Core Insights - DXC Technology has signed an agreement with Skanska AB to modernize Skanska's IT infrastructure, aiming to enhance operational efficiency in Europe and the United States [1][3] - The partnership involves transferring services and employees managing Skanska's global IT infrastructure operations to DXC Technology [2] - Skanska is undergoing a digital transformation, focusing on sustainability, process optimization, and cost efficiency, with DXC's support being crucial for this transition [3] Company Insights - DXC Technology is recognized as a leading global technology services provider, helping companies modernize IT while managing mission-critical systems [5][7] - The company will manage Skanska's Azure cloud and on-premises environments, enhance cybersecurity, and deliver modern workplace solutions [4] - DXC's expertise in managing hybrid IT environments positions it well to support Skanska's operational efficiency and security needs [4] Industry Insights - The construction and project development industry is experiencing significant digital transformation, with a strong emphasis on modern and flexible IT infrastructure services [3] - Companies in this sector are prioritizing sustainability and cost efficiency as part of their digital transformation strategies [3]

Core Insights - The European Space Agency (ESA) has contracted DXC Technology to develop an enterprise AI platform named "Ask ESA" to enhance efficiency and knowledge sharing within the organization [1][2] - The platform will utilize generative AI technology from Mistral AI and is designed to quickly and securely deploy AI solutions across various departments of ESA [2][4] - The collaboration between ESA and DXC builds on a 15-year partnership, emphasizing the importance of AI in accelerating growth and increasing agility for both businesses and government organizations [5] Company Overview - DXC Technology is a leading global technology services provider that helps organizations modernize IT, optimize data architectures, and ensure security across various cloud environments [7] - The company focuses on delivering high-performance solutions that enhance competitiveness and customer experience for its clients [7] Project Details - The "Ask ESA" platform is modular, allowing ESA to efficiently access and manage large volumes of documents and data while adhering to AI and data policies [4] - The project was initiated by Francois Margottin, Head of Application Services at ESA, and highlights the agile methodology used to transition from prototype to a robust production solution [3]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market engagement and confidence [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum characteristics, serving as complementary indicators to the Zacks Rank [3][4] - Each stock receives a rating from A to F, with A indicating the highest potential for outperforming the market [4] Value Score - The Value Score identifies attractive and discounted stocks using ratios like P/E, PEG, and Price/Sales [4] Growth Score - The Growth Score focuses on a company's financial strength and future outlook, analyzing projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Score helps investors capitalize on price trends, utilizing factors like one-week price change and monthly earnings estimate changes [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for selecting stocks with strong value, growth, and momentum [7] Zacks Rank - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in portfolio creation [8] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [9] Stock to Watch: DXC Technology Company - DXC Technology Company, formed from the merger of CSC and HPE, currently holds a 3 (Hold) Zacks Rank with a VGM Score of A [12] - The company has a Momentum Style Score of A, with shares increasing by 8.9% over the past four weeks [13] - Analysts have revised DXC's earnings estimate higher for fiscal 2025, with the Zacks Consensus Estimate rising by $0.07 to $3.25 per share, and an average earnings surprise of 23.8% [13]

Core Insights - DXC Technology, Inc. reported better-than-expected non-GAAP earnings of 92 cents per share for Q3 fiscal 2025, exceeding the Zacks Consensus Estimate by 19.5% and showing a 7% year-over-year increase [1] - The company has consistently beaten earnings estimates over the past four quarters, with an average surprise of 23.8% [2] - Following strong Q3 results, DXC raised its fiscal 2025 earnings guidance, leading to a 0.7% increase in share price in after-hours trading [3] Financial Performance - DXC's Q3 revenues were $3.23 billion, surpassing the Zacks Consensus Estimate by 0.7% but down 5.1% year-over-year; organic revenues declined 4.2% [4] - Global Business Services segment revenues decreased by 1.8% year-over-year to $1.67 billion, with organic growth driven by insurance software and BPS business [5] - GIS revenues fell 8.5% year-over-year to $1.56 billion, with organic revenues down 7.8%, impacted by declines in Cloud Infrastructure, ITO & Security, and Modern Workplace divisions [6] Profitability Metrics - Non-GAAP gross profit increased by 6% to $809 million, with a gross margin improvement of 150 basis points to 25.1%, attributed to disciplined resource management and restructuring benefits [7] - Non-GAAP operating income rose to $286 million, with an operating margin expansion of 140 basis points to 8.9%, primarily due to higher gross margins [8] Balance Sheet and Cash Flow - As of the end of Q3, DXC had $1.72 billion in cash and cash equivalents, up from $1.25 billion in the previous quarter; long-term debt decreased to $3.64 billion from $3.83 billion [9] - The company generated operating cash flow of $650 million and free cash flow of $483 million in Q3, totaling $1.08 billion and $576 million respectively for the first three quarters of fiscal 2025 [10] Updated Guidance - DXC updated its fiscal 2025 guidance, now expecting revenues between $12.8 billion and $12.83 billion, down from previous guidance of $12.9-$13.1 billion; the consensus estimate is $12.95 billion [11] - The adjusted EBIT margin is projected to be approximately 7.9%, up from the previous guidance of 7-7.5%, with adjusted EPS now expected at $3.35 compared to the previous $3-$3.25 [12] - For Q4 fiscal 2025, DXC anticipates revenues between $3.10 billion and $3.13 billion, with an adjusted EBIT margin of approximately 7% and adjusted EPS of 75 cents [13]

