DXC Technology Company

Good day. Thank you for standing by and welcome to the XC Technology Q1 Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 1 on your telephone keypad. As a reminder, there is a limit of one question per analyst. If you require any further assistance, please press star zero. Thank you. I would now like to hand the conference over to your speaker today, Mr. John Sweeney, Vice President of Investor Relations. The floor is yours.

Thank you, and good afternoon, everyone. I'm pleased that you're joining us for DXC Technologies' first quarter 2022 earnings call. Our speakers on the call today will be Mike Salvino, our president and CEO, and Ken Sharp, our executive vice president and CFO. This call is being webcast at dxc.com slash investor relations, and the webcast includes slides that will accompany the presentation today. Today's presentation includes certain non-GAAP financial measures which we believe provide useful information to our investors. In accordance with SEC rules, we provided a reconciliation of these measures to their respective and most direct comparable GAAP measures. These reconciliations can be found in the tables included in today's earnings release and on the webcast slides. Certain comments we make on the call will be forward-looking statements. These statements are subject to known and uncertain risks and uncertainties, which could 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'd now like to remind our listeners that DXC technology assumes no obligation to update the information presented on this call, except as required by law. And with that, I'd like to introduce DXC Technologies President and CEO, Mike Salvino.

Mike. Thanks, John. And I appreciate everyone joining the call today. And I hope you and your families are doing well. Today's agenda will begin with a quick update on our solid Q1 performance, which continues to show that revenue, adjusted EBIT margin, book-to-bill, and non-GAAP EPS all have a positive trajectory compared to past quarters. During our investor day in June, we gave you additional insights into the steps of our transformation journey, and those steps are inspire and take care of our colleagues, focus on our customers, optimize costs, seize the market, and build a strong financial foundation. I will give updates on each step and then hand the call over to Ken to share our Q1 financial results, guidance, and more details on how we are building a strong financial foundation. Finally, I will make some closing remarks before opening the call up for questions. Regarding our Q1 performance, our revenues were $4.14 billion, and our adjusted EBIT margin was 8%. This represents the fourth straight quarter of both revenue stabilization and sequential margin expansion, and we expect both trends to continue in Q2. Book-to-bill for the quarter was 1.12. This is the fifth straight quarter that we have delivered a 1.0 or better book-to-bill and we expect our success of winning in the market to continue in Q2. Our non-GAAP EPS was 84 cents in the quarter, which is up 300% as compared to 21 cents that we delivered in Q1 of FY21. The positive trajectory of all four of these numbers gives us confidence that our playbook is working. As a refresher, our playbook has three phases. The stabilization phase was completed in FY21. This phase enabled us to make great progress with our colleagues, customers, on revenue, margin, book to bill, and reducing our debt. We are now focused on the foundation phase. This phase focuses on the steps that will allow us to deliver growth. The goals of this phase are, first, continue to increase our employee engagement, all while we attract and retain highly talented colleagues. Second, stabilize year-on-year organic revenue. Third, expand adjusted EBIT margins. Fourth, consistently deliver a book-to-bill number of 1.0 or greater with a nice mix of new work and renewals. And finally, under Ken's leadership, deliver a financial foundation that increases discipline and improves our cash flow and earnings power. Now, I will discuss the good progress we are making on each step of our transformation journey, beginning with inspire and take care of our colleagues. We are executing a people-first strategy. Attracting and retaining talent is fundamental to enable our growth. Our refreshed leadership team has deep industry experience and is delivering. Brenda, who is our chief marketing officer, is our newest addition. Brenda is a strategic results-oriented leader who brings deep marketing experience to DXE. Seventy-five percent of our leadership team is now new to DXE and bringing in talent based on their personal credibility as talent follows talent. What the team is finding is that the new DXE story is resonating in the market, and new hires are wanting to join DXE because they see the opportunity to progress their careers with a company that's on the right trajectory. We mentioned during our investor call that nearly 50% of our vice presidents across the company are new to DXE within the last 22 months. Also, we are investing in our people. This quarter, we rewarded high performance by paying annual bonuses that benefit roughly 45,000 of our colleagues. In Q2, we are planning merit increases that will benefit roughly 77,000 of our colleagues. In addition to these investments, we're doing a great job of taking care of our colleagues and their families during the pandemic. This focus on our colleagues is unique and builds trust with them, increases employee engagement, allows us to compete for talent, and enables us to deliver for our customers. Focus on our customers is the second step of our transformation journey. Our investment in our customers is the primary driver of revenue stabilization. During the Investor Day presentation, I couldn't be more proud to have you hear from American Airlines, FedEx, P&G, Lloyd's, Bright House, Deutsche Bank, Campbell's, and Microsoft. And I want to thank them again for their support and partnership. It was clear from their comments that the new DXC story is resonating with them because we are a delivery. These are all large global companies, and they are saying that their IT estates are important. In fact, they use the word critical. Our strategy of delivering ITO services builds customer intimacy and develops trust that when our customers want to further transform their business, they turn to us and allows us to move them up the enterprise technology stack. Additional evidence that our strategy is working is the nice progress we have made on our GBS business along with the cloud and security layer of our GIS business. All of this gives us confidence that we will deliver on our financial commitments. Now let me turn to our cost optimization program. We continue to do well optimizing our costs and delivering for our customers without disruption. We're focused on four cost levers, which are contractor conversion, real estate, scaling our GIDCs, and automation through Platform X. These levers have helped us expand our margins going from 7.5% last quarter to 8% this quarter. You will hear from Ken that we expect to continue to expand margins in Q2. Next, seize the market is where we are focused on cross-selling to our existing customers and winning new work. The 1.12 book-to-bill that we delivered this quarter is evidence that our plan is working. In Q1, 57% of our bookings were new work and 43% were renewals. You will see that we are running specific sales campaigns. An example of these campaigns is ITO Modernization, which is focused on improving the performance of our customers' IT estates. Another example is our campaign to show our customers how to think about cloud, which combines on-prem, private cloud, and public cloud technology. Our ability to deliver a consistent book-to-bill of 1.0 in each of the last five quarters is evidenced that these sales campaigns are working and that we can win in the IT services industry. This momentum and success in the market gives us confidence that we will deliver another book to bill of 1.0 or greater in Q2. Now let me turn the call over to Ken.

