DXC Technology, Inc. DXC reported better-than-expected bottom-line results for the fourth quarter of fiscal 2025. The company reported non-GAAP earnings of 84 cents per share, beating the Zacks Consensus Estimate by 10.5%. However, the bottom line decreased 13.4% year over year.

DXC reported revenues of $3.17 billion for the fiscal fourth quarter, which beat the Zacks Consensus Estimate by 1.2% but decreased 6.4% year over year. On an organic basis, revenues declined 4.2% year over year.

DXC’s Q4 Results in Detail

Segment-wise, revenues from Global Business Services declined 4.8% on a year-over-year basis to $1.63 billion. On an organic basis, the division’s revenues decreased 2.4% year over year. The organic growth in revenues was mainly driven by 1.3% growth in Insurance Software and BPS, partially offset by a 6% decline in Consulting and Engineering Services.

DXC Technology Company. Price, Consensus and EPS SurpriseDXC Technology Company. Price, Consensus and EPS Surprise

DXC Technology Company. price-consensus-eps-surprise-chart | DXC Technology Company. Quote

GIS revenues were $1.54 billion in the fiscal fourth quarter, down 8.1% year over year. On an organic basis, the division’s revenues decreased 6.0% year over year. The GIS division witnessed revenue declines across the Cloud Infrastructure, ITO & Security and Modern Workplace divisions.

The company’s non-GAAP gross profit was $768 million, compared to $798 million in the year-ago quarter. Non-GAAP gross margin increased 80 basis points to 24.2%.

DXC’s non-GAAP operating income (Adjusted EBIT) was $230 million in the fiscal fourth quarter, compared to $284 million in the year-ago quarter. Non-GAAP operating margin contracted 110 basis points to 7.3%, primarily due to lower revenues.

DXC’s Balance Sheet & Cash Flow Details

DXC exited the fiscal fourth quarter with $1.796 billion in cash and cash equivalents compared with $1.72 billion in the previous quarter. The long-term debt balance (net of current maturities) was $2.996 billion as of March 31, 2025, down from $3.64 billion as of Dec. 31.

In the fiscal fourth quarter, DXC generated an operating cash flow of $315 million and a free cash flow of $111 million. In the full fiscal year 2025, it generated an operating cash flow of $1.398 billion and a free cash flow of $687 million.

DXC Updates Guidance for FY25

DXC updated the outlook for fiscal 2025, under which it raised guidance for every metric except for revenues. For fiscal 2025, it now expects revenues between $12.18 billion and $12.44 billion compared with the previous guidance of $12.8-$12.83 billion. The Zacks Consensus Estimate for the top line is pegged at $12.83 billion, indicating a decline of 6.1%.

Story Continues

DXC now projects the adjusted EBIT margin to be in the range of 7% to 8%. It now forecasts adjusted EPS to be in the range of $2.75 to $3.25 compared with the previous guidance of $3.35. The consensus mark for fiscal 2025 earnings per share is pegged at $3.36, indicating an increase of 7.4%.

For the fiscal first quarter, the company anticipates revenues between $3.04 billion and $3.09 billion. The adjusted EBIT margin is expected to be approximately 6% to 7%. DXC projects adjusted earnings per share of 55 cents to 65 cents for the fiscal first quarter. The Zacks Consensus Estimate for revenues and earnings is pegged at $3.10 billion and 76 cents per share, respectively. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

DXC Technology’s Zacks Rank and Stocks to Consider

Currently, DXC carries a Zacks Rank #3 (Hold).

Amphenol APH, Juniper Networks JNPR and Upwork UPWK are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. APH, JNPR and UPWK sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

APH shares have gained 26.4% for the past year. The Zacks Consensus Estimate for APH’s full-year 2025 earnings is pegged at $2.62 per share, up by 4 cents over the past seven days, suggesting growth of 38.6% from the year-ago quarter’s reported figure.

JNPR shares have gained 4.8% in the past year. The Zacks Consensus Estimate for JNPR’s full-year fiscal 2025 earnings has been revised upward to $2.09 in the past 30 days, suggesting year-over-year growth of 21.5%.

UPWK shares have gained 38% over the past year. The Zacks Consensus Estimate for UPWK’s full-year 2025 earnings is pegged at $1.14 per share, implying a rise of 9.62% from the year-ago quarter’s levels.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Amphenol Corporation (APH):Free Stock Analysis Report

Juniper Networks, Inc. (JNPR):Free Stock Analysis Report

DXC Technology Company. (DXC):Free Stock Analysis Report

Upwork Inc. (UPWK):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments