- Total revenue of $3.23 billion, down 5.1% (down 4.2% on an
organic basis)(1)
- EBIT margin of 4.5%, and adjusted EBIT(2) margin of
8.9%
- Diluted earnings per share was $0.31 vs. $0.81 in the prior
year quarter; Non-GAAP diluted earnings per share(3) was $0.92, up
7.0% YoY
- Book to bill of 1.33x
- Increased full year adjusted EBIT(2) margin guidance to
~7.9%
- Increased full-year non-GAAP diluted EPS(3) guidance to
~$3.35
- Increased full year free cash flow(4) guidance to ~$625
million
DXC Technology (NYSE: DXC) today 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.
(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.
(2)
Adjusted EBIT and Adjusted EBIT margin are
non-GAAP measures. Reconciliations of GAAP Net Income to such
measures are attached to this release.
(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.
(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.
Additional metrics for the fourth quarter and full fiscal
year 2025 guidance are presented in the table below.
Revenue
Q4 FY25 Guidance
FY25 Guidance
Lower End
Higher End
Lower End
Higher End
YoY Organic Revenue %
(5.5)%
(4.5)%
(4.9)%
(4.7)%
Acquisition & Divestitures Revenues
%
(0.2)%
(0.2)%
Foreign Exchange Impact on Revenues %
(2.9)%
(1.2)%
Others
Pension Income Benefit*
~$27
~$108
Net Interest Expense
~$15
~$70
Non-GAAP Tax Rate
~29%
~33%
Weighted Average Diluted Shares
Outstanding
~185
~184
Restructuring & TSI Expense
~$200
Capital Lease / Asset Financing
Payments
~$290
Foreign Exchange Assumptions
Current Estimate
Current Estimate
$/Euro Exchange Rate
$1.04
$1.07
$/GBP Exchange Rate
$1.25
$1.27
$/AUD Exchange Rate
$0.62
$0.65
*Pension benefit is split between Cost Of
Services (COS) & Other Income:
Fiscal year 2025: Net pension
benefit of $108 million; $52 million service cost in COS, $160
million pension benefit in Other income
Fiscal year 2024: Net pension
benefit of $92 million; $53 million service cost in COS, $145
million pension benefit in Other income
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 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.
About DXC Technology
DXC Technology (NYSE: DXC) helps global companies run their
mission critical systems and operations while modernizing IT,
optimizing data architectures, and ensuring security and
scalability across public, private and hybrid clouds. The world’s
largest companies and public sector organizations trust DXC to
deploy services to drive new levels of performance,
competitiveness, and customer experience across their IT estates.
Learn more about how we deliver excellence for our customers and
colleagues at DXC.com.
Forward-Looking Statements
All statements and assumptions contained in this press release
that do not directly and exclusively relate to historical facts
constitute “forward-looking statements.” Forward-looking statements
often include words such as “anticipates,” “believes,” “estimates,”
“expects,” “forecast,” “goal,” “intends,” “objective,” “plans,”
“projects,” “strategy,” “target,” and “will” and words and terms of
similar substance in discussions of future operating or financial
performance. These statements represent current expectations and
beliefs, and no assurance can be given that the results described
in such statements will be achieved. Forward-looking statements
include, among other things, statements with respect to our future
financial condition, results of operations, cash flows, business
strategies, operating efficiencies or synergies, divestitures,
competitive position, growth opportunities, share repurchases,
dividend payments, plans and objectives of management and other
matters. Such statements are subject to numerous assumptions,
risks, uncertainties and other factors that could cause actual
results to differ materially from those described in such
statements, many of which are outside of our control. Important
factors that could cause actual results to differ materially from
those described in forward-looking statements include, but are not
limited to: our inability to succeed in our strategic objectives;
the risk of liability, reputational damages or adverse impact to
business due to service interruptions from security breaches,
cyber-attacks, other security incidents or disclosure of
confidential information or personal data; compliance, or failure
to comply, with obligations arising under new or existing laws,
regulations, and customer contracts relating to the privacy,
security and handling of personal data; our product and service
quality issues; our inability to develop and expand our service
offerings to address emerging business demands and technological
trends, including our inability to sell differentiated services
amongst our offerings; our inability to compete in certain markets
and expand our capacity in certain offshore locations and risks
associated with such offshore locations, such as the on-going
conflict between Russia and Ukraine; failure to maintain our credit
rating and ability to manage working capital, refinance and raise
additional capital for future needs; difficulty in understanding
the changes to our business model by financial or industry analysts
or our failure to meet our publicly announced financial guidance;
public health crises such as the COVID-19 pandemic; our
