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DXC DXC Technology

Participants
Shailesh Murali Investor Relations
Mike Salvino President and Chief Executive Officer
Paul Saleh Chief Financial Officer
Lisa Ellis MoffettNathanson
Rod Bourgeois DeepDive Equity Research
Ashwin Shirvaikar Citi
Jason Kupferberg Bank of America
Darrin Peller Wolfe Research
Jared Levine Cowen
Call transcript
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Operator

Good day and welcome to the DXC Technology’s First Quarter Year 2021 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Shailesh Murali. Please go ahead, sir.

Shailesh Murali

Thank you and good afternoon everyone. are XXXX for earnings you quarter Technology’s that year fiscal call. pleased joining DXC us first I'm

today's On Mike the our I'd included our President that like update Technology on listeners presented Mike? DXC discussion subject could remind I Our DXC Technology's of to Technology's these the results speakers unknown in Saleh, will on call, on at will our our Officer. believe DXC CEO, now, rules, President and investors. These to forward-looking. materially measures. that Annual most risks accompany today's on includes call post actual are information participants dxc.com/investorrelations certain call to like of statements call included measures DXC’s Form will on Chief This be expressed Relations our informs differ Report would XX-K tables no today. and includes Investor the Officer; those uncertainties, the can These with these we be and is on reconciliations Executive the X our risks the earnings uncertainties financial slides presentation by from to certain and to reconciliation will and make to a slides you'll in directly these Slide these in as non-GAAP law. being see discussion we information required Slide comparable SEC known Paul to filings. and is our website. provided webcast Financial and A Chief accordance certain In we measures, release. section cause found webcast provide and be Mike other measures call, GAAP SEC that comments adjustments assumes And except have that introduce Salvino, Salvino. respective the further to After call. obligation which which we X, useful and and of their

Mike Salvino

are up as joining hope and software was strong all start our financials going are our before on all well update make you strategic during COVID-XX to position how remarks and to QX doing for very today’s sale to guidance giving I including and our XXXX. I closing call which continue call you, Shailesh, call by will I’m share your today. everyone recent our the I we I QX update with the appreciate our we provider allowed growth. questions. for performance on progressing on our pandemic. quarter, pleased for Thank have start DXC business. QX, some to alternatives for FY of through our you the us transformation a families will you journey performance and I an then And the opening healthcare navigate has to the

DXC, new new thought revenues came book-to-bill costs. highlighting Margins win customers, May, during the of our effectiveness underscoring customers our people market. logos, optimize Our in on higher allowing was resiliency the the for to also approach renew than new which and successfully that existing X.Xx, and This to And existing underscoring came quarter we the cross focuses in higher, business we to the our to bringing are capabilities our us work. our of sell is in program our COVID-XX. our

during very customers, that to relevant times. Our especially tough our QX results DXC is in show

us put, enable to focus areas, the and revenue three us stabilize and Now in are key doing our I'd which journey how optimize like some on transformation to you starting our pay allowed concerning customers, to focus focus this are: Simply market will revenue on to in QX. opportunity. really The higher customers deliver is off. seize in specifics the cost, discuss we and give QX

We to transform me have looking week you we at his report to not an new Sabre to Sabre where challenged This happy good Sabre, working with our and the accounts. along modernize signing us identified standing give Google shape. with our forward was XX two the Sabre’s with Cloud. IT to fixed team of with an other Google Sean, the in final leadership XX the now through account account, and renewed Let are and accounts, expanded working estate with and brought that the we I'm to relationship we example. details DXC the successfully

rebuilt have We relationships more work. and these winning we are

have start stats. of you given DXC. accounts out centric us done customer in with XXXX. fundamental and this the now We're XX the is new XX in me million XX mindset FY work of this to QX program Let the new some excess of program, give the since of

was the Australian extremely customer’s of deliver how during Australian the in The inspiring. people investment our delivering customers. ransomware the our of is teams expectations businesses a resulted support COVID-XX and I'm the enable XX% to way work Our customer great delivered to where workers. COVID-XX. workforce DXC the has troubled are Xchanging people truly made proud cornerstone Office changes weeks to Tax for a our impacted and our Tax delivering for collaborated which wholesale helped CIO business. example our The in handled two DXC the operations also our worked pandemic. to as attack, during The we virtually key systems of Office commented and on to one people

leadership people way. the interest would as protecting step did thank thank Chris CIO, security a great summed of has clearly of runs transparent measures, they customers business, customers. customers, customers addressed our to best, our Association up has challenge our in of delivering containment resolving notes first-class. Under Market our of you Mark Our way which engaged people our situation our our and series the DXC kept for of the many team up our I and are job DXC. the implemented in and Hughes, receive got who and saying new and Drumgoole all updated running, the our we Lloyd's Among and immediately it and a been the from the of quickly remediation customers every the collaborative like

