DXC Technology Co (DXC) 2024 Q1 法說會逐字稿

Hello, and welcome to the DXC Technology Q1 Earnings Call. (Operator Instructions) I now turn the conference over to John Sweeney, VP of Investor Relations. Please go ahead.

您好，歡迎參加 DXC Technology 第一季度財報電話會議。 （操作員指示）我現在將會議交給投資者關係副總裁 John Sweeney。請繼續。

Thank you. Good afternoon, everybody. I'm pleased that you're joining us for DXC Technology's First Quarter Fiscal Year 2024 Earnings Call. Our speakers on the call today will be Mike Salvino, our Chairman, President, CEO; and Rob Del Bene, our EVP and CFO. This call is being webcast at DXC's Investor Relations website, and the webcast includes slides that will accompany this discussion today.

謝謝。大家下午好。我很高興您能參加 DXC Technology 2024 財年第一季度收益電話會議。今天電話會議的發言者是我們的董事長、總裁兼首席執行官邁克·薩爾維諾 (Mike Salvino)；以及我們的執行副總裁兼首席財務官 Rob Del Bene。此次電話會議正在 DXC 的投資者關係網站上進行網絡直播，網絡直播包括今天討論中附帶的幻燈片。

Today's presentation includes certain non-GAAP financial measures, which we believe provide useful information to our investors. In accordance with the SEC rules, we provide a reconciliation of these measures to their respective and most directly comparable GAAP measures. The reconciliations can be found in the tables included in today's earnings release and in the webcast slide.

今天的演示包括某些非公認會計準則財務指標，我們相信這些指標為我們的投資者提供了有用的信息。根據 SEC 規則，我們提供了這些指標與各自最直接可比的 GAAP 指標的調節表。這些調節可以在今天的收益發布和網絡廣播幻燈片中包含的表格中找到。

Certain comments we make on the call will be forward looking. These statements are subject to known 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 quarterly report on Form 10-Q 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.

我們在電話會議中發表的某些評論將具有前瞻性。這些陳述受到已知風險和不確定性的影響，可能導致實際結果與電話會議中表達的結果存在重大差異。對這些風險和不確定性的討論包含在我們的 10-Q 表格季度報告和其他 SEC 文件中。現在我想提醒我們的聽眾，除法律要求外，DXC Technology 不承擔更新本次電話會議中提供的信息的義務。

And with that, I'd like to introduce DXC Technology's Chairman, President and CEO, Mike Salvino. Mike?

接下來，我想介紹一下 DXC Technology 的董事長、總裁兼首席執行官 Mike Salvino。麥克風？

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 an update on our overall business performance. Next, I will update you on the performance of our GBS and GIS businesses. Rob will then discuss our financial results in detail, provide his perspective on DXC and his focus moving forward and then discuss our updated guidance. And finally, I will provide some closing remarks before opening the call up for questions.

謝謝約翰，我感謝今天加入電話會議的每個人，我希望您和您的家人一切順利。今天的議程將從我們整體業務績效的最新情況開始。接下來，我將向您介紹我們 GBS 和 GIS 業務的最新業績。然後，Rob 將詳細討論我們的財務業績，提供他對 DXC 的看法以及他未來的重點，然後討論我們更新的指導。最後，在開始提問之前，我將發表一些結束語。

Before I get into the results of Q1, I want to give you some context. We are taking the right steps to shape DXC into a company that consistently delivers revenue growth and expanded margins, EPS and free cash flow. We are doing this by focusing on our high-value growth business of GBS and fixing the historical challenges of our GIS business, along with changing the revenue mix so that GBS represents the majority of our revenue.

在討論第一季度的結果之前，我想向您提供一些背景信息。我們正在採取正確的步驟，將 DXC 打造成一家能夠持續實現收入增長並擴大利潤率、每股收益和自由現金流的公司。為此，我們專注於 GBS 的高價值增長業務，解決 GIS 業務的歷史挑戰，同時改變收入結構，使 GBS 占我們收入的大部分。

As we began FY '24, we saw resiliency in our business because, in FY '23, we delivered 4 quarters of revenue stability in a slowing IT market. Also, we thought customer demand for our work would stay at the buying levels we saw in late FY '23 because the work we do is essential to our customers' operation. Currently, we are seeing customer demand for hardware, PCs and network devices, along with some project work, either stopped or delayed to the second half of the year at a higher rate than we anticipated.

在 24 財年開始時，我們看到了業務的彈性，因為在 23 財年，我們在 IT 市場放緩的情況下實現了 4 個季度的收入穩定。此外，我們認為客戶對我們工作的需求將保持在 23 財年末的購買水平，因為我們所做的工作對客戶的運營至關重要。目前，我們看到客戶對硬件、個人電腦和網絡設備的需求以及一些項目工作要么停止要么推遲到下半年，速度比我們預期的要高。

You will see that the resiliency in our GBS business held up. GBS performed as we had planned and delivered solid growth. In contrast, GIS did not show the resiliency that we had hoped. Although this is not great news, I would like to point out that a major piece of the revenue shortfall was resale revenue, which is low margin, and we have conscientiously reduced over the last few years to limit our dependency on this type of revenue.

您會發現我們的 GBS 業務保持了彈性。 GBS 的表現符合我們的計​​劃，並實現了穩健的增長。相比之下，GIS 並沒有表現出我們所希望的彈性。雖然這不是個好消息，但我想指出，收入缺口的一個主要部分是轉售收入，這是低利潤的，我們在過去幾年裡有意識地減少了對此類收入的依賴。

We have made measurable improvements this quarter to proactively change our organization to be more competitive in this market environment. We have changed how DXC engages with the market by moving to an offering-led operating model. The offering-led operating model moves us from a regional model where leaders were generalists concerning offerings to a global [offering-led operating] model where the leaders are experts and focused 100% on growing revenue and margin for their offerings. This model increases our customer coverage and assures we bring the right skills to our customers to deliver and win new work.

本季度我們做出了可衡量的改進，以主動改變我們的組織，以便在這個市場環境中更具競爭力。我們通過轉向以產品為主導的運營模式，改變了 DXC 與市場互動的方式。以產品為主導的運營模式使我們從區域模式（領導者是產品方面的通才）轉變為全球[以產品為主導的運營]模式，在該模式中領導者是專家，並100% 專注於增加其產品的收入和利潤。這種模式擴大了我們的客戶覆蓋範圍，並確保我們為客戶提供正確的技能，以交付和贏得新工作。

As I mentioned last quarter, our analytics and engineering and insurance offerings were early adopters of this model, and they are consistently our highest revenue growth offerings. Our intent is to get this model to work for the other 4 offerings.

正如我上季度提到的，我們的分析、工程和保險產品是這種模式的早期採用者，它們始終是我們收入增長最高的產品。我們的目的是讓這個模型適用於其他 4 個產品。

Now let me discuss our Q1 results and the performance of our GBS and GIS businesses. Organic revenue growth was minus 3.6%, which is about $75 million lower than the midpoint of our guidance range. Our EBIT margin was 6.5%. The lower-than-expected margin was a result of us needing to fine-tune our new operating model to better manage supply and demand. Our free cash flow was better than expected due to our strong execution around our working capital management. Non-GAAP EPS was $0.63. And finally, after having a strong second half book to bill for FY '23, we delivered a book to bill of 0.89 as we continue to replenish our pipeline. Our trailing 12-month book to bill is now 1.03.

現在讓我討論一下我們第一季度的業績以及 GBS 和 GIS 業務的表現。有機收入增長為-3.6%，比我們指導範圍的中值低約 7500 萬美元。我們的息稅前利潤率為 6.5%。利潤率低於預期是因為我們需要微調新的運營模式以更好地管理供需。由於我們在營運資本管理方面的強大執行力，我們的自由現金流好於預期。非 GAAP 每股收益為 0.63 美元。最後，在 23 財年下半年的預定帳單表現強勁之後，隨著我們繼續補充我們的管道，我們的預定帳單率為 0.89。我們過去 12 個月的帳面成本現在為 1.03。

Now turning to our GBS business. The GBS business grew 3.3% in Q1. We look at GBS as a flywheel for DXC that provides sustainable growth at double-digit margins. It has now grown 9 consecutive quarters. Also, GBS is 49.4% of our overall revenue. It is still early days, but we've seen the ability to sell new GBS work to long-standing GIS customers, and scaling this will provide a source of upside revenue to our GBS business.