indebtedness and potential material adverse effect on our financial
condition and results of operations; the competitive pressures
faced by our business; our inability to accurately estimate the
cost of services, and the completion timeline of contracts; failure
by us or third party partners to deliver on commitments or
otherwise breach obligations to our customers; the risks associated
with climate change and natural disasters; increased scrutiny of,
and evolving expectations for, sustainability and environmental,
social, and governance initiatives; our inability to attract and
retain key personnel and maintain relationships with key partners;
the risks associated with prolonged periods of inflation or current
macroeconomic conditions, including the current decline in economic
growth rates in the United States and in other countries, the
possibility of reduced spending by customers in the areas we serve,
the uncertainty related to our cost-takeout efforts, continuing
unfavorable foreign exchange rate movements, and our ability to
close new deals in the event of an economic slowdown; the risks
associated with our international operations, such as risks related
to currency exchange rates; our inability to comply with existing
and new laws and regulations, including social and environmental
responsibility regulations, policies and provisions, as well as
customer and investor demands; our inability to achieve the
expected benefits of our restructuring plans; our inadvertent
infringement of third-party intellectual property rights or
infringement of our intellectual property rights by third parties;
our inability to procure third-party licenses required for the
operation of our products and service offerings; risks associated
with disruption of our supply chain; our inability to maintain
effective disclosure controls and internal control over financial
reporting; potential losses due to asset impairment charges; our
inability to pay dividends or repurchase shares of our common
stock; pending investigations, claims and disputes and any adverse
impact on our profitability and liquidity; disruptions in the
credit markets, including disruptions that reduce our customers’
access to credit and increase the costs to our customers of
obtaining credit; counterparty default risk in our hedging program;
our failure to bid on projects effectively; financial difficulties
of our customers and our inability to collect receivables; our
inability to maintain and grow our customer relationships over time
and to comply with customer contracts or government contracting
regulations or requirements; our inability to succeed in our
strategic transactions; changes in tax rates, tax laws, and the
timing and outcome of tax examinations; risks following the merger
of Computer Sciences Corporation (“CSC”) and Enterprise Services
business of Hewlett Packard Enterprise Company’s (“HPES”)
businesses, including anticipated tax treatment, unforeseen
liabilities, and future capital expenditures; risks following the
spin-off of our former U.S. Public Sector business (the “USPS”) and
its related mergers with Vencore Holding Corp. and KeyPoint
Government Solutions in June 2018 to form Perspecta Inc. (including
its successors and permitted assigns, “Perspecta”); volatility of
the price of our securities, which is subject to market and other
conditions. For a written description of these factors, see the
section titled “Risk Factors” in DXC’s Annual Report on Form 10-K
for the fiscal year ended March 31, 2024, and any updating
information in subsequent SEC filings.
No assurance can be given that any goal or plan set forth in any
forward-looking statement can or will be achieved, and readers are
cautioned not to place undue reliance on such statements which
speak only as of the date they are made. We do not undertake any
obligation to update or release any revisions to any
forward-looking statement or to report any events or circumstances
after the date of this press release or to reflect the occurrence
of unanticipated events except as required by law.
About Non-GAAP Measures
In an effort to provide investors with supplemental financial
information, in addition to the preliminary and unaudited financial
information presented on a GAAP basis, we also disclose in this
press release preliminary non-GAAP information including: earnings
before interest and taxes ("EBIT"), EBIT margin, adjusted EBIT,
adjusted EBIT margin, non-GAAP diluted EPS, organic revenues,
organic revenue growth, free cash flow, and non-GAAP tax rate.
We believe EBIT, adjusted EBIT, non-GAAP income before income
taxes, non-GAAP net income, non-GAAP net income attributable to DXC
common stockholders, and non-GAAP EPS provide investors with useful
supplemental information about our operating performance after
excluding certain categories of expenses as well as gains and
losses on certain dispositions and certain tax adjustments.
We believe constant currency revenues provides investors with
useful supplemental information about our revenues after excluding
the effect of currency exchange rate fluctuations for currencies
other than U.S. dollars in the periods presented. See below for a
description of the methodology we use to present constant currency
revenues.
