Q2 2021 DXC Technology Co Earnings Call
Denmark's Ministry of Finance is another recent win with a long-standing customer. We were selected to modernize their it platform which will enable employees and retirees to receive their pay checks and pensions on time.
These two of them examples along with others gives us confidence that we can continue to stabilize Revenue quarter-on-quarter.
The second key area of our transformation journey is optimized costs. We're on track to achieve our goal of $550 billion in cost savings this year, which is the main driver of our Q2 adjusted ebit margin of 6.2% We expect margins to continue to expand in Q3 on a like-for-like basis. We plan to deliver roughly two hundred basis points of margin improvement from Q2 to Q3 or looking at it on an as reported basis. We expect adjusted ebitda margins to remain relatively flat between Q2 and Q3, even with the sale of the state and local Health and Human Services business, which contributed roughly 95 million to ARA just bought it in the quarter. I'm very pleased at how we are optimizing costs while we are delivering for our customers without disruption sees the market is the third key. Yep.
our transformation journey in this
Area we are focused on cross-selling to our existing accounts and winning work with new customers. But the one point one book to build number that we delivered. This quarter is further evidence that our plan is working 50% of our Q2 bookings were renewals and 50% were new work either from existing or new customers.
Cuz I have given you a couple of examples of cross-selling to existing longstanding accounts. Now, let me give you a couple of examples of where we want work from new customers in the secure area. We recently signed as a new customer beam suntory known for its well established Brands such as Jim Beam and Maker's Mark. We also welcome dust rally has Department of Foreign Affairs and trade we will provide sap and PeopleSoft Services over the next three years across nine in country locations and 121 post office worldwide.
We are encouraged by our consistent success in this area and based on are qualified pipeline. We expect to achieve a book-to-bill of 1.0 or greater in Q3.
Now I'd like to discuss the good progress. We have made on our strategic Alternatives initiative shortly after I started with dxc. We Define this initiative consisting of three business name is under review and later added a fourth before businesses are the US state local Health and Human Services business the healthcare provider software business workplace am bility and horizontal VPS.
As we committed we sold our US state and local Health and Human Services business to Veritas capital for five billion on October one. This was a major milestone in our transformation journey, and I want to thank the women and men who worked incredibly hard on this transaction. We use the net proceeds of this transaction to pay down 3.5 billion of debt. We feel comfortable that we now have a strong balance sheet and the financial flexibility to continue the execution of our transformation journey girl talk more about our capital structure and liquidity in a few minutes. We also remain on track to close the sale of our healthcare provider software business to deta lose by the end of the fiscal.
Again, we will use the net proceeds from this transactions to pay down debt by about $450 million further strengthening our balance sheet. We've decided to retain both the workplace and mobility and horizontal BPS businesses this decision completes, the the Strategic Alternatives initiative. We're retaining these two thousand businesses as a result of our strong balance sheet and our analysis that we can create more value by applying our transformation journey to these businesses as compared with the the interest we receive from potential buyers during the Strategic Alternatives initiatives, these two businesses were ring-fenced and have been operating with an element of uncertainty. We're now looking forward to operating these businesses with Clarity and being able to apply our transformation journey to improve their financial contributions succeed.
regard
Getting workplace. We are the market leader with nearly 2x the manage devices of our nearest competitor that the business fits nicely into our cross-selling efforts, especially as a result of the demand created by COVID-19 where our customers now need to support their employees working remotely given my prior experience and the b p v. Industry. I'm looking forward to working with our VPS team to create additional value and competing again in a market that I've known for years.
Now I'd like to comment on our leadership team the or the organizational changes. We announced in September shows that we have worked hard to bring top talent and develop a strong senior leadership team. This team is driving the momentum in our business and helping us deliver strong financial results. The caliber of this leadership team is evidence that DXE can be tracked top industry Talent. Now as you know, we are conducting a detailed search for our next CFO. We are in the final stages and I'm looking forward to concluding this search page in the near-term. I want to thank Neil for stepping into the interim CFO role. I have appreciated his leadership and he's been a true partner over this transition. Now, let me turn the call over to Neil. Thank you Mike and see one I am also very pleased with the solid progress. We continue to make on our transformation Journey off.