Thank you, Mike. Turning to our financial performance on slide 12, for the quarter, DXC exceeded the top end of our revenue, margin, and earnings guidance and continued to deliver a strong book to bill. GAAP revenue was $4.14 billion, $10 million higher than the top end of our guidance range. Adjusted EBIT margin was 8% in the quarter, an improvement of 380 basis points as compared to the prior quarter. In Q1, bookings were $4.6 billion for a booked bill of $1.12, the fifth straight quarter of a booked bill greater than $1. Moving on to slide 13, our Q1 non-GAAP earnings per share was $0.84, or $0.08 higher than the top end of our guidance, benefiting $0.05 from a lower tax rate. Restructuring and TSI expenses were $76 million, down 58% from prior year. Free cash flow was a use of cash of $304 million as compared to a use of cash of $106 million in the prior year. We expect free cash flow to improve significantly as the year progresses. As the next slide shows, our Q1 FY22 performance continues our trajectory as we deliver on our transformation journey. Starting with organic growth progression, we went from approximately 10% declines in the first three quarters of FY21 to down 6.5% in the fourth quarter and now down to a decline of 3.7%. This is a 40% improvement from the prior quarter. Let me highlight our organic revenue growth calculation and our prior year earnings releases was structured to provide the year-over-year deconstruction of revenue changes into FX, acquisitions, dispositions, and organic compared to prior period gap revenue. Our previous organic revenue growth calculation was not performed in this manner. As a result, we have revised the organic growth rates for the prior year periods in our earnings deck and have further supplemented our organic calculation to include all the information to support the calculation, providing you complete transparency. This change does not yield a meaningful difference to our historically reported organic revenue growth rates, trajectory, or guidance. Adjusted EBIT margin expanded 380 basis points. Excluding the impact of dispositions, margin expanded almost 600 basis points. We continue to win in the market with five consecutive quarters of a vote to bill greater than one. And lastly, non-GAAP earnings per share quadrupled. Now moving to our GBS business, composed of analytics and engineering, applications, and business process services. Revenue was $1.9 billion in the quarter. Organic revenue growth was positive 2% as compared to prior year. In terms of quarterly progression, organic revenues declined about 6% to 7% in the first three quarters of FY21, declined 3.4% in the fourth quarter, and turned a positive 2% this quarter. GBS segment profit was $272 million with a 14.4% profit rate, up 450 basis points from the prior year. GBS bookings for the quarter were $2.4 billion for a book-to-bill of $1.29. As you have seen, for a number of quarters, the demand for our GBS offerings, the top half of our technology stack, have been quite robust and now yielding positive organic revenue growth. Turning to our GIS segment consisting of IT outsourcing, cloud and security, and modern workplace. Revenue was $2.3 billion down 9.1% year over year on an organic basis. We are seeing the rate of decline moderate this quarter despite the headwinds from our modern workplace business. GIS segment profit was $131 million with a profit margin of 5.8%, a 480 basis point margin improvement over the prior year quarter. GIS bookings were $2.2 billion for a book-to-bill of .97 compared to 0.77 in the prior year. It is safe to say revenues continue to stabilize and demonstrate that with improved customer intimacy and delivery, our revenue is not running away, allowing us to build our growth foundation. Now I will break down our segment results, GBS and GIS, into the layers of our enterprise technology stack, starting with GBS. Analytics and engineering revenues were $482 million, up 12.9% as compared to prior year. We continue to see high demand for our offerings, with a book-to-bill of 1.32 in the quarter. Applications also continue to demonstrate solid progress with revenue of $1.246 billion, growing organically almost 1%. Applications also continues its strong book-to-bill at 1.32%. Business process services revenues were $118 million down 13% compared to the prior year quarter with a book to bill of 1.13. Cloud and security revenue was $549 million up 4.9% as compared to the prior year. The cloud business is benefiting from increased demand associated with our hybrid cloud offerings. Booked the bill was 0.85 in the quarter. IT outsourcing revenue was 1.13 billion, down 9% as compared to prior year. To put this decline in perspective, last year this business declined almost 20% year over year. We expect this momentum to continue in organic declines to further abate as the year progresses. Modern workplace revenues were $577 million, down 19.7% as compared to prior year. Book-to-bill was 1.0 in the quarter. As you may recall, modern workplace was part of our strategic alternatives and was not part of our transformation journey until recently. As a result, we previously disclosed that the performance would be uneven as we invest in the business, enhancing