One category of expenses excluded from adjusted EBIT, non-GAAP
income before income tax, non-GAAP net income, non-GAAP net income
attributable to DXC common stockholders, and non-GAAP EPS,
incremental amortization of intangible assets acquired through
business combinations, if included, may result in a significant
difference in period over period amortization expense on a GAAP
basis. We exclude amortization of certain acquired intangible
assets as these non-cash amounts are inconsistent in amount and
frequency and are significantly impacted by the timing and/or size
of acquisitions. Although DXC management excludes amortization of
acquired intangible assets, primarily customer-related intangible
assets, from its non-GAAP expenses, we believe it is important for
investors to understand that such intangible assets were recorded
as part of purchase accounting and support revenue generation. Any
future transactions may result in a change to the acquired
intangible asset balances and associated amortization expense.
Another category of expenses excluded from adjusted EBIT,
non-GAAP income before income tax, non-GAAP net income, non-GAAP
net income attributable to DXC common stockholders, and non-GAAP
EPS is impairment losses, which, if included, may result in a
significant difference in period-over-period expense on a GAAP
basis. We exclude impairment losses as these non-cash amounts
reflect generally an acceleration of what would be multiple periods
of expense and are not expected to occur frequently. Further,
assets such as goodwill may be significantly impacted by market
conditions outside of management’s control.
Selected references are made to revenue growth on an “organic
basis” in order that certain financial results can be viewed
without the impact of fluctuations in foreign currency rates and
without the impacts of acquisitions and divestitures, thereby
providing comparisons of operating performance from period to
period of the business that we have owned during both periods
presented. Organic revenue growth is calculated by dividing the
year-over-year change in GAAP revenues attributed to organic growth
by the GAAP revenues reported in the prior comparable period.
Organic revenue is calculated as constant currency revenue
excluding the impact of mergers, acquisitions or similar
transactions until the one-year anniversary of the transaction and
excluding revenues of divestitures during the reporting period.
This approach is used for all results where the functional currency
is not the U.S. dollar. We believe organic revenue growth provides
investors with useful supplemental information about our revenues
after excluding the effect of currency exchange rate fluctuations
for currencies other than U.S. dollars and the effects of
acquisitions and divestitures in both periods presented.
Free cash flow represents cash flow from operations, less
capital expenditures. Free cash flow is utilized by our management,
investors, and analysts to evaluate cash available for normal
business operations, to pay debt, repurchase shares, and provide
further investment in the business.
There are limitations to the use of the non-GAAP financial
measures presented in this report. One of the limitations is that
they do not reflect complete financial results. We compensate for
this limitation by providing a reconciliation between our non-GAAP
financial measures and the respective most directly comparable
financial measure calculated and presented in accordance with GAAP.
Additionally, other companies, including companies in our industry,
may calculate non-GAAP financial measures differently than we do,
limiting the usefulness of those measures for comparative purposes
between companies. Selected references are made on a “constant
currency basis” so that certain financial results can be viewed
without the impact of fluctuations in foreign currency rates,
thereby providing comparisons of operating performance from period
to period. Financial results on a “constant currency basis” are
non-GAAP measures calculated by translating current period activity
into U.S. Dollars using the comparable prior period’s currency
conversion rates. This approach is used for all results where the
functional currency is not the U.S. Dollar.