現在轉向我們的 GBS 業務。 GBS 業務第一季度增長 3.3%。我們將 GBS 視為 DXC 的飛輪，能夠以兩位數的利潤率實現可持續增長。目前已連續 9 個季度增長。此外，GBS 占我們總收入的 49.4%。現在還處於早期階段，但我們已經看到了向長期 GIS 客戶銷售新 GBS 工作的能力，並且擴大這一範圍將為我們的 GBS 業務提供上行收入來源。

Our GBS offerings are all uniquely positioned in their respective markets. Analytics & Engineering is well positioned due to our engineering talent. Our skilled team does not just write code, but they bring the code together in engineering solutions to make things work better. A great example are the solutions we've developed for the dashboards in the cars of BMW and Mercedes.

我們的 GBS 產品在各自的市場中都具有獨特的定位。由於我們的工程人才，分析與工程處於有利地位。我們技術精湛的團隊不僅會編寫代碼，還會將代碼整合到工程解決方案中，以使事情更好地工作。一個很好的例子是我們為寶馬和梅賽德斯汽車的儀表板開發的解決方案。

Our insurance offering is the world's largest provider of insurance software and BPS solutions, working with 18 of the top 20 global insurers. Our unique position is we run the platform for Lloyd's of London. This platform brings together brokers and writers to create insurance policies for the European market. We are currently using our custom application team to modernize this important platform, which we believe will be another source of revenue growth.

我們的保險產品是全球最大的保險軟件和 BPS 解決方案提供商，與全球 20 強保險公司中的 18 家合作。我們的獨特地位是我們為倫敦勞合社運營該平台。該平台匯集了經紀人和作家，為歐洲市場創建保險單。我們目前正在利用我們的定制應用程序團隊來實現這一重要平台的現代化，我們相信這將是收入增長的另一個來源。

Along with our custom application skills, we have unique capabilities with enterprise application providers like ServiceNow. We run one of the largest instances of the ServiceNow product, and we have used our custom application team to embed ServiceNow into Platform X, which is our AI tool that monitors and fixes the IT estates of many of our GIS customers.

除了我們的定制應用程序技能之外，我們還擁有與 ServiceNow 等企業應用程序提供商合作的獨特能力。我們運行 ServiceNow 產品最大的實例之一，並使用我們的自定義應用程序團隊將 ServiceNow 嵌入到 Platform X 中，這是我們的 AI 工具，用於監控和修復許多 GIS 客戶的 IT 資產。

Moving now to our GIS business. As I mentioned, we did not make the progress we had hoped in GIS, and it declined 9.9%. Let me give you a quick performance recap of our 3 GIS offerings. Our security offering grew. This offering provides security strategies and valuable resources to both proactively and reactively help our customers protect themselves against security threats.

現在轉向我們的 GIS 業務。正如我所提到的，我們在 GIS 方面沒有取得我們希望的進展，它下降了 9.9%。讓我快速回顧一下我們的 3 種 GIS 產品的性能。我們的安全產品不斷增長。該產品提供了安全策略和寶貴的資源，可以主動和被動地幫助我們的客戶保護自己免受安全威脅。

Cloud/ITO experienced the largest decline. Chris Drumgoole, our former COO, and I are working closely together to fix our dependency on underutilized data centers we own, develop a solid pipeline and path to move work to the cloud, and use our unique position in the ITO market to take market share from our competitors and improved economics. An example of us taking market share at better economics was our recently announced AT&T deal, where we will be providing securely managed server, storage, enterprise backup and maintenance services to AT&T.

雲/ITO 跌幅最大。我和我們的前首席運營官Chris Drumgoole 正在密切合作，以解決我們對自己擁有的未充分利用的數據中心的依賴，開發可靠的管道和路徑將工作轉移到雲端，並利用我們在ITO 市場的獨特地位來奪取市場份額來自我們的競爭對手並改善了經濟。我們以更好的經濟效益獲取市場份額的一個例子是我們最近宣布的 AT&T 交易，我們將為 AT&T 提供安全管理的服務器、存儲、企業備份和維護服務。

After 3 quarters of consistent revenue in FY '23, Modern Workplace declined in Q1. We expected that Cloud/ITO and Modern Workplace would perform better in FY '24 based on the following 3 actions we have taken to fix them. First, we managed the disruption from terminated contracts that happened 2 to 3 years ago. This work takes multiple years to fall off; and for the most part, it will be out of our numbers after this year. Second, we bolstered our customer delivery and offshore delivery capability to secure the revenue we maintain and deliver it at better margins. Third, to win more work, we improved our market reputation. For example, Gartner now ranks us as a leader in modern workplace.

在 23 財年連續三個季度保持穩定收入後，Modern Workplace 在第一季度出現了下滑。基於我們為解決這些問題而採取的以下 3 項行動，我們預計雲/ITO 和現代工作場所將在 24 財年表現更好。首先，我們應對了 2 至 3 年前發生的終止合同造成的干擾。這項工作需要多年才能落下；大多數情況下，今年之後它將不再屬於我們的數量。其次，我們增強了客戶交付和離岸交付能力，以確保我們維持的收入並以更高的利潤率交付。三是贏得更多工作，提高市場美譽度。例如，Gartner 現在將我們評為現代工作場所的領導者。

We invested in tools to be more competitive like Platform X and UPtime. We are bringing in new work at better economics, and we have positioned ourselves to become the partner of choice to cloud providers as they move workloads that are essential to customer operations to the cloud. All that being said, it will take a little bit more time to get these 2 offerings to perform as we expected.

我們投資了 Platform X 和 UPtime 等更具競爭力的工具。我們正在以更好的經濟效益引入新的工作，並且我們已將自己定位為雲提供商的首選合作夥伴，因為他們將對客戶運營至關重要的工作負載轉移到雲中。話雖如此，要讓這兩種產品達到我們預期的效果，還需要一點時間。

Before turning the call over to Rob, I want to comment on our AI capability that we have built into both our GBS and GIS businesses because we believe we are in position to lead the market in this area. As many of you know, AI has been a passion for me. I brought this passion to DXC, and we have made focused investments in AI every year that I've been CEO.

在將電話轉給 Rob 之前，我想評論一下我們在 GBS 和 GIS 業務中內置的人工智能能力，因為我們相信我們有能力引領這一領域的市場。正如你們許多人所知，人工智能一直是我的熱情所在。我把這種熱情帶到了 DXC，在我擔任首席執行官期間，我們每年都會重點投資人工智能。

We have over 10,000 women and men that are trained in AI, and we have AI capability in now 4 out of our 6 offerings. In GBS, we have embedded our AI capability into both insurance and analytics and the engineering offerings. In insurance, DXC Assure uses AI to better serve customers by providing them insights and answers about the most complex policy questions. In Analytics & Engineering, Robotic Drive uses AI to enable cars to be self-driving, ranging from driving technology to assist drivers to full driving automation.

我們有超過 10,000 名女性和男性接受過人工智能培訓，目前我們的 6 種產品中有 4 種擁有人工智能功能。在 GBS，我們已將人工智能功能嵌入到保險和分析以及工程產品中。在保險領域，DXC Assure 利用人工智能為客戶提供有關最複雜保單問題的見解和答案，從而更好地服務客戶。在分析與工程領域，機器人駕駛利用人工智能使汽車能夠自動駕駛，範圍從輔助駕駛員的駕駛技術到全面的駕駛自動化。

In GIS, we have developed AI capability in both our Cloud/ITO and Modern Workplace offerings. In Cloud/ITO, our Platform X tool uses AI to proactively monitor IT estates to detect and resolve issues with 1 of our 10,000 bots to avoid costly business disruptions.

在 GIS 領域，我們在雲/ITO 和現代工作場所產品中開發了人工智能功能。在雲/ITO 中，我們的 Platform X 工具使用 AI 主動監控 IT 資產，以檢測並解決 10,000 個機器人中的 1 個的問題，以避免代價高昂的業務中斷。

In Modern Workplace, AI is built into our UPtime platform, which we leverage across 7 million devices. We use AI every time an employee reaches out for assistance and can resolve up to 80% of those interactions without human intervention, along with using AI to predict issues with PCs and reduce the carbon footprint for our customers. The bottom line is all of these solutions are at scale, are providing enhanced customer delivery capability and are driving new revenue for us.

在 Modern Workplace 中，人工智能內置於我們的 UPtime 平台中，我們在 700 萬台設備上利用該平台。每當員工尋求幫助時，我們都會使用人工智能，並且可以在無需人工干預的情況下解決高達 80% 的互動，同時使用人工智能來預測 PC 問題並減少客戶的碳足跡。最重要的是，所有這些解決方案都是規模化的，正在提供增強的客戶交付能力，並為我們帶來新的收入。

Now I want to turn the call over to Rod, who has been a pleasure to work with. And I have complete trust that he will transform our finance organization to deliver the financial analytics to make our results more predictable and repeatable.

