DXC - Earnings call transcript Q3 2025

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Operator

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the DXC Technology Third Quarter Fiscal Year '25 Earnings Conference Call. [Operator Instructions] And I would now like to turn the conference over to Roger Sachs, Head of Investor Relations. Roger, you may begin.

Roger Sachs

operator. you, Thank and call. everybody, DXC third Technology's Good welcome earnings quarter afternoon, to We review chance in a hope had you to section DXC's the of our website. IR release earnings and Chief Financial call Fernandez, are Speakers Officer. Rob on our our today's President Bene, Del CEO; Raul and

results you Rob performance will our update will will well our you our as financial then questions. the outlook some overview be on quarter and as update agenda take then fourth thoughts Raul will walk an Our an full year on our for your as Rob provide quarter. on follows. of and strategic initiatives. provide and Raul through our

made and expressed from comments subject those today's could and the to forward-looking to uncertainties call. materially Certain on risks call cause during are that actual results

find statements other We SEC report risks in and You of to today's filings. forward-looking during those call. and uncertainties updating on XX-K can our details any Form commit do not annual

Additionally, provide non-GAAP during the GAAP this call, in that measures release. Reconciliations are today's are information the most earnings our useful we to comparable in included discussing investors. measures financial that to tables we will be believe

let call Raul. over turn with me to And that, the

Raul Fernandez

us and earnings Good today Roger. for fiscal Thank you, for quarter thank call. you third afternoon, everyone, our joining XXXX

I'm pleased with the third quarter performance.

changes EPS came in all execution model is guidance. adjusted non-GAAP and reflected and disciplined operating focus on Revenue, ahead Our margin in our EBIT results. of

We flow. also delivered free strong cash

uptick driving off, meaningful paying in is approach a go-to-market revamped bookings. Our

convinced the ever path. right on year Reflecting I'm we that my first on are CEO, than as more

profitable and priority sustainable drive revenue Our top is to growth.

management centricity, culture a team and Our grounded is establishing evolving accountability. client performance in leadership

in market. positioned innovative, to more As a becoming result, faster the win and we're better

services, which complementary invest have and plan of grow. transformative portfolio to We all strong of IT in and we a

on basis; $XXX fiscal flow we exceeding X% year-over-year; a basis XXXX guidance. million during was organic year-to-date the total EBIT declined free diluted full X.X%, equaled million, cash XXX of of non-GAAP generated total up year year-over-year; an adjusted and points margin expanding $XXX X.X% year-over-year EPS quarter, revenue Specifically, $X.XX, for our

geopolitical costs investments and time, projects. labor Global ranging AI-driven balancing to with optimization transformation At from corporate trade policy, for uncertainties programs. pressure conflicts, discretionary cost the in same clients spending inflation are continue

some projects for the see committing ahead. clients also We year to full

approach to Our beginning revamped results. go-to-market is deliver

As expected, in quarter and the we're with improved shorter-cycle projects, both the gains clear and our momentum our is X across bookings of ratio evident sign offerings significantly book-to-bill X.Xx quarters. last over highest large with customers. connecting a in better This in

a to higher of continues deals of grow, and services. engineering in a including number mix consulting Our pipeline

While these engagements have impact, less for future growth. we on believe build foundation solid near-term revenue they a

invest refining the We drive our our and continued client management grow processes pipeline future in training continue bookings. expansion performance to partners our of to and

we to continued more earlier segment, we fiscal quarter, the accelerate we in tactical drive the and during to help third Business to actions Services In solutions year. the Additionally, digital began where on we standardized progress continue transformations, our support scalable growth. clients Global

increased and help their needs. And their scalable to is by gen unlock adoption. of driving we formation accelerate engineering, center help the ServiceNow, ensuring their SAP excellence AI tailored AI solutions secure AI, IT clients platform AI second, reliable, a helping SAP their with a S/XHANA incorporate projects business and deep collaborating to solutions AI expanded DXC's industry first, our ServiceNow's their capabilities to our into full application clients Examples gen cloud we data frameworks bookings. for consulting well that clients of in are new combining enterprise also leverage as clients evolving helping industry increase include the current way creating and paving as and clean, potential Specifically powerful with solutions of expertise the with deployments

to a of right recent few AI-powered details just and quickly can with treatment of solution antibiotics. if clicks, gen clinical doctors highlight to help the treatment Singapore recommend create quickly. With data access needed and antibiotics overuse of to doctors patient two me are and analyze an We AI General Let improve engagements. Hospital worked dosage plans examples alleviate the

