DXC Technology Reports Third Quarter Fiscal 2021 Results

Rhea-AI Summary

DXC Technology (NYSE: DXC) reported third-quarter results for fiscal year 2021, showing revenue of $4,288 million and net income of $1,103 million. Non-GAAP net income was $221 million, with diluted EPS at $4.29. Global Business Services (GBS) revenue fell 18.6% year-over-year, while Global Infrastructure Services (GIS) revenue decreased 11.1%. Bookings totaled $2.7 billion for GBS and $2.2 billion for GIS. Despite declining revenues, the company reported improved margins and exceeded non-GAAP diluted EPS guidance, indicating effective cost optimization.

Positive

• Diluted EPS of $4.29 exceeded guidance.
• Adjusted EBIT margin of 7.0% exceeded guidance.
• Bookings for GBS at $2.7 billion with a book-to-bill ratio of 1.35x.

Negative

• GBS revenue down 18.6% year-over-year.
• GIS revenue down 11.1% year-over-year.
• Profit margins decreased year-over-year in both GBS and GIS.

DXC Technology (NYSE: DXC) today reported results for the third quarter and first nine months of fiscal year 2021.

“Our strong third quarter results demonstrate the good progress we are making executing on our transformation journey. We have done well attracting talent, improving the environment for our people, strengthening our customer relationships, taking out cost without disruption, and winning in the market,” said Mike Salvino, DXC president and chief executive officer. “I am pleased with the solid level of stability and momentum we are achieving and want to thank our people, customers, and shareholders for their support of the 'new DXC'.”

Financial Highlights - Third Quarter Fiscal 2021

• Revenue in the third quarter was $4,288 million.
• Net income was $1,103 million for the third quarter. Non-GAAP net income was $221 million, excluding special items, net of tax.
• Diluted earnings per share was $4.29; non-GAAP diluted earnings per share was $0.84.
• Net cash used in operating activities was $(187) million.

Financial Information by Segment

Global Business Services (GBS)

• Bookings for the quarter totaled $2.7 billion for a book-to-bill ratio of 1.35x.
• Revenue was $1,921 million, down 18.6% year-over-year, and down 7.0% on an organic basis.
• Profit margin was 14.2%, an increase of 0.1% vs. the second quarter. Year-over-year, margins were down 0.8%, reflecting project terminations and price-downs offset by the timing of cost take out initiatives.

Global Infrastructure Services (GIS)

• Bookings for the quarter was $2.2 billion for a book-to-bill ratio of 0.95x.
• Revenue was $2,367 million, down 11.1% year-over-year, and down 13.2% on an organic basis.
• Profit margin in the quarter was 3.7%, an increase of 2.1% vs. the second quarter. Year-over-year, margins were down 5.0% reflecting project terminations and price-downs offset by the timing of cost take out initiatives.

Earnings

• EBIT and adjusted EBIT in the quarter were $2,032 million and $300 million, respectively. EBIT and adjusted EBIT margins were 47.4% and 7.0%, respectively. Adjusted EBIT margin exceeded our guidance, due to solid execution on our cost optimization initiatives.
• Diluted EPS and non-GAAP diluted EPS were $4.29 and $0.84. Non-GAAP diluted EPS exceeded our guidance range due to improved operational execution and a better than anticipated tax rate.

Ken Sharp, chief financial officer, commented: “I am truly excited to join DXC. The strength of the team, and the effectiveness of our transformation journey is clearly visible in our Q3 results. We see continued stabilization of revenues and improving margins, as we bring the ‘new DXC’, which focuses on our people and our customers, to the market.”

Earnings Conference Call and Webcast

DXC Technology senior management will host a conference call and webcast to discuss these results today at 5:00 p.m. EST. The dial-in number for domestic callers is 800-949-2175. Callers who reside outside of the United States should dial +1-323-994-2131. The passcode for all participants is 4526218. 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 February 11, 2021. The replay passcode is 4526218.