our offerings, and innovating the end-user experience. As our transformation journey takes hold, we expect modern workplace performance to improve similar to the trend we have seen with our IPO business. One of our key initiatives to drive cash flow and improve earnings power is to wind down restructuring and TSI costs. We expect to reduce this from an average of $900 million per year over the last four years to $550 million in FY22 and about $100 million in FY24. On slide 19, we detail our efforts to strengthen our balance sheet. We are proud of what we achieved on this front, reducing our debt by $7 billion while improving our net debt leverage ratio to 0.9 times. Further, we have reached our targeted debt level of $5 billion with relatively low maturities through FY24. From our improved balance sheet, let's move to cash flow for the quarter. First quarter cash flow from operations totaled an outflow of $29 million. Free cash flow for the quarter was negative $304 million. As you likely realize, with Mike's will continue to make decisions to better position the company for the longer term, creating a sustainable business. Certain of these decisions impacted cash flow this quarter. As our guidance anticipated, we plan to take certain actions that impacted the Q1 cash flow. We remain on track to deliver our full-year free cash flow guidance of $500 million. Let's now turn to our financial priorities on slide 21. We are working to build a stronger financial foundation and use that base to drive the company forward in a disciplined and rigorous fashion. unleashing DXC's true earnings power. Our second priority is to have a strong balance sheet. We achieved our targeted debt level. We are encouraged by our almost 50% year-over-year interest expense reduction. We continue to focus on reducing interest expense and are evaluating refinancing options given the advantageous interest rate environment. Third, we will focus on improving cash flow. During the quarter, we paid $88 million to draw to conclusion a longstanding $3 billion take or pay contract for IT hardware. These types of contracts are not efficient, and we are reducing our exposure. Additionally, we paid down $300 million of capital leases and asset financing in order to allow us to dispose of IT hardware purchased under the previously mentioned take-or-pay arrangement and realize a tax deduction once we dispose of the unutilized assets. Given our relatively low borrowing cost, it makes less sense to enter into capital leases as the borrowing costs are higher and creates other complexities. We continue to reduce capital lease and asset financing origination from approximately $1.1 billion in FY20 to $450 million in FY21 and believe that we will remain at that level or lower for FY22. As we continue to curtail capital lease origination, our average quarterly lease payment will reduce from about $230 million a quarter in FY21 to about $170 million nearer term. Our efforts to limit capital leases does create upward pressure on capital expenditures, though on balance we expect to reduce cash outflows for both capital leases and capital expenditures over time. Lastly, we terminated our German AR securitization program, negatively impacting cash flow by $114 million for the quarter. Going forward, this will result in interest savings, strengthen our balance sheet, but more importantly, it will bring us closer to our customers as cash collections is tied to their success. Fourth, we will reduce restructuring and TSI spends, improving our cash flow. Fifth, As we generate free cash flow, we will appropriately deploy capital to invest in our business and return capital to our shareholders, all the while continuing to maintain our investment-grade credit profile. During the quarter, we executed $67 million of stock buybacks to offset dilution, taking advantage of what we believe was an attractive valuation in the market. I should note, we continue to make progress with our efforts to optimize our portfolio, unlocking value as we divest non-core assets, including both businesses and facilities. We expect to continue these efforts. Our results today include the benefit from the sale of assets partially offset by other discrete items and the headwind of 30 basis points of margin associated with the disposition of our healthcare provider software business. Moving on to second quarter guidance on slide 22. Revenues between $4.08 billion and $4.13 billion. This translates into organic revenue declines of down 1% to down 3%. Adjusted EBIT margins of 8% to 8.4%. Non-GAAP diluted earnings per share in the range of 80 cents to 84 cents. As we look forward to the rest of the year, I would note that we expect $175 million of tax payments in Q2 related to the gains on dispositions. We also updated our FY22 interest guidance to approximately $180 million, a $20 million improvement. and reduced our full-year non-GAAP tax rate by 200 basis points to 26%. As noted on slides 23 and 24, we are reaffirming our FY22 and longer-term guidance. Lastly, we expect to see further improvement in the quarterly year-over-year organic revenue growth rates as we move through the year. With that, I will now turn the call back to Mike for his closing remarks.

