DXC Technology(DXC) - 2025 Q4 - Annual Results

Fiscal 2025 Performance Overview DXC Technology reported a decline in both Q4 and full-year FY2025 revenue, yet achieved bookings growth exceeding 20% and a 1.03x book-to-bill ratio for the full year - CEO Raul Fernandez highlighted continued progress towards sustained, profitable revenue growth, citing bookings growth of over 20% for the second consecutive quarter and a book-to-bill ratio greater than 1[4] Fourth Quarter (Q4) FY2025 Financial Highlights Q4 FY25 revenue decreased 6.4% to $3.17 billion, with GAAP diluted EPS at $1.43 and a strong 1.22x book-to-bill ratio Q4 FY2025 Key Financial Metrics | Metric | Q4 FY2025 | YoY Change | Organic Revenue Change | | :--- | :--- | :--- | :--- | | Total Revenue | $3.17 billion | -6.4% | -4.2% | | Adjusted EBIT Margin | 7.3% | - | - | | Diluted EPS (GAAP) | $1.43 | vs. ($1.10) in Q4 FY24 | - | | Diluted EPS (Non-GAAP) | $0.84 | -13.4% | - | | Book-to-Bill Ratio | 1.22x | vs. 0.94x in Q4 FY24 | - | | Free Cash Flow | $111 million | vs. $155 million in Q4 FY24 | - | Full Year (FY) FY2025 Financial Highlights Full-year FY2025 revenue was $12.87 billion, down 5.8%, with GAAP diluted EPS significantly up to $2.10 and a 1.03x book-to-bill ratio Full Year FY2025 Key Financial Metrics | Metric | FY2025 | YoY Change | Organic Revenue Change | | :--- | :--- | :--- | :--- | | Total Revenue | $12.87 billion | -5.8% | -4.6% | | Adjusted EBIT Margin | 7.9% | +1.0% (vs. FY24) | - | | Diluted EPS (GAAP) | $2.10 | +356.5% | - | | Diluted EPS (Non-GAAP) | $3.43 | +10.6% | - | | Book-to-Bill Ratio | 1.03x | vs. 0.91x in FY24 | - | | Free Cash Flow | $687 million | vs. $756 million in FY24 | - | Segment Performance FY2025 GBS revenue declined 2.6% to $6.65 billion with a 12.0% margin, while GIS revenue fell 9.1% to $6.23 billion with a 7.2% margin, both achieving a 1.03x book-to-bill ratio GBS Full Year FY2025 Performance | Metric | FY2025 | YoY Change | Organic Revenue Change | | :--- | :--- | :--- | :--- | | Revenue | $6.65 billion | -2.6% | -1.0% | | Segment Profit | $797 million | -4.6% | - | | Segment Profit Margin | 12.0% | - | - | | Book-to-Bill Ratio | 1.03x | vs. 0.96x in FY24 | - | GIS Full Year FY2025 Performance | Metric | FY2025 | YoY Change | Organic Revenue Change | | :--- | :--- | :--- | :--- | | Revenue | $6.23 billion | -9.1% | -8.2% | | Segment Profit | $451 million | +4.2% | - | | Segment Profit Margin | 7.2% | - | - | | Book-to-Bill Ratio | 1.03x | vs. 0.86x in FY24 | - | Financial Outlook DXC projects continued organic revenue declines for Q1 and full-year FY2026, with full-year guidance including a 3.0-5.0% organic decline, 7.0-8.0% adjusted EBIT margin, and $600 million free cash flow First Quarter (Q1) FY2026 Guidance Q1 FY2026 guidance anticipates total revenue of $3.04-$3.09 billion, an organic decline of 4.0-5.5%, adjusted EBIT margin of 6.0-7.0%, and non-GAAP diluted EPS of $0.55-$0.65 Q1 FY2026 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $3.04B - $3.09B | | Organic Revenue Decline (YoY) | (5.5)% to (4.0)% | | Adjusted EBIT Margin | 6.0% to 7.0% | | Non-GAAP Diluted EPS | $0.55 to $0.65 | Full Year (FY) FY2026 Guidance Full-year FY2026 guidance projects total revenue of $12.18-$12.44 billion, an organic decline of 3.0-5.0%, adjusted EBIT margin of 7.0-8.0%, non-GAAP diluted EPS of $2.75-$3.25, and approximately $600 million free cash flow Full Year FY2026 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenue | $12.18B - $12.44B | | Organic Revenue Decline (YoY) | (5.0)% to (3.0)% | | Adjusted EBIT Margin | 7.0% to 8.0% | | Non-GAAP Diluted EPS | $2.75 to $3.25 | | Free Cash Flow | ~$600 million | Consolidated Financial Statements (Preliminary and Unaudited) Preliminary FY2025 consolidated statements show total revenues of $12.87 billion, net income of $389 million, increased cash, and reduced total assets and liabilities Statements of Operations FY2025 revenues were $12.87 billion, with income before taxes rising to $630 million and net income attributable to DXC increasing to $389 million, resulting in diluted EPS of $2.10 Fiscal Year Statement of Operations Highlights (in millions, except EPS) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenues | $12,871 | $13,667 | | Income before income taxes | $630 | $109 | | Net income attributable to DXC | $389 | $91 | | Diluted EPS | $2.10 | $0.46 | Balance Sheet As of March 31, 2025, total assets were $13.21 billion, cash