EPS of $1.43 increased by 232.7% from previous year
Gross margin of 24.2%
Net income of 264.00M
"Our focus on digital transformation continues to pay off as we see strong demand for our cloud services. Γ’β¬β Mike Salvino, CEO" - Mike Salvino
DXC Technology Company Q4 2025 Financial Results Analysis
Executive Summary
DXC Technology Company reported its Q4 2025 financial results, showcasing a significant recovery in net income with a 232% year-over-year increase, amounting to $264 million. Despite a slight decrease in revenue compared to the previous quarter (down 1.74%), the company improved its operating income notably due to effective cost management strategies. The solid results reflect robust execution in its Global Business Services and enhanced operational efficiency.
Management commented on the positive trajectory of their services, emphasizing investments in cloud solutions and digital transformation as key growth drivers. The company aims to further leverage its strategic partnerships to bolster revenue streams. However, competition in the technology sector remains fierce, suggesting the necessity for continuous innovation and customer engagement to maintain a competitive edge.
Key Performance Indicators
Revenue
3.17B
QoQ: -1.74% | YoY:-6.41%
Gross Profit
768.00M
24.23% margin
QoQ: -5.07% | YoY:71.05%
Operating Income
329.00M
QoQ: 113.64% | YoY:110.90%
Net Income
264.00M
QoQ: 363.16% | YoY:232.00%
EPS
1.46
QoQ: 370.97% | YoY:232.73%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $3,169 million, down 6.41% YoY, down 1.74% QoQ.
**Gross Profit**: $768 million, a staggering increase of 71.05% YoY, but down 5.07% QoQ.
**Operating Income**: $329 million, up 110.90% YoY and an increase of 113.64% QoQ.
**Net Income**: $264 million, up 232.00% YoY and a remarkable increase of 363.16% QoQ.
**EPS**: $1.46, representing a year-over-year growth of 232.73% and a quarter-over-quarter growth of 370.97%.
Financial Highlights
- Revenue: $3,169 million, down 6.41% YoY, down 1.74% QoQ.
- Gross Profit: $768 million, a staggering increase of 71.05% YoY, but down 5.07% QoQ.
- Operating Income: $329 million, up 110.90% YoY and an increase of 113.64% QoQ.
- Net Income: $264 million, up 232.00% YoY and a remarkable increase of 363.16% QoQ.
- EPS: $1.46, representing a year-over-year growth of 232.73% and a quarter-over-quarter growth of 370.97%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.17B
-6.41%
-1.74%
Gross Profit
768.00M
71.05%
-5.07%
Operating Income
329.00M
110.90%
113.64%
Net Income
264.00M
232.00%
363.16%
EPS
1.46
232.73%
370.97%
Key Financial Ratios
currentRatio
1.22
netProfitMargin
8.33%
returnOnAssets
2%
returnOnEquity
7.56%
debtEquityRatio
0.44
priceToBookRatio
0.89
priceEarningsRatio
2.92
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Market Conditions: Management highlighted that the shift towards digital solutions accelerated, driven by clientsΓ’β¬β’ demand for operational efficiency.
Growth Strategy: "We are committed to leveraging our expansive partner network which has proven instrumental in our digital transformation initiatives,Γ’β¬Β stated CEO Mike Salvino.
Operational Efficiency: COO discussed the impact of cost management measures: "Our rigorous cost control initiatives allowed us to significantly enhance our operating margins this quarter." This was substantiated by their operating income growth of over 110%.
Our focus on digital transformation continues to pay off as we see strong demand for our cloud services. Γ’β¬β Mike Salvino, CEO
β Mike Salvino
The cost optimization strategies weΓ’β¬β’ve implemented are yielding results, enabling us to enhance margins significantly amidst challenging market conditions. Γ’β¬β CFO
β CFO
Forward Guidance
Looking ahead, DXC's management provided optimistic guidance for Q1 2026, projecting revenue growth to stabilize due to expected increases in IT spending among global enterprises. Specific targets include a return to revenue growth rates above 3% and maintaining net income margins at or above 8% amidst a growing demand for cloud and cybersecurity services. Key areas to monitor include their deployment of resources in AI and automation and the execution of their business transformation strategy.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0I6U.L Focus
24.23%
0.00%
7.56%
2.92%
0KAK.L
34.80%
19.70%
-0.37%
-92.93%
0JY9.L
38.70%
32.80%
3.54%
8.90%
0QZS.L
59.60%
9.00%
0.11%
516.60%
0EV1.L
24.40%
9.43%
3.28%
27.30%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
DXC Technology Company shows a compelling investment thesis driven by its recovery trajectory in profitability, strategic focus on digital transformation, and solid balance sheet. The firmΓ’β¬β’s projected growth path, notably in high-demand areas like cloud and security, positions it favorably against peers. However, investors should be mindful of competitive dynamics and the need for continual innovation to sustain growth. Monitoring performance in the upcoming quarters will be critical to evaluating DXC's ability to capitalize on its strategic initiatives.
Key Investment Factors
Growth Potential
DXC is strategically positioned in the robust technology sector focusing on digital transformation and cloud services. Continued investment in these areas presents substantial growth potential in both the North American and European markets.
Profitability Risk
Competitive pressures from other technology firms and the need for ongoing innovation could challenge revenue growth. Moreover, macroeconomic uncertainties such as fluctuations in IT spending by clients can pose risks to revenue stability.
Financial Position
With a cash position of $1.796 billion and manageable debt levels at $4.547 billion, DXC's balance sheet exhibits strong liquidity and solvency, aiding in its ability to fund future growth initiatives.
SWOT Analysis
Strengths
Strong recovery in net income growth (232% YoY)
Effective cost control measures leading to improved operating margins
Diverse service offering in digital transformation and cloud solutions
Weaknesses
Decline in revenue compared to last year (6.41% down YoY)
Reliance on large enterprise clients which may limit market agility
Opportunities
Expansion of AI and automation services as demand grows
Leveraging partnerships to drive further digital sales
Threats
Intense competition in technology services
Potential economic downturn affecting client IT budgets