現在我想把電話轉給羅德，與他合作很愉快。我完全相信他將改造我們的財務組織，提供財務分析，使我們的結果更加可預測和可重複。

Rob, over to you.

羅布，交給你了。

Mike, thanks for the introduction, and thank you for the opportunity to be part of the DXC team. In my brief time here, I've been impressed by the intense focus on delivery excellence, culture and customers. I can clearly see the strategic and long-term value of the business. I'll now provide you with a quick rundown of our first quarter performance, covering the important highlights of where we executed well and where we fell short of our expectation.

Mike，感謝您的介紹，也感謝您有機會成為 DXC 團隊的一員。在我在這裡的短暫時間裡，對卓越交付、文化和客戶的強烈關注給我留下了深刻的印象。我可以清楚地看到業務的戰略和長期價值。現在，我將向您簡要介紹我們第一季度的業績，涵蓋我們執行良好和未達到預期的重要亮點。

Organic revenue growth for the quarter was down 3.6% with consistent year-to-year growth of the GBS segment being offset by a greater-than-expected decline in the GIS segment. In the quarter, we were impacted by a slowdown in customer expenditures. This is mainly the resale of IT equipment such as PCs, networking gear and servers and project work. These are projects that are typically below $5 million in size and are sold into our existing account base. The GIS segment experienced the bulk of the slowdown. The declines in resale and projects are consistent with what is taking place in the industry with the economic environment impacting spending. This, we believe, accounted for the bulk of our revenue underperformance versus expectation with half of the miss in resale and half in project revenues.

本季度有機收入增長下降 3.6%，GBS 業務的同比持續增長被 GIS 業務超出預期的降幅所抵消。本季度，我們受到客戶支出放緩的影響。這主要是 PC、網絡設備和服務器等 IT 設備的轉售以及項目工作。這些項目的規模通常低於 500 萬美元，並出售給我們現有的客戶群。 GIS 領域經歷了大部分放緩。轉售和項目的下降與該行業正在發生的情況一致，經濟環境影響了支出。我們認為，這是我們收入表現低於預期的主要原因，其中一半是轉售收入，一半是項目收入。

In the first quarter, the revenue shortfall impacted profitability particularly since the revenue weakness was not evident until late in the quarter. While the resale revenue provides little to no bottom line profit, it does provide modest gross profit and absorb overhead. So in the short term, the underrun in resale revenue impacts bottom line profit.

第一季度，收入短缺影響了盈利能力，特別是因為收入疲軟直到本季度末才明顯。雖然轉售收入幾乎沒有帶來底線利潤，但它確實提供了適度的毛利潤並吸收了管理費用。因此，在短期內，轉售收入的不足會影響底線利潤。

As communicated by Mike and the team in prior calls, the strategy over the longer term is to reduce resale revenue and focus the team on driving services revenues. The project-based services revenue shortfall has a greater impact on profitability as the resources to deliver the higher revenue levels are already onboard. Reducing this excess capacity will be a focus going forward.

正如邁克和團隊在之前的電話會議中所傳達的那樣，長期戰略是減少轉售收入，並將團隊的重點放在增加服務收入上。基於項目的服務收入短缺對盈利能力的影響更大，因為提供更高收入水平的資源已經到位。減少過剩產能將是未來的重點。

Expenses were well managed in the quarter with spending in line with our expectations. Free cash flow for the quarter was negative $75 million, ahead of our expectations due to continued focus on working capital management including strong collections performance. As a reminder, the first quarter is seasonally our lightest free cash flow quarter as we made previously planned annual vendor payments for software, maintenance and paid annual bonuses.

本季度費用管理良好，支出符合我們的預期。由於持續關注營運資金管理（包括強勁的收款業績），本季度自由現金流為負 7500 萬美元，超出了我們的預期。提醒一下，第一季度是我們季節性自由現金流最輕的季度，因為我們按照之前計劃向供應商支付了軟件、維護費用並支付了年度獎金。

Now moving to our key financial metrics. Our first quarter gross margin of 21.1% was up 10 basis points year-over-year but below our expectation due to the revenue shortfall. SG&A spending was down 6.5% year-to-year, flat as a percentage of sales. Depreciation and amortization was down 10.5%, lower by 30 basis points. Other income decreased $40 million year-to-year, lower by 90 basis points, driven by 2 factors: a $30 million decline in pension income and a lower level of gains on sales of assets, which reduced adjusted EBIT by $17 million year-over-year.

現在轉向我們的關鍵財務指標。我們第一季度的毛利率為 21.1%，同比增長 10 個基點，但由於收入短缺而低於我們的預期。 SG&A 支出同比下降 6.5%，佔銷售額的百分比持平。折舊和攤銷下降10.5%，下降30個基點。其他收入同比減少 4,000 萬美元，下降 90 個基點，主要由兩個因素驅動：養老金收入減少 3,000 萬美元，資產銷售收益水平降低，導致調整後息稅前利潤同比減少 1,700 萬美元-年。

Taking this all together, adjusted EBIT margin was down by 50 basis points year-over-year. Excluding pension income and asset sales, the EBIT margin is up 60 basis points year-to-year. Non-GAAP EPS was down $0.12 compared to the prior year. The EPS reduction was driven mainly by the lower pension income and a lower level of asset sales in the current year. The higher tax rate compared to the prior year reduced non-GAAP EPS by $0.08, but this was fully offset by the lower share count resulting from our ongoing share repurchase program.

綜合考慮，調整後息稅前利潤率同比下降 50 個基點。不包括養老金收入和資產銷售，息稅前利潤率同比增長 60 個基點。非 GAAP 每股收益較上年下降 0.12 美元。每股收益下降的主要原因是本年度養老金收入下降和資產銷售水平下降。與上一年相比，較高的稅率使非 GAAP 每股收益減少了 0.08 美元，但這完全被我們正在進行的股票回購計劃導致的股票數量減少所抵消。

Now turning to our segment results. Our business mix continues to trend to our higher-margin GBS segment. As a percent of total revenue, GBS is now 49.4%, up 60 basis points sequentially. We anticipate that this trend will continue and that, in a matter of quarters, the GBS segment will be the majority of our revenue. GBS grew 3.3% organically and posted a ninth consecutive quarter of organic growth, which reflects the deep industry-based customer value delivered by the GBS team. The GBS profit margin declined 60 basis points year-over-year, reflecting the capacity required to continue to drive future growth and the impact of lower pension income.

現在轉向我們的部門業績。我們的業務組合繼續趨向於利潤率較高的 GBS 細分市場。 GBS 佔總收入的百分比目前為 49.4%，比上一季度上升 60 個基點。我們預計這一趨勢將持續下去，並且在幾個季度內，GBS 業務將成為我們收入的大部分。 GBS 有機增長 3.3%，連續第九個季度實現有機增長，這反映了 GBS 團隊提供的基於行業的深厚客戶價值。 GBS利潤率同比下降60個基點，反映了繼續推動未來增長所需的能力以及養老金收入下降的影響。

Turning now to GIS. Organic revenue declined 9.9%, driven by declines in Cloud Infrastructure & ITO and moderating declines in Modern Workplace. GIS profit margin decreased 130 basis points year-over-year, driven by the reductions in pension income, reduced gains on asset sales and revenue impact of clients delaying project-based services.

現在轉向 GIS。受雲基礎設施和 ITO 下降以及現代工作場所下降放緩的推動，有機收入下降 9.9%。由於養老金收入減少、資產銷售收益減少以及客戶推遲基於項目的服務對收入的影響，GIS 利潤率同比下降 130 個基點。

Now let's take a closer look at our offerings. Analytics & Engineering revenue performance was up 8.8%, which is slightly ahead of the fourth quarter growth rate. This is very solid performance in the current demand environment. The book to bill was 1.03, and trailing 12-month number is a strong 1.14x. Applications revenue declined 70 basis points, similar to the fourth quarter decline. The trailing 12-month book to bill is 1.06x. The application offering team has made good progress expanding our capabilities and success in enterprise applications such as SAP and ServiceNow.

現在讓我們仔細看看我們的產品。分析與工程收入業績增長 8.8%，略高於第四季度的增長率。在當前的需求環境中，這是非常可靠的表現。賬面價值為 1.03，過去 12 個月的數字為 1.14 倍。應用程序收入下降 70 個基點，與第四季度的降幅類似。過去 12 個月的帳面成本比為 1.06 倍。應用程序提供團隊在 SAP 和 ServiceNow 等企業應用程序方面取得了良好的進展，擴大了我們的能力並取得了成功。

Insurance Software & BPS continued to grow with revenue up 5.1%. The insurance SaaS component of the portfolio grew 8.5%. Insurance software and deep insurance industry BPS skills of our team is resonating in the market. Security had strong performance, up 6.8% year-to-year.

