• Q1 Earnings per Share was $0.55, including the cumulative impact of certain items of $(1.04) per share, reflecting restructuring costs, transaction and integration-related costs, and amortization of acquired intangible assets
  • Q1 Non-GAAP Earnings per Share was $1.59, compared with $0.61 in the prior year on a pro forma combined company basis
  • Q1 Net Income was $173 million, including the cumulative impact of certain items of $302 million, reflecting restructuring costs, transaction and integration-related costs, and amortization of acquired intangible assets
  • Q1 EBIT of $245 million, adjusted for certain items is $679 million and Adjusted EBIT Margin is 11.5%, compared to 4.8% in the prior year on a pro forma combined company basis
  • Q1 Net Cash from Operating Activities was $534 million
  • Q1 Adjusted Free Cash Flow of $595 million
  • Returned $39 million to shareholders in first quarter

DXC Technology Company (NYSE: DXC) today reported results for the first quarter of fiscal year 2018.

“In the first quarter, DXC Technology delivered on the revenue, profit, and cash flow roadmap that we laid out at our Investor Day,” said Mike Lawrie, chairman, president and CEO. “We achieved several key merger integration milestones and are executing on our synergy plan. We have implemented the first phase of the plan and are on track to meet our targets of $1 billion of year-one cost savings in fiscal 2018 as well as $1.5 billion of run-rate cost savings exiting the year.”

“We continue to lead our clients on their digital transformation journeys, leveraging efficiency gains in traditional IT to reinvest in digital solutions, including our own,” Lawrie said. “We are strengthening our partnerships and expanding our partnered offerings, and we are making strategic investments in the business, including our recent acquisition of Tribridge on July 5th, making DXC a leading global integrator of Microsoft Dynamics.”

To aid investors and analysts with year-over-year comparability for the combined businesses of Computer Sciences Corporation and the legacy Enterprise Services business of Hewlett Packard Enterprise Company, we are including certain pro forma financial information that combines the stand-alone CSC and Enterprise Services financial information as if the merger had taken place on April 2, 2016. This information is referred to as “pro forma combined company” information.

Financial Highlights – First Quarter Fiscal 2018

  • Diluted earnings per share was $0.55 in the first quarter, including $0.50 per share of restructuring costs, $0.29 per share of transaction and integration-related costs and $0.26 per share of amortization of acquired intangible assets.
  • Non-GAAP diluted earnings per share was $1.59, compared with $0.61 in the year ago period on a pro forma combined company basis.
  • Income before income taxes was $185 million in the first quarter, including $190 million of restructuring costs, $124 million of transaction and integration-related costs, and $120 million of amortization of acquired intangibles.
  • Non-GAAP income before income taxes was $619 million compared with $243 million in the year ago period on a pro forma combined company basis.
  • Net income was $173 million for the first quarter, including $145 million of restructuring costs, $83 million of transaction and integration-related costs, and $74 million of amortization of acquired intangibles.
  • Adjusted EBIT was $679 million in the first quarter compared with $310 million in the prior year on a pro forma combined company basis. Adjusted EBIT margin was 11.5% compared with 4.8% in the year ago quarter on a pro forma combined company basis.
  • Net cash provided by operating activities was $534 million in the first quarter, compared with $50 million in the year ago quarter.
  • Adjusted free cash flow was $595 million in the first quarter.

Global Business Services (GBS)

GBS revenue was $2,267 million in the quarter as compared to $1,049 million for the comparable period of the prior fiscal year. GBS revenue was $2,421 million during the first quarter of fiscal 2017 on a pro forma combined company basis. Excluding the impact of purchase price accounting, GBS revenue decreased 3.8% year-over-year in constant currency on a pro forma combined company basis. The GBS revenue decline was driven by the completion of large government application services contracts in the UK, which offset growth in our Enterprise Cloud Apps, Consulting and Analytics offerings. GBS profit margin in the quarter was 12.4% up from 10.5% in the prior year. GBS profit margin was 11.2% for the first quarter of fiscal 2017 on a pro forma combined company basis. New business awards for GBS were $2.4 billion in the first quarter.

Global Infrastructure Services (GIS)

GIS revenue was $2,969 million in the quarter as compared to $881 million for the comparable period of the prior fiscal year. GIS revenue was $3,290 million during the first quarter of fiscal 2017 on a pro forma combined company basis. Excluding the impact of purchase price accounting, GIS revenue decreased 4.7% year-over-year in constant currency on a pro forma combined company basis. The GIS revenue decrease was driven by the tapering decline in traditional infrastructure services. GIS profit margin in the quarter was 9.8% up from 5.8% in the prior year.  GIS profit margin was 1.7% for the first quarter of fiscal 2017 on a pro forma combined company basis. New business awards for GIS were $3.7 billion in the first quarter.

United States Public Sector (USPS)

USPS revenue was $677 million in the quarter. Excluding the impact of purchase price accounting, USPS revenue decreased 3.5% year-over-year in constant currency on a pro forma combined company basis. USPS profit margin in the quarter was 11.4%. USPS profit margin was 11.3% in the prior year on a pro forma combined company basis. New business awards for USPS were $184 million in the first quarter, reflecting the timing of contract awards including the pull forward of several deals into DXC’s pre-merger period.