high-speed Ferrari on DXC's the FXX digital a recently racing building expanded use system our partnership display public deep that performance providing user expertise, we cockpit transforms Next, displays automotive real-time The powers experience, infotainment on for enhanced the road the through new track. an the are software that data delivers with launched drivers to next-gen when into seamless for supercar. the

strong. remains insurance Our business capabilities in the

We global provider industries. and are reinsurance services leading software the for wealth, life and category specialty and

to continue workloads their further positioned same we're software efficiency. our scalability for migrate to help new invest At and to cloud-based to markets clients the well time, solutions drive cost grow growth. We cloud exploring and to the are

clients' represents evolving In technology to needs. portfolio secure which focus our Global delivering our of segment, Infrastructure services cutting-edge Services solutions, on our meet we

redesign groundwork expansion the our capabilities and our the quarter, the modern the and across offerings. and laid in workplace of platforms we security During AI cloud software for ITO

clients in and industry-specific management. data We infrastructure, will AI cloud to design that and security are build with accelerators partnering drive innovation

our to our service, and measurable our Net commitment for clients. to These Promoter improve quality and Scores. continue to efforts delivery We of metrics value driving leading overall record reflect innovation

new strategy. Brad experience that of DXC's attract. road and infrastructure consolidation has I'm usage years as deliver team DXC our able our the joined clear: advance architecture over mission of data leadership on Brad's operations, across our in latest data ERP also and talent Brad strategy, XX is bringing example is top-tier map. and to AI increase excited is CIO, Novak to our announce technology

team bring both our the on new I and throughout help pleased to in execute leaders, to organization, on ability priorities. our my strategic with am executive

growth encouraged biggest positive in being revenue in across With the using we've To goal, expanding the conclude, right driving capturing near-term the our economics and on pricing clear including progress business made pipeline that full our initiatives I'm better new we our believe improve and to effectiveness cycle our lie bookings. better models renewals. of opportunities solutioning, by

We back over a play gained my year a driving CEO, role commerce. we Looking in of services pivotal I've first appreciation provide. the deeper as global essential

and We relationships view help to clients with with capabilities as our transformation leveraging have them delivery global that journeys. partners, lasting their us strategic strong

drive to value revenue strong strong our clear: goal experienced with complementary confident, growth. Together all a and said, leadership remains of profitable continue to stakeholders. services portfolio have and our That team, success transformative I'm IT building deliver for long-term we

Today, we a the The and team running out fast, other. of past out coordinated history. is in each bringing silos breaking are best

quarter turn Rob me to call With a of results. detailed over that, for review let our the third

Robert Del Bene

our our view good and results, Today, quarter full provide the and fourth XXXX go our over third Thank year quarter I'll afternoon. fiscal Raul, guidance. for you, update

$X.X billion in expectation, FX facing revenue our X.X% While line with guidance top revenue total range. headwinds, incremental declined while our fell of of of ahead organic XQ end the

earlier, they're trailing ahead significantly year-over-year expectations. driving aligned basis business and from well X.XXx, the to higher of cost IT yields priorities. primarily improved driven quarter. our closely of margin ratio last our As expanded X.XX by book-to-bill This Raul ratio to XXX marketing as performance X.XX, was to ensure evolving to investments from as planned deferral management mentioned more X-month up certain with the initiatives X.X%, points our Adjusted EBIT

our basis the These leadership continue quarter changes to charge were we team. strengthen as consolidate a also centers. equity hardware of data made In by executive partially as from XX we benefit with recognized assets related the during and reshape senior compensation offset $XX a associated to the quarter, million tailwinds point we savings disposal

basis well recent percentage to by primarily XX at of disposal. This the hardware the were driven and Non-GAAP came XX.X%, quarter gross ERP sales management in for by This as IT from year-to-year. savings basis than points and consolidation as executive revenue center These to team and an lower related our primarily XX.X%. in the the points from SG&A offsetting margin leadership revenue driven from asset changes. savings third was a infrastructure was revenue impact Non-GAAP resource of efforts. as partially offset XXX restructuring practices increased data impacts investments our more by disciplined equity improvement expansion lower year-over-year

a changes I discussed business our to the SG&A costs of margin reminder, are development normalized non-GAAP non-GAAP for in As last quarter. gross that SG&A the year-to-year reclassification and certain

up last $X.XX each and decline The in adjusted count interest $X.XX the $X.XX taxes and expense was $X.XX a impact third year. lower higher quarter noncontrolling to was lower a driven last of of year. nonrecurring share of of primarily included from by offset the the of quarter $X.XX, $X.XX, third by increase EPS EBIT an net that Non-GAAP benefit of $X.XX, in interest partially

due to increased down points to by revenue, efficient Now XX segments. management. turning basis resource total of which XXX profit The XX.X%, basis represents XX% to largely year-to-year GBS GBS, margin was points year-to-year organically. more our