About DXC Technology

DXC Technology (NYSE: DXC) helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. With decades of driving innovation, the world’s largest companies trust DXC to provide services across the Enterprise Technology Stack to deliver new levels of performance, competitiveness and customer experiences. Learn more about the DXC story and our focus on people, customers and operational execution at www.dxc.technology.

Forward-Looking Statements

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. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the recent outbreak of the novel coronavirus (“COVID-19”) pandemic and the impact of varying private and governmental responses that affect our customers, employees, vendors and the economies and communities where they operate. For a written description of these factors, see the section titled “Risk Factors” in DXC's Annual Report on Form 10-K for the fiscal year ended March 31, 2020, and any updating information in subsequent SEC filings including DXC's upcoming Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2020. 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.

About 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 basis, we have also disclosed in this press release preliminary non-GAAP information including: revenues in constant currency, organic revenues, earnings before interest and taxes ("EBIT"), adjusted EBIT, adjusted EBIT margin, adjusted free cash flow, and non-GAAP results including non-GAAP income from continuing operations before taxes, non-GAAP income from continuing operations and non-GAAP EPS from continuing operations.

We present these non-GAAP financial measures of performance which are derived from the statements of operations of DXC. These non-GAAP financial measures include 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.

We present these non-GAAP financial measures to provide investors with meaningful supplemental financial information, in addition to the financial information presented on a GAAP basis. Non-GAAP financial measures exclude certain items from GAAP results which DXC management believes are not indicative of core operating performance. DXC management believes these non-GAAP measures allow investors to better understand the financial performance of DXC exclusive of the impacts of corporate-wide strategic decisions. DXC management believes that adjusting for these items provides investors with additional measures to evaluate the financial performance of our core business operations on a comparable basis from period to period. DXC management believes the non-GAAP measures provided are also considered important measures by financial analysts covering DXC, as equity research analysts continue to publish estimates and research notes based on our non-GAAP commentary, including our guidance around diluted non-GAAP EPS targets.

Non-GAAP financial measures exclude certain items from GAAP results which DXC management believes are not indicative of operating performance such as the amortization of acquired intangible assets, transaction, separation and integration-related costs, and gains and losses on dispositions of businesses.

Incremental amortization of intangible assets acquired through business combinations may result in a significant difference in period over period amortization expense on a GAAP basis. We exclude amortization of certain acquired intangible assets as these non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Although DXC management excludes amortization of acquired intangible assets, primarily customer related intangible assets from its non-GAAP expenses, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and support revenue generation. Any future transactions may result in a change to the acquired intangible asset balances and associated amortization expense.

There are limitations to the use of the non-GAAP financial measures presented in this report. One of the limitations is that they do not reflect complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Additionally, other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes between companies.

Selected references to revenues are made on a “constant currency basis” so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby providing comparisons of operating performance from period to period. In addition, references are made to revenues on a “organic basis” to exclude the impacts of acquisitions and divestitures from “constant currency basis” financial results, thereby providing comparisons of operating performance from period to period of the business that we have owned during all periods presented. Revenues on a “constant currency basis” and “organic constant currency basis” are non-GAAP financial measures calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. This approach is used for all results where the functional currency is not the U.S. dollar.

Condensed Consolidated Statements of Operations
(preliminary and unaudited)
		Three Months Ended								Nine Months Ended
(in millions, except per-share amounts)		December 31, 2020				December 31, 2019				December 31, 2020				December 31, 2019
Revenues		$	4,288			$	5,021			$	13,344			$	14,762
Costs of services		3,333				3,827				10,525				11,128
Selling, general and administrative		517				518				1,595				1,514
Depreciation and amortization		475				479				1,492				1,416
Goodwill impairment losses		—				53				—				2,940
Restructuring costs		104				74				441				248
Interest expense		82				93				284				288
Interest income		(28		)		(33		)		(76		)		(130		)
Gain on dispositions of businesses		(2,046		)		—				(2,046		)		—
Gain on arbitration award		—				—				—				(632		)
Other income, net		(127		)		(117		)		(318		)		(344		)
Total costs and expenses		2,310				4,894				11,897				16,428
Income (loss) before income taxes		1,978				127				1,447				(1,666		)
Income tax expense		875				37				789				191
Net income (loss)		1,103				90				658				(1,857		)
Less: net income attributable to non-controlling interest, net of tax		5				8				9				17
Net income (loss) attributable to DXC common stockholders		$	1,098			$	82			$	649			$	(1,874	)
Earnings (loss) per common share:
Basic		$	4.32			$	0.32			$	2.55			$	(7.20	)
Diluted		$	4.29			$	0.32			$	2.54			$	(7.20	)
Cash dividend per common share		$	—			$	0.21			$	—			$	0.63
Weighted average common shares outstanding for:
Basic EPS		254.32				255.09				254.03				260.24
Diluted EPS		255.75				256.05				255.20				260.24