Condensed Consolidated Statements of
Operations
(preliminary and unaudited)
Three Months Ended
Nine Months Ended
(in millions, except per-share
amounts)
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Revenues
$
3,225
$
3,399
$
9,702
$
10,281
Costs of services
2,416
2,636
7,369
7,988
Selling, general and administrative
335
294
989
949
Depreciation and amortization
320
350
975
1,055
Restructuring costs
43
36
124
91
Interest expense
66
78
207
222
Interest income
(51
)
(56
)
(153
)
(158
)
Gain on disposition of businesses
(7
)
(103
)
(7
)
(96
)
Other income, net
(28
)
(48
)
(94
)
(188
)
Total costs and expenses
3,094
3,187
9,410
9,863
Income before income taxes
131
212
292
418
Income tax expense
68
72
159
137
Net income
63
140
133
281
Less: net income (loss) attributable to
non-controlling interest, net of tax
6
(16
)
8
(10
)
Net income attributable to DXC common
stockholders
$
57
$
156
$
125
$
291
Income per common share:
Basic
$
0.31
$
0.82
$
0.69
$
1.45
Diluted
$
0.31
$
0.81
$
0.68
$
1.43
Weighted average common shares outstanding
for:
Basic EPS
181.02
190.31
180.54
200.68
Diluted EPS
184.77
191.93
184.65
203.55
Selected Condensed Consolidated Balance
Sheet Data
(preliminary and unaudited)
As of
(in millions)
December 31, 2024
March 31, 2024
Assets
Cash and cash equivalents
$
1,723
$
1,224
Receivables, net
2,759
3,253
Prepaid expenses
468
512
Other current assets
125
146
Total current assets
5,075
5,135
Intangible assets, net
1,786
2,130
Operating right-of-use assets, net
638
731
Goodwill
518
532
Deferred income taxes, net
917
804
Property and equipment, net
1,285
1,671
Other assets
2,812
2,857
Assets held for sale - non-current
2
11
Total Assets
$
13,033
$
13,871
Liabilities
Short-term debt and current maturities of
long-term debt
$
193
$
271
Accounts payable
563
846
Accrued payroll and related costs
509
558
Current operating lease liabilities
235
282
Accrued expenses and other current
liabilities
1,329
1,437
Deferred revenue and advance contract
payments
744
866
Income taxes payable
215
134
Total current liabilities
3,788
4,394
Long-term debt, net of current
maturities
3,637
3,818
Non-current deferred revenue
597
671
Non-current operating lease
liabilities
436
497
Non-current income tax liabilities and
deferred tax liabilities
549
556
Other long-term liabilities
774
869
Total Liabilities
9,781
10,805
Total Equity
3,252
3,066
Total Liabilities and Equity
$
13,033
$
13,871
Condensed Consolidated Statements of
Cash Flows
(preliminary and unaudited)
Nine Months Ended
(in millions)
December 31, 2024
December 31, 2023
Cash flows from operating activities:
Net income
$
133
$
281
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
995
1,076
Operating right-of-use expense
235
269
Share-based compensation
59
75
Deferred taxes
(182
)
(159
)
Loss (gain) on dispositions
30
(153
)
Provision for losses on accounts
receivable
9
—
Unrealized foreign currency exchange
loss
33
48
Impairment losses and contract
write-offs
25
17
Other non-cash charges, net
3
3
Changes in assets and liabilities:
Decrease in assets
334
431
Decrease in operating lease liability
(235
)
(269
)
Decrease in other liabilities
(356
)
(538
)
Net cash provided by operating
activities
1,083
1,081
Cash flows from investing activities:
Purchases of property and equipment
(171
)
(144
)
Payments for transition and transformation
contract costs
(106
)
(159
)
Software purchased and developed
(230
)
(177
)
Business dispositions
26
31
Proceeds from sale of assets
126
70
Other investing activities, net
12
12
Net cash used in investing activities
(343
)
(367
)
Cash flows from financing activities:
Borrowings of commercial paper
367
1,536
Repayments of commercial paper
(369
)
(1,281
)
Payments on finance leases and borrowings
for asset financing
(242
)
(333
)
Taxes paid related to net share
settlements of share-based compensation awards
(18
)
(34
)
Repurchase of common stock
(14
)
(755
)
Other financing activities, net
19
(10
)
Net cash used in financing activities
(257
)
(877
)
Effect of exchange rate changes on cash
and cash equivalents
16
(4
)
Net increase (decrease) in cash and cash
equivalents
499
(167
)
Cash and cash equivalents at beginning of
year
1,224
1,858
Cash and cash equivalents at end of
period
$
1,723
$
1,691
Segment Profit
We define segment profit as segment revenues less costs of
services, segment selling, general and administrative, depreciation
and amortization, and other income (excluding the movement in
foreign currency exchange rates on our foreign currency denominated
assets and liabilities and the related economic hedges). The
Company does not allocate to its segments certain operating
expenses managed at the corporate level. These unallocated costs
generally include certain corporate function costs, stock-based
compensation expense, pension and other post-retirement benefits
(“OPEB”) actuarial and settlement gains and losses, restructuring
costs, transaction, separation and integration-related costs, and
amortization of acquired intangible assets.