保險軟件和 BPS 繼續增長，收入增長 5.1%。投資組合中的保險 SaaS 部分增長了 8.5%。我們團隊的保險軟件和深厚的保險行業BPS技能在市場上引起共鳴。安全業務表現強勁，同比增長 6.8%。

Cloud Infrastructure and IT Outsourcing declined 12.7%. This business was significantly impacted by a slowdown in both resale revenue and project-based services revenue. The resale reduction accounted for almost 5 points of the revenue decline, while project-based services revenue accounted for 2.5 points.

雲基礎設施和 IT 外包下降 12.7%。該業務受到轉售收入和基於項目的服務收入放緩的嚴重影響。轉售減少佔收入下降的近 5 個百分點，而基於項目的服務收入則佔 2.5 個百分點。

Also impacting revenue is the wind down of several contracts that terminated some time ago. The headwinds from these contracts will continue throughout the year and combined with the reduced resale revenue, will result in ITO in the negative high single-digit range for the remainder of the year.

同樣影響收入的還有一些不久前終止的合同的逐步結束。這些合同帶來的不利因素將持續全年，再加上轉售收入減少，將導致 ITO 在今年剩餘時間內處於負高個位數區間。

Now turning to Modern Workplace. Based on our performance last fiscal year, we anticipated moderating declines going forward. However, like Cloud Infrastructure & ITO, we experienced a slowdown in project-based services that impacted revenue. We have also experienced several clients moving from a virtual model and taking work back in-house, further impacting revenue. These 2 factors drove the 5% decline in 1Q, and we are anticipating continued year-on-year declines for the remainder of the year.

現在轉向現代工作場所。根據我們上一財年的業績，我們預計未來的下滑將會放緩。然而，與雲基礎設施和 ITO 一樣，我們經歷了基於項目的服務放緩，影響了收入。我們還遇到了一些客戶從虛擬模型轉向內部工作的情況，這進一步影響了收入。這兩個因素導致第一季度下降 5%，我們預計今年剩餘時間將繼續同比下降。

Turning to our financial foundation, which the team has consistently managed. As anticipated 3 months ago, debt levels increased modestly in the first quarter to $4.6 billion. We continued to tightly manage restructuring and TSI expense, which was $21 million in the first quarter. Operating lease payments and the related expenses were $90 million, down $16 million year-to-year. We continue to manage new lease commitments in an effort to reduce our real estate footprint.

談到我們的財務基礎，團隊一直在管理它。正如三個月前的預期，第一季度債務水平小幅上升至 46 億美元。我們繼續嚴格管理重組和 TSI 費用，第一季度為 2100 萬美元。經營租賃付款及相關費用為 9000 萬美元，同比減少 1600 萬美元。我們繼續管理新的租賃承諾，以減少我們的房地產足跡。

Capital expenditures ticked up to $202 million in the first quarter, impacted by planned annual software renewals. Going forward, we expect to continue the progress that has been made lowering our capital requirements and drive free cash flow. Financing lease originations were reduced by $14 million year-to-year in the first quarter, another indication that we are lowering future commitments. As a percentage of revenue, capital expenditures and lease originations increased to 7.3% of revenues with the increase due to the annual software renewal.

受計劃年度軟件更新的影響，第一季度資本支出增至 2.02 億美元。展望未來，我們預計將繼續在降低資本要求和推動自由現金流方面取得的進展。第一季度融資租賃發起量同比減少 1,400 萬美元，這再次表明我們正在降低未來承諾。由於每年軟件更新，資本支出和租賃起源佔收入的百分比增加至收入的 7.3%。

Turning to capital deployment. We made continued progress on our latest $1 billion share repurchase program during the quarter. It is important to note that, in aggregate, our share repurchase program will be self-funded by our full year '24 free cash flow of $800 million and additional asset sales. As you'll remember from our last earnings call, we completed our previous $1 billion share repurchase program in April. We continued to believe DXC presents an attractive valuation.

轉向資本配置。本季度我們最新的 10 億美元股票回購計劃繼續取得進展。值得注意的是，總的來說，我們的股票回購計劃將由我們 24 年全年 8 億美元的自由現金流和額外的資產出售自籌資金。正如您在上次財報電話會議中所記得的那樣，我們在 4 月份完成了之前 10 億美元的股票回購計劃。我們仍然認為 DXC 的估值具有吸引力。

Assuming the current share price, the approximately $800 million remaining from the $1 billion program would equate to removing approximately 15% of the current outstanding shares. And please remember, this is on top of the 21% of shares we've already removed from the share base.

假設當前股價，10 億美元計劃剩餘的約 8 億美元將相當於移除當前流通股的約 15%。請記住，這是我們已經從股票基礎上刪除的 21% 股票的基礎上。

As a result of the areas of weakness that I discussed earlier, we are lowering our guidance. We expect second quarter organic revenue to decline minus 4.5% to minus 5.5%, reflecting the continued difficult economic environment impacting resale and projects most significantly in ITO and Modern Workplace; adjusted EBIT margin of 6.5% to 7%, with the revenue shortfalls continuing to impact profitability. We expect to improve adjusted EBIT margins in the second half of the year as our cost optimization efforts take hold; non-GAAP diluted EPS of $0.65 to $0.70.

由於我之前討論過的薄弱領域，我們正在降低我們的指導。我們預計第二季度有機收入將下降-4.5%至-5.5%，反映出持續困難的經濟環境對ITO和現代工作場所的轉售和項目影響最為顯著；調整後的息稅前利潤率為 6.5% 至 7%，收入短缺繼續影響盈利能力。隨著成本優化工作的落實，我們預計下半年調整後的息稅前利潤率將得到改善；非 GAAP 稀釋後每股收益為 0.65 美元至 0.70 美元。

Turning to our full year guidance. We are reducing our organic revenue growth to negative 3% to negative 4%. Adjusted EBIT margin is now 7% to 7.5%, impacted by the lower revenue and partially offset by cost reductions in the second half of the year. We're continuing the successful initiatives from fiscal year '23, focusing on staff and contractor optimization, reducing our real estate footprint and third-party spending. Non-GAAP diluted earnings per share of $3.15 to $3.40. Our non-GAAP EPS guidance reflects a tax rate of 29% and our expectations for the timing of our share repurchase initiative. Our non-GAAP EPS guidance does not reflect potential losses on asset sales that we are evaluating. While potential sales drive cash, they may have an associated noncash book loss. And lastly, free cash flow of $800 million, down from our previous guidance of $900 million.

轉向我們的全年指導。我們正在將有機收入增長降低至負 3% 至負 4%。調整後的息稅前利潤率目前為 7% 至 7.5%，受到收入下降的影響，並被下半年成本削減所部分抵消。我們將繼續實施 23 財年的成功舉措，重點關注員工和承包商優化、減少房地產足跡和第三方支出。非 GAAP 稀釋後每股收益為 3.15 美元至 3.40 美元。我們的非 GAAP 每股收益指引反映了 29% 的稅率以及我們對股票回購計劃時間的預期。我們的非公認會計準則每股收益指引並未反映我們正在評估的資產出售的潛在損失。雖然潛在的銷售可以帶來現金，但它們可能會產生相關的非現金賬面損失。最後，自由現金流為 8 億美元，低於我們之前指導的 9 億美元。

Now before I turn the call back over to Mike, allow me to comment on my immediate priority, which is to produce the metrics and analytics, meaning the financial headlights to drive predictable and repeatable results. I will align the financial teams to support the offering-led model and drive enhancements to our processes and systems. The offering-led model fully supported will give us transparency of financial performance and financial returns of the offerings, enabling focused operational management, targeted investments, portfolio management and help us confirm our strategy. I expect us to make steady progress with this finance transformation.

現在，在我將電話轉回給邁克之前，請允許我評論一下我的當務之急，即制定指標和分析，這意味著財務頭燈可以推動可預測和可重複的結果。我將協調財務團隊來支持以產品為主導的模型，並推動我們的流程和系統的增強。完全支持的以產品為主導的模式將為我們提供產品的財務業績和財務回報的透明度，從而實現集中的運營管理、有針對性的投資、投資組合管理，並幫助我們確認我們的戰略。我希望我們的財務轉型能夠穩步取得進展。

And with that, let me turn the call back over to Mike for his final thoughts.

