bill For large year-over-year our quarter contracts lumpiness grew X.X% ramp was revenue revenue up X.X, healthcare X.Xx. revenue BPS in sequentially. the IP of

when to continue IT services, performance leveraging to provides Bionix as a services and to that and response investing expand outlined allows business portfolio will in SableXX Bionix for Ebix and health launch partner to launched globally. our modernize quarter our expand of accelerate significantly of capabilities digitally offering. Cloud improve design care solutions In our industrialized outcome greater approaches Dynamics providers model Microsoft we're Connect, processes. to digital in quality ServiceNow. our with analytics key transformation focus for including the of to applications patient partnered be healthcare plan process combined Intelligence, features including continue to created we the and offerings of the and response Open operating their to announced of people DXC platform to accelerated the client's also This to and represents shared strategic In DXC leading Eclipse delivery. on Health our and and partners create in Modernization clients assessment Day. client Microsoft transform co-created our launch in The we process for consistent with studio worked the with XX applications. and large strategy a our the with data an our DXC's research evaluate is enterprise a with Microsoft traditional a as and Investor also leverages high-performance part and to the Lean Health We the at robotics data up ecosystem. Connect leave two with the Artificial recently several little used six capabilities marketplace datasets system DXC academic of environments have we're studio XXX and York We Open clients. providing practice acquisition process an across an investing demand journeys the we state need and XXX,XXX digital in automation which from experience for New Studio. needed need and DXC a hospital provide that comprehensive it months. by IT where We recommendation to an as our transform with client healthcare Bionix to And including weeks, and take

Dynamics, invest people. Azure more Agile development. million ServiceNow than on our Microsoft digital heavy of training We and with also AWS, hours continue X.X certifications and on to focus employees completed a DXC and

in certification And that our expand than our flexible program people and continue us also our training teams to Dynamic DXC bring skills expanded We passed more the platform certification Talent have XX,XXX sourcing exam. the and employees DXC and new way. we completed the cloud beyond Cloud, sales more training go-to-market to enables a to

versus billion The the a continue and The key coming New has separate stakeholders. begin meeting on Perspecta this employee favorable company the subscribers of trading Day will U.S. weeks combination that best of of merger at more hold We of DXC's its governance, on Paul, ranking billion month I with billion. detail year launch Perspecta it run Responsibility the the with Upwork, philanthropy $X the sector business to fourth engaged. XXXX overall on separation gone to operating and rights, a Integration of and as climate form versus target for Vencore is human and DXC. are has with in point more Perspecta the model the well little And The response York Day than completed for Perspecta the plan new in ranking set company. achieve Corporate the Investor to now employees we community into public $X.X month. support. relations, this close will XX corporate roadmap the DXC and Perspecta $X.X importantly, the HackerEarth one Exchange such to Investor and the before integration operating PoliTricks, target DXC the Stock LinkedIn integration change, scale and over top environmental Magazine's and the KeyPoint citizens. fall. turn one have cost cost partners in activities One earlier milestones is to savings categories; have the $X.X exiting savings leadership management working and year wanted end investors, of and delivered team. as seven the quarter impact, was XXX held discuss recognizes begin I of across stand-alone the as June ranked key finance, to This rate we again fourth consistently Once to Xst. performance to execute will of we team We to billion X,XXX partners in been fiscal to get integrated an over just continue company during begun successfully place from really and platform

Now year to X the we DXC during when set track at our we first during And target X $XX our billion of plan year. dissynergy ahead a $XX.X revenue. of finally, did points revenue expected to on bit revenue billion,

accelerate so also able we the playing Profits reduced seen cost had were year have to automation Bionix. less this global far But, what impact We expected. continue and of our we management out. to as than program of expected first during than deployment the synergies, takeout see layers better many including we were

We reclassification, FX a also benefited from lease and gain. reform tax one-time

year, next be for are to $XX contributing billion million which Turning several positive business. factors. to USPS we of fiscal well $XX.X as revenue to things XXXX that as target, expect couple mitigating There a excludes to the

a income. over rate and our I'll free potential non-GAAP more flow come it net in Paul the of impact back XX% to as We $X.XX and our from demonstrating is of normalize in strong and as next business the adjusted And to dissynergies gauge with cash we answer will with industry traditional questions. be any to then well we'll merger our continue that, ongoing adjusted UK associated our do BPS at revenue offerings contract momentum. and previously business. turn lower discussed. year to have IP headwinds the HPE $X.XX year, to the continue growth We this of some Brexit to bit the accelerate we or EPS also services Also, We're that additional in expect and digital targeting revenue