Three Months Ended
Nine Months Ended
(in millions)
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
GBS profit
$
224
$
202
$
619
$
607
GIS profit
101
119
344
308
All other loss
(39
)
(65
)
(174
)
(190
)
Subtotal
$
286
$
256
$
789
$
725
Interest income
51
56
153
158
Interest expense
(66
)
(78
)
(207
)
(222
)
Restructuring costs
(43
)
(36
)
(124
)
(91
)
Transaction, separation and
integration-related costs
(3
)
(2
)
(25
)
(6
)
Amortization of acquired intangible
assets
(87
)
(88
)
(263
)
(266
)
Merger related indemnification
—
(2
)
—
(15
)
Gains on dispositions
8
104
13
132
(Losses) gains on real estate and facility
sales
(3
)
2
(32
)
8
Impairment losses
(12
)
—
(12
)
(5
)
Income before income taxes
$
131
$
212
$
292
$
418
Segment profit margins
GBS
13.4
%
11.9
%
12.3
%
11.9
%
GIS
6.5
%
7.0
%
7.3
%
6.0
%
Reconciliation of Non-GAAP Financial Measures
Our non-GAAP adjustments include:
- Restructuring costs – includes costs, net of reversals, related
to workforce and real estate optimization and other similar
charges.
- Transaction, separation and integration-related (“TSI”) costs –
includes third party costs related to integration, separation,
planning, financing and advisory fees and other similar charges
associated with mergers, acquisitions, strategic investments, joint
ventures, and dispositions and other similar transactions incurred
within one year of such transactions closing, except for costs
associated with related disputes, which may arise more than one
year after closing.
- Amortization of acquired intangible assets – includes
amortization of intangible assets acquired through business
combinations.
- Merger related indemnification - in fiscal 2025 and fiscal
2024, represents the Company’s estimate of potential net liability
to HPE for tax related indemnifications.
- Gains and losses on dispositions – gains and losses related to
dispositions of businesses, strategic assets and interests in less
than wholly-owned entities.
- Gains and losses on real estate and facility sales – gains and
losses related to dispositions of real property.(1)
- Impairment losses – non-cash charges associated with the
permanent reduction in the value of the Company’s assets (e.g.,
impairment of goodwill and other long-term assets including fixed
assets and impairments to deferred tax assets for discrete changes
in valuation allowances). Future discrete reversals of valuation
allowances are likewise excluded.
- Tax adjustments – discrete tax adjustments to impair or
recognize certain deferred tax assets, adjustments for changes in
tax legislation and the impact of merger and divestitures. Income
tax expense of all other (non-discrete) non-GAAP adjustments is
based on the difference in the GAAP annual effective tax rate
(AETR) and overall non-GAAP provision (consistent with the GAAP
methodology).
(1)
Starting in the fiscal quarter ended
September 30, 2024, the Company’s reported non-GAAP financial
results reflect an adjustment for gains and losses on real estate
and facilities dispositions, which the Company’s current management
believes are not reflective of the core operating performance of
our business. For comparability purposes, historical non-GAAP
financial measures set forth herein have been recast to reflect
this change, which included gains on dispositions of real property
of approximately $2 million and $8 million during the three and
nine months ended December 31, 2023, respectively. For the fiscal
years ended March 31, 2024 and March 31, 2023, the Company had
gains on dispositions of real property of approximately $7 million
and $21 million, respectively.
