DXC Technology Company
Q1 2021 Earnings Call Transcript

Published: 7 Aug 2020

[Operator:]

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

[Shailesh Murali:]

Thank you and good afternoon everyone. I'm pleased that you are joining us for DXC Technology’s 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/investorrelations 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 2 informs our participants that DXC Technology's 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 a reconciliation of these measures to their respective and most directly comparable GAAP measures. These reconciliations can be found in tables included in today's earnings release. On Slide 3, you'll see that certain comments we make on the call will be forward-looking. These statements are subject to known and unknown 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 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 Technology's President and CEO, Mike Salvino. Mike?

[Mike Salvino:]

Thank you, Shailesh, 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 DXC 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. And I will make some closing remarks before opening the call up for questions. I was very pleased with our performance during the quarter, which has allowed us to have a strong start to FY 2021. 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 DXC, 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 DXC 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

[Paul Saleh:]

Well, thank you, Mike and greetings, everyone. Before I cover our financial results for the first quarter, I'd like to echo Mike's comment about our performance. We delivered results, which were ahead of the revenue and profit targets we shared with you on our last earnings call. This is clear indication that we are making solid progress on our transformation journey. Our business has proven to be more resilient in this COVID environment and our offerings are clearly relevant to our customers. Now, however, our first quarter results may not reflect the progress we're making due to the lag effect from prior terminations, price downs and runoffs. We expect these headwinds to subside starting in Q2. Now turning to business under strategic reviews, we remain on track to close the sale of our state and local health and human services business in the current quarter, which will allow us to reduce debt and further strengthen our balance sheet. The recent agreement to set our healthcare software business will further enhance our financial flexibility. Although we're quite encouraged by the progress we're making on multiple fronts, we’re still operating in an uncertain COVID environment. As a result, it's not yet the time to provide you with full-year guidance, but we will continue to update you on our progress on a quarterly basis. For the second quarter, we expect revenue to stabilize, margins to improve, and our bookings to continue to reflect the relevance of our new DXC in the market. So now let me turn to our first quarter financial results. I'll start by covering the items that are excluded from our non-GAAP results. In the first quarter, we had restructuring costs of $72 million on a pre-tax basis, or $0.24 per diluted share. These costs relate to the cost optimization program we discussed previously. Hopefully in the quarter, we had $110 million on a pre-tax basis or $0.32 per diluted share of transaction, separation, and integration related costs. And those were primarily driven by the external spend associated with the assets under strategic review. Now, in the first quarter, amortization of acquired intangibles was $148 million on a pre-tax basis, or $0.45 per diluted share. Excluding the impact of these special items, our non-GAAP income before taxes from continuing operations was $107 million for the quarter, and our non-GAAP EPS was $0.21, which is higher than we had indicated during our last earnings call. Our non-GAAP EPS in the quarter was impacted by a higher than expected tax rate of 45%, reflecting our mix of income and accrual related to a return to provision adjustment associated with prior tax filings, as well as the valuation allowance in certain foreign jurisdictions. Turning now to our first quarter results in more detail. As always, all revenue comparisons I'll discuss will be in constant currency. GAAP revenue in the first quarter was $4.5 billion, representing a sequential decline of 5.7%, but an improvement over the guidance we provided during our last earnings call. Our revenue for the quarter reflect the resiliency of our business, with a lower than anticipated impact from COVID during the quarter. Currency in the quarter was an incremental headwind of about $40 million sequentially, and $101 million, compared with the prior year. Adjusted EBIT in the quarter was $190 million. Adjusted EBIT margin was 4.2% reflecting the acceleration of some of our cost optimization initiatives. For the quarter, we delivered $60 million of cost optimization savings, which is about $45 million better than originally planned. This helped offset a $36 million in accruals, related to the resolution of certain prior customer disputes. And at this time, I'm able to report that we have dealt with the vast majority of outstanding disputes. Non-GAAP EPS was $0.21 in the quarter. And as I previously mentioned, our EPS was impacted by the higher than usual tax rate of 45%. Normalizing for a tax rate of 28%, EPS would have been $0.28. In the quarter, bookings were $5.3 billion for a book-to-bill of 1.2x. Turning now to our segment results, I'll start with a GBS segment, which includes the two top layers of our enterprise technology stacks, analytics and engineering, as well as the applications business. The GBS segment for now also includes three businesses under strategic review

[Mike Salvino:]

Thanks Paul. In summary, we had a positive start to the year. Now, let me share with you three key takeaways. First, on customers

[Operator:]

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

[Lisa Ellis:]

[Stuff] here on the results this quarter. Look, I know this revenue stabilization quarter-to-quarter is a key. Everyone’s watching very closely. Mike, I know you highlighted some things like the 40 challenged accounts, but can you maybe give a little bit more commentary? I know you've mentioned in the past the top 200 accounts just as – what are the factors giving you confidence that we're going to see this revenue stability when we get into 2Q? Thank you.

