DXC Technology reported results for the fourth quarter and full year fiscal 2025.
“Our fourth quarter results represent continued progress toward our goal of achieving sustained, profitable revenue growth,” said DXC Technology President and CEO, Raul Fernandez. “For the second consecutive quarter, we reported bookings growth of more than 20% and book to bill ratios of greater than 1. While the macro backdrop remains uncertain, we're staying focused on our priorities, delivering our deep and broad capabilities to our customers, driving performance with a newly energized and engaged employee base, and continuing to build a culture of accountability, collaboration, and urgency.”
Financial Highlights - Fourth Quarter Fiscal Year 2025
- Total revenue was $3.17 billion, down 6.4% year-over-year (down 4.2% on an organic basis)(1).
- EBIT was $350 million, with a corresponding margin of 11.0% compared to ($289) million in the prior year quarter. Adjusted EBIT(2)was $230 million, down 19.0% year-over-year, with a corresponding margin(2)of 7.3%.
- Diluted earnings per share was $1.43, compared to ($1.10) in the prior year quarter. Non-GAAP diluted earnings per share(3)was $0.84, down 13.4% year-over-year.
- Cash generated from operations was $315 million, up 12.5% year-over-year. Free cash flow(4)was $111 million in the fourth quarter of fiscal year 2025, compared to $155 million in the fourth quarter of fiscal year 2024.
- Book to Bill ratio of 1.22x, compared to 0.94x in the fourth quarter of fiscal year 2024.
Segment Highlights - Fourth Quarter Fiscal Year 2025
Global Business Services ("GBS")
- Revenue was $1.63 billion, down 4.8% year-over-year (down 2.4% on an organic basis).(1)
- Segment profit was $178 million, down 21.9% year-over-year, with a corresponding margin of 10.9%.
- Book to Bill ratio of 1.16x, compared to 0.99x during the fourth quarter of fiscal 2024.
Global Infrastructure Services ("GIS")
- Revenue was $1.54 billion, down 8.1% year-over-year (down 6.0% on an organic basis).(1)
- Segment profit was $107 million, down 14.4% year-over-year, with a corresponding margin of 7.0%.
- Book to Bill ratio of 1.28x, compared to 0.89x during the fourth quarter of fiscal 2024.
Financial Highlights - Full Year Fiscal 2025
- Total revenue was $12.87 billion, down 5.8% year-over-year (down 4.6% on an organic basis)(1).
- EBIT was $696 million, up 260.6% year-over-year with a corresponding margin of 5.4%. Adjusted EBIT(2)was $1,019 million, up 1.0% year-over-year, with a corresponding margin(2)of 7.9%.
- Diluted earnings per share was $2.10, up 356.5% year-over-year. Non-GAAP diluted earnings per share(3)was $3.43, up 10.6% year-over-year.
- Cash generated from operations was $1,398 million, up 2.7% year-over-year. Free cash flow(4)was $687 million in the full year of fiscal year 2025, compared to $756 million in the full year fiscal 2024.
- Book to Bill ratio of 1.03x, compared to 0.91x in the full year fiscal 2024.
Segment Highlights - Full Year Fiscal 2025
Global Business Services ("GBS")
- Revenue was $6.65 billion, down 2.6% year-over-year (down 1.0% on an organic basis).(1)
- Segment profit was $797 million, down 4.6% year-over-year, with a corresponding margin of 12.0%.
- Book to Bill ratio of 1.03x, compared to 0.96x during the full year fiscal 2024.
Global Infrastructure Services ("GIS")
- Revenue was $6.23 billion, down 9.1% year-over-year (down 8.2% on an organic basis).(1)
- Segment profit was $451 million, up 4.2% year-over-year, with a corresponding margin of 7.2%.
- Book to Bill ratio of 1.03x, compared to 0.86x during the full year fiscal 2024.
Full Year Fiscal 2026 and First Quarter Fiscal Year 2026 Guidance
Full Year Fiscal 2026
- Total revenue in the range of $12.18 billion and $12.44 billion, a decline of 5.0% to 3.0% on an organic basis(1).
- Adjusted EBIT margin(2)of 7.0% to 8.0%.
- Non-GAAP diluted EPS(3)of $2.75 to $3.25.
- Free Cash Flow(4)of ~$600 million.
First Quarter Fiscal 2026
- Total revenue in the range of $3.04 billion and $3.09 billion, a decline of 5.5% to 4.0% year-over-year on an organic basis.(1)
- Adjusted EBIT margin(2)of 6.0% to 7.0%.
- Non-GAAP Diluted EPS(3)of $0.55 to $0.65.
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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 fourth quarter of fiscal year 2025 is calculated by subtracting capital expenditures of $204 million from cash flow from operations of $315 million. Free cash flow for the fourth quarter of fiscal year 2024 is calculated by subtracting capital expenditures of $125 million from cash flow from operations of $280 million. Free cash flow for the full year of fiscal year of 2025 is calculated by subtracting capital expenditures of $711 million from cash flow from operations of $1,398 million. Free cash flow for the full year of fiscal year 2024 is calculated by subtracting capital expenditures of $605 million from cash flow from operations of $1,361 million. |
Additional metrics for the first quarter and full year fiscal 2026 guidance are presented in the table below.
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Revenue |
Q1 FY26 Guidance |
FY26 Guidance |
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Lower End |
Higher End |
Lower End |
Higher End |
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|
YoY Organic Revenue % |
(5.5)% |
(4.0)% |
(5.0)% |
(3.0)% |
|
Acquisition & Divestitures Revenues % |
(0.2)% |
(0.1)% |
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|
Foreign Exchange Impact on Revenues % |
(0.4)% |
(0.3)% |
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Others |
||||
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Net Interest Expense ($M) |
~$15 |
~$60 |
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Non-GAAP Tax Rate |
~40% |
~35% |
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Foreign Exchange Assumptions |
Current Estimate |
Current Estimate |
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$/Euro Exchange Rate |
$1.09 |
$1.09 |
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$/GBP Exchange Rate |
$1.27 |
$1.27 |
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|
$/AUD Exchange Rate |
$0.60 |
$0.60 |
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DXC does not provide reconciliations of non-GAAP measures included in its guidance because certain key information necessary for such reconciliations—most notably the impact of significant non-recurring items—is unavailable without unreasonable effort or may not be available at all. As a result, DXC believes any such reconciliation would not be meaningful.
Earnings Conference Call and Webcast
DXC Technology senior management will host a conference call and webcast to discuss fourth quarter fiscal 2025 results at 5:00 p.m. ET on May 14, 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 May 21, 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.