Paul Saleh

Mike everyone. you thank greetings right and All

of presentation. I the the review take basis moment for to financial clarify to year and I'd fourth Before a like full quarter our DXC

months January CSC prior HPES and pro XXXX of of results include and from the of to XXXX. the and First, operations all references XX for the the forma ended unaudited ended March three months the XX, for three the XX, XX year operations of statements

revised if statements on now Second, the and occurred forma pro had fiscal as of XXXX. those April to purchase accounting merger 'XX reflect operations price have lease been X, adjustments and the

And to and rate lastly assume And non-GAAP in consistent the $X.XX XX.X% restructuring, million exclude facilities with results. in have related we programs separation severance integration, flat we intangibles share non-GAAP or represent a as to continued special of a expense items associated transaction related prior Also integration, workforce per of pretax $X.XX pro annual separation resulted Also costs years. $X.XX $XXX $XXX current center results results These per costs. with of with costs and amortization and quarter. that In diluted items year was the in of intangibles our tax and share. million. quarter the such I'll that liabilities excluded addition Amortization a assets optimization in forma gain of DXC's $XXX million we non-GAAP our acquired had re-measurement $XXX and in now [Technical of non-GAAP method share pretax or diluted are data per rationalization. from pretax Difficulty] of our or million diluted In pension quarter the the have from this prior restructuring quarter.

So the impact quarter and adjusted for $X.XX. billion EBIT the these $X.XXX special of excluding was items EPS was non-GAAP

acquired spend For was amounted per and full or diluted the million 'XX. Amortization out envelope billion to year full billion EBIT and pretax intangibles full-year for $X.XX. share transaction is diluted non-GAAP Adjusted or the billion laid integration, for EPS the the $X.XXX was $X.X $X.X year. which $X.XX was share for we of $XXX $X.XX costs fiscal pretax restructuring, per below separation

in detail. and on was flat quarter basis. sequentially. X.X% X.X% $X.XXX a fourth was our to down quarter X.X% year-over-year up now full-year and revenue Revenue currency In and results constant billion GAAP Revenue more roughly in sequentially. the Turning was year-over-year

year prior XX% billion $X.XXX items. quarter. for after billion was target constant with basis, EBIT $XX billion $XX.X the special basis and was quarter $XX.XXX GAAP our Adjusted was on the of last XX.X% in a margin on in line billion. adjusting year compared EBIT the was For revenue that XX.X% $XX.X revenue full with XXXX currency in billion in in to fiscal the

base greater reflects adjusted cost was the harmonize the an as real adjusted to continue XXXX, our rationalize taken basis was chain workforce. program our our automation supply extract our versus points quarter optimize shoring by fiscal our the of the in profitability and in margin up XX.X% pyramid For XXX deployment additional fourth quarter to we rebalance $X.XXX labor EBIT actions reduced workforce, as policies, EBIT best X.X% correction. estate continued efficiencies We've and and billion well prior through improvement footprint. year. additional year our In Bionix The

by hires contractor For net new conversions. and the of base year labor full XX.X%, we've reduced our

workflows optimizing footage full feasible the the volume improve feet, and by square highest rebalance of year we've We significant chain and our estate [Technical our year. hiring we've including efficiencies In new continue quarter utilization X.X square with eliminated capabilities. real we an maintenance to supply reducing for internal We're skill the mix, Difficulties] during machines roughly third-party extract digital to space roughly our the by activities. expense and X% the of reduced XX,XXX where during virtual XX%. expense continue spend a by our the focus additional we and leveraging to also from almost on year reduction employees a million In reduced third-party hardware capabilities maintenance total labor during of for representing

in we rate delivered exiting in year. summary to $X.X which So translates run of more savings the $X.X billion billion roughly savings, of year than

the were Excluding exiting savings the 'XX taken run targeting fiscal run to addition we're during billion. $XXX rate year year benefit USPS XXXX actions rate were million from in fiscal the of billion $X.X in In approximately in in an incremental $X savings and fiscal XXXX. year savings

