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DXC Technology (DXC)

Participants
John Sweeney VP, IR
Mike Salvino CEO
Ken Sharp CFO
Ashwin Shirvaikar Citi
Bryan Bergin Cowen
Bryan Keane Deutsche Bank
Rod Bourgeois DeepDive
Brad Clark BMO
Lisa Ellis MoffettNathanson
Darrin Peller Wolfe Research
Jason Kupferberg Bank of America
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the DXC Technology's Fourth Quarter Fiscal Year 2022 Earnings Call. [Operator Instructions] Thank you. John Sweeney, Vice President of Investor Relations, you may begin your conference.

John Sweeney

Thank you, and good afternoon, everybody. I'm pleased that you're joining us for DXC Technology's Fourth Quarter and Full Year 2022 Earnings Call.

call and be and Ken the President Salvino, CFO. on CEO; and Sharp, speakers today Mike will our Our our EVP the This Investor will webcast being this webcast and accompany call that includes today. at discussion slides is Relations, dxc.com non-GAAP presentation we believe our measures, provide Today's financial which information useful certain to includes investors. respective SEC comparable directly GAAP the rules, reconciliation with most provide accordance a these and of In we measures to their measures. slides. and in the tables in in can the reconciliations release webcast be found These today's included earnings make call the forward-looking. we be comments Certain on will These which subject on to from to and statements known are expressed and could differ risks uncertain the those results uncertainties, call. cause actual materially A is XX-K included discussion on uncertainties filings. Form risks and report of and in other our these annual SEC Technology the update information assumes no I'd except to call, now law. like obligation presented the DXC remind on required that our by as to listeners DXC I'd and introduce And with Mike to Technology's that, Salvino. President like CEO, Mike?

Mike Salvino

call your There agenda a I with have John. doubt joining place. and the progress journey. driving hope I made Today's is DXC that well. no today, better doing we in and the our you will update are on transformation everyone appreciate is an Thanks, in begin families

with XXX we the update results we basis dramatically by FY made slides we've better I closing in will Russia. Ukraine qualitatively on discuss our numbers, what organic with quantitatively has progress Beginning accomplished opening the the And total then before remarks narrowed revenue have X put 'XX. questions. QX The will in place. next that and points. pleased and the DXC decline will a for I and show Next, I'm guidance. you 'XX some FY Ken finally, make up call

GIS. parts, and has negative strategy growth shrink the consistently declines GBS in X Our grow

GBS have X quarters achieved consecutive FY for growing strategy of consistently the 'XX. growth We in our by part first

we delivered Considering revenue was GIS, The margins, non-GAAP a expected EPS our $X.XX. While the point increase, which FY achieve in million 'XX. have shrink in free cash the better we we compared performance. FY indication basis plan adjusted clear can billion to and execute. that a of is that we free results, a improvement We in did team diluted year to declines up flow is highlight built our EBIT organic 'XX we cash This was XXX $X.X and a flow. drove $XXX

qualitative Now results, transformation the our discussing steps of let X turn me of each to journey. our

The businesses by industry and divesting first our of we've our step the how above our across is Russia's to was the at organization. score, created continue now by which well the colleagues, next care is progress highlighted to XX. now of XX of in taken not conflict that to we good invasion out Ukraine. care NPS our COVID fit increase through best portfolio people and by did XX% inspire we is strategy, Concerning and take which shaping Optimized step. range of our and made We drove cost practice costs customers,

market for lead where we Our business book-to-bill continue The is that the our the IT step 'XX. activities FY the cost can GIS fourth takeout numbers seize accelerate show industry. to in will in

of great book-to-bill stronger the finally, position. our team refinancing And X material X put a improving of result. financial our have free Our trailing job terms flow; done items foundation, a X.X these debt; cash XX-month weakness. of DXC in has in remediating All great Ken's financial initiatives: a is our executing and

a are to of focused conflict. stand and Ukraine, rapid on our continue thoughts with of the We resolution the people

significant business. Russia's not not invasion impact our has of will While has a been a and Ukraine tragedy, this have on

delivered we've X. we on take through the made you commitments how me Let on March

organization to great done region. thank coming for the to like in together colleagues. for customers for and across would I the our people a our excellence deliver colleagues job caring we've our First, DXC

we people, from journey commitment, past our starts honored and region few by caring and dedication transformation the over the with months. our are seen and people the throughout have we company Our in the

In of them many will have Romania. end like nondomestic began. Poland been and June, terms the employees our have X,XXX colleagues relocated the the and Ukraine, Russian since in successfully highlight also I our their we out corporate of to Ukraine, of successfully Russia. XX% to above moved productivity By Western of has And would we conflict

commitment to approximately we action $XXX market was region This year. exit and exited DXC' reduce million per our commitment Russian and fulfilled April, second to that took the exit our of Our In care business. and successfully the will of Russia. customers by colleague revenues

customer solid enabled better strong retention, has business deal has us with to conflict us continues. commitments as and Our execution made it our of position the have to effectively these

we've created FY we As we into within set our which that momentum team do DXC. 'XX, to customers consistently our for for need move This engineering leadership in will DXC in to grow. knows 'XX confidence is 'XX. a FY enables grown help is that GIS. FY comprised a and business This digital high is continue that business the clarity offerings of what gives value our offering, me and GBS GBS are our and by customers of highlighted

of digital produce are world's data. will one a of sensors largest know minimize that with to our growth and is example and engineering vital manufacturers. to sorts and skills them that want customers our automotive help number partner. create relationship Car In buyers customers. services customers our the us refer their of to disruption We all An cars use more vehicles, of as experience that make all to products, deep their relevant their experience fact, full a we