Selected Consolidated Balance Sheet Data
(preliminary and unaudited)
		As of
(in millions)		December 31, 2020				March 31, 2020
Assets
Cash and cash equivalents		$	3,919			$	3,679
Receivables, net		4,130				4,392
Prepaid expenses		586				646
Other current assets		470				270
Total current assets		9,105				8,987
Intangible assets, net		4,019				5,731
Operating right-of-use assets, net		1,459				1,428
Goodwill		736				2,017
Deferred income taxes, net		315				265
Property and equipment, net		3,321				3,547
Other assets		4,679				4,031
Total Assets		$	23,634			$	26,006
Liabilities
Short-term debt and current maturities of long-term debt		$	795			$	1,276
Accounts payable		852				1,598
Accrued payroll and related costs		741				630
Current operating lease liabilities		450				482
Accrued expenses and other current liabilities		3,285				2,801
Deferred revenue and advance contract payments		1,102				1,021
Income taxes payable		1,045				87
Total current liabilities		8,270				7,895
Long-term debt, net of current maturities		5,444				8,672
Non-current deferred revenue		666				735
Non-current operating lease liabilities		1,113				1,063
Non-current income tax liabilities and deferred tax liabilities		792				1,157
Other long-term liabilities		1,354				1,355
Total Liabilities		17,639				20,877
Total Equity		5,995				5,129
Total Liabilities and Equity		$	23,634			$	26,006

Condensed Consolidated Statements of Cash Flows
(preliminary and unaudited)
		Nine Months Ended
(in millions)		December 31, 2020				December 31, 2019
Cash flows from operating activities:
Net income (loss)		$	658			$	(1,857	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		1,506				1,429
Goodwill impairment losses		—				2,940
Operating right-of-use expense		463				506
Pension and other post-employment benefits, actuarial and settlement losses		2				—
Share-based compensation		42				57
Deferred taxes		(319		)		(28		)
(Gain) loss on dispositions		(2,023		)		6
Provision for losses on accounts receivable		52				—
Unrealized foreign currency exchange (gain) loss		(60		)		14
Impairment losses and contract write-offs		68				20
Other non-cash charges, net		(2		)		(13		)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in assets		88				141
Decrease in operating lease liability		(463		)		(506		)
Increase (decrease) in other liabilities		392				(647		)
Net cash provided by operating activities		404				2,062
Cash flows from investing activities:
Purchases of property and equipment		(215		)		(240		)
Payments for transition and transformation contract costs		(189		)		(220		)
Software purchased and developed		(209		)		(178		)
Payments for acquisitions, net of cash acquired		(10		)		(1,997		)
Business dispositions		4,942				—
Cash collections related to deferred purchase price receivable		159				513
Proceeds from sale of assets		27				55
Short-term investing		—				(75		)
Other investing activities, net		(5		)		20
Net cash provided by (used in) investing activities		4,500				(2,122		)
Cash flows from financing activities:
Borrowings of commercial paper		854				4,010
Repayments of commercial paper		(1,327		)		(3,893		)
Borrowings under lines of credit		2,500				—
Repayment of borrowings under lines of credit		(4,000		)		—
Borrowings on long-term debt, net of discount		993				2,198
Principal payments on long-term debt		(2,926		)		(1,029		)
Payments on finance leases and borrowings for asset financing		(694		)		(646		)
Proceeds from stock options and other common stock transactions		1				11
Taxes paid related to net share settlements of share-based compensation awards		(5		)		(15		)
Repurchase of common stock and advance payment for accelerated share repurchase		—				(736		)
Dividend payments		(53		)		(161		)
Other financing activities, net		(14		)		(44		)
Net cash used in financing activities		(4,671		)		(305		)
Effect of exchange rate changes on cash and cash equivalents		20				26
Net increase (decrease) in cash and cash equivalents including cash classified within current assets held for sale		253				(339		)
Less: cash classified within current assets held for sale		(13		)		—
Net increase (decrease) in cash and cash equivalents		240				(339		)
Cash and cash equivalents at beginning of year		3,679				2,899
Cash and cash equivalents at end of period		$	3,919			$	2,560

