To the shareholders of DXC Technology,
I hope you and your families are doing well.
I would like to thank our DXC shareholders, customers, and colleagues for the trust that they have placed in our management team.
Our clear execution on our transformation journey by our talented team in fiscal year 2023 has delivered:
- A better culture: We have done a great job changing the culture of DXC. We have built a strong team that is executing, and I am excited with how we are able to add talent to our team.
- Stronger customer relationships: Our net promoter score has consistently been between 20 and 30, which is near the top end of the industry benchmark range.
- An improved sales model: Our focus on relationship selling has helped enhance the performance of our Global Business Services (GBS) and will focus Global Infrastructure Services (GIS) on driving cash flow. Our new sales approach is working, as we have delivered another year with a book to bill of over 1.
- Revenue stability: Our focus on our customers translated into revenue stability and we achieved four consecutive quarters of similar revenues, excluding the impact of currency and divestitures. GBS has demonstrated 8 quarters of organic growth, and this high value business continues tombecome a larger part of our overall revenue, an outstanding proof point that this strategy is working.
- Expanded margins, EPS and FCF: We have now delivered two years of free cash flow above $700 million.* Our non- GAAP earnings per share (EPS) was $3.47.** And our adjusted EBIT margin* increased in FY23, excluding the impact of non-cash pension income.
- And we have maintained our investment grade credit profile, while returning $1 billion back to shareholders.
I am happy that our focus in fiscal year 2024 will not be fixing challenges but delivering higher-quality revenue, and expanding margin, EPS, and FCF. We have committed to return another $1 billion to shareholders, while maintaining our solid investment grade credit profile.
Our execution has positioned us to deliver the company we have envisioned in fiscal year 2024. This will be made possible through our progression on the five steps of our Transformation Journey, which is now embedded in how we operate:
- The first step is to inspire and take care of our colleagues, highlighted by our transition to an offering-led model. Our most experienced leaders are now focused on spending even more time with our customers and understanding the details of our accounts. And in fiscal year 2024, we will continue to add talent to our team.
- Our second step is to focus on our customers, and we utilized an outside firm to benchmark their views on DXC. What we heard back gives us confidence that we are well-positioned for the future because our customers consider the work that we do for them today essential, and they want us to help them evolve to their technology future because they trust us.
- The expansion of margin throughout the year was a function of our cost initiatives that focused on staff optimization, contractors, real estate and data centers, and third-party expenses. Our cost optimization initiatives will continue in FY24, with an increased emphasis on contractor reduction and data center rationalization.
- The fourth step is to seize the market, and here we are seeing that our external reputation has changed. Our new sales approach is working, and we will continue to do relationship selling and have a disciplined approach in GIS.
- Our last step is our financial foundation, which we continued to strengthen throughout the year:
- We intend to maintain our solid investment grade credit profile.
- We expect to deliver $900 million of free cash flow.***
- We announced another $1 billion commitment to repurchase our shares.
Our team is excited and proud of what we accomplished this year because we have worked hard to get DXC to this point. With the execution momentum we have created, along with our new operating model, we look forward to delivering in fiscal year 2024.
Thank you for your trust and commitment to DXC.