[Mike Salvino:]

Lisa, thanks for the question, always good to hear from you. Look, ever since I started securing the customers, and it's not just the 40, right? It's all of our customers around, making sure that they had confidence in not only our delivery, but also how we were dealing with them. So, when I talk about the new DXC, I talk about it being focused on our people and our customers, because we've always said, right, if you lose the people, you lose the business. So, we're very focused on that. People are engaged, our customers are seeing it, and based on that we feel very good about the stability of the revenue. And that's what we're saying around Q2. I think that's going to be the step in the right direction. And then specifically what we mean by stabilized revenues is that you are to expect it will be either flat or slightly up, quarter-on-quarter.

[Lisa Ellis:]

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

[Mike Salvino:]

So, let me give you one – let me give you even a different stat. When I started, we took an employee engagement survey. We recently finished that. We've got our board meeting next week, and employee engagement is significantly up, significantly. And they're actually seeing the fact that the town halls that I'm doing, the town halls that the leadership team is doing, the engagement on how we've dealt with them during COVID-19, and also social injustice in matters. And they're definitely paying attention. I can't thank them enough because without them, right, we don't stabilize this revenue. Without them, we don't deliver for the customers. So, very pleased with our employees are engaged.

[Lisa Ellis:]

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

[Mike Salvino:]

Thanks, Lisa.

[Operator:]

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

[Rod Bourgeois:]

Hey, guys. So, I want to ask more about where you're going with margins. I recognize there's definitely a bunch of COVID impacts and moving parts with your divestitures, but at the same time, you're citing revenue stabilization and progress on your cost actions. So, it'd be great to get your thoughts on your margin prospects for the rest of fiscal 2021. If you can say a little bit even beyond Q2, that would be really helpful?

[Mike Salvino:]

Rod thanks. And again, always good to hear your voice. First, let me give you some context, right, when you look at what we're doing, first of all, we're managing a transformation journey. Second, now, we have added another strategic alternative that we're managing, and then obviously we're managing COVID-19. And I think we're doing that incredibly well, meaning we're making very good progress. So again, I don't think it's the right time to give guidance, but here's what I can tell you. I've got the entire organization focused on expanding margins, and that's what you're going to see in Q2 and should continue to see quarter-on-quarter for the rest of the year. Now, why do I say that? I say that because we're making very good progress against the 550 million in cost savings. Now, beyond that, we still have the multiple levers that I talked about in my prepared comments. And that stuff that we're already working on, like consolidation of real estate, and data centers, right. I mean, what we want to do with our employee base is define a new employee experience. So, the folks that are working virtual are incredibly excited about that. And that will allow us to deal with the consolidation of real estate. Second is the use of technology, all right, you know, that's part of my playbook. You know, I've used that in my past. Bionics is very good, but there's more technology that we can put on this delivery footprint with Vinod. And then last, we are very focused around starting to optimize the organization. The organization was not ready to optimize when we started here at DXC. Okay, now we've got things stabilized with customers. All right, we like where the revenue is. So us, now looking at pyramiding and also offshoring the rate, make sure we've got that right mix is important. And then, look, I talk a lot about the employees, okay. And we are very focused on contractor conversion, because it's very hard to build a culture, if a significant portion of that workforce is contractors, and we're definitely all over that. All right, and you know, the contractor base, sees it and feels it. So, what I would say Rod, summarizing that whole thing is that look, all of these points will help us close the gap on the industry benchmarks. So, I'm pretty pleased with where we're going. Not only immediately, but also long-term.