接下來，讓我將電話轉回給邁克，詢問他的最後想法。

Thank you, Rob, and let me leave you with a few key takeaways. GBS is our high-quality growth business that we are proud of and is performing in a tough project-based environment. We are actioning the Cloud/ITO and Modern Workplace offerings of GIS, which have been impacted by the slowing IT market and are keeping us from making the progress we desire. We are still confident that we will stabilize the performance of these 2 offerings.

謝謝你，羅布，讓我給你留下一些重要的收穫。 GBS 是我們引以為傲的高質量增長業務，並且在艱難的基於項目的環境中表現出色。我們正在實施 GIS 的雲/ITO 和現代工作場所產品，這些產品受到 IT 市場放緩的影響，並阻礙我們取得我們期望的進展。我們仍然有信心穩定這兩項產品的性能。

We have made improvements in both leadership and our operating model to grow our company and to be even more competitive. We are managing areas that we can control very well like free cash flow and restructuring in TSI, and the financial analytics that Rob and his team are focused on building will allow us to deliver more predictable and repeatable results.

我們在領導力和運營模式方面都進行了改進，以發展我們的公司並更具競爭力。我們正在管理我們可以很好控制的領域，例如 TSI 的自由現金流和重組，而 Rob 和他的團隊專注於構建的財務分析將使我們能夠提供更可預測和可重複的結果。

We can see the value we are creating in DXC, and because of this, we will continue to deliver on our $1 billion buyback while maintaining our investment-grade credit profile. While the execution of any transformation journey is never a straight line, we feel strongly that we are making the right long-term decisions to position DXC for success.

我們可以看到我們在 DXC 中創造的價值，正因為如此，我們將繼續兌現 10 億美元的回購計劃，同時保持我們的投資級信用狀況。雖然任何轉型之旅的執行都不是一條直線，但我們強烈認為，我們正在做出正確的長期決策，以幫助 DXC 取得成功。

With that, Operator, please open the call up for questions.

那麼，接線員，請撥打電話詢問問題。

(Operator Instructions) Your first question comes from the line of Bryan Bergin of Cowen.

（操作員說明）您的第一個問題來自 Cowen 的 Bryan Bergin。

This is Zack Ajzenman on for Bryan. On the quarter, at a higher level, as you think about how demand played out, just kind of looking to dig further into what changed so quickly here in 2.5 months just to cause the magnitude of this guidance cut. And also, as we think about the guidance framework, has anything changed there given the lower visibility that is seemingly an issue here in the current environment?

我是紮克·阿傑曼 (Zack Ajzenman) 替補布萊恩 (Bryan) 發言。在本季度，在更高的層面上，當你思考需求如何發揮作用時，只是希望進一步深入了解 2.5 個月內發生的如此迅速的變化，只是為了導致本次指導下調的幅度。而且，當我們考慮指導框架時，考慮到當前環境中可見性較低這似乎是一個問題，那裡有什麼變化嗎？

So Zack, thanks for the question. The first thing I would draw back to, when we guided, we began FY '24 and we saw resiliency in our business. And specifically, I would highlight the fact that we just came off of delivering 4 quarters of stable revenue. And we saw the slowing environment during Q3 and Q4 last year, but the revenue stayed stable.

扎克，謝謝你的提問。我要回顧的第一件事是，當我們進行指導時，我們從 24 財年開始，我們看到了業務的彈性。具體來說，我要強調這樣一個事實：我們剛剛實現了 4 個季度的穩定收入。去年第三季度和第四季度我們看到環境放緩，但收入保持穩定。

The second thing that's really key in this whole situation is the fact that the work we do is essential for our customers. And because of that, we saw the levels of spend continue in terms of hardware, PCs and also the maintenance projects that go around maintaining these IT estates throughout FY '23. So when we guided FY '24, we expected that the revenue could stay stable and that we could continue to play through a slowing IT environment because we had facts around what the revenue was.

在整個情況中真正關鍵的第二件事是我們所做的工作對我們的客戶至關重要。正因為如此，我們看到在 23 財年硬件、PC 以及維護這些 IT 資產的維護項目方面的支出水平持續上升。因此，當我們指導 24 財年時，我們預計收入可以保持穩定，並且我們可以在 IT 環境放緩的情況下繼續發展，因為我們有關於收入的事實。

So when I look at Q1 and also the full year, basically, what we've done, if you take a step back, you will see that GBS is fine. It grew exactly the way we thought it was. We're happy with it. And when you dig into the offerings, the offerings seem to be doing just as well.

因此，當我看看第一季度和全年時，基本上，我們所做的事情，如果你退後一步，你會發現 GBS 很好。它的生長方式和我們想像的一模一樣。我們對此很滿意。當你深入研究這些產品時，你會發現這些產品似乎也表現得很好。

So the issue that we're talking about here is contained to Cloud/ITO and Modern Workplace of GIS. And when I say contained, when I look at the numbers, the numbers basically haven't changed much. We actually thought the numbers would start heading towards mid-negative single digits. And now that you've heard from us, they will stick around high negative single digits.

所以我們這裡討論的問題包含在Cloud/ITO和GIS的現代工作場所中。當我說包含時，當我看數字時，數字基本上沒有太大變化。我們實際上認為這些數字將開始走向中負個位數。現在您已經收到我們的消息，它們將保持在較高的負個位數附近。

And there's 2 reasons for that. The first one is now the resale revenue, and the resale revenue is the revenue we get by selling hardware and PCs and so forth that we've consistently told everybody that's low margin. And our strategy is to take that revenue down and as we take it down, replace it with service revenue. And what's happened is that's accelerated.

原因有兩個。第一個是現在的轉售收入，轉售收入是我們通過銷售硬件和個人電腦等獲得的收入，我們一直告訴大家利潤率很低。我們的策略是降低收入，並在降低的同時用服務收入取而代之。而現在發生的事情正在加速。

We've clearly seen that in the quarter. Half of the miss in the quarter, if you look at the midpoint being $75 million, half of that was resale. And then we carried that thinking all the way through the rest of the year. And the reason why we carried it through the rest of the year was because we don't plan to chase that low-margin revenue.

我們在本季度清楚地看到了這一點。如果你看看中點是 7500 萬美元，那麼本季度的一半失誤，其中一半是轉售。然後我們在今年剩下的時間裡一直秉承著這種想法。我們之所以在今年剩餘時間裡堅持這樣做，是因為我們不打算追逐低利潤收入。

So if it makes sense, we'll do it, but we're not going to all of a sudden try to chase that. And that goes back to the whole sales philosophy that we've had around making sure that we do these new deals at better economics. So that's resale revenue.

因此，如果有意義，我們就會這樣做，但我們不會突然嘗試去追求它。這可以追溯到我們一直以來的整個銷售理念，即確保我們以更好的經濟效益進行這些新交易。這就是轉售收入。

The second piece is what we referred to as services project work, and that project work typically is the essential maintenance that needs to be done to these IT estates. And what we've seen is those projects have been pushed and what we -- that's the other half of the miss in Q1. And what we did with looking at the project work is we, first of all, said, look, the clients need to spend this, -- and what we're seeing is it looks like they will spend it in the back half of this year.

第二部分是我們所說的服務項目工作，該項目工作通常是需要對這些 IT 資產進行的基本維護。我們所看到的是，這些項目已經被推動，而我們——這就是第一季度的另一半失誤。我們在研究項目工作時所做的是，首先，我們說，看，客戶需要花這個，--我們看到的是，看起來他們會在這個的後半部分花它年。

The second thing was the operating model, was we adjusted the operating model, so I'm looking to see getting the benefits out of that operating model change towards the back half of the year. And what I mean by that is customer coverage. To literally sell these projects, you got to sit with the client and describe the value or potentially the risk. And we think that the adjustment in the operating model will move this forward so that we will recover some of this in the back half of the year. So Zach, hopefully, that takes into account your questions.

第二件事是運營模式，我們調整了運營模式，所以我希望看到今年下半年從運營模式變化中獲益。我的意思是客戶覆蓋率。要真正出售這些項目，您必須與客戶坐在一起並描述其價值或潛在風險。我們認為運營模式的調整將推動這一進程，以便我們將在今年下半年恢復一些。希望扎克能夠考慮到你的問題。

It does. And just a follow-up on free cash flow and related on margins. I guess given the cut on revenue and earnings, I guess, we're surprised the free cash flow view was not reduced even further. So maybe you can speak to the levels that are partly inflating free cash flow here and maybe what you're doing to support expenses without cutting into the bone.