Now, cost make we let program me to optimization continue progress. where good turn to our

Here our taking anticipated, management faster layers we than to were able appropriate simplifying to size revenue. and to structure our steps the move cost right our

We better taking our on and achieved for are due have these making year We're QX to of people our this goal impact track margins to XXX ensuring focused than expected achieve million in business on out customers. our efforts.

from QX We QX. expect margins expand to to our

is key and our focused seize winning on existing cross-selling opportunity. accounts comment me of third market area with to new let We're customers. Finally, the work on the journey, transformation which

Our QX we quarter is one-third book-to-bill the were good seizing opportunity. and ratio The evidence of work new that two-third of market comprised bookings indeed renewals. X.Xx this are

and New existing new work a was work customers. to cross-selling generated customers, winning through from our combination of

of are we're you Let example globally. expanded Zurich willing evidence I make and is to to give DXC. an a policy example from commitments administration don't help them helping Avari, we multi-year modernize existing they work provide example solid our new we an at new modernize Also, existing additional to customer Zurich. me that renewals work their delivering each. Systems, Legacy as and our Group We cross-selling are services. support great of A customer of want is applications an security transform new who were to relationship, Insurance customer are for to ignore Avari’s and where selected customers

is Xx evidence we of in working, expect this is a book-to-bill All strategy QX. that of our and to hit

we Paul, over want call Now, I our before well-positioned are with pleased was to QX turn and the in I reiterate. QX. I for to performance

me Paul. let call turn Now, over the to

Paul Saleh

thank you, greetings, everyone. Well, and Mike

echo our we delivered results, is the I performance. results last call. revenue journey. which Before making cover the we profit our with first Mike's on about comment were you for ahead We financial clear indication that our solid earnings I'd This and progress like are targets transformation our on shared quarter, to of

and relevant offerings are business has this our to environment be in to more Our our proven clearly customers. COVID resilient

effect we're downs prior to first may reflect and from our however, price progress terminations, runoffs. results Now, the due the quarter making lag not

expect We in subside QX. starting these to headwinds

Now services strengthen health and software sale under will set debt our close current our business which reduce quarter, on reviews, further turning to our agreement sheet. The we healthcare human the our business to local remain balance and further enhance to in state us track strategic business to allow and will the flexibility. of recent financial

the we're Although encouraged uncertain making we're environment. progress operating an in on COVID still quite we’re by fronts, multiple

but to you a it's provide the guidance, you full-year update will with progress As on on a continue we our quarterly to time basis. not result, yet

our quarter, margins and reflect the revenue in to the our For to continue bookings the we improve, second stabilize, market. of to new DXC to relevance expect

program results. from $XX on had quarter financial first that now turn quarter, by the relate In optimization let integration we the the were we per first and had costs review. excluded These the Hopefully those a million pre-tax I'll me transaction, our $X.XX related non-GAAP by the spend quarter, in items of of costs external are million to covering to with or diluted So share. or results. basis assets basis, under And start our discussed associated diluted $X.XX per a restructuring previously. pre-tax strategic $XXX cost we on primarily separation, the share costs. driven

basis, first $XXX acquired diluted intangibles per pre-tax the a or in amortization quarter, was Now, on of share. million $X.XX

was $XXX call. our items, taxes we last million before EPS indicated the our quarter, non-GAAP our special during operations these non-GAAP of had impact for is the $X.XX, continuing income was from Excluding higher than which and earnings

of foreign accrual impacted return filings, related rate than adjustment associated certain Our was in mix provision the non-GAAP jurisdictions. the as to tax our well EPS in expected tax and prior with by higher income quarter a allowance valuation as of reflecting to XX%, a

first our more quarter Turning detail. now in to results

As our always, X.X%, first currency. of constant was an decline revenue all provided the quarter improvement billion, in representing revenue guidance we a last will call. discuss GAAP earnings in over be but the during sequential comparisons $X.X I'll

the the $XXX our some initiatives. prior of EBIT quarter million EBIT compared about for an million, anticipated in of million. revenue during was the Our business, margin the impact resiliency than Adjusted quarter in reflecting with acceleration a sequentially, from incremental COVID the the $XXX Currency and of our X.X% headwind reflect of was $XX quarter. was Adjusted with lower optimization quarter the year. cost