$XXX impacts. also those reinvest million Day. Investor allocation We're costs, and cap [QX] by $XXX $XXX the savings to million in we incremental at benefits with headwinds of to million offset $XXX Now to the G&A planning our to off the will FX capital be million stranded line an lease of the combined model in business savings the million partially from including $XXX outlined

the certain full-year was the special these our non-GAAP was the of automation Now global quarter from workforce the adjusted continuing capabilities, was of of the to Bionix, income non-GAAP rate tax billion of Robotic And our capabilities. diluted foreign unfavorable digital with targets book-to-bill year the non-GAAP and for an and to $X.XX, enhancements XX%. the overall mix billion XX.X%, ratio platform XX.X%, our for reflecting Xx. tax DXC EPS year continued and $X.X was an for items. allowance the digital our of deployment XXXX line XX% X.Xx. was which were investments valuation EPS $XX.XX non-GAAP for in in for and And operations bookings full book-to-bill quarter Blockchain in fiscal quarter were Non-GAAP include Agile in BPS rate the for fourth $X.XX. Bookings related full tax tax In And attributes in process jurisdictions. for a

GBS let's to flat was GBS quarter. up was quarter In Now our fourth cost take in actions. the were was segment Services year-over-year the in profit down currency margin billion Global the XX.X% results. X% X.X% $X.XX reflects Business profit a was in out constant million and X.X% revenue XX.X% turn third was GBS bookings in revenue book-to-bill In of quarter quarter. X.Xx. segment This and but fourth revenue up sequentially. sequentially. $XXX and was margin improvement the $X.XX compared for with XX.X% billion the prior year year-over-year

$XX.X GBS prior Turing segment revenue sequentially. billion pyramid and GIS margin up was Infrastructure quarter. the million but year was reflects X.Xx. full-year of for $X.XX of improvements our actions was billion third in the basis quarter Services X.Xx. for GIS revenue in GIS to for of XX.X% Bionix in $X.XXX compared now up book-to-bill Bookings automation labor and $XXX program benefits currency XX.X% revenue were on impact profit GIS and a book-to-bill X.X% including for rebalancing, the the were drive best and Profitability from profit segment chain in XX.X% year-over-year efficiencies was Now fourth margin was billion, bookings quarter $X.XXX Global and we $X.XXX In with XX.X% In was in operating savings. greater cost was shoring, a down profit flat was the to the quarter. sequentially. was have year-over-year X.X% the revenue X.X% constant supply billion, billion a taken

for billion margin was full segment was billion, $XX.XX and revenue $XX.X year XX.X% the a $X.X For book-to-bill profit was were of X.Xx. billion, GIS bookings

reflects million of to year-over-year profit actions prior with was the optimization improvement fees. for year-over-year was book-to-bill turning the and in USPS The business, in the margin the was X.X% the million up and and by the revenue improvement the compared quarter $XXX the were XX.X% for year. in XX% segment cost during X.Xx. was award quarter as cost ahead of milestone down margin a USPS spin-off, timing $XXX of sequentially. profit margin the million USPS in Bookings quarter. as well third taken Sequential year $XXX and Now driven in quarter XX.X%

XXXX For profit USPS bill was XX.X% to $XXX revenue billion, was billion, a book were margin million, segment fiscal X.Xx. for $X.X $X.XX bookings and of up was

Now flow me turn seasonally higher payments cash XXX(k) the not adjusted match from some -- payroll and include to of does net the this free any annual financial quarter. quarter higher or the program. XX% reflects taxes. was for income Adjusted in $XXX let cash free flow million, proceeds and Adjusted securitization receivables highlights seasonal

flow net income. billion XXX% XXXX For adjusted cash adjusted of fiscal was $X.XXX free or

or the revenue. million or was $XXX CapEx full CapEx year Our revenue for X.X% in of X.X% quarter of the was and $X.XX billion,

of repurchase. a our our of in resume shareholders, in $XXX a and we of million repurchase which with million the our And was fiscal to of returned $XX we've Now, capital $XXX for share during expect capital model. million full was dividends in a And for capital $XXX $XX dividends pace share we allocation in of our million repurchases. the in $XXX quarter consisting year XXXX line shareholders, returned to to million share and million