Thanks, Ken. Let me leave you with three key takeaways. First, I couldn't be more pleased with the trajectory of the business. Our improvement in revenue, margins, and EPS is evident, and we expect this success to continue. Second, we have momentum and continue to win in the market. We expect our progress in driving a book to bill of over 1.0 to continue. Third, our financial foundation is coming together nicely under Ken's leadership. We've made great progress on debt reduction, reducing our restructuring and TSI expense, and delivering on our capital allocation priorities. These three key takeaways show that we have good momentum. We are building the foundation for growth, and we are confident that we will deliver on our financial commitments. With that, operator, please open the call up for questions.

As a reminder, to ask a question, you will need to press star 1 on your telephone keypad. Again, that is star 1 on your telephone keypad. You have your first question coming from the line of Brian Kinn from Doja Bank. You may ask your question.

Hi, guys. I just wanted to ask, when we look at that enterprise stack, You know, when we go towards positive organic growth, can you just kind of walk us through there the big change items, Mike? I guess it sounds like ITO becomes even less of a drag and just thinking about the components there to get to the positive organic growth in the future.

Thanks, Brian. So when you look at the stack, let's just take GIS and GBS. The drivers that you'll see is in GIS, ITO, like Ken said, is not only stabilizing, but it's going to get better throughout the year. And that's because, look, we're focused on taking care of our customers' IT estates, which they think are incredibly important. When we do that, I've been very consistent that we'll build customer intimacy. When we build that customer intimacy, they will turn to us for new work. That's why the book, the bill, continues to be over 1.0. So what we're seeing in that space is we're seeing the need in the IT estates to do the maintenance. And then, like I said, we're running sales campaigns to move them to the cloud. If you go back to our investor day, both American Airlines, for example, along with FedEx, talked about us moving them to the cloud. And we think cloud, it will be a combination of on-prem and private, and public. Those are the three technologies we'll put together. So when I think GIS, those businesses are going well. What we have there is we have to continue to turn around modern workplace. And that's going to be on the same path that the ITO business was. That's why I like when Ken was saying that a year ago ITO was roughly 20, negative 20, and now it's minus 9. We expect workplace to do something similar. Now, when we talk about moving up the stack, you can see our numbers in GBS, analytics and engineering. outstanding, right? That growth there not only is good, but we expect it to continue with the book to bill 1.32. And then same with applications. Applications should continue to get better. So, Brian, look, that's the way we're looking at the business. You know, the focus is continue to move our clients up the stack. And the biggest thing there is making sure that we take care of not only what they have today but also where they want to go tomorrow.