Modern and of GBS. failure of better why offering our performance comprised Our you our is this data set The use in just on the customers. driver us. Overall, maintenance, Based is value this The our and this a of mission performance of to expected FY end will Workplace low of on this In business improves FY Workplace for turn business, of work the financial customers to one of will in the improvement diagnostics revenue XX% value be improving lower improve margin but organic high Modern the focus DXC we're engineering provide DXC. in the From and is GIS. lowers total expect is currently priority GIS preemptive 'XX, roughly represents a teams for for where we financial differentiated, experience. 'XX, that's is and engineering the analysis. of can car's be watermark of high for to about year's labor that business by And a this in is top infrastructure/ITO. revenue example, growth see last driving it making is Modern the leads performance QX attention value cloud now We declines. It's organic anticipate offerings to organic critical, the fleet drive Workplace excited future positive. 'XX. see revenue revenues of driving

cost we data and cloud increase contracts, to by be taking our done will optimizing which costs, assets out are For margin, of to infrastructure/ITO, the and centres. contractor real committed fixing estate reducing

continue value to run will portfolio higher a customers that has Finally, DXC. our and to we company shape, to

call the turn let Now to over me Ken.

Ken Sharp

you, Thank Mike.

are is better Turning progress transformation a to much in journey. we doubt There our no place. our on

points. Our Russia's basis year-over-year, X.X%, to care EBIT were basis Adjusted declined invasion Russian margin our of colleagues Russian business. basis revenue expanded of exiting Ukraine. impacted Ukraine impacted to and of related QX due organic XXX by X.X%, margin taking our points XX Margins points by our XX and

of per book-to-bill up trailing share Non-GAAP $X.XX, X.XX. is earnings to compared XX-month diluted Our prior year. $X.XX

Moving income statement to our XX. on Slide

down basis points. expanded Interest is QX lower total, and income XX.X%, due In business was margin, debt higher from EPS to by percentage to by legacy efforts $X due benefited quarter, was Adjusted a optimization retirement as accelerated our utility During lower a due adjusted Europe. costs share XXX was financial sales margin yielded boosted as EBIT the increased refinancing. a in basis and results. and fourth structure. points of lower sale assets. Other anticipated higher gain up to count. our EBIT margin than on basis hiring gross a interest million unwinding points increased SG&A of XXX XXX

X by European tax $X.XX rate. costs; to below increased Ukraine; utility higher Russian invasion of QX guidance $X.XX aggregating Our due our EPS $X.XX came $X.XX: and for in $X.XX items

and 'XX, FY we costs Russia million, be of For colleagues XX%. our expect exiting additional and back tax taking rate will our care related normalized of to level a to

strategy and ultimately Turning to to business. to our to be portion the of move segment part A mix the continue business GBS a of key improve larger results. Mike's is

invasion of GBS by basis GBS points XXX For improved with of growth XXX the organic continues mix fourth impacted quarter quarter, to its GBS points due Russian XX.X%. to about our growth X.X%. of consecutive was Ukraine. basis

profit XXX XXX year-over-year. revenue to impacted of margin benefiting GIS an well sale margins on about points improvement basis declined GBS was organic operational a as points GBS profit the points were from GIS gain XX.X%, basis was Our invasion improvements X.X%, down Russia's margin due XXX X%. by of of as Ukraine. basis assets.

the work forward. margin continue to We move plans GIS to

parts: the We articulated, revenue Mike has which IT outsourcing X organic second, As GIS strategy we our consistently growth first, good see business. success declines. moderate early about; feel our with grow GBS,

comprised and each GBS offerings. of are Our GIS X businesses

due Engineering up our organic its X.X% Turning decreased and offerings. to strong growth, continued Applications Analytics GBS XX.X%. timing. to

XX.X%. in QX. $XXX million EPS to revenue, applications growth We expect of down return generated to

level quarters our and X.X% ability the Infrastructure prior represents approximately due win declines a or was It's Modern offerings. digits quarter of higher-than-normal our investments watermark XXX rate. Cloud of million X.X%. the its to down see growth in Outsourcing with Modern low the IT quarter GIS for and We the single low points Workplace X to year Workplace based consecutive that basis great as book-to-bill our on decline market. was Moving a believe in in resale to a X.XX. of of business included down and compare Security the to the for XX.X% $XX difficult a fourth with of moderated

updates plan report 'XX, offerings. to our to operate X FY we For we and how make

reduced together; restructuring IPO business were there our entire insurance remain will combine million. target level expense Interest business; infrastructure will stand-alone. $XXX bring XX, and And be with we and and process software is the assets TSI third, Slide to second, year. debt infrastructure First, significantly. cloud our was our our and and down security reduced banking related debt outsourcing

We $XXX operating lease payments by million. also reduced

Lastly, capital roughly down as percentage demonstrates progress look lease cash a presents XX% 'XX a forward. translates FY in and improve to FY how opportunity of and expenditures XX significant flow. in our as X% revenue generation improved capital was cash into Slide 'XX, from originations we

that, billion a and ultimately in 'XX free Free towards an in FY the sit flow. of improvement leases should confidence of $X.X was come and related delivering operations FY quarters last has we longer-term Our in while of solid performance payments I gives quarter this 'XX financing Cash we've the cash platform inflow work free cash. provides X guidance million. $XXX flow totaled build million. cash us note off capital our cash of in to that for $XX of flow the quarter outside as from

For flow, delivered our the guidance full we million. of million free $XXX exceeding cash $XXX of year, initial

our improving TSI foundation mentioned program. restructuring a expense, our free earlier, our strengthening on the balance executing achieved and We allocation sheet, capital Mike transparency As reducing performance, into improving flow, in lot significantly place. our is year, better financial in and a cash much

margins particularly our focused to providing on Officer, Chief details much Operating by Chris pivot will on that led is financial Drumgoole. efforts, GIS business improved, our foundation more improving we optimization Now our

XX. to Turning Chart

on Let improving top that a me Mike what discussed a economics GIS bit is earlier expand priority.

ensure is and optimization that will optimizing Let's allow first, think our a margins. X second, profitable disciplined focus committed signing On with to execution terms. about execution, putting processes, in driving parts: team on metrics place this incentives to with in us economic with starts costs expand disciplined business to revenues; favorable and higher-quality new improving business disciplined our

flow. revenue our appropriate balance away We does to sell and margins are moving sheet cash not from with quality leveraging yield work that

us, we make of level clearly actively can relationships and are invest whether underperforming business. but ensure also it our a We underutilized these feel optimization. mix. GIS our of a us in and improved. the has to to centers margin allow provide to buildings, We offshore to a lot believe that circa software proper as underperforming renewing we the make levers XX%. opportunity addressing than in return to of competitive contractors, ever, enough service Cost can delivery more or high solutioning office is data our We improve standardization contracts front have There's agreements, landscape changes

million XX.X We XX. returned on shareholders, or our shares outstanding our Slide to allocation $XXX capital to million shares. over Moving repurchasing of X%

XX% the to We expect our million X repurchase $XXX shares about outstanding additional quarters. next over of or an

stock undervalued. to believe our We is continue

our to when a $X.X our over billion. target debt As any at expect reminder, we cash debt deploy level, is

cash to organic Additionally, portfolio-shaping, growth. ensuring portfolio-shaping generate disclosed to drive have expect we we we $XXX are to Related committed from portfolio million the of to our right

We reduce on critical our focus more to will focus complexity portfolio GIS the continually management to assess to of parts specific strategy time aligned on our to portfolio with is creation and allow the value our and business. ensure

Moving to be will that our are Mike remediated. is is and score not vein, committed clear, governance. we corporate governance and weakness our not To our improving I low brand. to be governance. In

feedback to proactively our engaged our our As many obtained of feedback practices. their and their pay part of efforts we used reshape shareholders, say-on-pay, pass to have

committed our will to that improvements You make detailed can we proxy. fully the in be see

FY key items billion. to are in guidance. to revenue our $XX.X of X addressing guidance. Turning $XX.XX Revenue we our 'XX billion

be headwind revenue on strengthening currency is million of approximately U.S. $XXX X% closed, X.X% the about by almost and Foreign or expected are to a announced lower $XXX divestitures or million. that based dollar,

of in divestitures margin in you Bank, including GIS. declines X% combination minus X.X% revenue and accordingly. X%, and additional GBS moderating continued Organic Fondsdepot which is process, to minus update of X%. of growth in EBIT Adjusted have growth to we'll We a

in our expected takes put reposition noncash of business to $XXX in as for overfunded. place as pension we it care decline exceeding a assets, several our our 'XX income and pension million Russia pension The guidance pension is returns noncash into on $XX margin better Our and exit our due associated Ukraine in pension a and with consideration plans taking Russia. of are FY of income costs to costs our million colleagues

to de-risking $XXX million. or earnings on our XX% diluted are a per down $X.XX at flow Free sheet. Non-GAAP and locking $X.XX the plans midpoint. further growth We focused these balance share cash

$X.XX million FY billion for revenue XXX guidance X.X%. about revenue quarter currency X% X.X XXX billion, foreign ‘XX to the Divestitures expected of are lower earnings headwinds. range of due margin to Our to decline Non-GAAP reduce in cash a of Adjusted by to estimated Ukraine X.X% Free per share income Organic high first of to of pension be the payments X.X% million. X% in of due minus $X.XX. seasonally and $XX our QX. and of to to cash cost X.XX the to diluted noncash EBIT about revenue a reposition to million business. million Russia of is or level flow $XXX

X for are We in our and years. journey belief the our This 'XX. to next company's progress execute reaffirming reflects capability our strong transformation guidance the fiscal over our FY on

cash. by goals, DXC. we've As we 'XX of issues that far the transparency our as process reshaping realize generation think we hang come our And it's FY [Indiscernible] ability cash grow our for and we generate generate important are that about and the to cash investability on higher organically portfolio the improved the customers of to of improved year-over-year financials We drive how flow. our to value so $X.X and impacted tackled the negatively can to we've billion. in We

As we we in let point better 'XX, X that close FY out key on place. me a demonstrate points are

now First, FY GBS 'XX X consecutive grown and quarters. grew has before never

no double is GIS longer digits. Second, declining

I'll 'XX, FY for positive which the this well to With back sets bring for momentum his into will turn up FY 'XX. final We Mike that, thoughts. us call

Mike Salvino

in excellent foundation. our we I DXC performance driving made strong our financial better that a progress building FY on Ken. Thanks, transformation place. In a agree financial is and journey, 'XX,

colleagues. of Ukraine tragedy, tremendous a team job of While done care has our is taking our Russia's invasion a

Our better delivery has business Analytics a will resilient, place. more in risk. and It and geopolitical far a more is diversified emerge lower global Engineering platform has

manage situation has it is unfortunate, and will not have business. we significant this While have our impact a not to able been it well, and on

in its fully we has we open excited 'XX. put on questions. call continue operator, and My leadership our a how We embark clarity actions and Over have and for FY clear the term. that is that, on years, our momentum last to DXC And the expect please better place, improve accomplish longer the on deliver to with far it trajectory. portfolio to that X.X team need I'm to up

Operator

Shirvaikar. Our question line Instructions] Ashwin [Operator the first of comes from

Mike Salvino

How you Ashwin, it's Mike. are doing?

Ashwin Shirvaikar

I'm good.

said Sorry, I that I my after need improved I performance. was mute. Figured guess first the with contracts that learned -- question X it is years. to of mention regards improvement

be how what when again, there if problem than there? got help that and is of contracts. different first any with There were you us you would come contracts So are you the out? Could kind And that? gets problem question

Mike Salvino

Okay.

got problem the have time team said was that do a with since this contracts. them to the been is my been I've majority team first tremendous our What the has management clarity original Ashwin, nothing This over seat those for us So here year. fixing -- now. of in I

they teams, we policies, clarity been literally business strategies, to never that GIS what have And their the their need the procedures. now on their better. to running So are their we has do

raising good at the on looks what bar like we're So here DXC.

make So I the contracts, fixing we're And about and just will run if look, go contracts going not some we getting when we we're appropriate not think COLA, get to the margin. COLA. where don't of

business. we're sure got making focus fixed. we've taking a There's of basically these not But So click a things on laser this on a up these managing contracts. clearly, ton get

Ken Sharp

jump quick, in to too. real just Ashwin, Maybe Yes.

we problem and I his margins. we I think actually we customer a did Mike about job that. contracts improving it think And generate we where previously, contracts, the phenomenal talk When team had it's around when was think better that relationship just underperforming can side.

right that to and we we're I focus. our think customers. move business our ought to think And we we and to have investing be business that’s and create the forward our happy is And believe a ensure margins just additive in able the an this as business. we that have We workforce, sustainable

Mike Salvino

market, know But this X Ashwin, there's things you you at. in look

and the We're you're scope is You the been fix continue business, X.X% and we've to Page to to floating do, X%. it, for around, margin. make call all. There's GIS the sure score. we chance NPS And that we're appropriate of to the at why that measures problem there our paid you not in like go second category the the look sure thing got that at the NPS getting bunch gave I -- in no the take right then I is going be make on XX, if clients -- contract you score track. are that's But that XX our delivery. we would not had We've a

Ashwin Shirvaikar

along. It said and of the right. like wage timing what -- that with that, inflation That's what things you and are Right, are fixing it you you're sounds there go that like. environment based as pricing on sounds just given these things

The Could regards perhaps you might know perhaps and walk table, other clarity with have through potential it. you what's on I pensions, of to pension. the I a question that? missed -- EPS just -- opportunity upside -- mentioned with size some there's sizing the

Ken Sharp

Yes.

Ashwin, income our pension pension our So expense. than greater runs generally

rates last year. a up. down noncash, gap, And couple a GAAP it'll be is crept have reasons, the running of this around $XXX million have It we was a year, So profit. somewhere million One interest certainly right? $XXX to there's and and it's

certainly plan. our with that I would has surpluses. benefit if we everybody maybe to investments. while we them can more impacts also move that to potential And pension a I'm those that some And to unlock all plans. well in see to defined maybe within thoughtful do that started surplus we've figure bit looking pensions that, how and conservative wind We've into, the think, think I relatively a And argue, out participants certainly these rules. have of we're trying little lock I down down been, the with in

Operator

line with Bryan Your from the comes next question Cowen. Bergin of

Bryan Bergin

that on portfolio-shaping? us the give the there? can In margin assumption and the outlook. first impact there quantify flow the 'XX, you or free divestitures Just or can a any fiscal you any clarification Was on cash sense off,

Ken Sharp

to impact Yes. be at. runs about roughly I'd look what our at business the margin

say a So but maybe range to right we're X% I side, wouldn't bit on it's the margin the at. accretive arguably, little around X.X%

Bryan Bergin

to on cash piece, specifically free the clarify call to out And flow, just nothing that? Okay. divestiture

Ken Sharp

free point. this No, flow we're on I cash I the think at piece. mean, good

Bryan Bergin

Okay.

number, chunky So in 'XX. that measures you we of you're did in as proactive have then lot when look a anything at Do obviously well? million you fiscal undertaking there XXX that

Ken Sharp

bit We free try of to the cash flow. make a sure on leave we room

deal pops So stuff the time with time. that to of we up can some legacy from

I that would to general. with tried in be we've say So thoughtful

Bryan Bergin

Okay. just last for And then you. one

macro. the on Just

if hearing And just change decision-making you can So how on what put did any notable from you a in about sense of you economic outlook, seen -- built Ukraine kind recent Russia there? you're in kind when Just what 'XX fiscal thought us and aside, you the of clients? weeks? you give you've in client environment build

Mike Salvino

I this. looked it mean we at like

first big book-to-bill is indicator we The that that’s was just our a thing X.X. delivered

and so seeing we're different So about Brian, yet. a commented, the the heard headwinds. I look we have we have not way seen X really like that it we businesses. Europe I and is -- at not lot forth, And I've

Engineering we and situation. that by the We we business business where highlighted XX%, consistently and And the grew that have Ukraine GBS almost had we've is that grown. deal with Analytics that is and Russian to

is number, and a environment. So increases that pass in to we've on good an this seen price XX.X% ability very

years. So annuity then This XX-plus is business outsourcing you turn business to the in I've for GIS. been stream. And an

thing our So environment, has that GIS terms have it, because put as And let’s of coming in then it the demand, will we've by the are holds you is the GIS got way holds some tell up. to good the contracts protected providers now mission-critical competitive relates got That changed of we've become hands. clauses. systems. this I landscape the it COLA thing downturns, And safe we pair business. of up in in long-term just And

margin inflation if this and and increases, and margin, adjustments put Ukraine economic some look, of the I into appropriate we terms I Russia we in salary inflation costs going expanded for keep investments headwinds, the in utility business. is when the that conservative, think look more cost, Now at then

One that things last really the a you we're to do business invest lean then at pretty in will has going people, heavily. see nice And thing would Brian. the for I insurance nugget been of that is look that us the is us into

number So our losing we am people? our definitely Otherwise, industry a wouldn't in centers with I of are network people? up the we for situation. Ukraine, attract to good scale key as And the attract and and good of And attrition averages. and signal the the Russia me global have with was numbers deal delivery can dealt could But we middle right the to Ukraine people. Russian we had effectively

tell don't we as aggressive think to color I get we 'XX? our on overly I viewpoint done. enough unoptimistic go. around overly steady what So how would we're I was trying we're saw give or you you Did

Bryan Bergin

it. Appreciate great. was That Yes.

Operator

of Keane Your the next line Bryan Deutsche Bank. comes from with question

Bryan Keane

probably I bit it expected. Mike, I let me ask history DXC, a typically guess little the GIS was weaker the it's And in of question differently. than know expected. been than weaker

a So work when is planning worked many Slide GIS? going plans improve improve haven’t it. to plan XX, to to this Why you have

Mike Salvino

do years, team can been got I've I’ve this X.X tell what finally to at and for Bryan, the now is it. I

we and So with the let was make #X the you sure to customers, score. delivering clearly NPS just to back those are for strategy. we me Strategy were take

relationship. make we thing the second build that then continue to to The sure was

if the have could and so conversations wanted change scope open-minded move we So the to we forth. scope,

the can those XXX. some Clients think of of think to we're third doesn't deal balance to proactive adjust. sheet this, The we that continue can contracts, for is what to go is some honing deal the to There's proactive. software. dollars us. with stuff I tell decrease quite to thing flow of into to the also them world. being doing. be people folks on But There and shaping give directly margin. computers that That's to purchase to our you do things we're should through should start we we need with I now of that may to at centers, look them be we need need be that Like when move the literally data really don't frankly, do, clients plenty the go what purchase we or, instance, Then around can and contractors, back the we

not can't Bryan, fact see any we're And in literally do you of right okay? that delivering, place. the got then when You this, I've the can team

The running say, changed, dollars. People second about your we've now being I That's to totally now let estates to IT look their That's coming that environment “hey, last us I in these making relationships. has sure is us over. competitive at investment us people. in That's contracts. don't tip and are of is, run -- the my because think, think having looked us, different mentioned, made DXC thing GIS, okay? at that's that hard answer, the not

competitive like kind the I So of environment.

on revenue that's side. the So

side, the like I this. On preparing cost been for said, we've

looking million while, roughly in a long all in estate. capacity The we've at center year you haven't thing had Slide team thing nice to I at data do. for we're on for and Ken maps job a we what cost. did built think going 'XX. now his been data the tackle $XX and going real real took last a we've contractors estate. to and touched The next going is XX tackle that we're is looking They know out yet teams that with out centers, to we're the which little

We strategy, to but way go can't a fact that of got we've answering of backwards. of is question, part sort It's that. GBS the of preparing love your grow been where for, something that's So GBS long-winded this while. the for to is. continue a

the was to meant strategy second is what GIS, growth of we're do. The fix which to going part

Bryan Keane

looks guidance, the didn't And fiscal it situation. Got a little a some But helpful. follow-up. on the be that's lighter 'XX may the year change. it. due of to No, 'XX Ukraine-Russian like as Ken, fiscal especially just year call-outs, unfortunate

hundred of year at points So points grow margins basis in 'XX XXX over basis least fiscal to couple you're a 'XX revenue. going in and

fiscal you maybe jump. that looks can jump, about one-timers 'XX there 'XX? like and the in that to from just It help but jump a are sizable some improvements some talk So year there

Mike Salvino

Bryan, take question. me let that Well,

straight look in next same the flow, results delivered point what we've at EBIT, basis adjusted you on the in over at at XX free done you if look So deliver months. you months, look XXX basis have 'XX, trajectory the We going hands point a the what been has like organic okay? policies team you in gives to to to we're over This what I improvement keep at a in look the Page and management cash improvement X and basically we we've team XXX We that revenue, past clear. definitely confidence XX never I around, this be me said, their on, the now the never strategy, their was literally would place, team, procedures back like is got around said line. thing coming the

literally, we point. see key X, to math that's 'XX. So the simple a And that's is take where pretty with you you landed Page do

usually the that color some upper team execute, the that you'll continue, we'll say deliver it. this we will which be only at date, way we we've continue not 'XX guidance, looked end. Hopefully, that see FY gives to the you we'll you to on on on If done will

Operator

of line the from DeepDive. with comes question next Bourgeois Your Rod

Rod Bourgeois

a Okay, with guys. question portfolio-shaping. I want start to about

how talk DXC' your criteria give and comments portfolio about mentioned in your would on portfolio-shaping hoping GIS. thoughts on You refinements your you overall for was I portfolio-shaping value. us could enhance

Mike Salvino

business, when for -- All our -- banks, talk the about right. systems, German we the same through criteria just look process. go let's question. The is Japan thanks they the Fixnetix, at all Israel the X because Rob,

and to of you've businesses out So this turn seen now 'XX, control we've us value. that that literally is the business, we've in get the really now our will it's sort first made to got progress high thing

So none. what do stuff. second Slide I background, again, my mean that's mean XX, can by with we that? to engineering GBS that business the I see do, all digital you work that's on The

value value customers. for that's So high high for DXC our and

that look something that's all to want first So looking trigger right, high business. we so the when is that start value, that at, at we'll at

complexity. is one second The

X.X drive we over trying to the the seat manage. years, I've I've to been since You have down the know complexity things sat of in

complexity towards if do. that So that's our matter, and management increase what can the focus businesses decrease the we we'll

the we 'XX divesting a business, we we accelerate help those And getting by then Third And a at if one will. look last valuation. lot. FY a good can is targets is to

think of would good those be divesting And didn't you think can of it. unlock DXC. and we we'll of of the valuation, at for significant sum with parts a the then would on that we the if see parts do can value we one if something sum I in we the remiss parts look

accelerate, valuation, if into it's simply value, if it good a if can 'XX it can we put, FY if and get DXC it. get gets -- we'll if reduce we can So consider to check; the we check; numbers, complexity, to higher check;

-- banks So did done, Rob. That's German the so and that's what we systems, forth. Fixnetix, what and we've with Japan

it. that gives little hopefully, So think on about we how you a detail more bit

Rod Bourgeois

encouraging. pretty for guidance workplace the And it's revenues, it. Got

workplace fiscal by to guiding the getting positive What in growth levers the the heading in You're the that to end direction? you get revenues are the that ability are giving of confidence year. to

Mike Salvino

Two levers.

work The first look at thing much. fix a exact did of minus gone to which ITO, saying X% all calls because pop we Workplace Workplace we didn't ITO, from ITO, see very other quarter the contracts. a beginning watermark, year revenue now is is year, mean you -- same over the chunky Modern below one just we to X%. the the probably going has like we comes on is basically and thing the that confidence to in I've Rob, the minus When not investment only fourth see But approach done at the that call for it, we has when of The us last but the stable, large the gives been made year, in that we've lot took last in Modern pieces. the

business pretty we've is we FY 'XX that when enough. I the for revenue in quick So some converted you, the know know new sold. over us, starting Workplace But hasn't the been is positive. to for and clearly book-to-bill can as Modern see what on, going X to doing that exactly we we've last of coming many of months convert

Operator

line of Bachman from Keith comes question next Your with BMO. the

Brad Clark

others? Can the What deeper some little to visit like comment dive with some made have conversations just with increases. guess, environment? seen pricing you the pricing This have is and the price I to Brad wanted to Keith. that pass you on and for into Clark bit conversation look a you on the ability do customers? Where openness, more customers I

