DXC Technology reported results for the fourth quarter and fiscal year 2021.
“I am pleased to report a solid fourth quarter as the leadership team continues to execute on our transformation journey. Our results clearly indicate that we are winning in the marketplace, which in turn is driving improved sequential revenue and adjusted EBIT margin performance,” said Mike Salvino, DXC president and chief executive officer. “I would like to thank the entire DXC team for their continued strong execution. Our FY22 and longer-term expectations reflect continuing solid business momentum and our confidence that we are building a people and customer focused organization that will compete and win in the IT services industry.” Mr. Salvino continued, “As the world is witnessing the ongoing impact of COVID-19, our focus continues to be on our people, particularly in the more severely impacted areas including India and the Philippines. The dedication and perseverance on display by our team is a source of the great pride I have as our people continue to take care of themselves, each other, their families, and deliver for our customers.”
Financial Highlights - Fourth Quarter of Fiscal Year 2021
Revenue was $4.385 billion, down 8.9% as compared to prior year, and down 7.0% on an organic basis. Fourth quarter revenues exceeded the Company’s previous revenue guidance range. Revenues increased 2.3% as compared to the third quarter of fiscal year 2021 and were up 0.4% on a sequential organic basis. This represents the third sequential quarter of organic revenue stabilization for DXC, and management anticipates this trend to continue into fiscal year 2022.
Net loss and EBIT included a $517 million pension and other post-employment benefits mark-to-market actuarial and settlement loss, asset impairment charges of $190 million, amortization of intangibles of $116 million, restructuring charges of $110 million, transaction, separation and integration cost of $51 million, loss on disposition of $42 million and a $41 million debt extinguishment charge resulting in EBIT margin of (16.8)% in the fourth quarter of fiscal 2021. Excluding these items, adjusted EBIT margin was 7.5% in the fourth quarter, an improvement of 50 basis points from the third quarter of fiscal year 2021. Fourth quarter adjusted EBIT margin came in above our guidance range.
Diluted earnings per share was $(3.14) and non-GAAP diluted earnings per share was $0.74 in the fourth quarter of fiscal year 2021, above our guidance range.
Book-to-bill for the quarter was 1.08x, underscoring the Company’s continued focus on customers and our people, which in turn is driving ongoing success in the market. This represents the fourth straight quarter that the Company has delivered a book-to-bill of over 1.0x. The Company expects the new business momentum to continue in FY22.
Financial Information by Segment
GBS segment revenue was $1.999 billion in the fourth quarter of fiscal year 2021, down 13.4% compared to prior year, and down 4.0% on an organic basis. On a sequential basis, GBS revenues increased 4.1% and on an organic basis, increased 2.0%, driven by growth in Analytics and Engineering, Applications and Business Process Solutions ("BPS"). GBS Segment profit was $315 million and segment profit margin was 15.8%, up 160 bps as compared to the third quarter of fiscal year 2021. GBS bookings for the quarter were $2.4 billion for a book-to-bill of 1.20x.
GIS Segment revenue was $2.386 billion in the fourth quarter of 2021, down 4.8% compared to prior year, and down 9.3% on an organic basis. On a sequential basis, GIS revenues increased 0.8% and decreased 0.9% on an organic basis, driven by low-single digit revenue growth in IT Outsourcing, offset by declines in Cloud and Security and Modern Workplace. GIS segment profit was $98 million with a segment profit margin of 4.1%, a 40 basis points segment margin expansion as compared to third quarter of fiscal year 2021. GIS bookings were $2.3 billion in the quarter for a book-to-bill of 0.98x.
Earnings Conference Call and Webcast
DXC Technology senior management will host a conference call and webcast to discuss these results on May 26, 2021, at 5:00 p.m. EDT. The dial-in number for domestic callers is +1 (833) 979-2847. Callers who reside outside of the United States should dial +1 (236) 714-2943. The passcode for all participants is 5488532. The webcast audio and any presentation slides will be available on DXC Technology’s Investor Relations website.
A replay of the conference call will be available from approximately two hours after the conclusion of the call until 06/02/2021 23:59 ET. Phone number for the replay is +1 (800) 585-8367 or +1 (416) 621-4642. The replay passcode is 5488532.