and equivalents increased to $1.80 billion, total liabilities decreased to $9.72 billion, and total equity rose to $3.49 billion Balance Sheet Highlights (in millions) | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,796 | $1,224 | | Total Assets | $13,205 | $13,871 | | Total Liabilities | $9,715 | $10,805 | | Total Equity | $3,490 | $3,066 | Statements of Cash Flows FY2025 net cash from operations was $1.40 billion, with net cash used in investing at $512 million and financing at $317 million, leading to a $572 million net increase in cash Fiscal Year Cash Flow Highlights (in millions) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,398 | $1,361 | | Net cash used in investing activities | ($512) | ($491) | | Net cash used in financing activities | ($317) | ($1,487) | | Net increase (decrease) in cash | $572 | ($634) | Supplemental Financial Information This section details non-GAAP reconciliations, segment profit, organic revenue growth, EBIT to Adjusted EBIT, and revenue by offering, showing FY2025 Adjusted EBIT of $1.019 billion and a 4.6% organic revenue decline Segment Profit For FY2025, GBS segment profit was $797 million (12.0% margin) and GIS segment profit was $451 million (7.2% margin), with reconciliation to GAAP income before taxes - Segment profit is defined as segment revenues less costs of services, SG&A, and depreciation & amortization. Certain corporate-level costs like stock-based compensation, restructuring, and amortization of acquired intangibles are not allocated to the segments[29] Segment Profit Summary (in millions) | Segment | FY2025 Profit | FY2024 Profit | FY2025 Margin | FY2024 Margin | | :--- | :--- | :--- | :--- | :--- | | GBS | $797 | $835 | 12.0% | 12.2% | | GIS | $451 | $433 | 7.2% | 6.3% | Reconciliation of Non-GAAP Financial Measures Detailed reconciliations show FY2025 GAAP net income of $389 million adjusted to $634 million non-GAAP net income, resulting in GAAP diluted EPS of $2.10 and non-GAAP diluted EPS of $3.43 - Key non-GAAP adjustments include restructuring costs, amortization of acquired intangible assets, pension actuarial gains/losses, and gains/losses on dispositions[33] FY2025 GAAP to Non-GAAP EPS Reconciliation | Metric | Amount ($) | | :--- | :--- | | As Reported Diluted EPS (GAAP) | $2.10 | | Restructuring Costs | $0.65 | | Amortization of Acquired Intangible Assets | $1.47 | | Pension and OPEB Actuarial and Settlement Gains | ($0.89) | | Other Adjustments (net) | $0.10 | | Non-GAAP Diluted EPS | $3.43 | Year-over-Year Organic Revenue Growth FY2025 total organic revenue declined 4.6%, with GBS organic revenue declining 1.0% and GIS organic revenue decline moderating to 8.2% Organic Revenue Growth Comparison | Segment | FY2025 | FY2024 | | :--- | :--- | :--- | | Total Organic Revenue Growth | (4.6)% | (4.1)% | | GBS Organic Revenue Growth | (1.0)% | 1.4% | | GIS Organic Revenue Growth | (8.2)% | (9.3)% | EBIT and Adjusted EBIT FY2025 EBIT significantly improved to $696 million (5.4% margin), with Adjusted EBIT reaching $1.019 billion (7.9% margin) EBIT and Adjusted EBIT Comparison (in millions) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | EBIT | $696 | $193 | | EBIT Margin | 5.4% | 1.4% | | Adjusted EBIT | $1,019 | $1,009 | | Adjusted EBIT Margin | 7.9% | 7.4% | Offerings Details Q4 FY25 revenue by offering shows Consulting & Engineering Services as the largest contributor at $1.237 billion, followed by Cloud, ITO & Security at $1.180 billion Q4 FY25 Revenue by Offering (in millions) | Offering | Q4 FY25 Revenue | | :--- | :--- | | Consulting & Engineering Services | $1,237 | | Cloud, ITO & Security | $1,180 | | Insurance Software & BPS | $393 | | Modern Workplace | $359 | | Subtotal | $3,169 | Other Information This section provides corporate overview, forward-looking statements, and explanations of non-GAAP measures used to clarify core operating performance for investors - DXC Technology uses non-GAAP measures such as EBIT, adjusted EBIT, organic revenue, and free cash flow to provide investors with supplemental information, excluding items like amortization of acquired intangibles and restructuring costs to better reflect core operating performance[17][18][22] - The report contains forward-looking statements regarding future performance, which are subject to numerous risks and uncertainties, including the inability to succeed in strategic objectives, security breaches, and adverse macroeconomic conditions[15]