Segment Results

The following table summarizes segment revenue for the third quarter and first nine months of fiscal 2021 and 2020:

Segment Revenue
		Three Months Ended								Percentage Change
(in millions)		December 31, 2020				December 31, 2019				Actual			Constant Currency			Organic
Global Business Services		$	1,921			$	2,359			(18.6	)%		(20.8	)%		(7.0	)%
Global Infrastructure Services		2,367				2,662				(11.1	)%		(13.5	)%		(13.2	)%
Total Revenues		$	4,288			$	5,021			(14.6	)%		(16.9	)%		(10.5	)%

		Nine Months Ended								Percentage Change
(in millions)		December 31, 2020				December 31, 2019				Actual				Constant Currency			Organic
Global Business Services		$	6,337			$	6,803			(6.8	)	%		(7.6	)%		(7.4	)%
Global Infrastructure Services		7,007				7,959				(12.0	)	%		(12.5	)%		(12.6	)%
Total Revenues		$	13,344			$	14,762			(9.6	)	%		(10.2	)%		(10.5	)%

We define segment profit as segment revenues less costs of services, segment selling, general and administrative, depreciation and amortization, and other income (excluding the movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges). The Company does not allocate to its segments certain operating expenses managed at the corporate level. These unallocated costs include certain corporate function costs, stock-based compensation expense, pension and OPEB actuarial and settlement gains and losses, restructuring costs, transaction, separation and integration-related costs, and amortization of acquired intangible assets.

Segment Profit
		Three Months Ended								Nine Months Ended
(in millions)		December 31, 2020				December 31, 2019				December 31, 2020				December 31, 2019
Profit
GBS profit		$	273			$	353			$	805			$	1,078
GIS profit		88				232				147				815
All other loss		(61		)		(57		)		(179		)		(184		)
Interest income		28				33				76				130
Interest expense		(82		)		(93		)		(284		)		(288		)
Restructuring costs		(104		)		(74		)		(441		)		(248		)
Transaction, separation and integration-related costs		(96		)		(68		)		(307		)		(226		)
Amortization of acquired intangible assets		(114		)		(146		)		(414		)		(435		)
Gain on disposition of businesses		2,046				—				2,046				—
Pension and OPEB actuarial and settlement losses		—				—				(2		)		—
Goodwill impairment losses		—				(53		)		—				(2,940		)
Gain on arbitration award		—				—				—				632
Income (loss) before income taxes		$	1,978			$	127			$	1,447			$	(1,666	)
Segment profit margins
GBS		14.2		%		15.0		%		12.7		%		15.8		%
GIS		3.7		%		8.7		%		2.1		%		10.2		%

Reconciliation of Non-GAAP Financial Measures

Our non-GAAP adjustments include:

• Restructuring costs - reflects costs, net of reversals, related to workforce optimization and real estate charges.
• Transaction, separation and integration-related (“TSI”) costs - reflects costs to execute on strategic alternatives, costs related to integration, planning, financing and advisory fees associated with the HPES Merger and other acquisitions and costs related to the separation of USPS and other divestitures.⁽¹⁾
• Amortization of acquired intangible assets - reflects amortization of intangible assets acquired through business combinations.
• Gain on disposition of businesses - Reflects gains and losses related to sales of businesses.
• Pension and OPEB actuarial and settlement gains and losses - reflects pension and OPEB actuarial and settlement gains and losses.
• Goodwill impairment losses - reflects impairment losses on goodwill.
• Gain on arbitration award - reflects a gain related to the HPES merger arbitration award.
• Tax adjustment - for fiscal 2021 periods, reflects the impact of tax entries related to prior restructuring charges and an adjustment to the tax expense relating to USPS, and for fiscal 2020 periods, reflects the impact of tax entries related to prior restructuring charges. Income tax expense of non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.