Core Insights - DXC Technology has improved its ranking in Whitelane Research's 2024/2025 European IT Sourcing Study, achieving a top-three position for overall customer satisfaction, up from fourth place last year [1][2] - The company was ranked first in the Public Sector, demonstrating its strong performance in this area [1][4] Company Performance - DXC was recognized as a Strong Performer across all service categories, including Digital Transformation, Application Services, Cloud & Infrastructure Services, Workplace Services, Network & Connectivity Services, and Security Services [2][3] - The company received an 84% customer satisfaction score in the Public Sector, where it was named an Exceptional Performer [4] Industry Position - DXC is regarded as a top vendor across most surveyed European countries, establishing itself as a trusted partner for its customers [3] - The company has decades of experience in the public sector, partnering with leading government organizations in Europe and the UK [4] Commitment to Innovation - DXC's Managing Director for Europe emphasized the company's dedication to customer success and its commitment to bringing cutting-edge innovations, including advancements in AI [5] - The company plays a crucial role in its customers' modernization journeys, leveraging deep engineering and industry expertise [6]

Financial Performance - Revenues for the three months ended December 31, 2024, were $3,225 million, a decrease of 5.1% compared to $3,399 million for the same period in 2023[10]. - Net income for the nine months ended December 31, 2024, was $133 million, down 52.7% from $281 million in the same period of 2023[10]. - Basic income per common share for the three months ended December 31, 2024, was $0.31, down from $0.82 in the same period of 2023[10]. - The company reported a comprehensive income attributable to DXC common stockholders of $2 million for the three months ended December 31, 2024, compared to $188 million for the same period in 2023[11]. - The company reported a net income of $125 million for the nine months ended December 31, 2024, compared to $291 million for the same period in the previous year[19]. - Net income attributable to DXC common stockholders for the three months ended December 31, 2024, was $57 million, a decrease of 63.5% compared to $156 million for the same period in 2023[28]. - Basic earnings per share (EPS) for the three months ended December 31, 2024, was $0.31, down 62.8% from $0.82 in the prior year[28]. - Total revenues for the nine months ended December 31, 2024, were $9,702 million, down from $10,281 million for the same period in 2023[86]. - Total revenue for the third quarter of fiscal 2025 was $3.2 billion, a decrease of 5.1% compared to the same period a year ago[112]. - Diluted earnings per share for the third quarter of fiscal 2025 were $0.31, down from $0.81 in the third quarter of fiscal 2024[112]. - Total revenue growth for the three months ended December 31, 2024, was reported at (5.1)%, while organic revenue growth was (4.2)%[158]. Cash Flow and Liquidity - The company reported a net cash provided by operating activities of $1,083 million for the nine months ended December 31, 2024, compared to $1,081 million for the same period in 2023[16]. - Cash and cash equivalents increased to $1,723 million as of December 31, 2024, compared to $1,224 million as of March 31, 2024[15]. - The company reported a net increase in cash and cash equivalents of $499 million for the nine months ended December 31, 2024[162]. - Operating cash flow for fiscal 2025 was $1,083 million, resulting in free cash flow of $576 million, compared to $601 million in the same period a year ago[112]. - As of December 31, 2024, total liquidity was $4.9 billion, including $1.7 billion in cash and cash equivalents and $3.2 billion in available borrowings[170]. - The company expects existing cash and cash equivalents, along with cash generated from operations, to be sufficient for normal operating requirements for the next 12 months[168]. Assets and Liabilities - Total current assets decreased to $5,075 million as of December 31, 2024, from $5,135 million as of March 31, 2024[15]. - Total liabilities decreased to $9,781 million as of December 31, 2024, from $10,805 million as of March 31, 2024[15]. - The company’s total equity increased to $3,252 million as of December 31, 2024, from $3,066 million as of March 31, 2024[15]. - The balance of accumulated deficit decreased to $(3,715) million as of December 31, 2024, from $(3,771) million at September 30, 2024[18]. - The estimated fair value of the Company's long-term debt was $3.3 billion as of December 31, 2024, compared to a carrying value of $3.5 billion[58]. - Total debt decreased by $259 million during the first nine months of fiscal 2025, from $4,089 million to $3,830 million[165]. Restructuring and Costs - The company incurred restructuring costs of $124 million for the nine months ended December 31, 2024, compared to $91 million for the same period in 2023[10]. - Restructuring liabilities totaled $45 million as of December 31, 2024, down from $51 million as of March 31, 2024[63]. - Restructuring costs for Q3 FY2025 were $43 million, an increase of $7 million year-over-year, and for the first nine months, they were $124 million, up $33 million[131]. Tax and Compliance - The effective tax rate for the three months ended December 31, 2024, was 51.9%, significantly higher than 34.0% for the same period in 2023[67]. - The effective tax rate for Q3 FY2025 was 51.9%, compared to 34.0% for the same period last year, and for the first nine months, it was 54.5% versus 32.8%[139]. - Approximately $463 million of foreign earnings are considered indefinitely reinvested, which could be subject to U.S. federal tax upon repatriation[68]. - The company recorded a $15 million tax indemnification receivable related to uncertain tax positions and a $99 million tax indemnification payable related to other tax receivables[69]. Share Repurchase and Equity - The company repurchased 11,341 thousand shares during the three months ended December 31, 2023, resulting in a reduction of equity by $255 million[18]. - A total of 32,274,927 shares were repurchased during fiscal 2024 at an average price of $23.11 per share, totaling $746 million[77]. - Approximately $592 million worth of shares remained available for repurchase under the share repurchase plan as of December 31, 2024[184]. - The company suspended payment of quarterly dividends for fiscal 2025 to maintain financial flexibility[171]. Segment Performance - Revenues for the Global Business Services (GBS) segment for the three months ended December 31, 2024, were $1,666 million, a decrease from $1,696 million in the same period of 2023[86]. - Segment profit for GBS for the three months ended December 31, 2024, was $224 million, compared to $202 million for the same period in 2023[86]. - The Global Infrastructure Services (GIS) segment saw revenues of $1,559 million, down 8.5% year-over-year[114]. - For Q3 FY2025, Global Business Services (GBS) revenue was $1.67 billion, a decrease of $30 million or 1.8% year-over-year, with a 0.5% decline in organic revenue[118]. - For the first nine months of FY2025, GIS revenue was $4.7 billion, down $487 million or 9.4% year-over-year, including an 8.9% decline in organic revenue[121]. Other Financial Metrics - The company reported adjusted EBIT of $286 million for the three months ended December 31, 2024, an increase of 11.7% from $256 million in the same period of 2023[152]. - The company has initiated a global cost savings initiative for fiscal 2025 to align workforce and facility requirements[64]. - The cash conversion cycle improved to 18 days for the three months ended December 31, 2024, compared to 2 days in the previous year[163]. - The company is in compliance with all financial covenants associated with its borrowings as of December 31, 2024[166]. - Credit ratings from Fitch and Moody's are BBB and Baa2, respectively, both with a negative outlook[167].