This which account revenue Within year-to-year. & by roughly projects primarily is Engineering driven pressures the market declined Services GBS ongoing Consulting application revenue. segment, affecting CES organic custom X.X% of X/X for

However, to more quarter at execution. our this X.X. ratio and to Applications X.XX to by partially improving we The The Enterprise the our XX-month trailing our decline continue due momentum stable quarter business in increase was as ratio third in than book-to-bill seasonality remained slightly improved offset book-to-bill capabilities. go-to-market

organic revenue grew horizontal and BPS year-to-year. Insurance X.X%

increased mix XX% in higher book-to-bill first mid-single-digit Insurance deliver business, at new expanding The for software ratio trailing BPS total, compared part basis, horizontal This the of book-to-bill Services during that of to driven Our rate. of mid-teen & X.XX, X.XX. by performance a XX-month approximately the that work was year. including half ratio revenue and the representing Software to bookings growth. continued On a a insurance was license was

primarily revenue, impact X.X%, benefit revenue I year-to-year and settlement of quarter's the efforts asset charge headwinds costs. fell management margin declined last GIS, lower basis, the offset revenue asset approximately basis of Profit organically profit related hardware approximately On margin These X% to the hardware reflecting a the total and center to to was down and our ongoing XX a of and resale points XX% in disposal that charge basis declined resource and which declined referred XXX GIS benefit due sequential represents year-to-year the XX%. of to discrete legal and earlier. software X.X% services the data optimizing matter.

opportunities X%, recent organic with X book-to-bill points of GIS, continue on resale our from driven and X.XX. of approximately trailing quarter. to in by XX-month resale approximately our from and narrowing by rate year-to-year down was steeper economics. X.XX security Cloud/ITO of year-to-year declines quarters, book-to-bill revenue Within be The The decline go-to-market on declined deal the improving services equaled ratio X%, X.X% XQ effectiveness. renewals we ratio was timing based improving last down selective

down trailing the XX-month and and equaled declined book-to-bill with down about Workplace X.XX was XX%. organically, The resale revenue X% revenue services ratio XX.X% Modern approximately book-to-bill ratio X.XX. year-to-year

balance Turning cash and sheet. our flow to

$XXX to driven compared During in period capital. the flow the million quarter, we free $XXX delta million of with by primarily year, the generated working same cash last

increased Additionally, reflecting CapEx financial million, limited by reduce million just quarter. to $XX originations, the efforts $XXX to to $X in which largely million were lease new

Taken together, lease CapEx percent as and revenue equaled X.X%. originations of a

lease As financial free a cash flow. originations not reminder, included are in

million, cash $XXX the the year guidance This for full first primarily approximately Fiscal X totaled December through our exceeding adjusted restructuring charges. was by exceeding XXXX, flow expectations, anticipated an our outperformance year-to-date along of EBIT prior million. free XX, $XXX year driven with of months

organization, the to a we $XXX and compared to to start the measured management targets actions $XXX our track disciplined enabled last our outlined. head net since savings meet for undoing to of initially right are the million year our above us now of have charges areas on driven resource be million year. expecting the practices, a year, the of With nearly to count which Our approach, have we maximum across cost X,XXX reduction restructuring deliberate remain

continue to 'XX. targeted for our into We remaining funding fiscal utilizing XXXX, reductions drive will restructuring planned operations the across fiscal

lease Total equal million quarter on reflecting to of currency bonds. impact the billion, $XX debt capital end the paydown and approximately the our euro-denominated at $X.X was of

was million of Total generated cash facility cash with we've $XX quarter-over-quarter. line from $XXX on $XXX driven through to flow proceeds divestiture more our and strong approximately approximately sale by and sales balance by other Asia cash increased assets additional million noncore Through of dispositions in business and of sheet than asset This the million Pacific. XX, sight of transactions. sale a of free December

As are included a our proceeds reported these flow. cash in not reminder, free

million $X.X and cash fiscal over structure, the cash more deployment we of asset fiscal billion strengthening billion. new delivered update our objective of of debt enter we the have As our generation, $X.X sales $XXX net free to strong reduction have With year. a on lowered and debt we our X year, first priorities approximately as result hand, on our of months the than by we'll capital capital flow

of provide quarter. fourth view let you Now me a our with

adjusted about reflecting in decline and margin the merit organic expect from IT. X.X%. decline X.X% expected be increased the to in revenue increases to marketing to EBIT impact sequential total We revenue, We anticipate investments and sales, X%,