(1)		TSI-Related Costs for all periods presented include fees and other internal and external expenses associated with legal, accounting, consulting, due diligence, investment banking advisory, and other services, as well as financing fees, retention incentives, and resolution of transaction related claims in connection with, or resulting from, exploring or executing potential acquisitions, dispositions and strategic alternatives, whether or not announced or consummated.
		The TSI-Related Costs for Q3 FY21 include $77 million of costs to execute the strategic alternatives (including $52M for the sale of HHS which closed in October 2020 and $23M for the sale of the healthcare software business which is expected to close later this year); $7 million in expenses related to integration projects resulting from the CSC – HPE ES merger (including costs associated with continuing efforts to separate certain IT systems) and $12 million of costs incurred in connection with activities related to other acquisitions and divestitures.

Organic Revenue Non-GAAP Reconciliation

		Three Months Ended
		December 31, 2020												December 31, 2019												Percentage Change
(in millions)		GBS				GIS				Total				GBS				GIS				Total				GBS			GIS			Total
Revenues		$	1,921			$	2,367			$	4,288			$	2,359			$	2,662			$	5,021			(18.6	)%		(11.1	)%		(14.6	)%
Impact of foreign currency		(53		)		(65		)		(118		)		—				—				—				(2.2	)%		(2.4	)%		(2.3	)%
Revenues in constant currency		1,868				2,302				4,170				2,359				2,662				5,021				(20.8	)%		(13.5	)%		(16.9	)%
Impact of acquisitions and divestitures		(7		)		(6		)		(13		)		(358		)		(17		)		(375		)		13.8	%		0.3	%		6.4	%
Organic revenues		$	1,861			$	2,296			$	4,157			$	2,001			$	2,645			$	4,646			(7.0	)%		(13.2	)%		(10.5	)%

		Nine Months Ended
		December 31, 2020												December 31, 2019												Percentage Change
(in millions)		GBS				GIS				Total				GBS				GIS				Total				GBS			GIS			Total
Revenues		$	6,337			$	7,007			$	13,344			$	6,803			$	7,959			$	14,762			(6.8	)%		(12.0	)%		(9.6	)%
Impact of foreign currency		(50		)		(45		)		(95		)		—				—				—				(0.8	)%		(0.5	)%		(0.6	)%
Revenues in constant currency		6,287				6,962				13,249				6,803				7,959				14,762				(7.6	)%		(12.5	)%		(10.2	)%
Impact of acquisitions and divestitures		(994		)		(37		)		(1,031		)		(1,085		)		(32		)		(1,117		)		0.2	%		(0.1	)%		(0.3	)%
Organic revenues		$	5,293			$	6,925			$	12,218			$	5,718			$	7,927			$	13,645			(7.4	)%		(12.6	)%		(10.5	)%

EBIT and Adjusted EBIT

A reconciliation of net loss to EBIT and adjusted EBIT is as follows:

		Three Months Ended								Nine Months Ended
(in millions)		December 31, 2020				December 31, 2019				December 31, 2020				December 31, 2019
Net income (loss)		$	1,103			$	90			$	658			$	(1,857	)
Income tax expense		875				37				789				191
Interest income		(28		)		(33		)		(76		)		(130		)
Interest expense		82				93				284				288
EBIT		2,032				187				1,655				(1,508		)
Restructuring costs		104				74				441				248
Transaction, separation, and integration-related costs		96				68				307				226
Amortization of acquired intangible assets		114				146				414				435
Gain on disposition of businesses		(2,046		)		—				(2,046		)		—
Pension and OPEB actuarial and settlement losses		—				—				2				—
Goodwill impairment losses		—				53				—				2,940
Gain on arbitration award		—				—				—				(632		)
Adjusted EBIT		$	300			$	528			$	773			$	1,709
Adjusted EBIT margin		7.0		%		10.5		%		5.8		%		11.6		%
EBIT margin		47.4		%		3.7		%		12.4		%		(10.2		)%