Core Insights - DXC Technology Company reported $3.23 billion in revenue for the quarter ended December 2024, reflecting a year-over-year decline of 5.1% [1] - The company's EPS for the same period was $0.92, an increase from $0.87 a year ago, resulting in an EPS surprise of +19.48% compared to the consensus estimate of $0.77 [1] - The reported revenue fell short of the Zacks Consensus Estimate of $3.25 billion, resulting in a surprise of -0.69% [1] Financial Performance Metrics - Global Business Service (GBS) revenue decreased by 1.9% year-over-year, compared to an estimated decline of 0.8% by analysts [4] - Total revenues experienced a year-over-year decline of 5.7%, against the three-analyst average estimate of -4.8% [4] - Global Infrastructure Services (GIS) revenue declined by 9.4% year-over-year, compared to an estimated decline of 8.7% [4] - GIS revenues were reported at $1.56 billion, slightly above the average estimate of $1.55 billion, representing a year-over-year change of -8.4% [4] - GBS revenues were reported at $1.67 billion, slightly below the average estimate of $1.68 billion, indicating a year-over-year change of -1.5% [4] Stock Performance - Shares of DXC Technology have returned +9% over the past month, outperforming the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

1 Q3 Performance Highlights and Business Update 3rd Quarter Fiscal Year 2025 Earnings Presentation February 4, 2025 Agenda for Today 2 Detailed Review of Q3 Results and Guidance Update Q&A 3 2 Forward-Looking Statements All statements and assumptions contained in this earnings presentation 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, ...