Executing well and delivering for our customers financially our second quarter featured quarter-on-quarter Revenue stability and sequential margin expansion. We exceeded the the end of our guidance on both revenue and adjusted ebitda margins. We strengthen our balance sheet through the execution of our strategic Alternatives initiative. We continue to commit it should be committed to an investment-grade credit profile. We are also winning in the marketplace as evidenced by our book-to-bill ratio of one point one. I will now turn to our detailing a second quarter Financial results and start by covering the items that are excluded from our non-gaap results in the second quarter. We had restructuring costs of $265 million dollars on a pre-tax basis or $0.83 per diluted share these costs relate primarily to the cost optimisation programme. We discussed previously.
Looking forward to Q3. We expect our restructuring costs to be between $125 and $150 for the quarter.
Also in the quarter we had a hundred and 1 million dollars on a pre-tax basis or 29 cents per diluted share of transaction separation and integration related costs money. I merely driven by external span associated with the assets under strategic review in Q3. We expect these costs to increase primarily as a result of transaction separation charges associated with the sale of our use of US state and local Health and Human Services business.
In a second.
Quarter amortization of acquired intangibles was $152 on a pre-tax basis or 46 cents per diluted share also in the quarter. We had a tax-related adjustment that it contributed $0.01 per diluted share excluding the impact of these special items non-gaap income before taxes from continuing operations was two hundred twelve million dollars for the quarter and non-gaap diluted EPS was $0.64. Our non-gaap diluted EPS. This quarter was impacted by a slower-than-expected tax rate of 24% Assuming a tax rate in line with our August guidance of 35% Our non-gaap diluted EPS for the quarter would have been $0.55.
I will now go through our second quarter results in more detail as always all revenue comparisons. I will discuss will be in constant currency. Yeah Revenue in the quarter was four point five billion dollars Revenue benefited from the weakening of the u.s. Dollar against major currency. Correct in the quarter was an incremental Tailwind of about 136 million dollars sequentially and seventy eight million dollars year-over-year on a constant currency basis Revenue declined sequentially by 1.9% a revenue for the quarter was better than the guidance. We provided you during our last earnings call reflecting the resiliency of our business and our continued focus on customers people and operational execution.
Adjust the heat in the quarter was 283 million dollars or adjusted ebit margin was 6.2% reflecting benefits from the continued executioner cost optimisation programme. I am pleased to say that we are on track to achieve our in class savings Target a 550 million dollars in our run rate cost savings Target a seven hundred million dollars.
Our non-gaap non-gaap diluted EPS of $0.64 in the quarter came in higher than the top end of our guidance. We gave you an August non-gaap diluted ETF benefit from the lower than expected tax rate of 24% that I spoke about previously in the second quarter bookings were four point $9 billion dollars off the bill of 1.1.
Turning now to our segment results. I will start with the GBS segment which includes the top two layers of our Enterprise technology staff analytics off engineering and our applications business. The GBS segment also includes the horizontal BPF asset that we are retaining for now the GPS segment also includes the US state and local Health and Human Services and the healthcare provider software businesses.
Revenue was two point four billion dollars in the second quarter up 5% sequentially reflecting the strength of our luck soft business year-over-year previous Revenue was down 3.4% which was driven by prior terminations and price Downs along with customer settlements that we actioned in the quarter in the second quarter. GBS segment profit was $317 and profit margin was 14.1% representing a 420 basis points improvement over the first quarter.
DBS bookings for the quarter or two point four or five billion dollars for a book to Bill of 1.1.
Turning to our GIS segment rgis segment consists of it. Oh and cloud and security layers of our Enterprise technology stack. It also includes our workplaces business, which we are retaining GIF segment. Revenue was 2.31 billion dollars in the second quarter down 4% sequentially and Thursday 11 .6 percent year-over-year the declines primarily driven by prior terminations and price Downs along with customers settlements that we action in a quarter.
GIF segment profit in the second quarter was thirty-six million dollars and profit margin was 1.6% a sixty basis points improvement over the previous call a GIS bookings for the quarter was 2.4 seven billion dollars for a book to Bill of 1.1.
Now let me comment on the performance of our Enterprise technology stack. I'd like to start by focusing you on the four layers i t o cloud and security applications and analytics and Engineering but we have spent the majority of our time executing our transformation Journey quarter-on-quarter. You will notice the numbers across the the players along with the totals in the circles all are moving in the right direction with a healthy book-to-bill this quarter-on-quarter movement demonstrates, the revenue stability track that we talked about earlier. Now, let me comment on each of the layers specifically.
