DXC Technology reported results for the second quarter of fiscal year 2025.
"I am pleased to report another quarter of solid results, with adjusted EBIT margin and non-GAAP diluted EPS exceeding our guidance, and revenue coming in toward the high end of our range," said DXC Technology President and CEO, Raul Fernandez. "I'm proud of how our new leadership team has come together and the early momentum we've seen from our initiatives this year. While there’s more work ahead, particularly in our go-to-market initiatives, we’re focused on execution and building a solid foundation to support stronger performance going forward."
Financial Highlights - Second Quarter Fiscal Year 2025
- Total revenue was $3.24 billion, down 5.7% year-over-year (down 5.6% on an organic basis). (1)
- EBIT was $111 million, down 27.5% year-over-year with a corresponding margin of 3.4%. Adjusted EBIT (4) was $279 million, up 11.2% year-over-year, with a corresponding margin (4) of 8.6%.
- Diluted earnings per share was $0.23, down 53.1% year-over-year. Non-GAAP diluted earnings per share (2) was $0.93, up 32.9% year-over-year.
- Cash generated from operations was $195 million, down 21.4% year-over-year. Free cash flow (3) was $48 million in the second quarter of fiscal year 2025, as compared to $91 million in the second quarter of fiscal year 2024.
- Book to Bill ratio was 0.81x, flat year-over-year.
Segment Highlights - Second Quarter Fiscal Year 2025
Global Business Services ("GBS")
- Revenue was $1.68 billion, down 1.9% year-over-year (down 1.6% on an organic basis) (1)
- Segment profit was $214 million, up 0.5% year-over-year, with a corresponding margin of 12.8%
- Book to Bill ratio of 0.90x, compared to 0.76x during the second quarter of fiscal 2024
Global Infrastructure Services ("GIS")
- Revenue from GIS was $1.56 billion, down 9.4% year-over-year (down 9.6% on an organic basis) (1)
- Segment profit was $129 million, up 27.7% year-over-year, with a corresponding margin of 8.2%
- Book to Bill ratio of 0.71x, compared to 0.87x during the second quarter of fiscal 2024
Full Year Fiscal 2025 and Third Quarter Fiscal Year 2025 Guidance
Full Year Fiscal 2025
- Total revenue in the range of $12.9 billion and $13.1 billion, a decline of 5.5% to 4.5% on an organic basis (1) compared to the prior guidance of a decline of 6.0% to 4.0%
- Adjusted EBIT margin (4) between 7.0% to 7.5%, compared to the prior guidance of 6.5% to 7.0%
- Non-GAAP diluted EPS (2) in the range of $3.00 to $3.25, compared to the prior guidance of $2.75 to $3.00
- Free Cash Flow (3) of approximately $550 million, up from the prior guidance of approximately $450 million
Third Quarter Fiscal 2025
- Total revenue in the range of $3.2 billion and $3.3 billion, a decline of 5.5% to 4.5% year-over-year on an organic basis (1)
- Adjusted EBIT margin (4) between 7.0% to 7.5%
- Non-GAAP Diluted EPS (2) in the range of $0.75 to $0.80
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(1) |
Revenue growth on an organic basis is a non-GAAP measure and is calculated by restating current-period activity using the prior fiscal period's foreign currency exchange rates, adjusted for the impact of acquisitions and divestitures. A reconciliation of GAAP to non-GAAP measure are attached to this release . |
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(2) |
Non-GAAP diluted earnings per share is a non-GAAP measure. A reconciliation of GAAP diluted earnings per share to non-GAAP diluted per share is attached to this release . |
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(3) |
Free cash flow is a non-GAAP measure. Free cash flow is calculated by subtracting capital expenditures (Purchase of Property, Plant & Equipment, Transition and Transformation Contract Costs and Software Purchased or Developed) from cash flow from operations. Free cash flow for the second quarter of fiscal year 2025 is calculated by subtracting capital expenditures of $147 million from cash flow from operations of $195 million. Free cash flow for the second quarter of fiscal year 2024 is calculated by subtracting capital expenditures of $157 million from cash flow from operations of $248 million. |
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(4) |
Adjusted EBIT and Adjusted EBIT margin are non-GAAP measures. Reconciliations of GAAP Net Income to such measures are attached to this release . |
Earnings Conference Call and Webcast
DXC Technology senior management will host a conference call and webcast to discuss second quarter fiscal 2025 results at 5:00 p.m. ET November 7, 2024. The dial-in number for domestic callers is 888-330-2455. Callers who reside outside of the United States should dial +1-240-789-2717. The passcode for all participants is 4164760#. The webcast audio and any presentation slides will be available through a link posted on DXC Technology’s Investor Relations website.
A replay of the conference call will be available approximately two hours after the conclusion of the call until 11:59 PM ET on November 14, 2024, at 800-770-2030 for domestic callers and at +1-647-362-9199 for international callers. The replay passcode is 4164760#. A transcript of the conference call will be posted on DXC Technology’s Investor Relations website.
