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What changed in DXC Technology Co's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of DXC Technology Co's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+248 added−281 removedSource: 10-K (2025-05-15) vs 10-K (2024-05-17)

Top changes in DXC Technology Co's 2025 10-K

248 paragraphs added · 281 removed · 197 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe operate through two segments: Global Business Services ("GBS") and Global Infrastructure Services ("GIS"), to provide solutions that modernize operations and drive innovation across our customers' entire IT estate. DXC was formed on April 1, 2017 by the merger of CSC and HPES (the "HPES Merger"). Segments and Services Our reportable segments are GBS and GIS.
Biggest changeWe serve a global client base, including many Fortune 500 companies, through our more than 120,000 employees in over 60 countries. We operate through two segments - Global Business Services ("GBS") and Global Infrastructure Services ("GIS") - delivering solutions that modernize operations and drive innovation across our customers' entire IT estate.
Drumgoole serves on the Board of Directors of Kodiak Gas Services; on the Advisory Board of Florida International University’s College of Engineering & Computing; and on the Board of Directors of ONUG, a forum for IT business leaders interested in open technologies. Mr. Drumgoole previously served on the Board of Directors of PetSmart. Matthew K.
Drumgoole serves on the Board of Directors of Kodiak Gas Services; on the Advisory Board of Florida International University’s College of Engineering & Computing; and on the Board of Directors of ONUG, a forum for IT business leaders interested in open technologies. Mr. Drumgoole previously served on the Board of Directors of PetSmart. 8 Matthew K.
At DXC, we value our people and the opportunity to engage with them - we are at our best when our people feel valued and respected. 6 Value of Employee Engagement We prioritize our employees and actively take steps to enhance their engagement.
At DXC, we value our people and the opportunity to engage with them - we are at our best when our people feel valued and respected. Value of Employee Engagement We prioritize our employees and actively take steps to enhance their engagement.
Available Information We use our corporate website, www.dxc.technology , as a routine channel for distributing important information, including detailed company information, financial news, SEC filings, Annual Reports, historical stock information and links to a recent earnings call webcast.
Available Information We use our corporate website, www.dxc.com , as a routine channel for distributing important information, including detailed company information, financial news, SEC filings, Annual Reports, historical stock information and links to a recent earnings call webcast.
Howard Boville serves as General Manager for Applications Services and Artificial Intelligence since September 2023. Before joining DXC, he served as Senior Vice President and Head of IBM Cloud Platform & Technology Lifecycle Services from April 2020 to September 2023. Prior to his role at IBM, Mr.
Howard Boville serves as Executive Vice President, Consulting & Engineering Services (formerly titled General Manager for Applications Services and Artificial Intelligence) since September 2023. Before joining DXC, he served as Senior Vice President and Head of IBM Cloud Platform & Technology Lifecycle Services from April 2020 to September 2023. Prior to his role at IBM, Mr.
Drawing from feedback collected through regular engagement surveys, our management has introduced several initiatives to enhance the employee experience. These include measures such as rewards and recognition, transparent communication, process enhancements, and utilization of various platforms like Global Talent Management, Coaching & Mentoring, and Career Development programs. Additionally, global recognition efforts contribute to fostering positive employee experiences and engagement.
Drawing from feedback collected through regular engagement surveys, our management has introduced several initiatives to enhance the employee experience. These include measures such as rewards and recognition, transparent communication, process enhancements, and utilization of various platforms like Global Talent Management, Coaching & Mentoring, and Career Development programs.
Boville served as Chief Technology Officer at Bank of America from August 2021 to April 2020. He joined Bank of America in August 2012 from British Telecom, where he served in its Global Services Division. Mr. Boville currently serves on the board of Entrust, a global leader in trusted identities, payments and data protection. 8 James M.
Boville served as Chief Technology Officer at Bank of America from August 2012 to April 2020. He joined Bank of America from British Telecom, where he served in its Global Services Division. Mr. Boville currently serves on the board of Entrust, a global leader in trusted identities, payments and data protection. Christopher R.
Our competitors include: • large multinational enterprises that offer some or all of the services and solutions that we offer; • smaller companies that offer focused services and solutions similar to those that we offer; • offshore service providers in lower-cost locations, particularly in India that sell directly to end-users; • solution or service providers that compete with us in a specific industry segment or service area; and • in-house functions of corporations that use their own resources rather than engaging an outside IT services provider.