originally a we And of was million planned. at For $XX quarter, a prior majority EPS time, book-to-bill with XX%, quarter, of helped report of Non-GAAP is of XX%. that million would impacted outstanding the for customer I accruals, mentioned, able This certain by offset better as the which resolution this the Normalizing the In the $XX to of million than cost rate related dealt quarter. disputes. higher in tax about delivered been tax previously I'm have have than to savings, the $XX EPS optimization And we rate were $X.XX X.Xx. disputes. of usual in our a was EPS $X.X for bookings billion $X.XX. vast

the segment, start includes three software Turning GBS acquisition and under profit DPS our up Dedalus reflecting million X.X local which now I'll first as segment two recently GBS our $XXX was segment the the In in of Year-over-year, health also of GBS review: down our revenue for analytics U.S. stacks, margin quarter, human The layers revenue with healthcare to sequentially. profit was business, well and business which services GBS we business. business. the top the agreed now state X.X%. sell and to as and includes enterprise $X.XX the billion Luxoft. engineering, quarter, to results, was was The X.X%, applications GBS technology horizontal the businesses strategic and a

for of for impact of would the million, X.Xx. book-to-bill GBS $XX profit a the quarter GBS for XX.X%. related bookings of the were Excluding have been billion $X.X accruals dispute margin

was mobility GIS layers also GIS to and workplace Turning by segment we and X%, was GIS reflecting the and actions. revenue in profit cost was our XX.X% our The the of segment, the down sequentially, business. profit first the our year-over-year. that and our timing segment previously discussed. and technology decline of of $XX in million quarter, $X.XX driven cloud includes offs of impact price the stack. billion was margin down X.X% and quarter consists GIS security primarily IPO run enterprise segment our the prior It terminations

booking a of We improvement the execute X.Xx. expect structure the revenue. our was on GIS cost and for our to for for align cost billion of $X.X margins remainder quarter the we as book-to-bill to year plan improve

stock. comment the me performance on of technology Let of layers the enterprise the

effect this in the driven the and from that X and the and prior again the was truly is revenues highlight stock of which and quarter, of in year-over-year, was and the year-over-year at to negotiate revenue offs Book-to-bill lag to X typically due IPO comparisons me sequentially, of the down, Let the price layer and sequential ensuing in trajectory reflecting X.Xx to are discussed offs. down run quarter, business, first and take terminations, indicative each the terminations, previously. not awards, of large the XX.X% the timing we run down, close. by contract X.X% months down price least

Xx of was revenue quarter. as in down the Now are qualified is this progress the by And by was security the X% by in was book-to-bill of ITO for pipeline. down deferral run a our in evidenced we and we encouraged layer, of making strength which we're Cloud are the decline related second as well quarter. stack primarily sequentially year-over-year. the and revenue XX.X% the layer offs, Book-to-bill of driven Xx targeting The spending. project

in X.Xx of renewals. was stack, the down and the as The the travel, Year-over-year project primarily Luxoft. stack, and delays by as engineering contract quarter, acquisition work by some decline the stack X% layer sequentially, primarily down of was of delayed was for In work. and by impacted management the year-over-year. application was driven layer layer in reflecting COVID, sequentially, well XX.X% goods. the revenue down long-term the applications completions, in was such due in X.Xx. Book-to-bill number revenue X.X% of this industries X.X% the a up quarter hospitality most and terminations, was Book-to-bill analytics to up driven project as Moving consumer

business review, current We track sell on and to which strategic to debt. we as the we use plan audited services quarter. Veritas health carve-out and previously, state milestone. Turning remain down delivered important the under discussed transaction we pay local to U.S. And human the business to now in this financials and for business, after-tax was proceeds an to the the closing from completed

This we sell transaction. $XXX million opportunistic for XX, an healthcare in agreement was reached July on software business to cash. Additionally, Group Dedalus our to an

Dedalus its was asset. looking an the software to attractive portfolio, to realize As for broaden were we value able

transaction is close end, [$XXX million] proceeds $XXX down this the fiscal to and of after-tax to to pay million Now plan use we expected year to debt. by our

the environment, the finding continue fit to also DPS parties. to horizontal process the now we customers with we're and taken in focusing anticipated due Turning the our be business interested current employees. than assets, to strategic The evaluation discussions for COVID but has strategic workplace and on longer right

path part as evaluating process, so, also of by assets, the of a these our but assets And make benefit the final this decision these we're for next retaining best call. we expect to forward on earnings

working annual financial of cash adjusted timing environment. the and negative the in $XX a the flow licenses increase current also maintenance, reflecting to Turning and other was quarter million, free slight of in payments highlights, in capital a software COVID

positive We expect flow in adjusted free be cash second to the quarter.

