DXC Technology Company (DXC) Q2 2025 earnings summary

Executive summary

• Q2 FY25 revenue was $3.2–$3.24 billion, down 5.7% year-over-year, with organic revenue down 5.6%.

• Adjusted EBIT margin rose 130 basis points to 8.6%, and non-GAAP/adjusted EPS increased 32.9%–33% to $0.93.

• GAAP diluted EPS fell to $0.23 from $0.49, and EBIT margin was 3.4%.

• Leadership highlighted early momentum from new initiatives and a focus on execution and foundational improvements.

• Free cash flow for the first six months was $93 million, up from $16 million a year ago.

Financial highlights

• Total revenue for the quarter was $3.2 billion, down 5.6%–5.7% year-over-year organically.

• Adjusted EBIT for Q2 FY25 was $279 million, up from $251 million in Q2 FY24; adjusted EBIT margin was 8.6%.

• Non-GAAP diluted EPS was $0.93, up 32.9%–33% year-over-year.

• Free cash flow for the quarter was $48 million, down from $91 million in Q2 FY24.

• Gross margin improved to 25.1%, up 1.7 percentage points year-over-year.

Outlook and guidance

• Full-year organic revenue expected to decline 5.5%–4.5%, with FY25 revenue guidance at $12.9–$13.1 billion.

• Full-year adjusted EBIT margin outlook raised to 7.0%–7.5%; non-GAAP diluted EPS guidance raised to $3.00–$3.25.

• Free cash flow guidance increased to approximately $550 million.

• Q3 FY25 guidance: revenue $3.2–$3.3 billion, organic decline 5.5%–4.5%, adjusted EBIT margin 7.0%–7.5%, non-GAAP EPS $0.75–$0.80.

• Management expects existing cash and cash equivalents plus operating cash flow to meet normal operating requirements for the next 12 months.