DXC Technology Company

Good day and welcome to the DXC Technologies first quarter fiscal year 21 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Shailesh Murali. Please go ahead, sir.

Thank you and good afternoon, everyone. I'm pleased that you are joining us for DXC Technologies first quarter fiscal year 2021 earnings call. Our speakers on today's call will be Mike Salvino, our President and Chief Executive Officer and Paul Saleh, our chief financial officer. This call is being webcast at dxc.com slash investor relations. And the webcast includes slides that will accompany the discussion today. After the call, we will post these slides on our investor relations section of DXC's website. Slide two informs our participants that DXC Technologies' presentation includes certain non-GAAP financial measures and certain further adjustments to these measures, which we believe provide useful information to our investors. In accordance with SEC rules, we have provided reconciliation of these measures to their respective and most directly compatible gap measures. These reconciliations can be found in tables included in today's earnings release. On slide three, you will see that certain comments we make on this call will be forward-looking. These statements are subject to known and unknown risks and uncertainties, which would cause actual results to differ materially from those expressed on the call. A discussion of these risks and uncertainties is included in our annual report on Form 10-K and other SEC filings. I would like to remind our listeners that DXC technology assumes no obligation to update the information presented on the call except as required by law. And now I'd like to introduce DXC Technologies President and CEO, Mike Silvino. Mike?

Thank you, Shelesh, and I appreciate everyone joining the call today. I hope you and your families are doing well as we all continue to navigate through the COVID-19 pandemic. I'm going to start today's call by giving you an update on our Q1 performance and how we are progressing on our transformation journey to position DXE for growth. I will then share our financials for Q1, our guidance for Q2, and update you all on our strategic alternatives, including the recent sale of our healthcare provider software business. Then I will make some closing remarks before opening the call up for questions. I was very pleased with our performance during the quarters. which has allowed us to have a strong start to FY21. Our revenues came in higher than we thought in May, highlighting the resiliency of our business during COVID-19. Margins also came in higher, underscoring the effectiveness of our program to optimize costs. And our book to bill for the quarter was 1.2X. underscoring that we are successfully bringing the new DXE, which focuses on our customers and our people, to the market. This new approach is allowing us to cross-sell our capabilities to our existing customers, win new logos, and renew existing work. Our results in Q1 show that DXE is very relevant to our customers, especially during tough times. Now I'd like to discuss our transformation journey. and give you some specifics concerning how we are doing in the three key areas which are focus on our customers, optimize cost, and seize the market opportunity. Our focus on customers is really starting to pay off. Simply put, this focus allowed us to deliver higher revenue in Q1 and will enable us to stabilize revenue in Q2. Let me give you an example. This week, we renewed and expanded our relationship with Sabre. an account where our standing was not in good shape. We brought the new DXE to the account, and now we are looking forward to working with Sean, his leadership team at Sabre, along with Google to transform and modernize Sabre's IT estate to the Google Cloud. I'm happy to report that with the Sabre signing and us working through the final details with two other accounts, we have successfully fixed 38 of the identified 40 challenged accounts. We have rebuilt these relationships and we are winning more work. Let me give you some stats. 31 out of the 40 accounts have given us new work in excess of 10 million since the start of the program in Q3 of FY20. We are now done with this program and this customer-centric mindset is fundamental to the new DXE. Our people are the cornerstone to delivering for our customers. The investment we made to enable 99% of our workforce to work virtually has resulted in DXC delivering on our customers' expectations during the COVID-19 pandemic. The Australian Tax Office is a great example of where our people delivered for a key customer during COVID-19. DXC helped the Australian tax office deliver wholesale changes to systems and operations in two weeks to support troubled businesses and workers. The CIO commented, the way our teams collaborated and worked as one was truly inspiring. I am also extremely proud of how our people handled the ransomware attack which impacted the exchanging business. Our team immediately implemented a series of containment and remediation measures, got our customers up and running, and kept our customers updated every step of the way. Under the leadership of our new CIO, Chris Drumgoole, and Mark Harris, Hughes, who runs our security business, our people did a great job of resolving the situation quickly and protecting the interests of our customers and DXC. Among the many thank you notes we received from our customers, Lloyd's Market Association summed it up the best, saying the transparent and collaborative way in which DXC has addressed the challenge has been first class. I would like to thank all of our people as they are clearly engaged in delivering for our customers. Now let me turn to our cost optimization program where we continue to make good progress. Here we were able to move faster than anticipated, simplifying our management layers and taking the appropriate steps to right-size our cost structure to our revenue. We have achieved better than expected margins in Q1 due to these efforts. We're on track to achieve our goal of taking out $550 million this year and ensuring our people are focused on making business impact for our customers. We expect to expand our margins from Q1 to Q2. Finally, let me comment on the third key area of our transformation journey, which is seize the market opportunity. We are focused on cross-selling to existing accounts and winning work with new customers. Our book-to-bill ratio of 1.2x this quarter is good evidence that we are indeed seizing the market opportunity. The Q1 bookings were comprised of one-third new work and two-third renewals. New work was generated through a combination of cross-selling to our existing customers and winning work from new customers. Let me give you an example of each. Zurich Insurance Group is an example of cross-selling new work to an existing customer. At Zurich, we expanded our relationship. We are helping them transform and modernize their applications and security globally. A great example of new work from a new customer is Avari, where we were selected to help modernize Avari's legacy systems, provide policy administration, and customer support services. Also, I don't want to ignore our renewals, as they are solid evidence that we are delivering for our existing customers who are willing to make additional multi-year commitments to DXC. All of this is evidence that our strategy is working, and we expect to hit a book to bill of 1X in Q2. Now, before I turn the call over to Paul, I want to reiterate, I was pleased with our performance in Q1, and we are well positioned for Q2. Now, let me turn the call over to Paul.