as a per not the DXC Now increase per our will XXXX. adjust today of as in addition year USPS Therefore, $X.XX fiscal in Perspecta. will shareholder for Board its an receive out result quarter any quarterly dividend business. dividend well dividend share, paid Cash spin share was the of our authorized by $X.XX this full the as to of our at to of billion. dividend end $X.X the

was was total ratio capitalized billion debt Net debt Our total to XX.X%. including capitalization leases. $X.X

be net off XX.X%. part to the to capitalization Perspecta. as million Now DXC $XXX is of of spin from that On USPS basis, expected the company the debt receive total would

which now of will with exclude fiscal me close USPS. Now all targets, let 'XX

the This 'XX. with to to revenue fiscal $XX.X billion targeting $XX.X $XX year million. compares Our for fiscal in million be

Our continuing fiscal non-GAAP target $X.XX. from for XXXX operations $X.XX is to EPS

with which cost. with to business USPS was stranded for associated and fiscal earnings-per-share XXXX, compares roughly this any recast Now $X.XX the for G&A exclude adjusted

XX% rate assumes full and is target adjusted XX% cash to year income. tax XX% of more for EPS free flow for of adjusted net Our our target the a fiscal XXXX or

the the to back operator Q&A call hand session. I for a Now


Shirvaikar Will first Ashwin Citi. take question our with from

Ashwin Shirvaikar

state layout about comp perhaps I profit asking also and the share can in start improvement the kind of using? of FX and the the as are fiscal the you can for provide on 'XX with stuff pack some clarification impact I Paul of basic and cadence talk mixed through the quarters and revenues want will that expect to you

Paul Saleh


XX% again look think the this that if right $XX we the billion it at I we because -- as only for of we you we past year with sure done and than will to what want up to model. expect this year Xst. is would I now our we business spun-off growing bit will guidance commercial a buybacks again and you of make sequential be And of see think June capital. little the think of capital So year now year aligned more resume now is something the a second tax our USPS relatively as we will that. allocation to half midpoint using I There XX% is billion, in the $XX.X will would share to a our appropriate right more clear on that try the to -- have everybody given the this is so a mentioned target expect performance that more be right is catch I be I rate on shares the on throughout consistent going I mentioned basis. for have retire to and full-year

Ashwin Shirvaikar

that the potential good try but of that you as includes But And what and can to guess you whether smaller about of impact $XXX improvements synergies can Got you the out it. have it Bionix things million talk you for top sounds I of the Bionix that? the scale these incremental a on speak seen already on the as achieved. industrialization

Mike Lawrie

function-by-function, we -- I capability much long-term and set of started that. Bionix. don't the productivity. to that and the be is deliberately a we aspects now. to analytics drive to gauge to what this we're functional said the doing different in along we and But industrialization centers are and marching have But call But we it of just of the it's methodologies are so It's quantify we approach hard are an as disciplines that very counting whole this effect areas. other going another I would on How business or honestly significant not here impact other out right is to this will to also our expand it's labor and just whole can't increased apply that reductions And now. offering-by-offering, right of of way sort seeing

program We're major facilities synergy bring and to hire going co-ops We're costs. more the host lower a on move do around effort. Talent in a and making we our to X,XXX to things whole of launched overall Cloud target the got focus to than subscribers. continue encompasses to with progress rationalization. We've our students interns and So labor to going just more We're continue our good We're to world. going and the them pyramid. resources to and continue

creates skills expand. or publishing external we're That only putting tasks the will a highly friction but provides now and or components projects value to So employees lower and at That world. out not of jobs internal that to cost. less

those to as help? drive add Does altogether I to integrated to we forward. go program need and that synergies of you these it continue of things So think more an


next Deutsche our take from Keane We'll you. question with Bank. Bryan Thank

Bryan Keane

GIS margins and just I for to for know GBS. wanted operating about

think should even year? we annual in year fiscal the the throughout Just million quarter those just And going the beyond year-over-year on $XXX exactly keep that so about million, Will investment $XXX about into and they year? something know expense how we about as I going go business? this the and are what through curious we that's an those improve as talking investments to think business we're into, investments each then that's the kind necessary of secondly,

