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DXC Technology Reports Fourth Quarter and Fiscal Year 2021 Results

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DXC Technology (NYSE: DXC) reported its fourth quarter and fiscal year 2021 results, with revenue of $4.385 billion, down 8.9% year-over-year. However, this figure exceeded prior revenue guidance and marked a 2.3% sequential increase. Adjusted EBIT margin improved to 7.5%, surpassing expectations. Despite a net loss of $(804) million, the company continues to show organic revenue stabilization for three consecutive quarters. The book-to-bill ratio stood at 1.08x, indicating strong business momentum expected to continue into FY22.

Positive
  • Fourth quarter revenue exceeded guidance, increasing 2.3% sequentially.
  • Adjusted EBIT margin improved to 7.5%, above guidance.
  • Organic revenue stabilization for three consecutive quarters.
  • Book-to-bill ratio of 1.08x indicates strong customer focus.
Negative
  • Revenue down 8.9% year-over-year and 7.0% on an organic basis.
  • Net loss of $(804) million impacted by significant charges.

DXC Technology (NYSE: DXC) today reported results for the fourth quarter and fiscal year 2021.

“I am pleased to report a solid fourth quarter as the leadership team continues to execute on our transformation journey. Our results clearly indicate that we are winning in the marketplace, which in turn is driving improved sequential revenue and adjusted EBIT margin performance,” said Mike Salvino, DXC president and chief executive officer. “I would like to thank the entire DXC team for their continued strong execution. Our FY22 and longer-term expectations reflect continuing solid business momentum and our confidence that we are building a people and customer focused organization that will compete and win in the IT services industry.” Mr. Salvino continued, “As the world is witnessing the ongoing impact of COVID-19, our focus continues to be on our people, particularly in the more severely impacted areas including India and the Philippines. The dedication and perseverance on display by our team is a source of the great pride I have as our people continue to take care of themselves, each other, their families, and deliver for our customers.”

Financial Highlights(1)

 

Q1 FY21

 

Q2 FY21

 

Q3 FY21

 

Q4 FY21

 

FY21

Revenue

 

$4,502

 

$4,554

 

$4,288

 

$4,385

 

$17,729

YoY Reported Revenue Growth

 

(7.9)%

 

(6.1)%

 

(14.6)%

 

(8.9)%

 

(9.4)%

YoY Organic Revenue Growth (2)

 

(11.0)%

 

(9.8)%

 

(10.5)%

 

(7.0)%

 

(9.6)%

Sequential Revenue Growth

 

(6.5)%

 

1.2 %

 

(5.8)%

 

2.3 %

 

N/A

Sequential Organic Revenue Growth (2)

 

(6.8)%

 

(2.4)%

 

1.7 %

 

0.4 %

 

N/A

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$(199)

 

$(246)

 

$1,103

 

$(804)

 

$(146)

 

 

 

 

 

 

 

 

 

 

 

EBIT

 

$(142)

 

$(235)

 

$2,032

 

$(738)

 

$917

EBIT Margin %

 

(3.2)%

 

(5.2)%

 

47.4 %

 

(16.8)%

 

5.2 %

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBIT (3)

 

$190

 

$283

 

$300

 

$329

 

$1,102

Adjusted EBIT Margin %

 

4.2 %

 

6.2 %

 

7.0 %

 

7.5 %

 

6.2 %

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share (Diluted)

 

$(0.81)

 

$(0.96)

 

$4.29

 

$(3.14)

 

$(0.59)

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP EPS (Diluted) (3)

 

$0.21

 

$0.64

 

$0.84

 

$0.74

 

$2.43

 

 

 

 

 

 

 

 

 

 

 

Book-to-Bill

 

1.18x

 

1.08x

 

1.13x

 

1.08x

 

1.12x

(1)

In millions, except per-share amounts

(2)

Reconciliation of reported revenue growth to organic revenue growth, and of sequential revenue growth to sequential organic revenue growth, provided in Non-GAAP Results.

(3)

Reconciliation of GAAP to Non-GAAP measures provided in Non-GAAP Results.

Financial Highlights - Fourth Quarter of Fiscal Year 2021

Revenue was $4.385 billion, down 8.9% as compared to prior year, and down 7.0% on an organic basis. Fourth quarter revenues exceeded the Company’s previous revenue guidance range. Revenues increased 2.3% as compared to the third quarter of fiscal year 2021 and were up 0.4% on a sequential organic basis. This represents the third sequential quarter of organic revenue stabilization for DXC, and management anticipates this trend to continue into fiscal year 2022.

Net loss and EBIT included a $517 million pension and other post-employment benefits mark-to-market actuarial and settlement loss, asset impairment charges of $190 million, amortization of intangibles of $116 million, restructuring charges of $110 million, transaction, separation and integration cost of $51 million, loss on disposition of $42 million and a $41 million debt extinguishment charge resulting in EBIT margin of (16.8)% in the fourth quarter of fiscal 2021. Excluding these items, adjusted EBIT margin was 7.5% in the fourth quarter, an improvement of 50 basis points from the third quarter of fiscal year 2021. Fourth quarter adjusted EBIT margin came in above our guidance range.

Diluted earnings per share was $(3.14) and non-GAAP diluted earnings per share was $0.74 in the fourth quarter of fiscal year 2021, above our guidance range.

Book-to-bill for the quarter was 1.08x, underscoring the Company’s continued focus on customers and our people, which in turn is driving ongoing success in the market. This represents the fourth straight quarter that the Company has delivered a book-to-bill of over 1.0x. The Company expects the new business momentum to continue in FY22.

Financial Information by Segment

Global Business Services ("GBS")(1)

 

Q1 FY21

 

Q2 FY21

 

Q3 FY21

 

Q4 FY21

 

FY21

Revenue

 

$2,174

 

$2,242

 

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FAQ

What were DXC Technology's revenue results for Q4 FY21?

DXC Technology reported revenue of $4.385 billion for Q4 FY21, down 8.9% year-over-year.

How did the adjusted EBIT margin perform in Q4 FY21?

The adjusted EBIT margin for Q4 FY21 was 7.5%, surpassing expectations.

What is the book-to-bill ratio for DXC in Q4 FY21?

The book-to-bill ratio for Q4 FY21 was 1.08x, indicating a positive business momentum.

What are the future expectations for DXC Technology?

The company expects new business momentum to continue into FY22.

DXC Technology Company

NYSE:DXC

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Information Technology Services
Services-computer Processing & Data Preparation
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United States of America
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