Adjusted Free Cash Flow

A reconciliation of net cash provided by operating activities to adjusted free cash flow is as follows:

(in millions)		Three Months Ended December 31, 2020				Nine Months Ended December 31, 2020
Net cash (used in) provided by operating activities		$	(187	)		$	404
Net cash provided by investing activities (1)		4,734				4,500
Acquisitions, net of cash acquired		—				10
Business dispositions		(4,942		)		(4,942		)
Payments on capital leases and other long-term asset financings		(207		)		(694		)
Payments on transaction, separation and integration-related costs		135				304
Payments on restructuring costs		149				309
Adjusted free cash flow		$	(318	)		$	(109	)

_________________

(1) Excludes short-term investments.

Non-GAAP Results

A reconciliation of reported results to non-GAAP results is as follows:

		Three Months Ended December 31, 2020
(in millions, except per-share amounts)		As Reported				Restructuring Costs				Transaction, Separation and Integration-Related Costs				Amortization of Acquired Intangible Assets				Gain on Disposition of Businesses				Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)		$	3,333			$	—			$	—			$	—			$	—			$	3,333
Selling, general and administrative (excludes depreciation and amortization and restructuring costs)		517				—				(96		)		—				—				421
Income (loss) before income taxes		1,978				104				96				114				(2,046		)		246
Income tax expense (benefit)		875				11				16				26				(903		)		25
Net income (loss)		1,103				93				80				88				(1,143		)		221
Less: net income attributable to non-controlling interest, net of tax		5				—				—				—				—				5
Net income (loss) attributable to DXC common stockholders		$	1,098			$	93			$	80			$	88			$	(1,143	)		$	216
Effective tax rate		44.2		%																		10.2		%
Basic EPS		$	4.32			$	0.37			$	0.31			$	0.35			$	(4.49	)		$	0.85
Diluted EPS		$	4.29			$	0.36			$	0.31			$	0.34			$	(4.47	)		$	0.84
Weighted average common shares outstanding for:
Basic EPS		254.32				254.32				254.32				254.32				254.32				254.32
Diluted EPS		255.75				255.75				255.75				255.75				255.75				255.75

		Nine Months Ended December 31, 2020
(in millions, except per-share amounts)		As Reported				Restructuring Costs				Transaction, Separation and Integration- Related Costs				Amortization of Acquired Intangible Assets				Gain on Disposition of Businesses				Pension and OPEB Actuarial and Settlement Losses				Tax Adjustment				Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)		$	10,525			$	—			$	—			$	—			$	—			$	—			$	—			$	10,525
Selling, general and administrative (excludes depreciation and amortization and restructuring costs)		1,595				—				(314		)		—				—				—				—				1,281
Income (loss) before income taxes		1,447				441				307				414				(2,046		)		2				—				565
Income tax expense (benefit)		789				75				70				95				(903		)		—				(2		)		124
Net income (loss)		658				366				237				319				(1,143		)		2				2				441
Less: net income attributable to non-controlling interest, net of tax		9				—				—				—				—				—				—				9
Net income (loss) attributable to DXC common stockholders		$	649			$	366			$	237			$	319			$	(1,143	)		$	2			$	2			$	432
Effective tax rate		54.5		%																										21.9		%
Basic EPS		$	2.55			$	1.44			$	0.93			$	1.26			$	(4.50	)		$	0.01			$	0.01			$	1.70
Diluted EPS		$	2.54			$	1.43			$	0.93			$	1.25			$	(4.48	)		$	0.01			$	0.01			$	1.69
Weighted average common shares outstanding for:
Basic EPS		254.03				254.03				254.03				254.03				254.03				254.03				254.03				254.03
Diluted EPS		255.20				255.20				255.20				255.20				255.20				255.20				255.20				255.20