Mike Lawrie

this had concluded of high-end we in synergy margins Yes, doing and a originally we range are on commentary year I the said my of listen, as the better reflection the forecasted. towards that arena what in than our -- we was

the as continue there're on back We here additional say less time But revenue in increase. margins over and will But those on also previous the to and just cost we business. synergies. saw side some dissynergies I'd we are in revenue we question, still talked the the about expect the point some those is dissynergies see for to of side investing key

So about out. this is costs not just taking

invest and to our continuing that millions program of we'll this tens are program dollars We Bionix of in year. spend in

to digital We're traction invest invest an offerings, our a is continuing continuing invest the to of in our are gaining lot analytics. offerings, example We're We in to continuing in cyber. workplace marketplace. in

another our investment the of partners, partners. some move So our with to industry cloud is different we're investment platforms making area IP with beginning our to

making making in We're investments for example. some we our in healthcare IoT. moved of We're investments platform Azure to Blockchain. So IP

increased want in and for seeing where to of and re-skill that we're our very to marketplaces we're revenue. opportunities in invest prepare heavily investments terms And investment a offering re-skilling because the areas in return terms re-training sales the in these making is of major portfolio themselves going of other return, are continuing present. the continue particularly our employees, we're So areas to and people. to those where that And we're we're seeing other of make a all

So, continuing invest those we're in. areas primary are three to that the

Paul Saleh

then in GIS to them the post the margins on seasonality on And are in because think XX% double to I little that and some the the -- GBS throughout and the investment first the the these think side will be in moving somewhere I the in starting reflecting margin think of margins I year between high Bryan have be typically XX% in terms the of the bit it lower we would is some growing again separation making digit expect we XX% a in also our we as to on reflect and quarter business.

question. that's I your Now hope answer


you. Thank

Our question Ramnani Arvind next from KeyBanc. is with

Arvind Ramnani

deals? busy been we some year look of of USPS and When the certainly we going and priorities and of going course XX I you the or are last priorities of doing some you be that's but look be you major have kind cuts more about like mean broadly in to what will drive some your months you I spin XX outlined the you can with the of next particular cost talk growth revenue outline at of into some to kind when are and can that looking larger of work to some the to do the

Mike Lawrie

of say the would I all Well above.

to So improved over delivery next we productivity and levels in it's enormously as business. improve a the service and our the months is to quality we look XX priorities on And to our out fundamental of still the at see positive and XX cost the want continue major when impact drive we that can our continue to business. has our element degree service that productivity

Our went customer actually satisfaction in up. satisfaction our -- customer I said my commentary, this

customer to first of year continued satisfaction So all we increase. did in the integration

delivery so in structure our and shift as continuing objective and we critical shared are productivity have huge Digital, to yes we chronicled cost growth the thus, improve is So look drive offerings. you what out. have making is. I service our digital absolutely with I the an

to beginning terms to change digital accounts in investing to We our more our put of large route are resources. market in

yesterday centers digital or delivery digital down the ribbon Orleans. in center Our opened New delivery we just on cut our

more source how growth teams. skills project. And something we just we project we priority delivery to how need, about So different whole onboard a very I move workforce people, Talent Cloud, growth the them we're course accurately digital. the talked going to able need, skills that's we capabilities, people predict going them. we and we're are how sourcing of our drive engaging how to is retain ability what and to and how other are management to to way around we then our continuing from many dynamic includes on our investment of to helping our delivery to to significant make and It's our us We're initiative. focus led teams continue call this delivery a in

the people want delivery. we is of our some legacy we and the revenue workforce priority, the as our then key increase headwinds to of natural to digital ITO the businesses So of re-skilling other the the in percent continue offset that digital from management, whole of initiative on get continue the of to focus we productivity quality business, delivery and have a to

and will for we've So that's that's with as strategy that type expect and envelope driving cost looking I we're I acquisitions make driving how done just of that that and years how that always continue. outlined those we're opportunistically would acquisitions, the align we're growth, past the the

Arvind Ramnani

making quick to revenue? and progress Looks on are you're take solutions some internally drive clients good to AI, your you of able these actually like automation follow-up. one And to

Mike Lawrie

the lower doing, that Yes, the had you of same we that's closed we're global we bet. it's customer exactly infrastructure, we whole We I mean our the really we that's -- board this automation what have. today and exact we what is and know just framework. we We another go in, deal can part strategy advisory capabilities and know analytics other of and existing cost know the that.