確實如此。這只是自由現金流和相關利潤率的後續行動。我想考慮到收入和收益的削減，我想我們對自由現金流的觀點沒有進一步減少感到驚訝。因此，也許您可​​以談談在一定程度上導致自由現金流膨脹的水平，以及您在不削減開支的情況下為支持支出而採取的措施。

Yes. Zach, this is Rob Del Bene. So thanks for the question. Look, when we take a look at the EBIT margin that we expect to perform at that level for the remainder of the year, take a look at the working capital levers we have. Taken all together, we are confident that we could achieve this adjusted level of $800 million. So we have cost reduction plans that support the EBIT, the margin -- the reduced margin, and we have operational actions and line of sight to deliver working capital and capital expenditure reductions to get to the $800 million.

是的。扎克，這是羅布·德爾·貝尼。謝謝你的提問。看，當我們查看我們預計在今年剩餘時間內達到該水平的息稅前利潤率時，請查看我們擁有的營運資本槓桿。總而言之，我們有信心能夠達到調整後的 8 億美元水平。因此，我們制定了支持息稅前利潤、利潤率的成本削減計劃，並且我們制定了運營行動和目標，以將營運資本和資本支出削減至 8 億美元。

So Zach, let me add to that because you have seen that we've been focused and we'll continue to focus on our expenses. And we still think there's more room there. In addition to that, we think that our cost takeout initiatives will deliver at the same levels of FY '23. If they deliver at the same levels of FY '23, then, remember, we generated $737 million. So we're going to be right there. So we think that's a good guide. So thanks for that question.

扎克，讓我補充一下，因為你已經看到我們一直專注於我們的支出，並且我們將繼續關注我們的支出。我們仍然認為那裡還有更多空間。除此之外，我們認為我們的成本削減計劃將達到 23 財年的相同水平。如果他們的交付水平與 23 財年相同，那麼請記住，我們的收入為 7.37 億美元。所以我們馬上就到那裡。所以我們認為這是一個很好的指南。謝謝你提出這個問題。

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

您的下一個問題來自 DeepDive Equity Research 的 Rod Bourgeois。

So I want to ask a question about maybe the linearity of what you're seeing in the more cyclical part of your business, this project-based work and this resale work. Have you seen any improvement maybe since the quarter closed that gives you a more encouraged outlook as you move into the later stages of the year. And I guess more specifically on that, you indicated that you do expect some project work to return in the back half of the year, but I think you also earlier said that you think it will take time to essentially get the ITO and the workplace businesses back on track. So my question is about the linearity of this cyclical demand issue that you have and whether your guidance -- your updated guidance assumes that the project-based work will improve meaningfully in the back half of the year.

因此，我想問一個問題，即您在業務的周期性部分、基於項目的工作和轉售工作中所看到的線性關係。自本季度結束以來，您是否看到了任何改善，這讓您在進入今年後期時對前景感到更加鼓舞。我想更具體地說，您表示您確實預計一些項目工作將在今年下半年回歸，但我認為您早些時候也說過，您認為需要時間才能基本上獲得 ITO 和工作場所業務回到正軌。因此，我的問題是關於您所遇到的周期性需求問題的線性度，以及您的指導（更新後的指導）是否假設基於項目的工作將在今年下半年得到有意義的改善。

Okay. So Rod, if you take them in both pieces, first of all, the resale revenue, we didn't expect that. So if -- you didn't expect that to get better throughout the year. So you will see that, in the guide, the majority of the adjustment is around that resale revenue because, like I said, we've typically seen that it's been around 25% down. We seem to have been able to play through that in Q3, Q4, but we definitely didn't do it in Q1. So we carried that all the way through.

好的。所以羅德，如果你把它們分成兩部分，首先是轉售收入，這是我們沒想到的。所以，如果——你沒想到這一年會變得更好。因此，您會在指南中看到，大部分調整都是圍繞轉售收入進行的，因為正如我所說，我們通常會看到轉售收入下降了 25% 左右。我們似乎能夠在第三季度、第四季度做到這一點，但我們在第一季度肯定沒有做到這一點。所以我們一直堅持這一點。

On the project stuff, the project work doesn't always just impact ITO -- Cloud/ITO and Modern Workplace. So Cloud/ITO and Monitor Workplace, we're going to go hard after that project work, but there's project work in the other offerings that are performing well, and we expect that we can increase that project work in the back half of the year.

在項目方面，項目工作並不總是只影響 ITO——雲/ITO 和現代工作場所。因此，Cloud/ITO 和 Monitor Workplace，我們將在該項目工作之後努力工作，但其他產品中的項目工作表現良好，我們預計可以在下半年增加該項目工作。

So that's basically the guide. So you should take what we're doing in Q1 and push it all the way through the year; and then for resale and for the project-based services stuff, you should see an uptick in the back half of the year.

這基本上就是指南。因此，您應該將我們在第一季度所做的事情延續到全年；然後對於轉售和基於項目的服務，您應該會在今年下半年看到增長。

Okay. And I want to ask another question that I'm seeing kind of on the heels of this update that you've given, you definitely saw other big players in the industry have to lower their guidance for the year because of cyclical challenges. Accenture and Infosys both had big guidance reductions. You also, during that same quarter, had a CFO transition. So I guess it's worth asking if the CFO transition contributed at all to the shortfall in the expectations and then perhaps if something was learned about ways to kind of stay in front of that to be able to track these things to recognize them ASAP and make adjustments. And I'm really asking that because I do think it was a challenging quarter on the macro, but I also want to get these investor questions in about whether the CFO transition had any impact and whether there were some lessons learned.

好的。我想問另一個問題，在您提供的此更新之後，您肯定看到該行業的其他大型參與者由於週期性挑戰而不得不降低今年的指導。埃森哲和印孚瑟斯均大幅下調了指引。在同一季度，您還進行了首席財務官的過渡。因此，我想值得一問的是，首席財務官的過渡是否導致了預期的不足，然後也許是否了解瞭如何保持領先地位，以便能夠跟踪這些事情，盡快認識到它們並做出調整。我之所以這麼問，是因為我確實認為從宏觀角度來看，這是一個充滿挑戰的季度，但我也想向投資者提出有關首席財務官過渡是否產生任何影響以及是否吸取了一些教訓的問題。

So Rod, I would say it had 0 impact. What I would tell you is that we changed the operating model in the quarter. And the operating model, we went from a regional model, which you know well, right? You've been in the industry for a long, long time. So the regional model allows our leaders to sell any of the 6 offerings, and they typically will sell the offerings they know best.

所以羅德，我想說它的影響為零。我要告訴你的是，我們在本季度改變了運營模式。至於運營模式，我們從區域模式轉向，你很清楚，對吧？你已經在這個行業工作了很長時間了。因此，區域模型允許我們的領導者銷售 6 種產品中的任何一種，而且他們通常會銷售他們最了解的產品。

So if you're trying to drive this sort of change and you really want to get these offerings to move, then the best way to do it is go to a global offering model, which is what we've done. And what we talked about is Analytics & Engineering along with insurance being our flagship to offerings that have embraced the model, the model is working. They can -- we can see them driving the growth in revenue and margin. And what our intent is to literally get the other 4 offerings working the same way.

因此，如果您正在嘗試推動此類變革，並且確實希望讓這些產品得到推廣，那麼最好的方法就是採用全球產品模式，這就是我們所做的。我們談論的是分析和工程以及保險是我們採用該模型的產品的旗艦產品，該模型正在發揮作用。他們可以——我們可以看到他們推動收入和利潤的增長。我們的目的是讓其他 4 個產品以同樣的方式工作。

When you also look at the guide, I expect to get benefits out of that in the back half of the year as we're still working through making some of the adjustments. But I look at the softness that we see in the project work as the challenge to the operating model, nothing else.

當您也查看該指南時，我預計會在今年下半年從中受益，因為我們仍在進行一些調整。但我將項目工作中看到的軟性視為對運營模式的挑戰，僅此而已。

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

您的下一個問題來自 BMO 資本市場的 Keith Bachman。

Mike, I wanted to play off something you said about asset sales maybe being part of what happens over the next couple of quarters. And to put it in context, if I think about what's going on, on essentially half of your business, you haven't been able to turn it around. And in particular, workforce management is an area that you look to sell. Doesn't seem like you can get enough value for it, decide to turn around, but it's still really struggling. And your growth would be much improved without something like workforce management.

