Rob Del Bene: Yes. I mean, the way I’d answer that is, we’re adjusting our capacity based on demand. So there’s always some leverage with more demand and more revenue, right? There’s always operating leverage as a result. So the higher the demand over time, the higher the free cash flow. But the way I’d answer it is, for this year, in particular, we’re managing our structure going forward and operating within the envelope of demand that we see on the table, right, and in our pipelines.
Mike Salvino: So Rod, the other thing I would add to Rob’s comments is, we keep overlooking the operating model. So it takes most companies a year or two to get these operating models right. We now are starting to see the benefits of it because after last quarter, right, every transformation hit some bumps. But I couldn’t be more proud of the execution of our team this quarter. And what that means, is we’re getting to a lower level of detail than DXC has ever seen with our customers. And that detail not only produces new project work. It also makes us have the ability to manage our margins a lot better to generate more free cash flow. So when I talk about the right model, right leader approach, to me, that’s the catalyst that we’re giving to the market at this point in time.
And you’re starting to see a team really starting to deliver now versus being able and having a consistency around hitting our financial performance. So we don’t have much more on the free cash flow. We’re happy with where it is and where it’s going to be and we’ll go forward from there.
Operator: [Operator Instructions] Your next question comes from Brad Clark with Bank of Montreal. Brad, go ahead.
Brad Clark: Two part question. First, as you’ve mentioned cost reduction as a gradual free cash flow, and it’s been a focus for some time during this economic cycle and DXC in general. How much room do you see left in cost reduction activities for DXC, if you’re looking forward and if an economy start to improve, how much would that mean a focus? And then the second part is on modern workplace. It sounds like this is mostly an execution-based improvement rather than a demand-based improvement. With the new leadership in position and with it being with the business, what are going to be some of the focus is to improve execution and sort of how long does that take to play out? Thank you.
Mike Salvino: Okay. So Brad, first, I’ll take your cost point. Look, there’s always four levers that we’re focused on. I think we’ve drained the details on us focusing on facilities that will change our fixed cost over time. And that will play out through the rest of this year. Second is the increase in margin this quarter was solely due to the reduction of contractors and us continuing to optimize our staff to the revenue we have, and that’s not going to change. I was very pleased on the execution. And again, I’ll give that benefit to our new operating model with our six leaders now running these global offerings. And then the final one is Onshore/Offshore. So that’s one we got to continue to focus on. The onshore ticked up a little bit.
So we need to go back and look at that but there’s more room there, and we certainly haven’t said we’re done yet. So I like the opportunity we have there, whether the environment is good or bad, all right? On modern workplace, modern workplace, there is demand. Let’s make no bones about that. The demand environment is there. Everybody hasn’t gone back to being in offices full time. So being virtual is still a big piece of what’s going on in the market, and we think we’ve got a great solution. So from an execution standpoint, my expectation is, one, you will see Andrew knock down a few more deals that we weren’t able to get in past quarters. The second thing you’ll see him do, is look at the value proposition because the value proposition isn’t just maintaining PCs and so forth, it’s also helping with the employee experience.
