DXC Technology: Reports Third Quarter Fiscal Year 2025 Results

  • 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 are 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 measures is 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.
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DXC Technology
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