[Rod Bourgeois:]

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

[Mike Salvino:]

Okay, so, look Rod on Sabre, we’re thrilled, right? We're thrilled to be working with Sean. We're thrilled to be working with Google. And it wasn't just fixing a relationship, right? When I talk about the new DXC, it was literally bringing our analytics, our apps, our cloud and security and our ITO capability to showcase in front of Sabre. So, when you look at that deal, the thing I like best about that deal, which is indicative of other deals, large deals that we've got in the pipeline is its full enterprise stack. Now, what do I mean by that? It's got every single layer in the stack that we show. Roughly 70% of it is ITO. Roughly 40% of it is cloud and security and apps. And then the final 15 is analytics and engineering. So, we're thrilled, right, by that deal. The other thing I will tell you is this; the end industry continues to talk about the cloud, the cloud, the cloud. All right. And we believe in the cloud, we always have believed in a cloud. We think that the industry, though, is going to take a very balanced approach. What we talked about during the last earnings call is that we've used virtual clarity across 135 of our top 200 accounts. And over the next two years, those clients aspired to move 20% of that critical work, which is where the industry is now moving critical work to the cloud, which won't happen overnight, but when you went through the process of technical feasibility risk business case, and the ability to execute that cloud percentage dropped to 5%. And what was telling about all that analysis is the existing ITO work, our clients wanted 60% of their remaining work to be modernized. Now, why do I tell you all that? I tell you all that, because it's a balanced approach. It's in hand, right? You got to do ITO and you got to be able to do cloud. And what I had a client tell me this quarter was what DXC is, is the engineers for engineers. Like we know how to do the engineering work, whether it's on-prem or in the cloud. So, like I said, I like the Sabre deal, not just because it got us back in to a client that was moving away, but more importantly, it's a full enterprise stack deal. So that's probably more than you wanted to hear, but those are my thoughts on the Sabre deal.

[Rod Bourgeois:]

All helpful. Thanks, guys.

[Operator:]

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

[Unidentified Analyst:]

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

[Mike Salvino:]

So, Jonathan, thanks. So first of all, on the pricing, you know, I just talked about our margin. All right. So, we are very focused on obviously, growing revenue and stabilizing that revenue, but also making sure those margins are good. Alright, so we like the margins we're getting with the new work and we're incredibly disciplined around that. Now, the work on the challenged accounts is, again, full enterprise stack. I mentioned during the last earnings call that we were pursuing our top 200 accounts to cross sell. That's one of the reasons why you spend all this time to make sure these customer relationships are rebuilt. I've said it over and over again, that clients give trusted people that have delivered for them more work. And what we're seeing is, we're seeing the work across the stack. We're seeing in the analytics and engineering offering, primarily fueled by not only DXC, but Luxoft. We're also seeing it with cloud and security and apps. And then the final piece is, again, as people move to the whole virtual mindset is people started to take real notice to the ITO layer. So, in some cases, we've helped them shore up that layer. In some cases, we've quite frankly shut down some of the ITO layer because we can see great ways to get cost savings. So, that's what we see and that's just not for the 40 accounts. All right, but it's also across our top accounts, Jonathan.

[Unidentified Analyst:]

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

[Mike Salvino:]

Yeah, I mean, look, the way I always look at these alternatives, and first and foremost, is that the right thing for our customers? And is it the right thing for our people? Okay, and, you know, you know, my background pretty well, I'm pretty deep in BPO. All right, and if I can't feel comfortable with that, and if I can't feel comfortable with the value that we're getting out of that, then you know, we think we can create shareholder value by keeping it. That's clearly one of my strengths in my past and I can see clear to, to fix in that business if we need to. Now, having said that, you shouldn't take away that we're still not trying to work deals, okay. And we've got a few work in immediately. Like Paul said, we plan on landing both the BPS and the workplace strategic alternatives basically before the next earnings call, Jonathan.

[Unidentified Analyst:]

Super helpful. Thank you.

[Operator:]

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

[Ashwin Shirvaikar:]

Thank you. Hi Mike, hi Paul.

[Mike Salvino:]

Hi, Ashwin.

[Ashwin Shirvaikar:]

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

[Mike Salvino:]

So, Ashwin the – thanks for that question, all right. And much like the guidance, I'm not going to talk about the alternative uses of cash, whether it be dividends, whether it be buybacks, whether it the potential acquisitions, because again, where we are is, we're laser focused right. This quarter-to-quarter progress that you all have seen now, is a lot of work. Okay, and couldn't be more thrilled with the progress that we're making. But with the transformation journey we got going on, with now the four strategic alternatives and COVID-19, you know, look, we just don't think it's the right timing to comment on that.

[Ashwin Shirvaikar:]

Got it. Okay.