of capital on the the in revenue. end billion. capital quarter of the leases million X.X% including at was or Cash expenditures, $X.X quarter the payment Our $XXX was

to capitalization Our capitalized XX.X%. was ratio leases, a for debt net of $XX total including total billion debt,

previously, more services the we and health debt forma U.S. plan from would first less the the On and had of $X quarter to including which normalized debt. of pay local leases $X.X and state of business this As COVID is minimum basis, capital have to pro down a we stated absent a the assumes billion, at a proceeds we this human been total use sale the billion environment. balance cash than end level,

upgraded from BBB S&P respectively, our quarter, to revised negative credit ratings DXC and to of the Fitch their BBB- outlook During and but stable.

an of to healthcare profile. the investment from flexibility. our consistent committed only a software financial will The enhance credit grade to serve position sale proceeds with remain strong the business we after-tax Now, maintaining financial

initiatives. in closing, in in should expect we optimization of to billion quarter Margin to cost the X% $X.XX stabilize revenue So, to second contributions reflecting $X.X second the range quarter sequentially to improve the additional our in X.X%, from billion.

his remarks. in $X.XX call the EPS targeting tax XX%. an on effective quarter $X.XX with about I'll our be And Mike that, the are of now for to We closing non-GAAP to rate based turn second to

Mike Salvino

summary, a start Thanks In year. had Paul. to the we positive

Now, share with key let takeaways. three you me

pleased First, behind we my are when fixed I those the on I'm say and us, DSC. top with to priorities that issues have of which was customers: accounts, one challenged started

delivery We have us confidence customer our enabling stabilize rebuilt reinstalled our in revenue. capabilities, relationships and to

the Our people to in efforts engaged turnaround. and by our recognized customers. are new leadership this are being team They're key fully their

XXX cost target we're for profitability, our on making of this on Second year. reduction clear progress million

levers We of We ahead plans, execute benchmarks to a the we profitability our are and the close will state. of industry this not number gap. over that clearly but time is end have know

year, consolidation pyramiding, conversion. delivery the in data optimization we have footprint, that of contractor this more finally across of and off-shoring, organization of of centers, real use our technology, the opportunities the Bionix, include already Beyond further started through like and estate

on an their to Third, we've and good years. them because progress market, In for the delivered customers opportunity needs that they we're seen is us. for us, unique IT trust times, we've know challenging they for us capturing turn us, to making

in step closing, call transformation QX in open journey. carry the with be momentum on to we positive will believe please questions. the up and over operator, we that, So, that And positive our for QX forward will another created

Operator

This will Thank we [Operator come Ellis with take first will you. And Instructions] from our question. MoffettNathanson. Lisa

Lisa Ellis

confidence you XQ? Thank to we I the accounts this we're you. that mentioned – when this stabilization you commentary? the you Look, I stability accounts, like key. here as get revenue little some watching just top I giving a quarter. XXX [Stuff] things Mike, on factors the the closely. are revenue a know know can quarter-to-quarter challenged maybe past know give is Everyone’s XX more see the into results in bit this what very highlighted but you've going

Mike Salvino

thanks question, the since were customers we and making in dealing ever with Lisa, started just around, customers, sure hear XX, securing not delivery, It's right? of all but it's I Look, how had to from always also them. for our the not confidence they you. good only the our that

people, about DXC, lose when I always focused it if the and I business. the new talk customers, said, So, lose we've our talk about the people right, you because being our on you

revenue. that. customers And the that So, we're based our very about are focused the stability saying we're engaged, and on People very that's QX. are around it, what of seeing we feel on good

right I what think by you be to will to step specifically the up, is we And mean stabilized revenues going direction. or in then that's it that slightly expect quarter-on-quarter. either are flat the be

Lisa Ellis

a Okay. about just good give or metrics you attrition question – doesn't attrition maybe And quarters? in disclose like talent. in few for us know are last my how feeling you can the then Maybe thank utilization, a highlighted I follow-up, metrics on are sense those you. over just labor you. for Thank base? that. the like How trending, you And but know morale these headcount, I just voluntary particular, DXC talent

