On August 8, 2024, DXC Technology Co (DXC, Financial) released its 8-K filing for the first quarter of fiscal year 2025. DXC Technology Co is a vendor-independent IT services provider, operating through its Global Business Services (GBS) and Global Infrastructure Services (GIS) segments, with the majority of its revenue derived from the GIS segment.
Performance Overview
DXC Technology Co reported total revenue of $3.24 billion for Q1 FY25, a 6% decline year-over-year (4% on an organic basis). Despite the revenue drop, the company achieved a diluted earnings per share (EPS) of $0.14, down from $0.17 in the prior year quarter. However, non-GAAP diluted EPS rose by 17% to $0.74, surpassing analyst estimates of $0.71 EPS and $3.19 billion in revenue.
Financial Achievements
Key financial highlights include:
- Operating cash flow of $238 million, an 87% increase year-over-year.
- Free cash flow of $45 million, compared to a negative $75 million in the same quarter last year.
- Adjusted EBIT of $222 million, with a margin of 6.9%.
These achievements underscore the company's improved execution and operational efficiency.
Segment Performance
In the GBS segment, revenue was $1.67 billion, down 2% year-over-year but up 1% on an organic basis. Segment profit was $181 million, with a margin of 10.8%. The GIS segment reported revenue of $1.56 billion, a 10% decline year-over-year (9% on an organic basis), but segment profit increased by 25% to $114 million, with a margin of 7.3%.
Income Statement Highlights
| Metric | Q1 FY25 | Q1 FY24 |
|---|---|---|
| Total Revenue | $3.24 billion | $3.44 billion |
| Net Income | $25 million | $42 million |
| Diluted EPS | $0.14 | $0.17 |
| Non-GAAP Diluted EPS | $0.74 | $0.63 |
Balance Sheet and Cash Flow
As of June 30, 2024, DXC Technology Co reported cash and cash equivalents of $1.32 billion, up from $1.22 billion at the end of March 2024. Total assets stood at $13.35 billion, with total liabilities at $10.25 billion. The company generated $238 million in operating cash flow and $45 million in free cash flow during the quarter.
Outlook
For the full fiscal year 2025, DXC Technology Co has updated its guidance:
- Total revenue in the range of $12.74 billion to $13.02 billion.
- Adjusted EBIT margin between 6.5% to 7.0%.
- Non-GAAP diluted EPS in the range of $2.75 to $3.00.
- Free cash flow of approximately $450 million.
Commentary
"I am pleased with our first quarter results that came in ahead of our expectations on top line, adjusted EBIT margin and adjusted diluted EPS," said DXC Technology President and Chief Executive Officer, Raul Fernandez. "Our performance is an early testament to the improved execution by our teams along many fronts."
For more detailed insights and the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from DXC Technology Co for further details.