Your next question is from Lisa Ellis from Musset-Nevenson. You may ask your question.

Good afternoon. Thanks, guys. I think yesterday you reiterated that DXC's focus is on your 175 platinum accounts, the ones that generate about two-thirds of your revenue. Can you give a sense for the health of those accounts, like relative to the overall, you decline of 4%? Are they performing better than that? How much better? Are they growing? Many of them growing with you now. Can you just give us a little bit of color of what's going on with those accounts? Thank you.

So, Lisa, those accounts are the ones that are driving our revenue stability. Those are our biggest accounts. What I said in Investor Day is that Like I said, we're focused on making sure that we deal with not only the ITOPs, but also them moving up the stack. So those are the accounts that are focused on when I look at our new management team in terms of stabilizing our business. So they're driving the majority of this stabilization. That's what I would tell you there. But the other thing that's key is the 57%. of the new work that we're now getting and that new work is usually also lisa on those accounts we are getting some new labels but our our focus is on those platinum accounts next question is from keith backman from bmo capital markets your line is now open

Yes, thank you for taking the question. I wanted to follow a question with the affirmation of both your 22 and 24 guidance. As I think about this year, there's a lot of moving parts to both the revenue and the cost. But even if we look at, say, FY23, what you're intimating is that revenues will continue to flatten out, indeed, just call it flattish, and yet margins will continue to expand. How do you balance that as you're working through the cost actions that presumably help this year? But as you think about the next two years, and particularly at the end of this year, how do you continue to expand margins with revenues flattish when presumably a lot of your restructuring activities will have run the course? Thank you.

So, Keith, if you go back to our four cost levers, our four cost levers are contractor conversion, real estate, the scaling of the GIDCs, that's our global innovation delivery centers, and then the final one is the automation. What was never done with this business is, first of all, we're very focused on making sure that we replace contractors with our own people. And we think we've got a substantial chunk that we've taken out of that, and there's more to go. Real estate, we will continue to look at. One of our strategies is to implement a distributed workforce. That's one of the things that we like about our modern workplace solution. We're implementing our own modern workplace solution on ourselves. and therefore we're allowed under Ken's leadership to drive down our real estate costs. So that will also continue. Now, the last two are the keys, because as you stabilize all these customers and you don't have service delivery issues anymore, in fact, our customers say our delivery is silent now, which means we're performing. That's when you can take the next two clicks and at the operations. And the first one is you got to scale your centers. And in the past, we had not done that. So what you're seeing is we've got roughly around 20 key global information or innovation delivery centers. That's what we're scaling. And then on top of that, Platform X is where we're automating a lot of that manual work away. So when I look at those four levers, those are the four levers that will drive us towards not only delivering on our 22 commitments, but also on our 24 commitments.

Next question is from the line of Rod Bourgeois from Deep Dive. Your line is now open.

Hey, guys. I want to look at your stack slide and ask about the workplace business with that negative 19.7% organic growth. I assume that business's sales process had stalled some when it was up for sale. And I'd now like to ask you a bit more about your outlook for that business and the levers that you have to make its trajectory more like the rest of the ITO business where you're making progress. You have this big partnership with Microsoft, and there's been some recent press on that, yet that business is shrinking quite a bit. So it would be helpful to get some more color on what you're seeing in that business and the leverage that you have. Thanks.

okay rod so first let's start with what happened with that business so that was one of the businesses like bps that we put into the strategic alternatives to remind everybody and look let's be frank whenever you do that you lose a level of uh customer support and that's what happened to us last year when we put that business uh into that state And the key thing now is we fully expect that that will follow the same similar path as ITO. So think about it. ITO last year roughly minus 20. Now it's minus 9 and continually to continue trending in the right direction. And it hovered in sort of the mid-teens, negative mid-teens last year. That's what I see modern workplace doing throughout this year and then turning. Now, the key shoots are these. The Microsoft relationship is important to us, and we also are seeing good traction in the marketplace in terms of our pipeline. The 1.0 that we showed here is good. I expect that to continue. Second is the solution, I think, is second to none. That's why I'm implementing it. for our own people. And then third, going back to the cost levers, the main cost levers there is that we've already replaced the leadership. The second thing is, again, we're focused on the contractor conversions and then scaling our delivery. And look, that playbook has worked across this entire business. I don't know why it wouldn't work on Modern Workplace. So I have confidence that we will definitely turn that around.