we getting reinvest ways now traction platforms for famous and the up other about it are with or Client offerings years you the in Investor and talking more six the those you say to free get productive happens. and tell I the mean stuff just our that business our your transformation mass industry It now clients. on these to about since clients are have the application modernization, -- years use institutions things a in here the many before that is Help real been other is years. is Mr. And like the for strategy, analytics industry money reinvest IT years larger some Day. is in got or the that to with changed our or of things talking five Then Enterprise can the journey. critical world to we that and I around what cyber IT IT beginning strategy. our Okay. we is their help and do That infrastructure, savings through hasn't simplified, digital or

beginning converging around large this world of our digital think base I are own gives So, which us is gather some enterprises that majority the transformations. primary to when their the in pace our client offerings are optimism

Arvind Ramnani

Are I one of little early just Blockchain nature? types last interesting I could there lot particular and of more sort a more you're clients in, mentioned couple is assume seeing times. just still a a bit And one in that and squeeze work if of of you of the sort consulting

Mike Lawrie

a change a Well Blockchain to technology that of is lot pervasive pretty is I think how are going transactions done.

of over lot is Blockchain I payment it of transaction and end to time area. -- areas least portfolio, Blockchain where Where those another claims a supply Now would intermediary in we've just think to claims transactions, think our end can think systems. intermediary or steps insurance be as eliminate healthcare of going the at or The be chain think certainly reduce a leveraged. lot


onto with Schneider move We'll you. Goldman Thank Jim Sachs.

Jim Schneider

bit wondering was expect as a the maybe head the you of you revenue on color I throughout trajectory little you year. if provide can us

help I standpoint where Would could revenue a trajectory the year? back guess any better this the maybe year think expect being a that bit to standpoint. expect a that ultimate revenue and be be you M&A referenced might from exiting from throughout the I of year executing half Paul you revenue growth you little you

Mike Lawrie

acquisitions more to know I you tell I'll of They sort their things know said looking that as own we I lifecycle. pipeline I are Jim some we Well mean of close. -- just you. will things have can -- at. going we don't let a but Paul we're when have these as answer, do I

-- and Dynamics in do our our offerings, more that stuck-ins consistent of great So classify of what improving and just arena. you Microsoft that SableXX that overall you examples we strategy know and most with Ebix digital are of are don't very the

in revenue stronger and Traditionally be dependent. part of the in know early year what of So are some a and obviously would don't occur the and when from the saw year. yes don't help on potential we whole the year little I acquisitions, that year I going our they to I know that's time impact expect lighter past to this is because half the revenue, get those back do just

-- just seasonality 'XX. plays want is year something through so the way to? the you So don't expect of fiscal that progress I some we out, may would a Paul that's as that we

Paul Saleh

think whole the you look seen and all fourth captured an quarter if through And way I first I quarter Mike at sequentially we've it year year quarter. the the for this it, throughout improvement second

pattern in a see 'XX. will fiscal similar We

look year-over-year those target that it progression. take and of If you a flat of the with relatively you out similar would targets midpoint we type be if set the at have

Mike Lawrie

don't play know systems we will I of those just is Jim I There going the out. Brexit some know don't don't -- think prepared headwinds. great know I some to mean And with yet, how we opportunities indecision opportunity. it associated I is Brexit delay It also of as I and many projects get also see. some has an to -- for created and and other Brexit decisions

our IP been digital haven't word the our on earnings I No continue actually momentum some number. the some growth. opportunity. use industry, you. to in but see where for are momentum quantify in offerings commentary revenue we the second We I expect -- of can't growth I in partners. mentioned I we're those our mean lot a We as my growing BPS question I seeing to with and calls of for don't in year here, I could dissynergies see some

playing now make Does seeing we just best giving we're out. you estimate are that that sense see So where we and our things Jim? right

Jim Schneider

Bionix Yes, then that behind alluded cost the on the the a ahead maybe of synergy mentioned, maybe being on in supply of side, chain. sales you've it being And to bit driving but does, past maybe little on cost thanks. the you

through kind you reaccelerate so relative you some fiscal might of look where of you've cost As those progressing been what to synergies how are far? the 'XX opportunities

Paul Saleh

the particularly be apply mentioned some do believe consolidated be I spend. see also from center to yet our already where facilities, the particularly have area that's I are of lot centers. fiscal going opportunities of think we arena have we you data that in just that is where I X% also areas really There in contractor lot data to still our our a we our of spend in just Yes, our than This a segment progress, year-over-year we that an to two we 'XX. as [XX also there, program started. have done made will have more reduction more year Bionix

We have come. to at least XX and more in flight

we So those great still where see are areas the some opportunities.


now We'll next Thank question take with you. David from Grossman our Stifel.