Mike Salvino

enough matters. we COVID-XX, the the we've you definitely them employee halls paying you revenue. we that an deliver team let and let is When in And engagement town because give them, halls survey. injustice for don't right, engagement a significantly and we dealt stabilize social seeing – they're board the I them took significantly. one I doing, started, engagement up, is meeting finished give can't that I'm And week, me they're them, thank next town during stat. even actually customers. without the that So, got that. fact We've the with different attention. on me the We recently don't our doing, employee Without this leadership also how

engaged. are pleased very employees So, with our

Lisa Ellis

lot. Excellent, tough a thank a and in nice environment. Thanks you, results

Mike Salvino

Lisa. Thanks,

Operator

Equity take Rod question. DeepDive come And our Research. we will This Bourgeois will from next with

Rod Bourgeois

guys. Hey,

stabilization want your actions. a you're definitely to at going ask time, divestitures, you're cost COVID progress and I bunch about same I your where of with the and impacts parts on So, citing margins. with more recognize there's revenue moving but

prospects the it'd for So, thoughts great of your your be fiscal XXXX. to margin get rest on

helpful? say beyond you that would be If really little a can bit QX, even

Mike Salvino

again, thanks. to always Rod your good voice. hear And

right, context, transformation First, when first doing, look you all, let me at what a give of we're we're managing you journey. some

I alternative incredibly we now, obviously we're we're Second, added doing that well, very have managing strategic COVID-XX. another managing, we're good and progress. making meaning that we're think And then

think expanding for here's but I've the of don't time see it's going and again, to focused rest guidance, and quarter-on-quarter got in give the the that's on you. can entire QX what should So to I year. what right to I continue the margins, you're organization tell see

progress savings. Now, why XXX that? I say because good do that I in very million the against we're cost say making

estate, want define employee that, talked still I And on, the mean, to working have of levers employee prepared we centers, Now, new with right. already that comments. about I in beyond consolidation real experience. base like we're stuff what that multiple data a is that do my we and our

So, will working allow us the that the And folks are are estate. that. consolidation incredibly virtual that about excited real deal of with to

the know, technology, all use right, of is you playbook. that's of Second part my

good, but You The used past. when is Vinod. on very with that we I've DXC. very to technology focused here we the was that optimize optimize we my are then organization. put at delivery can starting ready And footprint started know, to not last, around organization more Bionics there's this in

stabilized got things like right, revenue customers. the All where we we've Okay, now with is.

on and a it contractor all hard that and we very mix know, the significant it's base, lot So the important. workforce is talk we've contractor looking about the And I pyramiding make a also are offshoring us, now sure All over contractors, if very look, a got because conversion, rate, focused that. okay. sees that definitely right then, And and it. at and portion right, employees, to is build feels culture, of we're you

would So, on the close all us the that say points Rod, look, will that thing these of whole benchmarks. industry summarizing gap I is help what

with only but also long-term. pleased going. Not where we're pretty I'm So, immediately,

Rod Bourgeois

quick a follow Great. And just up.

it's that significant of Sabre Cloud, You there? indicative Particularly were situation? relationship? mentioned a announced signing too, Sabre is can facing deal about or away that Is you Can going deal. from legacy a a other the of DXC a on a of more had situation service customer to DXC if just moving fixing what's Sabre seems case you case earlier Sabre switch now to accounts? is that talk the since I'm customer in at with it Google now interested a they that contract just challenges provider elaborate very

Mike Salvino

Okay, right? so, our Google. talk our thrilled, to about Sean. Sabre, to look just Rod cloud it apps, on literally front When we’re thrilled relationship, with security thrilled We're bringing be showcase working with it and be I fixing was analytics, right? to ITO working our a of And and We're wasn't the capability new Sabre. DXC, in our

you is its pipeline like which of is look that enterprise thing large deals, we've deals when in full best about that the deal, that the other deal, stack. So, got I indicative at

security do got cloud every it stack Roughly XX% XX engineering. then and and ITO. that is what And of the It's layer Now, is apps. final of by in I we single mean the is and that? XX% Roughly it analytics show.

by deal. right, thrilled, we're So, that

to where industry work, of other is through virtual move overnight, I is the clients that cloud. moving of end we industry, call XXX those is you take going though, the across balanced XX% critical is analysis the technical XXX top about right. over clarity process a of the was What case, we a our cloud, cloud next the thing that our the And about which ability to accounts. talked critical have to risk the earnings that that And the the cloud, which the we've feasibility cloud, about We to to aspired used modernized. remaining what is two during wanted went now we ITO work, won't approach. happen existing talk the work cloud, their very last when to work this; always cloud. All And but telling believed The in be all clients XX% that the think X%. execute industry the dropped of continues business percentage believe and years, will is in tell to you

approach. client hand, able do and why all engineering or be I tell had to ITO quarter right? a what cloud. got a that? this do all I And whether cloud. because do got that, you how the work, tell Now, me know engineers in Like DXC in we the to engineers. balanced is, you is to I what tell it's for do You you the It's it's was on-prem to

I because back got Sabre away, importantly, but I enterprise it's deal, like deal. that the like in So, us a not a said, just to full it more moving client was stack

you So that's are probably than Sabre the thoughts to hear, but deal. on my more those wanted

Rod Bourgeois

All guys. helpful. Thanks,

Operator

James take come next Morgan will question. we will our And This from Faucette with Stanley.