Next question is from Brian Bergen from Cowens. Your line is now open.

Hey, good afternoon. Thank you. I have a question on the hiring environment. So given the tightness that we have heard peers experiencing, can you comment on your confidence in hitting the headcount targets in your global delivery centers and any changes in the cost that you're experiencing around that versus the prior plan?

So on the cost, no change in cost. One of the things I continue to highlight is us implementing our people first strategy, which is unique in this industry. You hear me talk about our colleagues all the time because we believe talent wins in the market. And retaining our best people is incredibly important. So if you think about the environment that we're in, first of all, the new DXC not only story but culture is resonating in the market. You think about I've replaced 75% of our leadership team. And again, talent follows talent, along with 50% of our VPs across the company are new since I joined. So just that alone is bringing in a lot of good talent that we need to run the business. Now, when I look at As we move up the stack, look, we are seeing competition for analytical skills, for application skills, and for cloud skills just like everybody else. But we are definitely getting our fair share of those to support our clients. So I still feel very confident looking at our talent across the board that we will compete very well in this space for talent.

Next question is from the line of Diane Teller from Wolf Research. Your line is now open.

Thanks, guys. Look, it's a little higher level. I mean, it's really good to see the book to build coming in at this level, you know, consistently now for several quarters above one, over 1.1 this quarter. And if you break down, again, the new and the renewals was also pretty constructive. I think over 50% new business. I mean, just the dynamic that gives you so much conviction in that continuing. Is it, you know, beyond the demand in the environment? I guess if you could just give us a sense, Mike, of what you're most proud of as the top of the list of what's really winning the most and resonating the most with incremental new logos right now. Maybe just if you could touch on the top few right now that's really doing it. Thanks.

Well, I mean, the biggest thing is we're delivering for our existing clients. The biggest thing when you look at this space is referenceability. And when you deliver for those clients, those clients talk to other folks that allow us to win new logos. And I appreciate your comments about the 1.12 book to bill because, again, That is not only key to showing that we're winning the market, but that mix is also important because that mix is always going to have renewals, which means clients are still wanting to do work with us, and then new work on either existing clients or new clients. So when I think about the key thing that we're doing in the market is we've embraced ITL. There's a lot of people that haven't embraced ITO. We've embraced that because that is critical and important to our clients. So if it's important to them, it's important to us, and we're delivering. I also talked on Investor Day and continue to talk about customer intimacy. Showing up and listening to these customers resonates. in the market. And that's what I keep talking about in terms of the new DXC. Now, that gives us a chance to do cloud, to do the applications work, to do the analytics work. And look, I'm very proud about not only stabilizing the GIS business when you look quarter to quarter, minus 9.3 to minus 9.1, but the key thing is look at GVS. Minus 3.4 last quarter, positive 2% this quarter. And we expect that's going to continue. So the strategy that we've put in place is absolutely working and gives us real confidence to not only deliver for Q2, but also our short and long-term plans.

Last question comes from the line of James Fawcett from Morgan Stanley. You may ask your question.

Hey, this is Jonathan on Free Games. You touched on costs earlier in response to Brian's question, but can you talk to your ability to pass on any potential wage pressure, perhaps in the form of COLA? Are clients receptive to these pricing dynamics?

I mean, look, COLA is a pretty standard term within this industry. So we haven't had any issues in terms of getting COLA. And in terms of passing price pressures on, look, you know, we're incredibly competitive in this market across the entire stack. So I don't see that being an issue for our margin whatsoever. that ends our question and answer session i'll turn the call back over to the presenters so look i want to thank everybody for joining the call today i'm very pleased with the momentum we've achieved in q1 and we are confident that that momentum will continue also we're very excited about the future of dxe because of the positive trajectory of the business and we look forward to speaking with all of you in q2 For our earnings and all the best to you and your families and operator, please close the call.

That concludes today's conference call. Thank you all for participating. You may now disconnect.