Competition The IT and professional services markets we compete in are highly competitive,with a substantial number of companies having onshore and offshore delivery capabilities offering services that overlap with our offerings. 4 Our competitors include: • large multinational enterprises that offer some or all of the services and solutions that we offer; • smaller companies that offer focused services and solutions similar to those that we offer; • offshore service providers in lower-cost locations, particularly in India that sell directly to end-users; • solution or service providers that compete with us in a specific industry segment or service area; and • in-house functions of corporations that use their own resources rather than engaging an outside IT services provider.
The information on our website is not incorporated by reference into, and is not a part of, this report. 7 Information About Our Executive Officers Name Age Year First Elected as Officer Term as an Officer Position Held with the Registrant as of the filing date Family Relationship Raul Fernandez 57 2023 Indefinite President and Chief Executive Officer None Rob Del Bene 64 2023 Indefinite Executive Vice President and Chief Financial Officer None Howard Boville 56 2023 Indefinite General Manager, Applications Services and Artificial Intelligence None James M.
The information on our website is not incorporated by reference into, and is not a part of, this report. 7 Information About Our Executive Officers Name Age Year First Elected as Officer Term as an Officer Position Held with the Registrant as of the filing date Family Relationship Raul Fernandez 58 2023 Indefinite President and Chief Executive Officer None Rob Del Bene 65 2023 Indefinite Executive Vice President and Chief Financial Officer None Howard Boville 57 2023 Indefinite Executive Vice President, Consulting & Engineering Services None Christopher R.
From June 2018 to November 2018, Mr. Voci served as Vice President and Controller for the Innovation Systems Sector of Northrop Grumman Corporation. From 2016 to June 2018, Mr. Voci served first as Vice President, Finance and then as Vice President, Controller and principal accounting officer of Orbital ATK (subsequently purchased by Northrop Grumman).
Voci served as Vice President and Controller for the Innovation Systems Sector of Northrop Grumman Corporation. From 2016 to June 2018, Mr. Voci served first as Vice President, Finance and then as Vice President, Controller and principal accounting officer of Orbital ATK (subsequently purchased by Northrop Grumman). Prior to that, he spent eleven years at Air Products and Chemicals, Inc.
Prior to that, he spent eleven years at Air Products and Chemicals, Inc. (“APD”). While at APD from 2004 to 2015, Mr. Voci was Global Controller Industrial Gases from 2014 to 2015, Global Controller Merchant Gases from 2011 to 2014, Director, Financial Planning & Analysis from 2007 to 2011 and Global Healthcare Controller from 2004 to 2007. Mr.
(“APD”). While at APD from 2004 to 2015, Mr. Voci was Global Controller Industrial Gases from 2014 to 2015, Global Controller Merchant Gases from 2011 to 2014, Director, Financial Planning & Analysis from 2007 to 2011 and Global Healthcare Controller from 2004 to 2007. Mr.
Ms. Finch also served as VP Human Resources of Abilizer Solutions Inc. from 2000 to 2001. Christopher A. Voci serves as Senior Vice President, Corporate Controller and Principal Accounting Officer since June 2021. Before joining DXC, Mr. Voci served as Senior Vice President, Corporate Controller and principal accounting officer for CACI International Inc. from November 2018 to May 2021.
Voci serves as Senior Vice President, Corporate Controller and Principal Accounting Officer since June 2021. Before joining DXC, Mr. Voci served as Senior Vice President, Corporate Controller and principal accounting officer for CACI International Inc. from November 2018 to May 2021. From June 2018 to November 2018, Mr.
Fernandez brings more than three decades of executive experience scaling innovative and rapidly growing technology companies. Mr. Fernandez was the founder of Proxicom, which under his leadership evolved into a prominent early global provider of e-commerce solutions for Fortune 500 companies, Mr. Fernandez guided the growth of Proxicom from its launch in 1991 to public listing in 1999.
Fernandez was the founder of Proxicom, which under his leadership evolved into a prominent early global provider of e-commerce solutions for Fortune 500 companies. Mr. Fernandez guided the growth of Proxicom from its launch in 1991 to public listing in 1999. Proxicom was acquired by Dimension Data.
Voci served as Senior Manager, Audit and Risk Advisory Services at KPMG LLP from 2002 to 2004 and in various roles at Arthur Andersen LLP from 1994 to 2002. Andrew Wilson serves as General Manager for Modern Workplace since October 2023.