Unidentified Analyst

accounts Hey guys, Congrats some Jonathan challenged potentially from the this some is on quarter. the and work through considerations talk you on Can seeing accounts? the mixed you're for James. of the of pricing in those

Mike Salvino

Jonathan, thanks. So,

All margin. on I talked our right. just all, know, about of first you the So pricing,

very and and that. the are but also that sure we're margins obviously, growing those revenue Alright, work good. we're so making new stabilizing we the margins incredibly getting with around like on focused So, are revenue, disciplined we

fueled not and work. stack. analytics primarily We're the sell. the this DXC, what that to to apps. we engineering make the virtual is, across Luxoft. also top seeing mindset clients trusted seeing more that why notice time that Now, delivered seeing spend customer I've for to real ITO were and it cloud earnings said we're started and offering, the full people give our call reasons work security rebuilt. the the sure work is on mentioned one the I you by And it the people these cross We're is, only with relationships but accounts stack. them in is, the to pursuing people enterprise And XXX all as over are we're and then have That's the whole over again, during again, final again, to last take challenged layer. accounts move piece of seeing

So, shore layer because them some cost great ITO frankly in cases, can quite to of some savings. we cases, we've helped see down layer. some ways shut In the up that we've get

that's and just accounts. also All not Jonathan. see top we what that's but the accounts, across our right, it's So, XX for

Unidentified Analyst

horizontal Appreciate keeping also the the puts and taking new. around potentially of net sort evaluate Can you in through there. asset. and walk color the considerations takes and of you're terms that there that believe disclosure was BPS, I

Mike Salvino

BPO. mean, look if pretty getting is our feel and I first value these thing my thing clear by that my to think need pretty can't you we of create know, way you is feel comfortable All and foremost, Okay, deep our right we to. always out fix Yeah, if then strengths I'm and I That's right know, that shareholder of And customers? we're look, that, the to, it my background in can people? if in I at for and see well, for I alternatives, keeping the it. right, and, the that I can't can with that, know, business one with in we value clearly comfortable you the and past

you and work Paul landing Now, away strategic next deals, both And shouldn't before said, we're the having plan Like on got take that we trying a we've that, the workplace not the few basically okay. Jonathan. earnings immediately. call, said BPS still in to work alternatives

Unidentified Analyst

you. Thank helpful. Super

Operator

Shirvaikar with will we come our This take will from next Citi. And Ashwin question.

Ashwin Shirvaikar

Paul. Thank hi you. Hi Mike,

Mike Salvino

Hi, Ashwin.

Ashwin Shirvaikar

become start where uses HHS the down, see the leverage to leverage? inappropriate level on associated to the what good all, of I'm shouldn't and wanted more you likely? target thoughts to about you and pay by the sales, other progress, Because tactical. software have strategic getting an thinking, healthcare quarter-to-quarter your I both asking cash of be and First is post your

Mike Salvino

I'm of So, right. be whether Ashwin we're not much about it right. we laser dividends, acquisitions, buybacks, it whether the where the thanks be question, And the again, talk whether all it like the because to uses for is, that are potential guidance, alternative cash, – going focused

This quarter-to-quarter a now, you progress lot have all that seen is of work.

Okay, with the the just couldn't and we journey alternatives strategic know, and progress going transformation that. it's more on But thrilled be the timing that got we we're now comment you four COVID-XX, don't right with the look, with making. to on, think

Ashwin Shirvaikar

Got it.

Okay.

