News Details

• Q4 Earnings per Share was $1.93, including the cumulative impact of certain items of $(0.35) per share, reflecting restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, pension and OPEB actuarial and settlement gains, and a tax adjustment related to U.S. tax reform
• Q4 Non-GAAP Earnings per Share was $2.28
• FY18 Earnings per Share was $6.04, including the cumulative impact of certain items of $(1.90)
• FY18 Non-GAAP Earnings per Share was $7.94
• FY18 Net Cash from Operating Activities was $3,243 million
• FY18 Adjusted Free Cash Flow was $2,427 million

TYSONS, Va., May 24, 2018 - DXC Technology (NYSE: DXC) today reported results for the three and twelve months ended March 31, 2018.

"In fiscal 2018, DXC successfully executed on our strategic roadmap, including the integration of CSC and HPE Enterprise Services, achievement of our first-year financial objectives, and a strengthened leadership position in digital transformation," said Mike Lawrie, DXC's chairman, president and CEO. “Revenue in the quarter grew year-over-year and sequentially, and we delivered more than $1.1 billion dollars of in-year savings. We continue to invest in our digital capabilities and strategic partnerships, and we achieved strong growth in digital this year. Looking ahead, we expect to complete the Perspecta transaction next week, and we have positioned DXC Technology to deliver EPS and margin expansion in fiscal 2019."

Financial Highlights - Fourth Quarter Fiscal 2018

• Diluted earnings per share was $1.93 in the fourth quarter, including $(0.50) per share of restructuring costs, $(0.33) per share of transaction, separation and integration-related costs, $(0.37) per share of amortization of acquired intangible assets, $0.55 per share of pension and OPEB actuarial and settlement gains, and $0.30 per share of tax adjustment related to U.S. tax reform. This compares with $(1.05) in the year ago period.
• Non-GAAP diluted earnings per share was $2.28.
• Revenue in the fourth quarter was $6,294 million compared with $1,889 million in the year ago period. Revenue grew 4.3% compared with $6,036 million in the prior year on a pro forma combined company basis.
• Income before income taxes was $661 million for the fourth quarter, including $(208) million of restructuring costs, $(124) million of transaction, separation and integration-related costs, $(153) million of amortization of acquired intangibles and $203 million of pension and OPEB actuarial and settlement gains. This compares with $(187) million in the year ago period.
• Non-GAAP income before income taxes was $943 million compared with $548 million in the year ago period on a pro forma combined company basis.
• Net income was $565 million for the fourth quarter, including $(145) million of restructuring costs, $(97) million of transaction, separation and integration-related costs, $(108) million of amortization of acquired intangibles, $161 million of pension and OPEB actuarial and settlement gains, and $88 million of tax adjustment related to U.S. tax reform. This compares with $(138) million in the prior year period.
• Non-GAAP net income was $666 million.
• Adjusted EBIT was $1,017 million in the fourth quarter compared with $615 million in the prior year on a pro forma combined company basis. Adjusted EBIT margin was 16.2% compared with 10.2% in the year ago quarter which is presented on a pro forma combined company basis.
• Net cash provided by operating activities was $701 million in the fourth quarter, compared with $173 million in the year ago period.
• Adjusted free cash flow was $557 million in the fourth quarter.

Financial Highlights - Fiscal 2018

• Diluted earnings per share was $6.04 in fiscal 2018, including $(2.06) per share of restructuring costs, $(1.00) per share of transaction, separation and integration-related costs, $(1.37) per share of amortization of acquired intangible assets, $0.60 per share of pension and OPEB actuarial and settlement gains and $1.94 per share of tax adjustment related to U.S. tax reform. This compares with $(0.88) in the year ago period.
• Non-GAAP diluted earnings per share was $7.94.
• Revenue in fiscal 2018 was $24,556 million compared with $7,607 million in the year ago period. Revenue declined (3.3)% compared with $25,394 million in the prior year on a pro forma combined company basis, in line with fiscal 2018 targets.
• Income before income taxes was $1,671 million for fiscal 2018, including $(803) million of restructuring costs, $(408) million of transaction, separation and integration-related costs, $(591) million of amortization of acquired intangibles and $220 million of pension and OPEB actuarial and settlement gains. This compares with $(174) million in the year ago period.
• Non-GAAP income before income taxes was $3,253 million compared with $2,184 million in the prior year on a pro forma combined company basis.
• Net income was $1,782 million for fiscal 2018, including $(597) million of restructuring costs, $(291) million of transaction, separation and integration-related costs, $(398) million of amortization of acquired intangibles, $175 million of pension and OPEB actuarial and settlement gains and $561 million of tax adjustment related to U.S. tax reform. This compares with $(100) million in the prior year period.
• Non-GAAP net income was $2,332 million.
• Adjusted EBIT was $3,499 million in fiscal 2018 compared with $2,445 million in the prior year on a pro forma combined company basis. Adjusted EBIT margin was 14.2% compared with 9.6% in the prior year which is presented on a pro forma combined company basis.
• Net cash provided by operating activities was $3,243 million in fiscal 2018, compared with $978 million in the prior year.
• Adjusted free cash flow was $2,427 million in fiscal 2018.