EPS non-GAAP expect $X.XX. of We diluted about

And and prior the X.X% now between full to year. year-to-year expect guide calling We now for total for X.X% compared of decline the a decline to to revenue X.X%. organically X.X%

revenue our to year $X.XX. expect expect from single-digit at about increased. our GIS guide X.X%, X.X%, of the to high We to our adjusted has tax approximately decline year-over-year guide this time this prior We continue a year to bringing diluted be up year full X.X% EPS to to third range rate full We XX%, decline been an of our now $X now and from GBS $X.XX, full full be EBIT effective margin year to increase non-GAAP that being of approximately anticipate rates. prior guide the year slightly non-GAAP

now our guidance flow adjusted cash an EBIT spending. from $XXX is year lower the the largely due our about of and This view to improvement increase for increase million, Free approximately restructuring anticipated in is be million. $XXX the to prior expected

turn let Roger. call me over to And with back the that,

Roger Sachs

open Thank like Rob. the the provide for you, you to We'd please questions. instructions? your Operator, can now call

Operator

from of Bryan with [Operator first Deutsche comes Instructions] Bank. line the question Your Keane

Bryan Keane

third to of where third the and so we as ask quarter, decrease in guidance. the what from did know jump growth, to wanted your and means into increase we reconcile slight growth Just in quarter, expectations just quarter, quarter about a quarter, the into it's for in in to fourth next as organic the we the book-to-bill bookings organic the that the over the up, are kind fourth year. trying But and I for especially beat turn that

Robert Del Bene

quarter-to-quarter decrease to it's of year. The in slight the the reason in Thanks Rob. is guidance question. for bookings Bryan, for half related the that first the

bookings X.X pipeline, through were into the If flow that you backlog first our into the range And half. recall, revenue. for into to of in takes time the the bookings rather,

that So in over the we bookings And better in will be for drag next to of quarter bit a of that time. quarters. third the will experienced couple start a layer

the that decrease. So it's the primarily first half causes

Bryan Keane

it. above quarter, then obviously, helpful. raising quite our expectations you're to adjusted in guidance the a Got bit turning That's the And just and EBIT margins, again.

I we quarter lower we're to takes make where third were increasing quarter the sure fourth in understand Just and trying it's the year. to the little because the puts between a though bit level, full even

Robert Del Bene

Yes.

X.X%, that the were to the third So which quarter, drivers, the in equity benefits in referred the nature. comp some in onetime experienced call we we

that XX point about So help. a drove basis

month had quarter-to-quarter And where the and be X in primary merit worth going to the quarter. So decline we've X.X% have months' about we is the from bottom employees is given the fourth revenue quarter the driver X really the increases of with to X%. that, bridge And going to to dropping in we that reduction line. down the along third

the margin drivers So the degradation. primary those two of are

Operator

question next line Jonathan the of Guggenheim from Partners. Your with comes Lee

Yu Lee

was of bookings Tremendous the you strength book-to-bill seasonal the how to XQ? flush by characterize see quarter. the much driven in deal activities? the environment How fiscal And into budget would momentum

Raul Fernandez

impact across all about increasing, carrying obviously, that operationally book-to-bill better, had So because proposals, and out big had environment conversion getting place; better on lot and progress; And Thank with the to material, cetera. again, bigger in what forward sales really, better It still but right a of a rate of marketing impact smarter making revisions us an question. we're factor, quality another we that got force. we're across and et a in getting get that do; is pursuits year, the through board, did we've is Look, to right on people, conversion, leaders some But is what for terms big from up. the need is and better the starts you that. not we for then within that better, and factor execute and to pitches Raul our demand the sales working the of more here. plans board pipeline, we're as better comp

Yu Lee

know calendar calendar conversations your 'XX, I that demand should As may and for be better year be would confidence you there customer that in 'XX think give a 'XX calendar you early, anything it about from is perhaps perspective? than you

Raul Fernandez

I that think solid. very the for have is the demand services set of we

to on Then business, and sequence. partners shorter They transformational. and multiyear our we're run help and term, a trusted make get engineering, are them more They're booked commitments side they term. on quicker larger. multiyear, companies to that their get is consulting of the We And operators global businesses. on that other us they're longer with burned

So see internal in we of those for more But more us, can it's getting measurement an mechanics management, on of I'm right slope. operations combination place the so the have that focused more performance. of and predictability upward

external mean, to And changing country who change table. stop. faster. technology anything, AI of experienced expertise adds customers everywhere. get going the can it's dimension very in complexity. is to every bring If need every Complexity our are industry and that is current relevant not means look, increases. going good. another The environment I to people and Pace of it's

we success impact for the have and in big backdrop impacts That's key pursuits. our solid every our against and certain is new and of So to looking and performance we Obviously, today see successful shows anything demand don't there's verticals, in I as us. execution newspaper the a our then But And of performance single being also, read again, last that across now, quarter. day, change solid. that can across vertical you environment trade policy blip. pretty in But could right can that all have demand. a the every had the demand industries

Operator

next line Your from Huang with of comes JPMorgan. question Tien-Tsin the

Tien-Tsin Huang

that max expenses, $XXX on I target just I a curious size lower? it of to marketing fiscal margins. heard And is same if pushout the I million question that? into that the I the well? million. out a wanted that million going ask just now be could was 'XX? now And $XXX restructuring to Or on as pushed think, $XXX there the charges, below the you heard some And Is deferral, is that's correctly.

Robert Del Bene

Yes.

well. we've increase we modest new in and added, So the some guide to make the in CIO where leaders these for and take marketing new and had our investments leaders, we Tien-Tsin, want a as had new go-to-market Americas. back, in included thoughtful I a really XQ in just investments. deliberate XQ our we're on being leaders And And both added, Europe

So guide, than in we the in-house. originally the and while left very evaluating the have in incremental I of we they're little a terms room we're onboarding, deliberate again, investments. what slower plugged being they're guide And into

be our to go continue extremely we'll investments. forward prudent We're and basically do an expect We thoughtful marketing So we with function. uptick. as the rebuilding

time. So providing with streamlined. have we in consolidations IT be system in-house efficient and And are going AI more increased that along in, much capability investments we're better to we investing over expecting become to

So the perhaps, capability we'll sales then from over perspective, And time. will get and to bubble, effort we come build past down. growth. to revenue back modestly our an the future continue they'll And drive increase IT investments once a

Raul Fernandez

Yes.

rebuilding the our ground and X, June, about months effectively So leader team. we're being back right? marketing the on in up, data a point talking X Just in, came to that of

I'd little later time, a relatively the new taking deliberate be rather and we need a do what we at use powder just and getting what date. had team, dry a handle and to but a and more bit thoughtful So on

Robert Del Bene

I cost that about thoughtful execute Tien-Tsin, mentioned Similar being question been the we we're the to targeted the your with in able so to And remarks we've our reductions investments, prepared restructuring. on restructuring, less deploy extremely on on where restructuring dollars. and

on plan continuing we So do that effort.

surface become to into million that year-to-year going increase. efficient are down the $XX $XXX overhead, rationalizing spend a would profile, our more million and and which drilling carry fiscal keep We on 'XX, be our

XX call. that current So add now when that's do from to we And we'll the year-end more days our plan.

Operator

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

Bryan Bergin

I the the here. just the that, flow wanted cash to that clean was first, to for to free the dig the Rob, margin quarter? rolls X.X% in your plan into relative on clarify outperformance op margin And on

Robert Del Bene

Yes.

Bryan Bergin

about the sustainable And as then here CapEx, what the efficient prior and level takes the puts your versus and and cash versus view more some like are transitory working that things of foundational returning these of of forward of timing like here, capital the margin think we about talking flow? on restructuring factors items and roughly free as million consider $XXX look a to we you're

Robert Del Bene

for thanks No, Yes. the Bryan. question,

through me So step this. let

the impacts full expenditures. that, year, leases If which gone to year $XXX the two to is So all incremental is up the million, $XXX which that, a from now of our of we the is capital now $XXX through guide for million. max restructuring, then of targeted we primary have think at shift capital the and million

top If 'XX around right million, of fiscal in were at 'XX adjustments, you on flow we make that is in ballpark. free $XXX those two where for cash our fiscal

So stable. free generation flow underlying cash our is

good going XXXX would to of I that Now $XXX a think foundation. million from as 'XX,

work forward, is forward, will spend XX through now, as days 'XX. The to restructuring We are a will we that going little that the to capital going right what we'll which holding and on minimize in have suggesting million, from I'm dynamics leases, put fiscal $XXX and we pressure continue capital now. needed

of million. the on worth have So million be that pressure a we working would $XX But capital. $XXX

have EBIT our We profile.

cash-out. have We

a fourth we free working number that before cash quarter for set have guide our the we next drivers flow of So year. during of through we'll be significant

Bryan Bergin

and the about flow to it's net sheet, debt as looks That's the of Okay. balance And down helpful. turn, X leverage kind marry gross then like we your cash down.

where to more there? I preclude I'm become of there Or a about you priority? Just in reaching if allocation the a are M&A wasn't how you buyback quarter. anything would here? much capital know starts thinking more to becoming active point curious you are start

Raul Fernandez

an at we next give the for what to year evaluate on of opportunities biggest to to investments. update call. for our going allocation We're terms have return the capital get next going in We're

the As smaller been more But what M&A team if do that you making can were be both importantly, operating any on that system terms a cetera. with is I've basis. an super of is know, revenue, people, we've that to we doing we effective of sure accretive, part stand-alone in et got sort of clients,

not making on are and next give use aligned those progress in optionality. we're color that quarter, front So fully yet, the along but we'll more the you capital so that we have

Robert Del Bene

our just to going exactly the we're the right Yes. still our to important to investment I we us: on in All suspended as three to and return all And are fiscal 'XX. into having profile, us. the We Bryan, head would reevaluate we quarter we business would and We've beginning next levers the add are priorities capital shareholders important as year. We sheet accomplished the this you we're that, told that executing at year. improving balance of buyback. focused

Operator

Capital Your next Markets. RBC the question line from comes Roswell Matthew of with

Matthew Roswell

a not I very pricing, bit guess for the especially kind good Congratulations what contracts? about of little through a most you're legacy, and and rates could and in whether of pricing, of profitable seeing on renewals, quarter. win around terms you're you talk

Robert Del Bene

Thanks, Rob. Matthew. It's

So the being is this dynamics that our stable, year board. I pricing would across describe and as

renewals, to contract a this regard Now with by very contract. targeted conversation, is

have accomplish to renewal to it's have forward, our able that. we and going of We each both for out contracts. better in going been forward, strategies economics set we terms cases economics have And where

equally intention of the and negotiations, is for into Our win-win. it renewal, economics outcome a with us, of is and having out with good go happy who to a customer have discussions the every coming the

for better good renewal job at better And we'll we've intention continue So contract. that that we've in prices. renewing the to the way and done targeted each a terms contracts operate with of

Matthew Roswell

And the seeing in win terms you them are rates, I of guess improved?

Robert Del Bene

very been they've stable. Yes,

quarter, The actually stable. first the year the half did of better. we is third In

are And win go-to-market making So win well the with we along also had that positioned mentioned add, in that generation And and improvement, the hold. we're fourth And taking pipeline also bookings it's indication have changes the is rates it pipeline very improved quarter. the another the us. that in quarter for our improved. rates earlier, I the I'd

Operator

question next line of from comes with Friedman Jamie Susquehanna. Your the

James Friedman

reported of Raul, opportunity the your really vary to by revenue growth I for they improvement. The perspective book-to-bills to diverge have get was these which or as the segments rates. hoping most segment from

But that's think maybe from perspective, objectives? is which market you of these part do the either of So your answer. under-indexing your segments the or

Raul Fernandez

Yes.

one look, all that having I make that solid been that full is year, positioned that So units want a we've I portfolio got is that for current well and point we feel to very future the now here have, of is operating a that in demand. demand

competing have two great effective the can across are as in we're a and on our focused and that get efficient of marketplace and one conversion And DXC way of new new our then rate. of we net tell on indicators So bring starting we more to winning worthy story our face today the in that we we that segments, building of into click being the up every accounts. our on building offerings and geographies, on top the clients great early

that and sales all you the the it's across win, right is it what it's to say board, material, pitch, I'd That improvement So they get improve. improvement the price. to have the in marketing right it's the right execution. solution, it's room when ingredients right down the And takes into of

there. And and all have perform very They I areas have improve. room very don't a we're that's to well continue performing grow there. well. they think gosh, multiple all I positioned room to is oh, Insurance segment to in turnaround where, have well big a very, globally So and will

upon is the holistic I'm so and And entire excited But success. continue to approach upside portfolio. build that my there's to across

James Friedman

revenue GBS between could do hopefully think we opportunities ask and Is how the between margin, how zero can then Rob, margin? growth a two, be there we and or And dynamic the move GIS? same up? I if in there? sum Raul, of direction, revenue thinking But about about the just both those should Or and they

Robert Del Bene

Yes.

So Jamie, we business project-oriented, mentioned. CES have being across terms as contracts. businesses it's longer-term From board GIS with the as opportunity are the more I for Raul the of dynamics is the Look, improvement, an of Rob. know. you in contracts, the think outsourcing term in nature units standpoint, opportunity different, longer

dynamics for regard. the also both. improvement that There's across the different There's opportunity So board. in opportunity margin are in

We're guide. year's it. get we're going as next all more you So all for after And 'XX we'll of it. we of give after color going to

Operator

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

Keith Bachman

from It's Keith Bachman BMO.

background ask the to dispositions. I about noise. wanted about Sorry

of in been a some businesses. You've back doing paring nice job

have You quarter. magnitude I on, mainly, about a room areas run? first And do positive. that But that ask book-to-bill did when XX%, to us services, book-to-bill. see you more performance I broadly, is question. positive declining understand is my a years. have about? this you there more that improving? the more revenue some to drag your But And is which paring there more a Is managed for you it's on to has been that And is help that's And don't easier can there back think can

Robert Del Bene

actively of this dispositions. year. Let million other dispositions me take the far We've opportunities $XXX have we're And pursuing. first so we do one that a on list had the in

of uncertain But uncertain. in be list, trying we'll the I've that with at the out more timing excess dispositions. And I the especially we're that. opportunity there to list originally I'm hundred to these, in And you're we're million of So on is a quantify to be were an we of when million is got couple $XXX timing the think successful But going room earmarking. yes, I of at beginning happy we get mark. executing set that what but sell to that would facilities. is not dollars think, run. the And year,

Raul Fernandez

Yes.

X the Just functionality, next that have managed on X talent been the months. we less in industries. internal And on managed the records a various months. in having has investment success here rollout working new account. SaaS building in currently services, products the that existing actively set, They're scale one to the features, today of a that be whole of in offering product They're services they'll in great areas of essentially relaunch of than of bringing has X our track supports

we're investing early and but a an it's talent today. that's the an an bit is I where out that to So area expect area that roll area improvement, little making brought in. It's we see too an impact, that to in

Keith Bachman

That folks didn't to my leadership of add? who How question. leads your have not second you that And on in were is? related recently the place? I you think more there do team quite the your Or need that what you stable that to into margin Do Does a from was. I'm that, you very clear stay some clear, was there's genesis like you wasn't hired? think equity. feel team mean gain Congrats. senior do

Robert Del Bene

I'll third was in the Yes. reversed financial the let that the impact just the quarter, Raul executives take reversal on that But the had we and just accruals. of equity benefit question. left a we those accrued

Raul Fernandez

many talent an been experienced to able the Yes. terrific velocity And in in impact that super have XX, XX them join, having we've super over bring them cases, happy the different has for that across companies I'm last years, with me worked having personally. I've with, been

needed. that what's so direction. more That as place. that, everybody news that's every settled same if to on you you and happening know, And good everybody you as the in get And go, the going today. has still team, you bring is is network get network But in

talent I'm but as we satisfied with the happy where and So changes super we'll on side, today. make very are needed,

Operator

with from Jason line comes question of the Kupferberg Bank next of Your America.

Tyler DuPont

'XX? due bookings. to is maybe a duration these and we Can I that large positive a bookings Jason. on see for what well deal the quarterly discuss deals? while. new quite first looks as that DuPont I I'm wins ramp trying It versus ability wanted by line the This the on both time smaller move time much in what nice like and is GIS the bookings get backfill was to at through basis for calendar for potential on to how GBS as of as was you and touching for to start Tyler guess to

Robert Del Bene

$XXX call the quarter was third that Thanks within of beginning or the which significant a end we the in of quarter, in a million. the slipped second it like XX the days and quarter. question, that opportunity week that did Tyler. We next approximately Yes. big we was ended there mentioned have up of the out quarter, at this booking for And the renewal the of

project-based was healthy, services. that So very big approximately. board. across a and without range book-to-bill, still The rest renewal, our healthy outsourcing longer-term good were was in the There X.X services mix bookings, of the of they the

bookings manifesting fourth those So fiscal and pipeline we're mentioned good bookings as start good the for quarter expecting I will looks earlier, as progress the the we themselves quarter, fourth. 'XX. in of strength another And through the

Tyler DuPont

helpful, That's Rob.

been outperform Just look And shifting level. down. by XQ look taking a and really I outperformance would lines nice through through further ask of bit. we expecting? sustainability to of do in along anticipate you just those the we step the But drive are of to brought up 'XX, see it's segment be What segment. couple you margins wanted But gears wanted to dynamics It's what your quarter. I get XQ, the I expansion? calendar XQ Anything on a take know saw the of we just helpful. on in a know will about GBS also segments sort sort is just as times. margins. the

Robert Del Bene

will impact in merit fourth segments the Again, earlier, Yes. increases fiscal revenue commenting 'XX so the the they across declines board, the But mentioned expectations. will pass the we'll the of both perspective. and from on we items fourth on a on both quarter-to-quarter quarter quarter, the be

Operator

with Morgan of Stanley. the line question Faucette next from Your James comes

James Faucette

and appreciate answered my today, lot have questions guys details. all of I a You the

color on us Just than see growth thought? which incremental weaker can ones of little you delivering wondering of verticals what versus you kind industry if would have were give better-than-expected maybe a bit you maybe

Robert Del Bene

Yes.

let quarter care strong, insurance James, and as for both GIS communications from well separately. did Public was So in GBS media that sector and in perspective, strength that But we GBS address the in sector. me the a health well. take had and and in

performing And did kind quarter-to-quarter in a broad-based improvements were and were better and sectors broad sectors. had health transportation And growth GBS. in we those energy. for better from both of care, in GBS So quarter-to-quarter we perspective, the travel well our and primarily GIS. Those performers, GIS,

James Faucette

you Got policy we about think think it. the a at and public far, Appreciate how that. when particularly benefits least should sector, about disruptions, And what standpoint new potential under public or the then administration? you've intentions seen thus from

Raul Fernandez

that. Yes, I'll take

outside Just so in heavy the U.K., it's States, talk about to Australia. be United public when sector clear, public sector, the Ireland, we

in domestic here. budgets, have us an or changes not U.S. cetera, So et do cuts impact on

Operator

Your Bourgeois final question with comes Rod from Research. DeepDive Equity

Rod Bourgeois

ask to a big want here. question I picture

in if working that's characterize over year like new seems lot the about new you like last I think in last horizon. and a you've want could year, to X been are phase Perhaps to guess But the guide you and that I next talk in for effort? investment you've I'd now, in of turnaround the you're your year. on seeing been blocking phase I on months, approaching a you priorities. the when a to It the stage ask, tackling

on could you overall give just the picture if trajectory So big a perspective there. turnaround us

Raul Fernandez

Sure.

to sustain along need lot and done. and it's win early, left on work way. it better give to behavior, to a behavior change wired a consistent getting get we Look, we've still changed Let of a there's and better We're continue basis, first. me but that the shot be now to

to have a positives, items consistency continued it's very with checklist. global. It's it's needed be scale very make of in the the we're happy with we're to getting time, the takes I next on progress and the So to that we It on big, that upcoming set and fixed the progress year. making, but of about think the that happy and bit little we're then plans

Rod Bourgeois

of I more come so to occurring the guidance. existing history guidance I first last in But there earlier. Well, about decline, half or that months. addressed on but since All more bookings, March conservative I know there I revenue considerable deals. quarter. positive wondering about weak years into seasonality right. that. your quarter-to-quarter that maybe revenue X if positive past ask some heading your is with seasonality on in to revenue if had ask you the a also the are but is want you've the you're runoffs implying QX for some quarter, still above-normal in Because know you had Okay. March I year, in sequential to bookings want revenue I'm weak mean

at play. to maybe wanted is just So just guidance on maybe that. I your conservative factor ask or that's there's another

Robert Del Bene

would the right I Yes, down Rod, I'd guidance our describe not is revenue as conservative. characterize guidance middle. our

So that's for starters.

decline into bookings the quarter. overwhelming and the first the the dynamics, revenue In half the through of bleeding and of of the terms that driver fourth half year is second

exposures. So the that not runoffs primary new It's is or driver. other

Rod Bourgeois

What following I'm adding is not bookings backlog. is to

your to quarter decline, has form where to some seasonality. order existing be in in So run revenues for particularly a of on rate, positive there runoff there's

a know inquiring that's the I'm appears. it I runoff, that's were And net what just So if but bookings you... into translating weak,

Raul Fernandez

cetera. all burn, bookings of not terms et period are Look, for performance Yes. in equal of

an So next all in will it's the large how and hits. you within these booking the year of revenue with On important smaller the book, the varies. is the to and transitions signing, the and In the we to of within is get the the X number, dealing some over sorts line, it's and part what X right? nature is was deals, while top of X of need smooth next what or then quarters So can we're out But do burn, quarters. side, increase slow help the quarters, ago. you ramp-up bill number, ingredients of very first burned the what ones, and that

Operator

Roger back turn to Sachs And conference that concludes And remarks. the for session. will over our closing I question-and-answer

Roger Sachs

to to want look with you we and thank joining everybody us next forward I today, quarter. for speaking

Operator

and And your may now call. ladies and you Thank conclude you for participation, gentlemen, does today's this disconnect. conference

DXC Technology (DXC) 4 Feb 252025 Q3 Earnings call transcript