Core Viewpoint - DXC Technology Company reported quarterly earnings of $0.92 per share, exceeding the Zacks Consensus Estimate of $0.77 per share, and showing an increase from $0.87 per share a year ago, representing an earnings surprise of 19.48% [1][2] Financial Performance - The company posted revenues of $3.23 billion for the quarter ended December 2024, which was a miss against the Zacks Consensus Estimate by 0.69%, and a decrease from $3.4 billion year-over-year [2] - Over the last four quarters, DXC Technology has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - DXC Technology shares have increased approximately 10.2% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] Future Outlook - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.74 on revenues of $3.23 billion, and for the current fiscal year, it is $3.17 on revenues of $12.95 billion [7] Industry Context - The Computers - IT Services industry, to which DXC Technology belongs, is currently ranked in the top 18% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Revenue Performance - Total revenue for Q3 FY2025 was $3.23 billion, down 5.1% year-over-year and down 4.2% on an organic basis[6]. - Revenues for the three months ended December 31, 2024, were $3,225 million, a decrease of 5.1% compared to $3,399 million for the same period in 2023[27]. - Global Business Services revenue was $1.67 billion, down 1.8% year-over-year, while Global Infrastructure Services revenue was $1.56 billion, down 8.5% year-over-year[9]. - Total revenue growth for the nine months ended December 31, 2024, was down 5.6%, compared to a decline of 5.1% in the previous year[38]. - Consulting & Engineering Services revenue for Q3 FY25 was $1,270 million, a slight decrease from $1,281 million in Q2 FY25[41]. - Cloud, ITO & Security revenue remained stable at $1,184 million in Q3 FY25, compared to $1,188 million in Q2 FY25[41]. - Insurance Software & BPS revenue was consistent at $396 million for both Q3 FY25 and Q2 FY25[41]. Profitability Metrics - EBIT margin was 4.5%, with adjusted EBIT margin at 8.9%, reflecting a year-over-year increase of 11.7%[7]. - Diluted earnings per share decreased to $0.31, down 61.7% year-over-year, while non-GAAP diluted EPS increased by 7.0% to $0.92[7]. - Segment profit for Global Business Services (GBS) for the three months ended December 31, 2024, was $224 million, representing a profit margin of 13.4%[31]. - Segment profit for Global Infrastructure Services (GIS) for the three months ended December 31, 2024, was $101 million, with a profit margin of 6.5%[31]. - Adjusted EBIT for the nine months ended December 31, 2024, increased to $789 million, up 8.8% from $725 million in the same period of 2023[39]. - Basic EPS for the quarter was reported at $0.94, while diluted EPS was $0.92, showing a positive trend in earnings per share[33]. Cash Flow and Financial Position - Cash generated from operations was $650 million, down 7.9% year-over-year, with free cash flow at $483 million compared to $585 million in Q3 FY2024[7]. - Free cash flow for the nine months ended December 31, 2024, was $1,083 million, slightly up from $1,081 million for the same period in 2023[29]. - Cash and cash equivalents at the end of the period on December 31, 2024, were $1,723 million, an increase from $1,224 million at the beginning of the year[29]. - Total assets as of December 31, 2024, were $13,033 million, a decrease from $13,871 million as of March 31, 2024[28]. - Total liabilities as of December 31, 2024, were $9,781 million, down from $10,805 million as of March 31, 2024[28]. Guidance and Future Outlook - Full-year adjusted EBIT margin guidance increased to approximately 7.9%, up from previous guidance of 7.0% to 7.5%[9]. - Full-year non-GAAP diluted EPS guidance raised to approximately $3.35, compared to prior guidance of $3.00 to $3.25[9]. - Free cash flow guidance for the full year increased to approximately $625 million, up from prior guidance of $550 million[9]. - The company is focused on strategic changes to improve bookings performance and drive sustainable revenue growth[4]. - Future outlook includes continued focus on mergers, acquisitions, and strategic investments to drive growth[34]. Restructuring and Costs - The company reported restructuring costs of $43 million for the three months ended December 31, 2024, compared to $36 million in the same period of 2023[27]. - The company incurred $43 million in restructuring costs, primarily related to workforce and real estate optimization[34]. - Transaction, separation, and integration-related costs amounted to $87 million, reflecting ongoing strategic initiatives[34]. - Amortization of acquired intangible assets was $12 million, indicating continued investment in acquired technologies[34]. - The company reported impairment losses of $12 million for the nine months ended December 31, 2024, compared to $5 million in the same period of 2023[39]. Tax and Income - The effective tax rate for the period was 35.1%, down from 51.9% in the prior year, indicating improved tax efficiency[33]. - The effective tax rate for the three months ended December 31, 2023, was 54.5%, compared to 33.9% in the previous year[36]. - Net income attributable to DXC common stockholders for the three months ended December 31, 2024, was $57 million, down 63.5% from $156 million in the same period of 2023[27]. - Net income attributable to DXC common stockholders for the three months ended December 31, 2024, was $170 million, reflecting a significant increase compared to previous periods[33]. - Net income for Q3 FY25 was $63 million, a decrease of 55% compared to $140 million in Q3 FY24[39].