Global Business Services (GBS)

GBS revenue was $2,361 million in the quarter compared to $1,043 million for the prior year. GBS revenues grew 3.3% year-over-year on a pro forma combined company basis, reflecting our clients’ continued shift from traditional application services to Enterprise Applications and growth in our Business Process Services businesses. GBS profit margin in the quarter was 19.9%, up from 12.4% in the prior year on a pro forma combined company basis, reflecting ongoing cost actions in the business. New business awards for GBS were $2,038 million in the fourth quarter. 

Global Infrastructure Services (GIS)

GIS revenue was $3,223 million in the quarter compared to $846 million for the prior year. GIS revenues grew 3.6% year-over-year on a pro forma combined company basis. The GIS revenue reflects strong growth in our Workplace and Mobility business as well as growth in Cloud and Platform services as clients migrate to hybrid infrastructure environments. GIS profit margin in the quarter was 14.8%, up from 11.4% in the prior year on a pro forma combined company basis, reflecting cost actions and process automation. New business awards for GIS were $2,862 million in the fourth quarter.

United States Public Sector (USPS)

USPS revenue was $710 million in the quarter. USPS revenue grew 11.1% year-over-year on a pro forma combined company basis, reflecting growth in two of our largest contracts. USPS profit margin in the quarter was 17.0%, up from 9.9% in the prior year on a pro forma combined company basis, reflecting ongoing cost actions in the business.  New business awards for USPS were $522 million in the fourth quarter.

Returning Capital to Shareholders

During the fourth quarter, DXC Technology returned $123 million to shareholders in the form of common stock dividends and share repurchases.

Earnings Conference Call and Webcast

DXC Technology senior management will host a conference call and webcast today at 5 p.m. EDT. The dial-in number for domestic callers is (800) 289-0438. Callers who reside outside of the United States should dial +1 (323) 794-2423. The passcode for all participants is 6166236. The webcast audio and any presentation slides will be available on DXC Technology’s Investor Relations website. 

A replay of the conference call will be available from approximately two hours after the conclusion of the call until May 31, 2018. Replay numbers can be found here. The replay passcode is also 6166236.

Non-GAAP Measures

In an effort to provide investors with supplemental financial information, in addition to the preliminary and unaudited financial information presented on a GAAP and pro forma basis, we have also disclosed in this press release preliminary non-GAAP information including: constant currency, earnings before interest and taxes ("EBIT"), EBIT margin, adjusted EBIT, adjusted EBIT margin, non-GAAP income before income taxes, non-GAAP net income, non-GAAP EPS and adjusted free cash flow. Reconciliations of the preliminary non-GAAP measures to the respective most directly comparable measures calculated on a GAAP or pro forma basis, as well as the rationale for management’s use of non-GAAP measures, are included below. 

About DXC Technology

DXC Technology is the world's leading independent, end-to-end IT services company, serving nearly 6,000 private and public-sector clients from a diverse array of industries across 70 countries. The company's technology independence, global talent and extensive partner network deliver transformative digital offerings and solutions that help clients harness the power of innovation to thrive on change. DXC Technology is recognized among the best corporate citizens globally. For more information, visit dxc.technology.

All statements in this press release that do not directly and exclusively relate to historical facts constitute “forward-looking statements.” These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control. For a written description of these factors, see the section titled “Risk Factors” in DXC's Quarterly Reports on Form 10-Q for the quarters ended June 30, 2017, September 30, 2017, December 31, 2017 and any updating information in subsequent SEC filings, including DXC's upcoming Form 10-K for the fiscal year ended March 31, 2018. No assurance can be given that any goal or plan set forth in any forward-looking statement can or will be achieved, and readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events except as required by law.

View the charts and complete press release