I t o Revenue was down 4.7% sequentially and down 14% per year driven by determinations Price downs and a couple settlements. We discussed previously book-to-bill was 1.3 in the quarter reflecting 170% growth in bookings year-over-year. We are encouraged by the progress. We are making the in the ideal Lair as evidence by over q1 Trends in sequential Revenue decline bookings growth and the strength of qualified pipeline.
Security Revenue was up 2.8% sequentially and down 3.4% Year-over-year book-to-bill was 1.0 in the quarter.
Moving up to stack the applications layer was down 2.6% sequentially and 9.4% year-over-year. The sequential decline is primarily driven by the incremental terminations and price Downs that were discussed last quarter book-to-bill for this layer of the stack was nine in the quarter.
Any analytics and Engineering layer of the stack Revenue was up 4.0% sequentially driven by the performance of the Lux off business year-over-year wage was down 5% booked the bill in the quarter was 1.4. Let me now comment on the rest of our portfolio. I will start with the workplace and Mobility wage BPS businesses that we are now retaining the sequential decline of 5.4% was primarily driven by answered the associated with the outcome of these Alternatives initiative despite strong demand customers put certain project related work and new business Awards on hold as they awaited Clarity on whether or not we're going to retain the business book-to-bill ratio for these offerings was seven in the quarter our pipeline remains strong and we are excited about the opportunities in the marketplace dead.
Turning now to the businesses under strategic review in its last quarter under DX ownership the state and local Health and Human Services business was up 3.6% sequentially and up 16% year-over-year book-to-bill ratio for the business was 1.6 in the quarter.
The healthcare provider software business grew by 5.7% sequentially and 9.5% year-over-year booked a bill was 1.0.
turning to other Finance close both in conjunction with the sale of our local Health and Human Services businesses, the
It's the first is a repurchase of 272 million dollars of securitized receivables. And the second is a one-time purchase of a software license that can be made with the divested business.
Our Capital expenditures including the payments on Capital leases was $355 million dollars in the quarter or 7.8% of Revenue cash at the end of the quarter was three point 1 billion dollars at the end of the second quarter are total debt including capitalized leases was nine point seven billion dollars for a net gain a total capitalization ratio of 45.7% during the second quarter. We pay down two point five billion dollars of debt. This included the whole payment of 2 billion dollars of revolver draw and another five hundred million dollars consisting of term loans and Commercial paper.
Let me now give you an update on our capital structure following the close of the sale of our state and local Health and Human Services business to Veritas Capital as you know off the transaction closed on October 1st, and we received gross proceeds of five billion dollars three point five billion dollars of these proceeds were used to pay down dead in addition to the street point five billion dollars as part of the clothes. We also used about three hundred and thirty million dollars to repurchase the receivable securitization facility off purchase a software license that I mentioned earlier.
The remaining proceeds have been earmarked for taxes and third-party fees related to advisory and separation activities are revolving credit facility has now been paid back in full we have access to the entire four billion dollars of credit line to be drawn at our discretion.
Following repayment of three point five billion dollars of debt and repurchase of $270 million dollars of securitized receivables and excluding the cash earmarked for estimated taxes and transaction and separation expenses are adjusted debt and cash balances are 6.2 and 3.1 billion dollars respectively.
In closing we expect Q3 revenues to stabilize sequentially on a like-for-like basis as discussed previously like for like means excluding the state and local Health and Human Services business. We are targeting third quarter revenues of 4.15 to 4.2 billion dollars.
Adjusted ebitda margins in what their quarter should be broadly in line with the second quarter on an as reported basis on a like-for-like basis. We expect Q3 Marge's life span roughly two hundred basis points. We are targeting adjusted ebitda margins 6 to 6 and half percent in the third quarter reflecting quarter-on-quarter off of revenues and additional contributions from our cost optimization initiatives. We expect our non-gaap diluted EPS in a third quarter to be 50,000 the $0.55 based upon an effect effective tax rate of about 30%
We can.
Continue to guide on a quarterly basis as we are managing a number of variables. We are executing on our transformation journey, and we are now applying that journey to to businesses that we are not painting. We are still a few months away from closing the sale or healthcare provider of software business. Also, we are unclear about the potential impact of the next wave of COVID-19. Hence. We are guiding you to the numbers that we have the best visibility on currently with that. I will now turn the call to Mike for his closing remarks.