Non-GAAP
Results
A reconciliation of reported results to
non-GAAP results is as follows:
Three Months Ended December
31, 2024
(in millions, except per-share
amounts)
As
Reported
Restructuring
Costs
Transaction,
Separation and
Integration-Related
Costs
Amortization
of Acquired
Intangible
Assets
Impairment Losses
(Gains) and Losses on
Dispositions
(Gains) and Losses on Real
Estate and Facility Sales
Tax Adjustment
Non-GAAP
Results
Income before income taxes
$
131
$
43
$
3
$
87
$
12
$
(8
)
$
3
$
—
$
271
Income tax expense
68
9
1
18
2
(6
)
1
2
95
Net income
63
34
2
69
10
(2
)
2
(2
)
176
Less: net income attributable to
non-controlling interest, net of tax
6
—
—
—
—
—
—
—
6
Net income attributable to DXC common
stockholders
$
57
$
34
$
2
$
69
$
10
$
(2
)
$
2
$
(2
)
$
170
Effective Tax Rate
51.9
%
35.1
%
Basic EPS
$
0.31
$
0.19
$
0.01
$
0.38
$
0.06
$
(0.01
)
$
0.01
$
(0.01
)
$
0.94
Diluted EPS
$
0.31
$
0.18
$
0.01
$
0.37
$
0.05
$
(0.01
)
$
0.01
$
(0.01
)
$
0.92
Weighted average common shares outstanding
for:
Basic EPS
181.02
181.02
181.02
181.02
181.02
181.02
181.02
181.02
181.02
Diluted EPS
184.77
184.77
184.77
184.77
184.77
184.77
184.77
184.77
184.77
Nine Months Ended December 31,
2024
(in millions, except per-share
amounts)
As
Reported
Restructuring
Costs
Transaction,
Separation and
Integration-Related
Costs
Amortization
of Acquired
Intangible
Assets
Merger Related
Indemnification
Impairment Losses
(Gains) and Losses on
Dispositions
(Gains) and Losses on Real
Estate and Facility Sales
Tax Adjustment
Non-GAAP
Results
Income before income taxes
$
292
$
124
$
25
$
263
$
—
$
12
$
(13
)
$
32
$
—
$
735
Income tax expense
159
25
5
53
5
2
(5
)
8
(3
)
249
Net income
133
99
20
210
(5
)
10
(8
)
24
3
486
Less: net income attributable to
non-controlling interest, net of tax
8
—
—
—
—
—
—
—
—
8
Net income attributable to DXC common
stockholders
$
125
$
99
$
20
$
210
$
(5
)
$
10
$
(8
)
$
24
$
3
$
478
Effective Tax Rate
54.5
%
33.9
%
Basic EPS
$
0.69
$
0.55
$
0.11
$
1.16
$
(0.03
)
$
0.06
$
(0.04
)
$
0.13
$
0.02
$
2.65
Diluted EPS
$
0.68
$
0.54
$
0.11
$
1.14
$
(0.03
)
$
0.05
$
(0.04
)
$
0.13
$
0.02
$
2.59
Weighted average common shares outstanding
for:
Basic EPS
180.54
180.54
180.54
180.54
180.54
180.54
180.54
180.54
180.54
180.54
Diluted EPS
184.65
184.65
184.65
184.65
184.65
184.65
184.65
184.65
184.65
184.65
Three Months Ended December
31, 2023
(in millions, except per-share
amounts)
As
Reported
Restructuring costs
Transaction,
Separation and
Integration-Related
Costs
Amortization
of Acquired
Intangible
Assets
Merger Related
Indemnification
(Gains) and Losses on
Dispositions
(Gains) and Losses on Real
Estate and Facility Sales
Tax Adjustment
Non-GAAP
Results
Income before income taxes
$
212
$
36
$
2
$
88
$
2
$
(104
)
$
(2
)
$
—
$
234
Income tax expense
72
5
—
13
—
(10
)
(1
)
5
84
Net income
140
31
2
75
2
(94
)
(1
)
(5
)
150
Less: net loss attributable to
non-controlling interest, net of tax
(16
)
—
—
—
—
—
—
—
(16
)
Net income attributable to DXC common
stockholders
$
156
$
31
$
2
$
75
$
2
$
(94
)
$
(1
)
$
(5
)
$
166
Effective Tax Rate
34.0
%
35.9
%
Basic EPS
$
0.82
$
0.16
$
0.01
$
0.39
$
0.01
$
(0.49
)
$
(0.01
)
$
(0.03
)
$
0.87
Diluted EPS
$
0.81
$
0.16
$
0.01
$
0.39
$
0.01
$
(0.49
)
$
(0.01
)
$
(0.03
)
$
0.86
Weighted average common shares outstanding
for:
Basic EPS
190.31
190.31
190.31
190.31
190.31
190.31
190.31
190.31
190.31
Diluted EPS
191.93
191.93
191.93
191.93
191.93
191.93
191.93
191.93
191.93
Nine Months Ended December 31,
2023
(in millions, except per-share
amounts)
As
Reported
Restructuring
Costs
Transaction,
Separation and
Integration-Related
Costs
Amortization
of Acquired
Intangible
Assets
Merger Related
indemnification
(Gains) and Losses on
Dispositions
(Gains) and Losses on Real
Estate and Facility Sales
Impairment Losses
Tax adjustment
Non-GAAP
Results
Income before income taxes
$
418
$
91
$
6
$
266
$
15
$
(132
)
$
(8
)
$
5
$
—
$
661
Income tax expense
137
18
1
53
12
(20
)
(3
)
1
37
236
Net income
281
73
5
213
3
(112
)
(5
)
4
(37
)
425
Less: net loss attributable to
non-controlling interest, net of tax
(10
)
—
—
—
—
—
—
(4
)
—
(14
)
Net income attributable to DXC common
stockholders
$
291
$
73
$
5
$
213
$
3
$
(112
)
$
(5
)
$
8
$
(37
)
$
439
Effective Tax Rate
32.8
%
35.7
%
Basic EPS
$
1.45
$
0.36
$
0.02
$
1.06
$
0.01
$
(0.56
)
$
(0.02
)
$
0.04
$
(0.18
)
$
2.19
Diluted EPS
$
1.43
$
0.36
$
0.02
$
1.05
$
0.01
$
(0.55
)
$
(0.02
)
$
0.04
$
(0.18
)
$
2.16
Weighted average common shares outstanding
for:
Basic EPS
200.68
200.68
200.68
200.68
200.68
200.68
200.68
200.68
200.68
200.68
Diluted EPS
203.55
203.55
203.55
203.55
203.55
203.55
203.55
203.55
203.55
203.55
The above tables serve to reconcile the non-GAAP financial
measures to the most directly comparable GAAP measures. Please
refer to the “About Non-GAAP Measures” section of the press release
for further information on the use of these non-GAAP measures.