Paul Saleh

we're balance an Sheet, we we’re investment as really as profile. mentioned credit – is transactions bit you financial we're what will I stronger, flexibility. all in all and been today quite that work our and heard Xx to teed-up a be add our or these targets. of to our of enhance the two that, the position are debt-to-EBITDA particularly is committed the would less Ashwin, are grade liquidity probably would going solid again, that to financial just And have we two, Longer-term along, going maintain to already

Ashwin Shirvaikar

Understood.

customers, The cost the employees. versions one it it the fast, cutting cost because went this second prior of deep, I too cuts ask question and hurt the of hurt too cut is saving, about optimization, XXX

this you when there? faster, What these how is Any initiatives different? optimization So, you're are smarter? cost action taking? you color incremental say How doing are now specific

Mike Salvino

Okay.

right. key the this, is thing So,

reductions, delayering. call last and what and and look, we're customers on the in XXX can't the the cost that cost Because is focused the I've key, fix in out, take seen what With And said you I okay, it's this, right. right?

months with I Almost that my you noticed DXC in to that some You did the our say, six account. but to folks on using show would causing And individual validated and are rumblings, within up know, is confusion. detailed what got customers. you we've reviews layers have these that complexity I the I in seen first hear names

what done. want you about that up. and detailed because we've look, I'm proud also customers what know, what is, that's direct how to the And do simplified we're and important. doing, Okay, so that our very I'm doing doing line about are cleaning want the And teams. incredibly how make we're know, we're work a proud that that's, that's I we've sure organization, work, very you we've, to have the this I our and account our is to folks

say thing with is being would people. this, we're second our I transparent very The

our monthly people, words I Okay, our town do with I've going, where we're doing, talked be making we talk specific what people to we impact. halls, want the about customer are, it. we're and about

I organization, successful think at is basically three right why we're So, want know, two making Ashwin, I around being what simplifying thing the doing; impact, way and is last. then you understand, that's this versus of XXX things: we're you're of time the the I would fact impact, not the right, know the say the if then you we're and One, looking to delayering key; and last customer is, customer

Ashwin Shirvaikar

Understood. Thank that. for you

Operator

question. next take of from our America. will Kupferberg will And This Jason we come with Bank

Jason Kupferberg

X.X to second know that was on would GBS near-term book-to-bill again, the you're around think that based weighted I targeting expectation if conversion? more Good of you're seeing in similarly towards quarter, you afternoon. curious is the your I balanced be do or QX it'll what pipeline be

Mike Salvino

No.

between focused both when GIS. GBS look Xx. be it GBS, much I more balanced not will at will at on Actually, and them, they're definitely be it So,

meaningful do, about be get Paul take very Sabre, pipeline. to grown pipeline ITO I with significantly. on So, bit the like little it focus said when they're deals a balanced, longer has remember Those and that our like should but what but you

to harvest expect We that.

Jason Kupferberg

well, on had Maybe outsourcing XXX business. like legacy know of along that on update Is that's that? into a Can talked to all hear. over of investment okay, an some about you're from get the just, investing see lines, track that time, you still to million period follow-up good starting we just guys sort those Great, I sounds IP maybe those pre-COVID fruits plans? what

Mike Salvino

Jason is mean making pay-off. that, work. is right. basically, when That our mean, really what's I focus I our to customers right. that so said investment I All starting that’s done, on

last basically not those tools, million is the that we on on customers, you The as that So, automation, call, that folks. think All recognize rewarding And what's are this one for fact, I that's with DXC folks work. and pay detailed we're again, our We're And the I that right, it's leadership rewards in month. our work what important the right, I sure of folks rewarding making us the folks through getting closer increases. the forward. thing, helps All on us XXX that doing and that's said have team the training, doing. move making then some call to also they're but the layers, that four only that also know, happening. use sure account the our incredibly people, of last the

Jason Kupferberg

Thanks. Congrats on quarter. the

Mike Salvino

our Wolfe come Thanks, Peller All And Jason. guys. Research. from question with will thanks, next right, Darrin

a X.X of little us to of the more contracts, about the quarter a the a in for third a or great What's horizontal types on of for standpoint? having, is next we little consider obviously sense in obviously, hone and X.X offering pipeline with then new. but workflow for the going also standpoint actual clients this most others? you're just when on you're thinking quarter, – from quarter? to more What both bookings, exactly then it's the the think resonating the over that winning and a again, see question? that give bit next Can you're maybe about Just And your is similar you one

Mike Salvino

seeing board, Okay, so across pipeline. Darrin, significant pipeline, in we're said, the to obviously, pipeline, The an ITO. in like Paul back the increase most

Okay.

is, The would say the is that actually and I capability we little with it significant. is, have second resilient surprised how what thing bit a And I was. analytics engineering was

to all when and looked of into our that wasn't. you we piece we be thought was quarter, impacted So, our going more, know, pre, at the right, COVID numbers, selling it pre-actually this business

did they well. very fact, In

Okay.