Thanks Neil and let me share for key takeaways on our progress. We are making DXE first. We're bringing the new dxc to the market and we have demonstrated solid momentum in executing on our transformation Journey. This is translating into quarter-on-quarter Revenue stability sequential margin expansion and a book-to-bill number off of 1.0 second. We now have a strong balance sheet due to the sale of the US state and local Health and Human Services business and using the net proceeds to pay down 3.5 billion in debt. We also expect to complete the sale of the health care of the financial contributions. They are making the DXE.
fourth we have built a strong leadership team that is executing on
Transformation Journey bringing the new XE to our customers and our people and closing. I'm very pleased about the progress and the level of stability. We have achieved. Our balance sheet is stronger. We are enhancing our customer relationships. We're taking out costs without disruption and we are improving our position in the market and bring more. We expect all this positive momentum to continue in Q3, and with that operator. Please open the call up for questions at this time. We'll open the Palm questions. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment back again, press * 1. If you'd like to cue up for a question will pause for just a moment to allow everyone an opportunity to signal for questions.
Our first question in queue comes from Rod with deep dive equity research, please go ahead sir.
All right. All right. Thanks. Hey Mike. So troubled account was the main topic for DXE over the last few quarters. I did notice that you didn't talk about troubled accounts in your update today. So I'd like to ask what your status with these troubled accounts or at least the accounts that were previously considered troubled thoughts and to what extent are you concerned about the relationship that it's large clients at this point?
Okay. So thanks Rod the look when I reflect back on my first year DXE, I would say my two biggest achievements are around strengthening our balance sheet in our customer when I think about the 40 troubled accounts in my mind, we've moved past that right. So I I communicated the 38 out of the 40 were fixed and changed my mind right now. We're in the enhancing our customer relationship phase and it's not just with forty. It's with our top 200 accounts that that we're focused on and when I say focused on we're folks don't obviously delivering to them with without disruption. Second is we're focused on proactively reaching out to them so that we could listen to their needs and we're seeing a lot of needs in the i t o space right now people want the the technology to just work. All right along.
The transformation narrative but we're seeing quite a bit of demand of just hey, can you just make sure the the technology works and then the last thing is cross-selling to them. So, you know, we're having a lot of discussions and you know part of the thing Rod that we're seeing now is people are starting to talk about the new C and we think it's great because that's why I mentioned that I was pleased about the momentum of us improving our brand in the market any more. So look the momentum on the customer side Rod is good. I think we're making good progress and you know, we're making the right calls and the in the customer area, but we've definitely moved Beyond troubled accounts.
all right, great, and then just
Just a follow-up. I'm looking at the cloud layer of the stack your growth in Cloud did improve from the prior quarter, but you know cloud is clearly home of the big growth Trends in this industry and relative to that Trend. Your Cloud growth is is somewhat lackluster here. So can you give us some color on your clown business? I know a growth turn around there doesn't happen overnight has traditionally had the most Revenue run off but as we are stabilizing that which you can see in these phone numbers when we looked through
Both GBS and GIS and we looked at the stack my expectation is as we build the deeper relationship with the customers that we're going to get better at selling up the stack. So when I look at the thing as a whole with Neil mentioned is when you look at i t o cloud and security applications and analytics and Engineering you add all up all those together that is where we've spent the majority of our time on their transformation Journey. No question and last quarter of the quarter-on-quarter growth was negative 7% now its -1.8 and two out of those four have a positive growth Trend. So obviously I'm focused on cloud, but I'm also focused on analytics and Engineering analytics and engineering and applications as well. But going back to your Cloud question that layer like you said went from 11% to roughly 2.8. It's got a strong book-to-bill. I like that momentum, I think
That momentum will continue as we get into Q3 and like I've always said our strategy is an and strategy. It's not one or the other the the it own business is real and clients are asking for help there and we're not saying it's one or the other we have to do that and do the cloud. So I was actually pleasantly surprised with the with the cloud growth now when it was negative last quarter.
Got it. Thanks guys.
Our next question in queue comes from Reyna with evercore, please go ahead good evening. Thanks for taking my question. It's really good to see the strong book-to-bill and then you know that, you know potentially going into three Q as well if you talk a little bit about the sustainability of 1 times or greater book-to-bill going forward and, you know, all of my follow-up question up front page if you can talk a little bit about the strength in your pipeline and the timeline of converting that into Revenue. Thank you.
