Regarding our Q3 performance, our revenues were $4.09 billion compared to $4.03 billion in Q2.
Organic revenue continued to improve as we progressed from minus 2.4% in Q2 to minus 1.4% in Q3.
I see this as a significant improvement as only a year ago, our organic revenues were minus 9.7%.
I was also very pleased to see the organic revenue growth in GBS accelerate, from positive 3.4% in Q2, to positive 7% in Q3.
Our adjusted EBIT margin was 8.7%, up 170 basis points as compared to last year driven by our operational work that we are doing to optimize our business.
Our non-GAAP diluted earnings per share was $0.92 in the quarter, which is up 10% as compared to $0.84 last year.
While the quarter was strong across the board, the 2 strongest financial results were book-to-bill and free cash flow generation.
We delivered $5 billion in bookings for a book-to-bill of 1.23 times.
This gets us to a book-to-bill of 1.08 times on a trailing 12-month basis.
And in Q3, we delivered $550 million in free cash flow.
In the quarter, we increased our headcount by 3% and increased project work by 13%.
Currently, our 12-month rolling NPS score is at the upper end of the industry best practice range of 20 to 30.
We have identified businesses with roughly $500 million in revenues that are not strategic and will not help us grow.
We expect the sale of these businesses to result in an additional $500 million in proceeds within the next 12 months.
We had a strong quarter of bookings, totaling $5 billion and a book-to-bill of 1.23 times.
58% of the bookings were new work and 42% were renewals.
Our strong 12-month book-to-bill of 1.1 times gives us confidence that, like ITO, we can take this business from double-digit to low single-digit decline in the next 12 months.
Analytics and Engineering is a great story as we are converting our strong book-to-bill of 1.29 times on a 12-month basis and growing this business 18.7% in Q3, which is helping us consistently grow our GBS business.
Organic revenue improved 100 basis points from Q2 to a decline of 1.4%.
Adjusted EBIT margin is up to 8.7%.
Year-over-year, our adjusted EBIT margin expanded 170 basis points, while we substantially reduced our restructuring and TSI expense.
Q3 book-to-bill was 1.23 times and 1.08 times on a trailing four quarters.
Non-GAAP diluted earnings per share was $0.92, up $0.08 compared to the prior year.
Our earnings per share expanded despite $0.23 of headwinds from taxes.
GBS continued its strong performance, accelerating organic revenue growth to 7%, our third consecutive quarter of organic revenue growth.
Our GBS profit margin was 16.2%, up 200 basis points compared to the prior year.
GIS organic revenue declined 8.3%.
GIS profit margin was 4.8%, an improvement of 110 basis points compared to prior year.
Analytics and Engineering revenue was $545 million and organic revenue was up 18.7%.
Applications organic revenue increased 4.8%, also accelerating.
BPS, our smallest layer of the enterprise technology stack, generated $116 million of revenue, and organic revenue was down 8.3%.
For our GBS layers of our technology stack, our book-to-bill was 1.28 times and 1.17 times on a trailing 12-month basis.
Cloud and Security revenue was $471 million and organic revenue was down 12.2%.
IT Outsourcing revenue was $1.11 billion and organic revenue was down 1.9%.
Let me remind you that this business declined 19% in Q3 FY '21.
We expect IT Outsourcing to continue to decline in low single digits, ideally 5% or better.
Lastly, Modern Workplace revenue was $561 million, and organic revenue was down 16% as compared to prior year.
And our strong book-to-bill of 1.11 times over the trailing 12 months is expected to stabilize Modern Workplace as we move through FY '23.
For our GIS layers of the technology stack, our book-to-bill was 1.18 times and 1.01 times on a trailing 12-month basis.
We reduced our debt from $12 billion to $4.9 billion and are now below our targeted debt level.
We have reduced our quarterly net interest expense to $23 million, a $31 million reduction as compared to prior year.
We expect to continue the lower interest expense at approximately $25 million per quarter.
This reduction contributed $195 million to cash flow during the quarter as compared to the prior year.
Lastly, as you can see, we have also reduced operating lease cash payments from $156 million in the third quarter of the prior year to $117 million in the third quarter of FY '22.
Moving to Chart 16.
Our capital expenditures were reduced from $219 million in Q3 FY '21 to $146 million in Q3 FY '22.
In FY '20, we had a $270 million quarterly run rate for originations while our last two quarters averaged less than $60 million.
We made $207 million of capital lease payments in Q3 last year, which is now down to $184 million in the current quarter.
