DXC Technology reported results for the third quarter of fiscal year 2025.
“I am pleased with our third quarter performance. Our operating model changes and focus on disciplined execution is reflected in our third quarter financial results, which were ahead of guidance. The go to market changes we have made are starting to take hold, driving a meaningful improvement in bookings performance,” said DXC Technology President and CEO, Raul Fernandez. "Reflecting on my first year as CEO, I'm very confident that we are on the right path to building a business with profitable and sustainable revenue growth."
Financial Highlights - Third Quarter Fiscal Year 2025
- Total revenue was $3.23 billion, down 5.1% year-over-year (down 4.2% on an organic basis)(1).
- EBIT was $146 million, down 37.6% year-over-year with a corresponding margin of 4.5%. Adjusted EBIT(2)was $286 million, up 11.7% year-over-year, with a corresponding margin(2)of 8.9%.
- Diluted earnings per share was $0.31, down 61.7% year-over-year. Non-GAAP diluted earnings per share(3)was $0.92, up 7.0% year-over-year.
- Cash generated from operations was $650 million, down 7.9% year-over-year. Free cash flow(4)was $483 million in the third quarter of fiscal year 2025, compared to $585 million in the third quarter of fiscal year 2024.
- Book to Bill ratio of 1.33x, compared to 0.99x in the third quarter of fiscal year 2024.
Segment Highlights - Third Quarter Fiscal Year 2025
Global Business Services ("GBS")
- Revenue was $1.67 billion, down 1.8% year-over-year (down 0.5% on an organic basis).(1)
- Segment profit was $224 million, up 10.9% year-over-year, with a corresponding margin of 13.4%.
- Book to Bill ratio of 1.23x, compared to 1.26x during the third quarter of fiscal 2024.
Global Infrastructure Services ("GIS")
- Revenue was $1.56 billion, down 8.5% year-over-year (down 7.8% on an organic basis).(1)
- Segment profit was $101 million, down 15.1% year-over-year, with a corresponding margin of 6.5%.
- Book to Bill ratio of 1.44x, compared to 0.73x during the third quarter of fiscal 2024.
Full Year Fiscal 2025 and Fourth Quarter Fiscal Year 2025 Guidance
Full Year Fiscal 2025
- Total revenue in the range of $12.80 billion and $12.83 billion, a decline of 4.9% to 4.7% on an organic basis(1)compared to the prior guidance of a decline of 5.5% to 4.5%.
- Adjusted EBIT margin(2)~7.9%, compared to the prior guidance of 7.0% to 7.5%.
- Non-GAAP diluted EPS(3)of ~$3.35, compared to the prior guidance of $3.00 to $3.25.
- Free Cash Flow(4)of ~$625 million, up from the prior guidance of approximately $550 million.
Fourth Quarter Fiscal 2025
- Total revenue in the range of $3.10 billion and $3.13 billion, a decline of 5.5% to 4.5% year-over-year on an organic basis.(1)
- Adjusted EBIT margin(2)~7.0%.
- Non-GAAP Diluted EPS(3)of ~$0.75.
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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) |
Adjusted EBIT and Adjusted EBIT margin are non-GAAP measures. Reconciliations of GAAP Net Income to such measures are attached to this release . |
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(3) |
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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(4) |
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 third quarter of fiscal year 2025 is calculated by subtracting capital expenditures of $167 million from cash flow from operations of $650 million. Free cash flow for the third quarter of fiscal year 2024 is calculated by subtracting capital expenditures of $121 million from cash flow from operations of $706 million. |
Earnings Conference Call and Webcast
DXC Technology senior management will host a conference call and webcast to discuss third quarter fiscal 2025 results at 5:00 p.m. ET on February 4, 2025. 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 its conclusion until 11:59 PM ET on February 11, 2025, 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.