邁克，我想引用你所說的關於資產出售可能是未來幾個季度發生的事情的一部分的內容。結合上下文來看，如果我考慮一下正在發生的事情，基本上你的一半業務，你都無法扭轉局面。特別是，勞動力管理是您希望推銷的一個領域。似乎無法獲得足夠的價值，決定轉身，但仍然很掙扎。如果沒有勞動力管理之類的東西，你的成長將會得到很大的改善。

So I just want to revisit on the broader theme. Is there a sense of less is more in some areas that you haven't been able to turn around despite having some opportunity to do so over the last year or so or more? Is there more that you could do on, say, getting rid of underperforming assets to try to help the financial condition of the broader DXC?

所以我只想重新審視更廣泛的主題。儘管在過去一年左右的時間裡有一些機會扭轉局面，但在某些領域你是否有一種“少即是多”的感覺？您是否還可以採取更多措施，例如擺脫表現不佳的資產，以改善更廣泛的 DXC 的財務狀況？

So Keith, thanks for that question. What I would say to that is, look, we're always looking at all of the offerings. And the key thing to the offerings is right now we think that we can sell new GBS work on the GIS long-standing customers, all right? So -- and we're really starting to see an uptick of that. So anytime you get rid of an asset, that's not the best thing for our customers. So we think collectively that DXC will be better off if we keep everything together.

基思，謝謝你提出這個問題。我想說的是，我們一直在關注所有的產品。產品的關鍵是現在我們認為我們可以向 GIS 長期客戶出售新的 GBS 工作，好嗎？所以——我們確實開始看到這種情況有所上升。因此，無論何時您擺脫資產，對我們的客戶來說都不是最好的事情。因此，我們集體認為，如果我們把一切都放在一起，DXC 將會變得更好。

Now back to your question about us not being able to move cloud and ITO and Modern Workplace over the last several years. It's not like we're not trying to adjust the business. And one of the things I keep calling out is 2 things: one, data centers, the fact that we're looking to sell those data centers; and then the second thing is our ability now, because we have delivered for these customers and we haven't sold these assets, because we've got an entry way into those customers, the cloud providers like what we're doing. And what we want to do is be the partner of choice to the cloud providers as they're moving that last set of work, which is so essential and critical to our customers to the cloud.

現在回到您關於過去幾年我們無法遷移雲、ITO 和現代工作場所的問題。我們並不是沒有嘗試調整業務。我一直強調的一件事是兩件事：一是數據中心，事實上我們正在尋求出售這些數據中心；二是數據中心。第二件事是我們現在的能力，因為我們已經為這些客戶交付了產品，但我們沒有出售這些資產，因為我們有進入這些客戶的途徑，雲提供商喜歡我們正在做的事情。我們想要做的是成為雲提供商的首選合作夥伴，因為他們正在將最後一組工作轉移到雲端，這對於我們的客戶來說非常重要且至關重要。

So that's where we're headed. I would tell you more to come. But we are not just sitting here looking at these numbers and not thinking about other things to do, but they do take a little bit of time to get it done. So Keith, that's the answer to that question. Do you have a second one?

這就是我們要去的地方。我會告訴你更多的事情。但我們不僅僅是坐在這裡看著這些數字而不考慮其他要做的事情，但它們確實需要一點時間才能完成。基思，這就是這個問題的答案。你有第二個嗎？

I just wanted to go -- yes, sir, I do. On the free cash flow to EBIT, I heard the answer to a previous question on why the free cash flow performance is better, some working capital tweaks. And I want to ask it in the context of are those working capital tweaks, are you sort of borrowing from next year's potential free cash flow generation by some of the things that you're doing to support the $800 million target versus a more significant degradation associated with the EBIT line.

我只是想去——是的，先生，我想去。關於息稅前利潤的自由現金流，我聽到了上一個問題的答案，即為什麼自由現金流表現更好，以及一些營運資本調整。我想問的是，在這些營運資本調整的背景下，您是否通過為支持 8 億美元目標而採取的一些措施來借用明年潛在的自由現金流生成，而不是更嚴重的退化與息稅前利潤行相關。

Keith, this is Rob. The answer to that is no. I mean we think there are operational improvements that will benefit us over the long term, which will help us drive capital savings over time and get the receivables to what we think is the right sustainable future level. So we're not trying to accelerate anything temporarily. We're more focused on just operational discipline and getting to the right levels, as I said, on a sustained basis.

基思，這是羅布。答案是否定的。我的意思是，我們認為運營方面的改進將使我們長期受益，這將有助於我們隨著時間的推移節省資本，並使應收賬款達到我們認為正確的可持續未來水平。所以我們不會試圖暫時加速任何事情。正如我所說，我們更專注於運營紀律並持續達到正確的水平。

(Operator Instructions) Your next question comes from the line of Lisa Ellis of MoffettNathanson.

（操作員說明）您的下一個問題來自 MoffettNathanson 的 Lisa Ellis。

Maybe, Mike, at a higher level, and you may not really have an answer to this, but just looking at sort of the evolution of DXC's revenue trajectory here to start the year, are there any more, I guess, strategic or transformational types of changes you're considering at DXC to maybe help kind of bend the curve here a little bit? I know, obviously you've done a lot of portfolio adjustments. I'm just thinking about what other things might be on the table, whether they be more on the acquisition side, additional divestitures, kind of creative client deal structuring, et cetera. Just at a higher level, yes, what are the types of things you might be considering at this point?

也許，邁克，在更高的層面上，你可能對此沒有真正的答案，但只要看看今年年初 DXC 收入軌蹟的演變，我猜還有更多的戰略或轉型類型嗎？您在DXC 正在考慮進行哪些改變，以幫助稍微彎曲這裡的曲線？我知道，顯然你已經做了很多投資組合調整。我只是在考慮可能會討論的其他事項，是否更多是在收購方面、額外的資產剝離、創造性的客戶交易結構等等。只是在更高的層面上，是的，您此時可能正在考慮哪些類型的事情？

Okay. So Lisa, thanks for the question, and I'll continue with where I went with Keith's question. Yes, there are strategic things that we can do with cloud and ITO. All right? And we look at -- along with Modern Workplace. I mean we've looked at this as a 4-step process. And I understand it's taken longer, all right? And that's not lost on me, and that's not lost on our team. But the progress we are making through these 4 steps shows that we will achieve value in those 2 businesses, although it is taking a little bit more time.

好的。麗莎，謝謝你的問題，我將繼續回答基思的問題。是的，我們可以利用雲和 ITO 做一些戰略性的事情。好的？我們和現代工作場所一起關注。我的意思是，我們將其視為一個 4 步過程。我知道這需要更長的時間，好嗎？我並沒有忘記這一點，我們的團隊也沒有忘記這一點。但我們通過這 4 個步驟所取得的進展表明，我們將在這兩項業務中實現價值，儘管需要更多的時間。

So the 4 steps are these. You remember back when we had to deal with the disruption from the terminated contracts. Both of those businesses had terminated contracts. And Lisa, you know those terminated contracts take 2, 3 years to have that revenue come out of our business. So this should be the last year that, that revenue is coming out of our business, which that's a great accomplishment in terms of you can see that the revenue that we have is all stuff that's going to stick, all right, because of the second thing we've done is we've really focused on customer delivery.

所以這 4 個步驟就是這些。您還記得我們不得不處理終止合同帶來的干擾的情況嗎？這兩家公司均已終止合同。麗莎，你知道那些終止的合同需要 2、3 年才能從我們的業務中產生收入。因此，這應該是最後一年，收入來自我們的業務，這是一項偉大的成就，因為你可以看到我們擁有的收入都是會持續下去的東西，好吧，因為第二個我們所做的事情是我們真正專注於客戶交付。

And that customer delivery, we've continued to give you an NPS score that is in the industry benchmark. And because of that customer score and delivery, we also look at it and say, from a customer standpoint, what else can we do with that work. So the next thing we did was the offshore model. So we've definitely scaled our offshore model for delivery of that work and also to increase our customer satisfaction of it.

在客戶交付方面，我們繼續為您提供行業基準中的 NPS 分數。由於客戶評分和交付，我們也會從客戶的角度看待它並說，我們還能用這項工作做些什麼。所以我們接下來做的就是離岸模式。因此，我們肯定會擴展我們的離岸模型來交付該工作，並提高客戶滿意度。

And then the final thing is deals. So we will not be doing deals that we don't believe, all right, have good economics. So if you think about the hygiene of the business, Lisa, meaning the revenue runoff should be gone, the customers are being delivered, we've gone to an offshore model, all right, and then the last thing is we're not bringing in any new work at not solid economics, then that makes us very, very, let's call it, desirable for cloud hyperscalers to partner with. So if you go look at the last piece of the cloud that has to go, it's all this essential work that's sitting where? It's sitting in data centers, and those data centers we own, and those data centers are not fully utilized.