So thanks for the question in terms of the the book The Bill were obviously very focused on the next quarter. I like to what Neil laid out in terms of wage are guidance. Um, you know, we're still managing quite a few things here right with we still got one of the assets that we have to complete. We're bringing the other two businesses in office were executing against our transformation journey and and COVID-19 still looms out there in terms of the next wave but we're very bullish about a book-to-bill off for 100 or greater in Q3. I also mentioned that we do see a solid Pipeline and that solid pipeline is you can see office is across the stack, right? Cuz that's why we put down the the book-to-bill numbers for this quarter and said that it was going to continue in Q3.
Thank you.
Our next question in queue comes from Ashland with Citibank, please go ahead. Thanks you guys. I hope you're well. Good to hear from you. I guess my my my question is to ask but I have to put an update in terms of the month during and is simplifying the organization that you've spoken about in the past like and and once that's done what's next in terms of sort of looking at margin improved and they're sort of a revenue mix push is a you know, a pivot to maybe, you know higher value services in talk a little bit about the truck that we should expect.
Ashwin
Always good to hear from you. So look when the update on the delayering is is we definitely said we're on page to achieve our $550 million for fiscal year. We did better than expected in Q2. We took out roughly sixty million in costs we expect that that level to continue in Q3 and then Thursday, it's over. This is this is part of the you know, the transformation journey and what I call the Playbook. So what we'll do is we will then pivot and we're starting to build some of that capability now Palm will pull we will continue right our optimization on the pyramiding the offshoring and the contractor conversion. So that's one the second issue is the use of Technology. All right, meaning, you know us applying technology to these environments is key. All right, and you know, one of the things that we've done is we've taken wage.
Best of platform DXE in bionics and now we call it platform Max and we are piloting that right now and then the third thing is we will continue to look at consolidating our real estate footprint and data center. So Ashwin, there's there's more levers to pull on. I think we're taking a very prudent approach. I know you heard me say that we've been taken out cost and not disrupting the business probably two or three times because that's important. Okay, because what we're not going to do is hurt our customers nor people by doing this. All right, so we're taking a very focused approach.
Got it. Got it. Okay, and and and then the the other question as the look at bookings and driving trying to get get a bead on off on spender Behavior Enterprise spending Behavior anything with regards to you know pace of decision-making contract sizing up, you know new contacts already signed should be expect normal ramps things like that as we as we look out what our what our clients telling you.
Okay. So here here are the five things that I'm seeing in the market. All right, and you know, that's what this is these five things are pushing our book-to-bill of 1.0 or greater. The the first thing is that cios are making decisions. And when you look at our pipeline, it's up 11% Quarter-on-quarter. Okay. The second thing is everybody's talking about transformation. So that was going back to an earlier question about the cloud a lot of a lot of discussions about the cloud. The 3rd is people want to automate. All right, because in this COVID-19 area, right they they basically want to see greater automation so that they have got more flexibility with their with their Workforce Now points four and five are the key things to the DXE Story the dog
The 4th thing is you can't.
Do those first three unless the environment works. Okay, so when you've got this this many people still working remotely and you know, we're dealing with the next wave of code and so forth. People are talking to me CIO CEOs are talking to me about hey upgrade it make it work as efficiently as possible and then ask when the last thing off fifth point is when you're dealing with these environments one of the biggest thing operationally you need to deal with is downtime and we've seen an unprecedented amount now of our ability to get down time to upgrade these environments. So that's what's fueling a lot of our pipeline. That's what's fueling a lot of you know, the the deals so we feel good about the position that we're in in the the IT services space.
Thank you for that update.
Our next question comes from Lisa with moffettnathanson, please go ahead.
Terrific. Thanks guys, and nice Revenue stabilization here. Great to see that like no rest for the weary now that you've completed a review of the portfolio. How are you thinking about m&a going forward meaning are there some high-growth areas you're eyeing potentially for tuck-in Acquisitions, and you know, and or would you consider another big scale demerger at this point, and then maybe I'll ask my follow-up just up front, which is just around restructuring and transaction-related costs, which have been pretty persistent in a bit of a drag on cash flow. I'm just wondering if you have sort of line of sight at this point into now that you've got a lot of the restructuring done and the transactions under wage, you know when we might see those put down. Thank you.