Year-over-Year Organic Revenue
Growth
Three Months Ended
Nine Months Ended
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Total revenue growth
(5.1
)%
(4.7
)%
(5.6
)%
(5.1
)%
Foreign currency
0.7
%
(1.7
)%
0.7
%
(1.0
)%
Acquisition and divestitures
0.2
%
1.9
%
0.2
%
2.2
%
Organic revenue growth
(4.2
)%
(4.5
)%
(4.7
)%
(3.9
)%
GBS revenue growth
(1.8
)%
(2.4
)%
(1.8
)%
(1.9
)%
Foreign currency
0.9
%
(1.4
)%
0.9
%
(0.7
)%
Acquisition and divestitures
0.4
%
4.1
%
0.4
%
4.6
%
GBS organic revenue growth
(0.5
)%
0.3
%
(0.5
)%
2.0
%
GIS revenue growth
(8.5
)%
(6.8
)%
(9.4
)%
(8.1
)%
Foreign currency
0.7
%
(2.1
)%
0.5
%
(1.2
)%
Acquisition and divestitures
—
%
—
%
—
%
—
%
GIS organic revenue growth
(7.8
)%
(8.9
)%
(8.9
)%
(9.3
)%
EBIT and Adjusted EBIT
Three Months Ended
Nine Months Ended
(in millions)
December 31, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Net income
$
63
$
140
$
133
$
281
Income tax expense
68
72
159
137
Interest income
(51
)
(56
)
(153
)
(158
)
Interest expense
66
78
207
222
EBIT
146
234
346
482
Restructuring costs
43
36
124
91
Transaction, separation and
integration-related costs
3
2
25
6
Amortization of acquired intangible
assets
87
88
263
266
Merger related indemnification
—
2
—
15
Gains on dispositions
(8
)
(104
)
(13
)
(132
)
Losses (gains) on real estate and facility
sales
3
(2
)
32
(8
)
Impairment losses
12
—
12
5
Adjusted EBIT
$
286
$
256
$
789
$
725
EBIT margin
4.5
%
6.9
%
3.6
%
4.7
%
Adjusted EBIT margin
8.9
%
7.5
%
8.1
%
7.1
%
Offerings Details
(in millions)
Q3 FY25
Q2 FY25
Q1 FY25
Q4 FY24
Q3 FY24
Consulting & Engineering Services
$
1,270
$
1,281
$
1,284
$
1,317
$
1,310
Insurance Software & BPS
396
396
389
388
379
Cloud, ITO & Security
1,184
1,188
1,206
1,290
1,277
Modern Workplace
375
376
357
384
426
Subtotal
3,225
3,241
3,236
3,379
3,392
M&A and Divestitures
—
—
—
7
7
Total Revenues
3,225
3,241
3,236
3,386
3,399
Source: DXC Technology
Category: Investor Relations
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250204909943/en/
Roger Sachs, CFA, Investor Relations, +1-201-259-0801,
roger.sachs@dxc.com Suzanne Cross, Corporate Media Relations,
+1-518-506-8848, suzanne.cross@dxc.com
DXC Technology (NYSE:DXC)
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DXC Technology (NYSE:DXC)
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