最後一件事是交易。因此，我們不會進行那些我們認為經濟效益不佳的交易。因此，如果你考慮到業務的衛生狀況，麗莎，這意味著收入徑流應該消失，客戶正在交付，我們已經採用離岸模式，好吧，最後一件事是我們不會帶來在任何不紮實的經濟學方面的新工作中，這使得我們非常非常值得云超大規模企業與之合作。因此，如果您查看必須刪除的最後一塊雲，您會發現所有這些重要的工作都在哪裡？它位於數據中心，我們擁有的數據中心，而這些數據中心沒有得到充分利用。

So doing strategic deals around that will definitely move the ball in our GIS business. So that's about as far as I can go with that, Lisa. Like I said, more to come. But like we're definitely not sitting here thinking that we're in a situation where we're in a weakened state. We actually think we're actually in a pretty good state, and yes, the resale revenue accelerated on us. In all honesty, when you look at what we've done to the resale revenue for the last 3 years, we've taken that now down from $1.4 billion in fiscal year 2022 to $1.2 billion in FY '23. And now it will be below $1 billion in FY '24. So what does that mean? That means our revenue that we're talking about on these calls every quarter should be higher quality, should be revenue that we can get good margins on. So anyhow, Lisa, that's the way we think about that mix of business. Hopefully, that gives you a little bit more context and color.

因此，圍繞這一點進行戰略交易肯定會推動我們的 GIS 業務發展。麗莎，我能做的就這麼多了。就像我說的，還會有更多。但我們絕對不會坐在這裡認為我們處於弱勢狀態。事實上，我們認為我們的狀態非常好，是的，我們的轉售收入加速增長。老實說，當你看看我們過去 3 年對轉售收入所做的事情時，我們已經將其從 2022 財年的 14 億美元降至 23 財年的 12 億美元。現在，到 2024 財年，這一數字將低於 10 億美元。那麼這意味著什麼呢？這意味著我們每個季度在這些電話會議上討論的收入應該更高質量，應該是我們可以獲得良好利潤的收入。無論如何，麗莎，這就是我們考慮業務組合的方式。希望這能給你更多的背景和色彩。

Yes, very helpful. And then maybe as a follow-up, I'll give you an opportunity to comment a little bit more on your AI passion. Could you highlight just -- it sounded like the call out you made on some of the AI activities you're doing at DXC are -- are these -- I guess, are the initiatives primarily centered around your own operations internally? Are you doing -- starting to engage with clients on things they're looking at doing with their business? Just maybe elaborate a little bit about what kind of you're seeing in terms of ongoing initiatives right now around AI.

是的，非常有幫助。然後也許作為後續行動，我會給您一個機會對您對人工智能的熱情發表更多評論。你能否強調一下——聽起來你對你在 DXC 正在進行的一些人工智能活動的呼籲是——這些——我想，這些舉措主要是圍繞你自己的內部運營嗎？您是否正在開始與客戶就他們正在考慮開展業務的事情進行互動？也許只是詳細說明一下您在目前圍繞人工智能正在進行的舉措方面所看到的情況。

All of it, Lisa, is focused on us driving revenue and showing our customers that, look, we are more than a GIS business, that this GBS business is real and we can take our capabilities that we've scaled in the GBS business and apply them to any of the offerings. So let me go through the 4 that I mentioned on the call.

Lisa，所有這一切都集中在我們推動收入並向我們的客戶展示，看，我們不僅僅是一家 GIS 業務，GBS 業務是真實的，我們可以利用我們在 GBS 業務中擴展的能力，將它們應用到任何產品中。讓我回顧一下我在電話中提到的 4 點。

So if you look at DXC Assure, right, we have a market-dominating play with our insurance business. When you have -- when 18 out of the top 20 do business with you, you want to continue to keep them by doing innovative things. So DXC Assure literally is able to answer some of their complex -- most complex insurance questions. And I don't know about you, but when I look at a lot of my insurance policies, I've got questions around it, and this tool allows us to be able to answer those questions, so again, helps us generate revenue.

因此，如果您看看 DXC Assure，就會發現我們的保險業務在市場上佔據主導地位。當你——當前 20 名中的 18 家與你做生意時，你希望通過創新的事情繼續留住他們。因此，DXC Assure 確實能夠回答他們的一些最複雜的保險問題。我不了解你的情況，但是當我查看很多保單時，我對此有疑問，而這個工具使我們能夠回答這些問題，因此再次幫助我們創造收入。

Robotic Drive is second to none. The fact that we are not only on the wave of self-driving vehicles, but we are leading that wave is fantastic. And when I said that the AI there does 2 things, it can help a car automatically drive or it will literally give driving type facial recognition and so forth to help assist a driver driving a car. So again, that's our engineering talent full go.

機器人驅動是首屈一指的。事實上，我們不僅處於自動駕駛汽車的浪潮之中，而且還引領著這一浪潮，這真是太棒了。當我說人工智能有兩件事時，它可以幫助汽車自動駕駛，或者它實際上會提供駕駛類型的面部識別等等，以幫助駕駛員駕駛汽車。再說一次，這就是我們的工程人才的全力​​以赴。

And then the AI capability we put into GIS is we've talked about Platform X. I mean ever since I've got here, I've been talking about Platform X that our clients use because a lot of these monitoring tools on these IT estates are outdated. And Platform X is right there. It's current. The AI capability allows us to launch as we detect and we see that something needs to be resolved. It allows us to launch 1 of our 10,000 bots, and there's very little human intervention. Clients love it, and we're very happy about that.

然後我們放入 GIS 的人工智能功能就是我們談論的平台 X。我的意思是，自從我來到這裡，我一直在談論我們的客戶使用的平台 X，因為這些 IT 上有很多監控工具莊園已經過時了。 X 平台就在那裡。這是當前的。人工智能功能使我們能夠在檢測到需要解決問題時啟動。它允許我們啟動 10,000 個機器人中的 1 個，並且幾乎不需要人工干預。客戶喜歡它，我們對此感到非常高興。

And then the final one is UPtime. So the Uptime tool, like I said in the call, I mean, everybody is sort of doing the call center stuff, where you've got these AI agents that can deflect both written and verbal type questions. And what we've seen is the ability to deflect up to 80% of that volume coming in. But the key thing to uptime is it also helps us predict when PCs are going down and then also helps us, from an ESG standpoint, help our customers manage their carbon footprint.

最後一項是正常運行時間。因此，正常運行時間工具，就像我在電話中所說的那樣，我的意思是，每個人都在做呼叫中心的工作，在那裡你有這些人工智能代理，可以轉移書面和口頭類型的問題。我們所看到的是能夠轉移高達 80% 的流入量。但正常運行時間的關鍵在於，它還可以幫助我們預測 PC 何時出現故障，然後從 ESG 的角度來看，也可以幫助我們幫助我們的客戶管理他們的碳足跡。

So I really, Lisa, appreciate the call. Like I said, you know it's a passion of mine. You know I've spent a lot of time before I got here on it. I think we are basically on the cusp of leading that industry. And the way we think about it is we're not going to do anything that we can't scale. We're not going to do anything that a customer doesn't see value in, and then obviously it will help us drive revenue.

所以，麗莎，我真的很感謝你接到這個電話。就像我說的，你知道這是我的熱情。你知道我在這之前花了很多時間。我認為我們基本上正處於引領該行業的風口浪尖。我們的想法是，我們不會做任何我們無法擴展的事情。我們不會做任何客戶看不到價值的事情，顯然這會幫助我們增加收入。

So Lisa, thanks for that call. And look, let me close by saying this. We are still very confident in our business. When I look at GBS, we think we can continue the growth momentum in GBS in a tough project-based market. And we also believe with the actions that I've discussed on this call along with -- in the prepared remarks, we think we can improve that performance over time. It's just going to take a little bit longer. And when we do improve that performance, that the revenue that you will see in that GIS business will be mostly services revenue and not resale revenue.

麗莎，謝謝你的來電。聽著，讓我以這句話結束。我們對我們的業務還是很有信心的。當我審視 GBS 時，我們認為我們可以在嚴峻的基於項目的市場中繼續保持 GBS 的增長勢頭。我們還相信，通過我在這次電話會議中討論的行動以及在準備好的發言中，我們認為我們可以隨著時間的推移提高這一績效。只是需要更長的時間。當我們確實提高性能時，您在 GIS 業務中看到的收入將主要是服務收入，而不是轉售收入。

So with that, operator, please close the call.

那麼，接線員，請結束通話。

This concludes today's conference call. You may now [disconnect].

今天的電話會議到此結束。您現在可以[斷開連接]。