Okay, so Lisa, thanks and I always check in on your seven points about how your your tracking our our progress. So so thank you. All right. I can recite them the look on the m&a front when I talk about us getting to a certain level of stability month. We are now getting to a point where I can run this business. Okay, and you know, I I don't want to put any small piece on that because that's what we've been trying to get where things are starting to quiet down a bit and now we can drive this business and start competing in the space. So I'm a hundred percent focused on Monday. I think we've you know, we've got the right strategy we're showing people whether it's your seven points or the ones that I talked about which are strengthening the balance sheet rights stabilizing Thursday.
Avenue expanding the margins and winning in the the market. That's what we're focused on so, I don't see any major transactions in our future now that doesn't mean that I'm not going to continue to look at the portfolio cuz we're already always studying that now in terms of your second question restructuring. Okay, my favorite topic restructuring and and transaction costs. Okay. So look having just completed this they should be coming down right? We will definitely be no can uh give you more details around that as we are now finalizing what I call the the, you know, the Strategic Alternatives initiative, but I you know, that's that's the direction Lisa. They're headed, okay.
Perfect. Thank you. Thanks, and then congrats again nice job. Thanks. Very excited to see that Revenue number this quarter. Thank you.
Our next question comes from James with Morgan Stanley, please go ahead.
Hey, this is Jonathan. For James. Thanks for taking the question to expand on the leases Point around m&a. Can you talk more broadly about Capital allocation now that you've paid down the debt with the health and your name?
Or transformation Journey on to the two businesses that we're going to retain and again, that's no small piece. Right? I mean we've been letting those businesses run as is as I'm going through this strategic alternative. So it will be good for us to to get after those businesses and then you know in terms of thumb the the COVID-19
yeah, so let's take
Go ahead. Sorry and on the workplace Mobility asset and the horizontal ppss set. Can you talk to some the actions? You're looking to take around? Those there any reinvestment that's expected to take place. If so, is that consult with your margin guidance?
Yeah, so the bottom line is what we're going to do with those businesses. So I don't want anybody to to misunderstand we're bringing those businesses back in but we are not going to run them differently. And the three things were focused on is one strengthening the management team to give you a specific example and workplace. We've already hired a new leader wage Daniel with somebody that I've worked with in my past for a number of years and Mike will do a great job drive in that business. Second is we're looking to change in value propositions. So if I use workplace again workplace now is not just about the distribution of devices and supporting them today. The focus of that business is around employee experienced employees want the ability to connect better with their colleagues and also their companies and that's where we're heading.
With our value proposition and then third is deeper relationships with some of our partners. We're in discussions right now again on workplace with one of the industry-leading it providers to sort out how we can even better and closer work together to capture that opportunity. So Jonathan that's that's our focus with those businesses at a high level. But remember the transformation journey is let's go after and get those customers nailed down. Let's make sure we're optimizing our cost. All right off, but we also want to make sure we're cross-selling. So yeah, there are investments we're making but it's not just with those two businesses. It's you know, it's across the board.
appreciate the color back next
our last question. Hey operator. Let's take one more question. Yes, sir. Our last question in queue comes from Jason with Bank of America, please. Go ahead.
Hey guys. Thanks for taking my question. This is Cassie on for Jason. I just wanted to ask about I know you guys been talking about like the prior termination price Downs went off and those of affected f2q. I'm just wanting like others expect you to graduate subside throughout the end of the fiscal year, or sort of how long are those impacts still going to last. Thank you.
So thanks for your question. So look, we've been talking about those run off for a while. Now. We are pretty much through them. And that's why we continue to talk about the revenue stream. Cuz what I you know, the the year-on-year compare is a tough one and what I'm trying to show you all is we've gone from Green shoots to real hard evidence that the Earth is stabilizing so, you know, we're through those and that's also why I talked about our customer relationships that I don't see those key relationships being, you know in the troubled area anymore. In fact, we're enhancing them.
So look with that. I want to thank everybody for joining the call tonight. I think we're making strong progress on our transformation journey and bringing the new DXE to our customers and our people were confident that the momentum we've created in Q2 will continue in Q3. And with that I want to wish you and your family is all the best and operator. Please close all thank you, ladies and gentlemen, this concludes today's presentation. You may now disconnect.
dead
Thursday
off
Thursday Thursday