Mike Salvino

the Okay. question. Thanks for

value and right, value a amount Engineering create a the forward pretty conversation we to, these we've can think the that pilot the engineering and After team to recruit we've space in a work what's these the the certain increase moving position of that the critical usually because and And moving conversation create we up, create look, And to created is staffing all know space. get going how why terms going we are people in value to and get. look is quick we're we're got engineers in as unique continue price forth, forward? the Analytics at simple. goes done. the to to of That's so engineers So well, doing

to they're those moved because price a projects. be because So the can in bit, of other resources, us about don't such to just has of increase terms resources demand, customers because a quite being been uptick talks give everybody they an the use number to quickly there little able it if a in all

been because in. thrilled conversation. the leaning it I've basically that's we've So been about

folks. of bench, And quick. Our better get you for much bench can pretty that a gets when as got you've cleared as those low we money

Operator

line of MoffettNathanson. Lisa question from Ellis Your the next with comes

Lisa Ellis

for book-to-bill. trailing me was on XX-month the First one

'XX X% bridge You FX factors other numbers. just is Is the weakness Like a underneath there there? Or reconcile bit? kind of an revenue FY Can or those really number. I'm like running us there highlighted X.XX. then on are to you down that's X guide impact? organic a the those help what is at strong just drivers But X% in basis. That's an backlog? the X levers

Mike Salvino

That us 'XX taking work. months oh, the is to revenue or outsourcing look, some literally No convert to is So -- X that to it's a FX like Well, but jump. is converts question -- impact, the don't project-based. I chunks months, literally stuff our a large the and say, was you're bringing 'XX jump FY forget X looks on that above the large of of Lisa. contracts, not if deals a That's quickly, okay? lot convert overnight. call

months between So X and know take convert. anywhere those -- and you to X

where by comments converted. my being they're tell can You

is because guide on come of in guide revenue portion is the reason the that So why that should FY 'XX. back the

Lisa Ellis

it. Got

helpful. Yes. Okay. Super

So there's like there a the duration in side. kind ITO of on impact

clients these into a you've of relationship that on of can -- work the like you some the you actually piece doing of how improving might actions question, work of now migration the on right, migrating tremendously these Second of with I that, an just clients with this helping investments workloads give of last a GIS. business, X over looking said, was much they're actions. couple affecting with your us this? good in I that's doing was for And cloud at as list modernizing years? bit Slide of cloud. just clients Is the improved update that or the kind be many little clients

Mike Salvino

there. we -- that's cloud that work not I and infrastructure do. that highlighted. there's Ken ton the it's Yes. stuff, that things when ITO, The I in just one a And definitely Lisa, but cloud on-prem the cloud -- mean, of it's only look at of

and they person team journey going I away. think you're guys get now. And look are control, you that's As taking GBS you out talked move data we infrastructure. get these data also to but do okay, definitely we're start should the we're running there that? in poking delivering hired on of to center been the point what what Should to go But the code out. place. detail that the we've what that So that of really not assets we under say, more lot the assets fully in even only on-prem? you stay great. stuff the there. after this that's person. into data I talking that was when the optimizing about we're we first that contracts, cloud? that's means. has utilized? for That's But QX, in can I balance we've the been or contracts Clarity. on, I GIS And assets And the about in mean them. estate, then here the when thing that said, that's I've at that's know center cost the we do hey, optimizing that And is take some like got is a the Should to we're to centers, GIS we're about, going this That's our real they the cloud clearly data start time mean is now how balance on. not and what centers the a I've first How the

are and So has to means really good good now to we're stayed here. do that talent. talent that But trying got we've starting what drive

Lisa. that gives color, you So enough hopefully,

Operator

Wolfe Darrin Your of Peller line Research. question the next with from comes

Darrin Peller

areas mean key earlier, which, on out strong question rates first those looking lift the is should called of these point. at the ship some that's lift if whole sustainable, metrics My in just some here mean, that side, rising tide growth I I the we were -- again, very the at probably to GBS

business I you alluding think question GIS it's to just earlier, like of a were the inflecting.

to question like well with that What fiscal kind later year bit the in what about it of terms contracts big side of the sort exactly remind resonating drive And follow-up are you're path? now what's a that is to more going what's And coming GIS Lisa's in term so coming booking? as little work in? going you in booking that as, to mind, contracts now? really see the types -- of us your can I you Brian's, think, of in bit into resonating And a that's big that business

Mike Salvino

months. trailing on. you I book-to-bill, is is for XX That's he's Modern that's about at these a to have X.XX And then So the while – a started you line door, Workplace. XXX,XXX Daniel we That at going lot right, good we first that think the these to revenue. When book-to-bill go the lost We the think, at up a job. revenue then the done great built has backlog clients have one and and all looking mean all XX,XXX, right, those of what numbers, in the right, that negative contracts kept that indicator it. bottom that a it a out look a showing when people. bring takes was we --

one contracts. Modern large said, first Workplace. I So the those is our And like are

one that competitive the keep within second is ITO. talking about I The environment