For Q4, we expect a further reduction of capital lease payments to approximately $140 million.
We are now tracking at 5.2% for two consecutive quarters, down from roughly 10% in FY '20.
Cash flow from operations totaled an inflow of $696 million.
Free cash flow for the quarter was $550 million, an increase of $956 million as compared to prior year and moves our year-to-date free cash flow to $650 million or $150 million above our full year guidance.
Further, cash in the quarter was negatively impacted by two previously disclosed payments, totaling approximately $130 million.
Our progress in Q2 and Q3 gives us confidence as we work toward delivering our longer-term FY '24 guidance of $1.5 billion in free cash flow.
We are targeting a debt level of approximately $5 billion and a cash level of $2.5 billion.
With debt at our target debt level, cash over $2.5 billion is excess cash, which we expect to deploy.
Based on this formula, we expect to self-fund stock repurchases of $1 billion over the next 12 months.
The $1 billion in repurchases will be funded from a combination of cash generated from operating our business as well as proceeds from our portfolio-shaping efforts.
We recently executed a number of sale agreements and expect to divest businesses and assets with approximately $500 million of revenue and will generate $500 million of proceeds in the next 12 months.
As you will see in our 10-Q, we entered into an agreement to sell our German financial service subsidiary that includes both of our banks for approximately $340 million.
The current cash balance related to these deposits is $670 million.
We also announced an agreement for the sale of our Israeli business for $65 million.
In Q3, we repurchased $213 million of common stock, bringing our FY '22 year-to-date repurchases to $363 million or 10.6 million shares.
As noted, we expect to repurchase $1 billion of our common stock over the next 12 months as we firmly believe our stock is undervalued.
Revenues between $4.11 billion and $4.15 billion.
If exchange rates were at the same level as when we gave guidance last quarter, our fourth quarter revenue guidance range would be $20 million higher.
Organic revenue declined, minus 1.2% to minus 1.7%.
Adjusted EBIT margin in the range of 8.7% to 9%.
Non-GAAP diluted earnings per share of $0.98 to $1.03 per share.
For Q4, we expect a tax rate of approximately 26%.
Based on the strengthening U.S. dollar, our revenues are expected to be negatively impacted by approximately $40 million.
We now expect to come in at approximately $16.4 billion.
Organic revenue growth range of minus 2.2% to minus 2.3%, which is slightly lower than our previous range.
Adjusted EBIT margin, 8.5% to 8.6%.
We continue to expand margins while significantly lowering restructuring and TSI expense and are now guiding to $400 million for FY '22.
To put this all in context, we expect to spend $500 million less on restructuring and TSI spend than last year, while expanding margins by over 200 basis points.
Non-GAAP diluted earnings per share of $3.64 to $3.69.
Lastly, we are increasing free cash flow guidance to over $650 million, $150 million improvement to our prior FY '22 guidance.
Fourth quarter cash flow is expected to be impacted by timing, which boosted Q3 cash flow and in addition, a $100 million payment in Q4 to terminate a financial structure put in place a number of years ago.
Our trailing 12-month average is now 1.08 times.
Our debt is now at $4.9 billion, and our refinancing has significantly lowered our interest expense.
Achieved organic revenue growth of minus 1% to minus 2% in FY '22.
This is where we're coming up a little short, anticipating negative 2.2% to negative 2.3% organic revenue growth.
We have taken it from over $900 million to roughly $400 million in FY '22.
We exceeded the $500 million guidance for FY '22.
We have repurchased $363 million and plan to do another $1 billion over the next 12 months.
Our portfolio-shaping is anticipated to drive $500 million in excess cash in the next year.

Summary:
Regarding our Q3 performance, our revenues were $4.09 billion compared to $4.03 billion in Q2.
Our non-GAAP diluted earnings per share was $0.92 in the quarter, which is up 10% as compared to $0.84 last year.
Non-GAAP diluted earnings per share was $0.92, up $0.08 compared to the prior year.
Based on this formula, we expect to self-fund stock repurchases of $1 billion over the next 12 months.
The $1 billion in repurchases will be funded from a combination of cash generated from operating our business as well as proceeds from our portfolio-shaping efforts.
As noted, we expect to repurchase $1 billion of our common stock over the next 12 months as we firmly believe our stock is undervalued.
Non-GAAP diluted earnings per share of $3.64 to $3.69.
Achieved organic revenue growth of minus 1% to minus 2% in FY '22.
We have repurchased $363 million and plan to do another $1 billion over the next 12 months.