[Paul Saleh:]

Ashwin, what I would add is that, we’re just really as we mentioned all along, we're committed to an investment grade credit profile. And our balance Sheet, as you heard today is in stronger, we have quite a bit of liquidity and all these transactions are going to – the two, particularly the two that are been teed-up already will enhance our financial flexibility. Longer-term again, we're going to work to maintain that solid financial position and the debt-to-EBITDA of 2x or less would be probably our targets.

[Ashwin Shirvaikar:]

Understood. The second question is about the 515 cost saving, I ask this because one of the prior versions of cost cutting and optimization, the cuts went too fast, cut too deep, it hurt customers, it hurt employees. So, when you say you're doing faster, how are these cost optimization initiatives different? How this is smarter? What specific action are you now taking? Any incremental color there?

[Mike Salvino:]

Okay. So, the key thing is this, right. With the 550 and cost reductions, we're focused on the delayering. And what I said in the last call is that look, what I've seen in this, okay, and it's key, right? Because you can't fix customers and take the cost out, right. You know, you would hear some rumblings, but what I noticed in my detailed reviews that I did in the first six months is we've got layers within DXC that are causing complexity and confusion. And I validated that with our customers. Almost to using individual names to say, have you seen these folks show up on the account. Okay, and look, what I want to do is, I want to make sure and this what we're doing is that our detailed folks that are doing the work, have a direct line to our customers and our account teams. And that's what we're doing, we're cleaning that up. And you know, so I'm very proud about the work we've done. I'm also very proud about how we've, how we've simplified the organization, because that's, you know, that's incredibly important. The second thing I would say is this, we're being very transparent with our people. Okay, I do monthly town halls, with our people, we talk about it. I've talked about what we're doing, where we're going, and the specific words are, we want our people to be making customer impact. So, I would say three things

[Ashwin Shirvaikar:]

Understood. Thank you for that.

[Operator:]

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

[Jason Kupferberg:]

Good afternoon. I know you're targeting the book-to-bill of 1.0 in the second quarter, I was curious if your expectation is that that would be weighted towards GBS again, similarly to Q1 or do you think it'll be more balanced based on what you're seeing around near-term pipeline conversion?

[Mike Salvino:]

No. So, it definitely will not be focused on GBS, it will be much more balanced between GBS and GIS. Actually, when I look at them, they're both at 1x. So, it should be very balanced, but I like remember what Paul said about the ITO pipeline. Those deals take a little bit longer to do, but when you get on like Sabre, they're meaningful and that pipeline with our focus has grown significantly. We expect to harvest that.

[Jason Kupferberg:]

Great, okay, well, that's good to hear. Maybe just, sort of a follow-up along those lines, I know that pre-COVID you guys had talked about investing 100 million into the legacy IP outsourcing business. Can we just get an update on those investment plans? Is that all still on track over what period of time, sounds like maybe you're starting to see some fruits from that?

[Mike Salvino:]

I mean Jason that’s done, right. I mean, so when I said that, basically, our focus on our customers is really starting to pay-off. That investment is what's making that work. All right. So, us getting closer to those customers, making sure that the folks on the account team have the tools, the training, and then making sure that we also not only use that 100 million on people, but also some of the automation, you know, helps us basically move that forward. The last thing, as I said on the last call, is that we're rewarding our folks. All right, in fact, it's this month. We're rewarding our folks that are doing the detailed work. All right, what I call layers, one through four with pay increases. And again, I think that's incredibly important that the leadership of DXC recognize and rewards our folks for the work they're doing. And that's what's happening.

[Jason Kupferberg:]

Congrats on the quarter. Thanks.

[Mike Salvino:]

Thanks, Jason. And our next question will come from Darrin Peller with Wolfe Research. All right, thanks, guys. Just to hone in a little more on the bookings, again, it's obviously great to see the 1.2 and then the 1.0 for next quarter, but when we think about the types of contracts, you're having, obviously, one third is new. Can you give us a little bit more of a sense of the actual – from a horizontal standpoint or workflow standpoint? What exactly is resonating with your clients the most that you're offering that you're winning over others? And just maybe consider also thinking about both for this quarter? What's going on for next quarter and then the pipeline in a similar question?