And going modernizing I'm literally means on-prem get both updating be and that also that can servers. I'm in. into So I'm I'm environment. ITO cloud. that's networks work, competitive not okay? to detail updating So more on the going

safe, hear it pair team, is Let's is financially client hands, nice just to that safe references. good of say good DXC a

guys checks. your channel You own do

You know what you're hearing.

price. it it, there. right So we're what, at go there's work and going to you And had get going know be get out go to we're the to

there. So that's our attitude

Darrin Peller

I Okay, ask okay. one Can just followup --

Mike Salvino

thing you that When is like sees mentioned Darrin hang or the hopefully you No, literally business. our case. now that, XX.X% is on business, our one look the at GBS half on of that Ken did everybody make because GBS. something a almost point not has sec, other been

we anybody a grown value. journey, billion So we digital have that's compete of stuff is, -- high can business $X.X we throughout now this that what, that transformation with

about to GIS, growing. couple We I DXC. So I pleased and we be keep business like more of to more couldn't the a that future got that. do things

Sorry about --

Darrin Peller

reiterated. Obviously, just now just when think, from, it to that. lot be a And amount was financials, think appreciate It next already. just a saying Very $XXX team. the I step the I seems which I made it. curious on done would what great. really you've so bridge you're quickly That's about 'XX, for or $X.X -- says into, and I'm guess like on quick And million we bridge think billion huge X the the you've

Ken Sharp

talking bridge one FY things the You're Look, 'XX. is -- we of into about this

Darrin Peller

Exactly. Yes.

Ken Sharp

Yes.

progress, have we I we've the of one think pretty business. $X.X of to year that And kind beat certainly significantly, that'll go right, a in got great result. some the this the impact certainly 'XX billion 'XX, -- is think which of of restructuring down. you cash flow, TSI basically our things expense the When for it, been This so details Sorry. when guide these in about change, we is

think CapEx, couple uses X% very So running We're of a dollars focused CapEx. cash. of The business on there. hundred been X%, million has

think there's I turn that certainly knobs there. So some

talk we and things. deploy heard more need to about You We Mike how get passing definitely thoughtful through software with kind those of capital.

So capital I portfolio. as think cash well. as just improvement focus to little there working on, there And in the bit a expect it because consumed actually consume touch is a Margin pretty don't year, going of be can we big which then well. we this our it forward bank won't

bank it flow, guess, a the how but cash I go sounds and has on the impact negative works. up deposits odd, that's, down, when So accounting which actually

I ultimately So think portfolio. the that'll of out be

comfortable last $X.X keep we this them. got we've We working we'll So And on levers, we're that's think and our think did to lot at just year. a billion. bridge what of pretty I

Mike Salvino

from the commitment expense, restructuring lot X drive to detail, more around our whether But I good all right, with the -- There's it opportunities and a with fiscally our basis, the literally we're it's at, the that about. billion keep talks that like pleased sure the it's making of and a quarterly $X around is continue way cash smart keeping $XXX Ken to Whether us very it's now to literally million it interest has about then the that of pieces the capital and down. something roughly doing allocation. leases, all Darrin, with Ken what which let key starting our and look TSI. be that on over XX are. in is XX right, I'll things deck, we couldn't taking

our very -- but Ken that home. finance a has So nice I with done team a driving job effort, team know new it's

Ken Sharp

our Mike journey, about Yes. you burning started on said, Maybe capital $XXX which think they were leases, million. if something just around we even when touch the

the all to hanging ticking that flow. with to about we Mike's outside more think more becomes million, guided point sits $X.X down. number this I meaningful on $XXX And that even cash, year to of cash free billion

think that's result great as we well. So just a

Mike Salvino

one at the the hour, top we’re know can. if I question let’s but more Josh, take of we

Operator

Instructions] questions. [Operator I'll Mike to no closing Salvino turn call for There are the back remarks. further

apologies. My Sorry.

from question a of Jason from have We Bank Kupferberg America.

Jason Kupferberg

this I curious be all pricing, this the But revenue revenue just commentary I'll net the just of organic wondering, there quick. growth positive assumption just to real an I’m growth? I'm is And in at wrap trying outlook pricing you're year? to fiscal around know given expect for up. year breakeven you exit do

Mike Salvino

No.

the I do the to this looking we've come Jason, the that growth. the and trajectory. been we is business So We're put revenue got X.X to we said, would I at have the like rhythm the pricing, the at to was into on thing said, done now of be didn't back mean, I done right? What for the like shown years. that years have. literally delivering. I going I deliver doing momentum line. a This never straight over that comment -- just got we We next X what just

lot 'XX. in got So I I a in mean good sites of can and our guide I us getting there. think for definitely see of confidence terms we've 'XX got a

So Jason, thanks.

a Sorry, bit. held were up little you

couldn't definitely our about I team 'XX in we've achieving be our the -- and, all, and 'XX goals. of appreciate leave momentum FY team everyone call. first forward closing, ultimately, to longer-term in looking of carrying and joining with our that with look, want I more I the So achieved into momentum just you that pleased

So a the weekend. Josh, nice with close please hopefully, call. that, has holiday And everybody

Operator

conference joining. concludes for Thank call. you This today's

disconnect. now may You