cloud first move it's to is the we're that right about The second is, are That the the our as cloud. view What the to business we seeing engineers thing a engineers. I XX%. the the the help, of is means ITO what cloud, need easy public. move they balanced was now What is, of My people said approach. stuff and exactly and the

critical absolutely they doesn't the modernized. it of right, pivotal but seeing. to Those dealing role we're we're That play move does a cloud. And Other work, the we're it's of It what does, a move that's definitely We're some that mean is seeing to approach. balanced work, with want not in the with the Now it. cloud don't what that the cloud applications. dealing quick.

the modernized. estate ITO, Our the want IT clients

pipeline. that a balanced So, Darrin, a flavor. you gives It's hopefully

book-to-bill We deliver expect but across next about that Xx. quarter, GIS feel GBS a confident we to balanced do and

Darrin Peller

I'm Okay. you you of new. don't new get what that's that that have your, your the bookings choosing know, and one-third you to logos. have a sense that's they're competitors and That why trying those think really of clients your

the like and though is it a of conversions analytics, you're as on Sounds the saying your well. obviously, lot around capabilities cloud what

Mike Salvino

the right, to it's ability Well, the – it's migrate, work. also, ITO look

you single client mean, business I a we favor know, Okay. in us, walk everything's cloud. this because right. the ITO every All not is into for

not able the is So, us being [ASXXX], stuff deal deal mainframes. with that that with with has to Darrin, deal us Us being competition of able our unique. to to able all net-net of being kind that's

the for speaking that's for Google, up, show for for can huge. we cloud when then VMware, Microsoft, Amazon, and Okay,

keep it's why story. that's an so saying Okay, and I

Darrin Peller

Got sense. it. makes That a lot actually of

really I how challenged were seemed on trying the is implications accounts. Just when up to mean, about a talked uncovering that? was the done fix quick you you issues. like are it follow of different you're What

now For just no really couple that Mike, the can cannot uncover came do of feel first other and to quarters, forward rest? done, you like look CEO, you're now? you expecting you There's – to you're as put but that you issues,

Mike Salvino

probably every And look, many about, status Could call, me a these day times look, could in. as my was mean, a Because able every I week be than more of I, you would working. And call, what inquisitive all checking in customer customers sending get just Darrin I'm huge. us thought a if are I'm that and on, right, fashion. got time, then stuff not some they about opportunity tell DXC No, as there and that for to, certainly they're what's basically tell And all on being story right. does out emails and think goes other going they in be I about me just capability by, have, engaged. to they've is fact, constantly

Okay.

What And focused. customers that of fact not a engaged. thing I is that in, this. So in, again, customer position with like is DXC would the the part logo. It what new around This okay. are the believe like is finish we're we being like is

that about where is centricity mindset built-in, mentioned customer that's I when So, we're going.

so, we're go So, the not culture expect us again, that backwards. I dealing Alright, to with. do that's

Darrin Peller

Appreciate it. that guys Got Thanks. nice.

Operator

will will take Bergin come Bryan next our This we And question. with from Cowen.

Jared Levine

mobility the is This on in performed Jared a Can give update Levine the quick Bryan. and us you workplace quarter? on for actually business how

Mike Salvino

for converted we company pharmaceutical were the in business, the to that two work, nice XXX demand, One right us over in need. of we very that million for a a deals Jerry, in mobility saw for the one where details up because better time their showed quarter. another workplace again, we of up that company, even electronics we delivered. And large The compete TCV allowed

Paul, you So, the anything business? of performance about would add workplace the

Paul Saleh

Yes.

in pipeline environment of timing constant COVID side revenue pretty overall, some X%, to think do is the On close you quarter points I think currency, about looking strong the of of the few so, our but were the that down also in things to right again, it know, now. was first more in a customers I what

Jared Levine

are portfolio Okay great. the sales the any there being evaluated opportunistic at moment? within other And

Mike Salvino

the certainly our we enterprise fact is again, we We focus listen, in we've a of to at look one, and on our always doing lot Jerry, that work those technology got unlock continue will another The focus stack. four. value as great portfolio, we're on it. you especially added to know,

question. that So how that's, answer that's I’d

listen… So

Jared Levine

Yeah.

Mike Salvino

that will do of on position continue taking highlight our want care DXC thanks, our for allowed has has and This make is, transformation Yeah, our confident for like on in Jerry. QX in focus us are to customers momentum and to good one to strategy each to like growth based journey QX. progress I'd this I'd and I you of people. been always call our that to we thank look, every joining the What and

best. I you the operator, with and the that, families want wish call. all your close to So, And please

Operator

This your concludes for participation. today's call. Thank you

disconnect. now may You