		Three Months Ended December 31, 2019
(in millions, except per-share amounts)		As Reported				Restructuring Costs				Transaction, Separation and Integration- Related Costs				Amortization of Acquired Intangible Assets				Goodwill Impairment Losses				Tax Adjustment				Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)		$	3,827			$	—			$	—			$	—			$	—			$	—			$	3,827
Selling, general and administrative (excludes depreciation and amortization and restructuring costs)		518				—				(68		)		—				—				—				450
Income before income taxes		127				74				68				146				53				—				468
Income tax expense (benefit)		37				10				16				34				53				(10		)		140
Net income		90				64				52				112				—				10				328
Less: net income attributable to non-controlling interest, net of tax		8				—				—				—				—				—				8
Net income attributable to DXC common stockholders		$	82			$	64			$	52			$	112			$	—			$	10			$	320
Effective Tax Rate		29.1		%																						29.9		%
Basic EPS		$	0.32			$	0.25			$	0.20			$	0.44			$	—			$	0.04			$	1.25
Diluted EPS		$	0.32			$	0.25			$	0.20			$	0.44			$	—			$	0.04			$	1.25
Weighted average common shares outstanding for:
Basic EPS		255.09				255.09				255.09				255.09				255.09				255.09				255.09
Diluted EPS		256.05				256.05				256.05				256.05				256.05				256.05				256.05

		Nine Months Ended December 31, 2019
(in millions, except per-share amounts)		As Reported				Restructuring Costs				Transaction, Separation and Integration- Related Costs				Amortization of Acquired Intangible Assets				Goodwill Impairment Losses				Gain on Arbitration Award				Tax Adjustment				Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)		$	11,128			$	—			$	—			$	—			$	—			$	—			$	—			$	11,128
Selling, general and administrative (excludes depreciation and amortization and restructuring costs)		1,514				—				(226		)		—				—				—				—				1,288
(Loss) income before income taxes		(1,666		)		248				226				435				2,940				(632		)		—				1,551
Income tax expense (benefit)		191				42				43				99				53				—				(39		)		389
Net (loss) income		(1,857		)		206				183				336				2,887				(632		)		39				1,162
Less: net income attributable to non-controlling interest, net of tax		17				—				—				—				—				—				—				17
Net (loss) income attributable to DXC common stockholders		$	(1,874	)		$	206			$	183			$	336			$	2,887			$	(632	)		$	39			$	1,145
Effective Tax Rate		(11.5		)%																										25.1		%
Basic EPS		$	(7.20	)		$	0.79			$	0.70			$	1.29			$	11.09			$	(2.43	)		$	0.15			$	4.40
Diluted EPS		$	(7.20	)		$	0.79			$	0.70			$	1.28			$	11.03			$	(2.42	)		$	0.15			$	4.38
Weighted average common shares outstanding for:
Basic EPS		260.24				260.24				260.24				260.24				260.24				260.24				260.24				260.24
Diluted EPS		260.24				261.69				261.69				261.69				261.69				261.69				261.69				261.69

The above tables serve to reconcile the Non-GAAP financial measures to the most directly comparable GAAP measures. Please refer to the “About Non-GAAP Financial Measures” section of our press release for further information on the use of these Non-GAAP measures.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210204006031/en/

FAQ

What were DXC's earnings for the third quarter of fiscal 2021?

DXC reported earnings of $1,103 million for the third quarter.

How did DXC perform in terms of revenue in Q3 2021?

DXC's revenue for Q3 2021 was $4,288 million.

What is DXC's EPS for Q3 fiscal 2021?

The diluted EPS for DXC in Q3 fiscal 2021 was $4.29.

How did DXC's Global Business Services perform in Q3 2021?

GBS revenue decreased by 18.6% year-over-year, totaling $1,921 million.

What were the bookings for DXC in Q3 2021?

DXC's total bookings were $4.9 billion, with GBS at $2.7 billion.