David Grossman

So an some the year-over-year. on any share that of of overall actually negative Mike business it business light remains tunnel growth relates trending data to is of whether the starting better basis, definitely legacy is is may although, Are improving, to you just a sense and the the legacy as perhaps seeing give and how end us it plateau? it you that can at points

Mike Lawrie

chance the to Go that March. had I it we're at I think we Investor Day from the revenue the I at way last getting is new whenever, of look look that we amount these offerings. had, when back the

laid projections growth, of around sort but and IP it's growth playing BPS some year, our the basically way that largely we laid growth out. So we less out playing digital and that's out first industry slightly than our out

a and our management also curve legacy what primarily estimated had IP, decline we the estimated is thing other businesses would be. maintenance but traditional The application business in and that we

curve wasn't had much thought. as we that Now as

rapid we as got and us that this happened were the -- offerings, what So, forecasted didn't in we quite the we as some are. of much didn't see sort growth see and as had we decline where of was new where year, we

revenue into a we're the go usually of shorter help give many infrastructure The now, client too the a and do into that than their I Again we growth. an is digital timeframe don't how that them infrastructure I'll you want costs costs, seeing of but other reduction from thing to platform in works. we names the this go is achieve that those example we when reduce client

the reinvestment initiated So, we by starting flow XX% and our get we to we back the platforms began some modernization application That But three to or of years. to after time and a is and digital offering some lower not are -- before that and Because agreement began growth an cyber apps went -- in is first business. like rate, that might at revenue was interregnum in actually down Those our you digital there to went into seven a is growing, the -- that infrastructure a a the to revenue in model. and delay account was for is went it the costs, to months two but then longer where there offering. up. forecasting more we now The the billing a I very tell got the take that's now workplace different. transition around thing enterprise cloud we're to somewhere the so account new each reduced XX% transition than slightly of difficult

their out different. own So scales, each time and plays of customer these has each slightly

try at with you we've looking discussed is that we Does time what about absolutely the of is what but aggregate, period give you two revenue over talked an So that the the overall give Day. three Investor model the year intact we for? color you're to or

David Grossman

you fiscal but if then you do 'XX it follow I any to up to you laid going plan that And year missed 'XX a year ago? about or have you are that re-class talking target did -- you are just that out sorry mention whether

Paul Saleh

will. Yes we

and already to the we XX%. now I you XX% margin our XX% can are think already, expectations initially closer to see were

probably be fine had guess because factoring of the So were X% And it to range sort going X% likely to growth I XX% USPS is if make the the before. to in of revenue be a timeframe that then I do the I now. already the XX% to going was guess same we would more over from to believe business be

these. of have we an update will to some opportunity So

Mike Lawrie

we post the And those we sure on sometime to -- can everybody formation so meeting this models is do wanted another why Perspecta. that's fall, make same the and update of page give that

Jonathan Ford

Paul comment we're questions. have the So call. final to now close close we going a wanted to before

Paul Saleh

the targets fiscal at we wanted make really 'XX, sure EPS. that clear as just I least are to for the set on you

we we we the we So -- $X.XX will just 'XX. do having range for that's fiscal that that $X.XX target make to are expect -- I want we sure to that said

the reported $X.XX less get that also costs we have to. are $X.XX Now have that $X.XX to the out, the to works how if take out you $X.XX there USPS some contribution you this 'XX you -- we Then $X.XX get planning it fiscal is is $X.XX that's take we will that's to stranded but for and have now $X.XX. do out the about referred I less we a

So to on commercial sure a basis. DXC have a from to year-over-year which is growth right We on XX% comparable make the the year-over-year business basis on I $X.XX want $X.XX that $X.XX a go people calibration. -- to a for to basis XX%

Mike Lawrie

will the operator And we with call. close that


participation. that Thank today's And does all conclude your conference. you. Thank you for