- Total revenue of $3.24 billion, down 5.7% (down 5.6% on an organic basis (1) )
|
- Diluted earnings per share was $0.23 vs. $0.49 in the prior year quarter; Non-GAAP diluted earnings per share (2) was $0.93, up 32.9%
|
- EBIT margin of 3.4%, and adjusted EBIT (4) margin of 8.6%
|
- Increased the full-year adjusted EBIT (4) margin guidance range by 50bps to 7.0% - 7.5%
|
- Increased the full-year non-GAAP diluted EPS (2) guidance range by $0.25 to $3.00-$3.25
|
- Increased full-year free cash flow (3) guidance to approximately $550 million
|
| DXC Technology (NYSE: DXC) today 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 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
|
| (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 measures is attached to this release. |
| (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. |
| (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. |
| (4) Adjusted EBIT and Adjusted EBIT margin are non-GAAP measures. Reconciliations of GAAP Net Income to such measures are attached to this release. |
| Additional metrics for the third quarter and full fiscal year 2025 guidance are presented in the table below. |
| Revenue |
|
Q3 FY25
Guidance |
|
FY25 Guidance |
| |
Lower End |
Higher End |
|
Lower End |
Higher End |
| YoY Organic Revenue % |
|
(5.5)% |
(4.5)% |
|
(5.5)% |
(4.5)% |
| Acquisition & Divestitures Revenues % |
|
(0.1)% |
|
(0.2)% |
| Foreign Exchange Impact on Revenues % |
|
1.3% |
|
0.2% |
| Others |
|
|
|
|
| Pension Income Benefit* |
|
~$27 |
|
~$105 |
| Net Interest Expense |
|
~$20 |
|
~$80 |
| Non-GAAP Tax Rate |
|
~35% |
|
~32% |
| Weighted Average Diluted Shares Outstanding |
|
~184 |
|
~184 |
| Restructuring & TSI Expense |
|
|
|
~$275 |
| Capital Lease / Asset Financing Payments |
|
|
|
~$275 |
| Foreign Exchange Assumptions |
|
Current Estimate |
|
Current Estimate |
| $/Euro Exchange Rate |
|
$1.10 |
|
$1.10 |
| $/GBP Exchange Rate |
|
$1.31 |
|
$1.30 |
| $/AUD Exchange Rate |
|
$0.68 |
|
$0.67 |
* Pension benefit is split between Cost Of Services (COS) & Other Income: |
| Fiscal year 2025: Net pension benefit of $105 million; $50 million service cost in COS, $155 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 a reconciliation of non-GAAP measures that it discusses as part of its guidance because certain significant information required for such reconciliation is not available without unreasonable efforts or at all, including, most notably, the impact of significant non-recurring items. Without this information, DXC does not believe that a reconciliation would be meaningful. |
| For the full document click the link below: |
| DXC Technology |
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