[Mike Salvino:]

Okay, so Darrin, back to the pipeline. The pipeline, like Paul said, we're seeing an increase in pipeline, obviously, across the board, most significant in ITO. Okay. The second thing is, what I would say is, the analytics and engineering capability that we have is significant. And I was actually a little bit surprised with how resilient it was. So, when we looked at our pre, you know, our COVID numbers, all right, pre-actually selling into this quarter, we thought that piece of the business was going to be impacted more, and it wasn't. In fact, they did very well. Okay. The second thing is exactly what I said about the ITO and the cloud. What we're seeing is, we are the engineers of engineers. What that means is, as people move to the cloud, they need our help, and it's a balanced approach. My view of the cloud business right now is the easy stuff move to the public. That was the first 25%. Now what we're dealing with is we're dealing with the critical applications. Those don't move to the cloud quick. That doesn't mean that the cloud does not play a pivotal role in it. It absolutely does, but it's definitely right, a balanced approach. And that's what we're seeing. We're seeing some of that work, move to the cloud. Other of the work, they want it modernized. Our clients want the ITO, the IT estate modernized. So, Darrin, hopefully that gives you a flavor. It's a balanced pipeline. We expect to deliver a balanced book-to-bill across GBS and GIS next quarter, but we do feel confident about that 1x.

[Darrin Peller:]

Okay. I'm trying to get a sense of what your, you know, your clients think that you have that really your competitors don't have and that's why they're choosing you and those new logos. That one-third of the bookings that's new. Sounds like it is a lot of what you're saying around the analytics, though and obviously, your capabilities on the cloud conversions as well.

[Mike Salvino:]

Well, it's also, look – it's the ability to migrate, right, the ITO work. Okay. I mean, you know, this ITO business is a favor for us, because every single client we walk into not everything's in the cloud. All right. So, the net-net is us being able to deal with mainframes. Us being able to deal with [AS400], us being able to deal with that kind of stuff that not all of our competition has Darrin, that's unique. Okay, and then when we can show up, speaking the cloud for Google, for Microsoft, for VMware, for Amazon, that's huge. Okay, so that's why I keep saying it's an and story.

[Darrin Peller:]

Got it. That actually makes a lot of sense. Just a quick follow up is on when you talked about how you're done was really trying to fix the challenged accounts. What are the implications of that? I mean, it seemed like you were uncovering different issues. For the first couple of quarters, you came as CEO, Mike, but now that you're done, do you feel like you can really put that to rest? There's no other issues, you cannot – you're expecting to uncover and just look forward now?

[Mike Salvino:]

No, I mean, look, Darrin for as many times as I, you just think about, basically a week of my time, probably every day that goes by, I'm on a customer call, in some fashion. Could be a status call, could be me just checking in. And then look, I'm constantly sending these customers emails about what's going on, all right. And they would tell me if stuff was not working. Because they've got every opportunity to, all right, and they certainly are engaged. And in fact, they're more inquisitive than I thought about what other capability does DXC have, and us being able to get out there and tell that story is huge. Okay. So again, like the position we're in, like the fact that the customers are engaged. What I would finish with is this. This new DXC thing is not like a logo. It is what we believe in, okay. And part of that is around being customer focused. So, when I mentioned about that customer centricity mindset is built-in, that's where we're going. So, I do not expect us to go backwards. Alright, so, again, that's the culture that we're dealing with.

[Darrin Peller:]

Got it. Appreciate that guys nice. Thanks.

[Operator:]

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

[Jared Levine:]

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

[Mike Salvino:]

The details of the workplace mobility business, again, we saw the demand, we converted two very nice deals that were up over 200 million in TCV in the quarter. One for a large electronics company, another one for a pharmaceutical company where Jerry, we showed up in their time of need. And that allowed us right to compete even better for that work, because we delivered. So, Paul, would you add anything about the performance of the workplace business?

[Paul Saleh:]

Yes. On the revenue side in constant currency, I think it was down about a few points close to 4%, more again, you know, timing of some of the things in the first quarter in the COVID environment of what customers were looking to do so, but overall, I think that our pipeline also is pretty strong right now.

[Jared Levine:]

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

[Mike Salvino:]

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

[Jared Levine:]

Yeah.

[Mike Salvino:]

Yeah, thanks, Jerry. What I'd like to do is, I want to thank each and every one of you for joining the call and I'd like to highlight that look, our strategy to position DXC for growth has always been based on taking care of our customers and our people. This focus has allowed us to make good progress on our transformation journey in Q1 and we are confident that this momentum will continue in Q2. So, with that, I want to wish you and your families all the best. And operator, please close the call.

[Operator:]

This concludes today's call. Thank you for your participation. You may now disconnect.