Voci served as Senior Manager, Audit and Risk Advisory Services at KPMG LLP from 2002 to 2004 and in various roles at Arthur Andersen LLP from 1994 to 2002. 9
He previously served as Executive Vice President and Chief Operating Officer of DXC from August 2021 to April 2023 and as Executive Vice President and Chief Information Officer of DXC from April 2020 to August 2021. Before joining DXC, Mr.
Drumgoole serves as Executive Vice President, Global Infrastructure Services (formerly titled General Manager, Cloud Infrastructure and ITO) since April 2023. He previously served as Executive Vice President and Chief Operating Officer of DXC from August 2021 to April 2023 and as Executive Vice President and Chief Information Officer of DXC from April 2020 to August 2021. Before joining DXC, Mr.
See Note 19 - "Segment and Geographic Information" for additional information related to our reportable segments, including the disclosure of segment revenues, segment profit, and financial information by geographic area.
See Note 19 - "Segment and Geographic Information" for additional information related to our reportable segments, including the disclosure of segment revenues, segment profit, and financial information by geographic area. Important Divestitures During the past three fiscal years, we completed the sale of various insignificant businesses.
Proxicom was acquired by Dimension Data. From 2000 to 2002, he served as Chief Executive Officer for Dimension Data North America, an information systems integration company, and as a director of its parent company, Dimension Data Holdings Plc, in 2001.
From 2000 to 2002, he served as Chief Executive Officer for Dimension Data North America, an information systems integration company, and as a director of its parent company, Dimension Data Holdings Plc, in 2001. He also served as Chairman and CEO for ObjectVideo, a leading developer of intelligent video surveillance software, which was sold to Alarm.com in 2017.
Voci 52 2021 Indefinite Senior Vice President, Corporate Controller and Principal Accounting Officer None Andrew Wilson 58 2023 Indefinite General Manager, Modern Workplace None Business Experience of Executive Officers Raul Fernandez serves as President and Chief Executive Officer of DXC since February 1, 2024.
Voci 53 2021 Indefinite Senior Vice President, Corporate Controller and Principal Accounting Officer None Business Experience of Executive Officers Raul Fernandez serves as President and Chief Executive Officer of DXC since February 1, 2024. He previously served as Interim President and Chief Executive Officer of DXC from December 18, 2023, to January 31, 2024. Mr.
He previously served as Interim President and Chief Executive Officer of DXC from December 18, 2023, to January 31, 2024. Mr. Fernandez has served as a member of our Board of Directors since August 13, 2020. He is Vice Chairman and co-owner of Monumental Sports & Entertainment, a private partnership which owns some of Washington, D.C.’s major sports franchises. Mr.
Fernandez has served as a member of our Board of Directors since August 13, 2020. He is Vice Chairman and co-owner of Monumental Sports & Entertainment, a private partnership which owns some of Washington, D.C.’s major sports franchises. Mr. Fernandez brings more than three decades of executive experience scaling innovative and rapidly growing technology companies. Mr.
Our ESG leadership team updates the committee quarterly on ESG status and provides an update to the full Board annually. Our ESG strategy reflects our ongoing commitment to being a responsible corporate citizen.
The Nominating/Corporate Governance Committee of our Board has specific oversight of ESG and receives quarterly updates from our ESG leadership team. 5 Our ESG strategy reflects our ongoing commitment to being a responsible corporate citizen.
Our Board provides oversight of our ESG program, enabling us to have the governance, long-term strategy and processes to manage ESG outcomes and meet the needs of our stakeholders. The Nominating/Corporate Governance Committee of our Board has specific oversight of ESG.
Environmental, Social and Governance (ESG) The governance of DXC's ESG program is a multitiered process involving our Board of Directors (the "Board"), members of our executive staff and internal leadership. Our Board provides oversight of our ESG program, enabling us to have the governance, long-term strategy and processes to manage ESG outcomes and meet the needs of our stakeholders.
Encouraging continuous learning, personal growth, and exploration of new opportunities contributes to our ability to retain a motivated and knowledgeable workforce. At DXC, assessing employee abilities and recognizing their contributions is fundamental to our development approach. Our self-directed learning culture allows employees to learn at their own pace and in an environment that suits their preferences.
At DXC, assessing employee abilities and recognizing their contributions is fundamental to our development approach. Our self-directed learning culture allows employees to learn at their own pace and in an environment that suits their preferences. Additionally, we emphasize the critical role of managers in supporting and guiding our people toward success.
See Note 2 - "Divestitures" for further information on divestitures. Sales and Marketing We market and sell our services to customers through our direct sales force, which operates out of various locations around the world. Our customers include commercial businesses of many sizes and across many industries, as well as public sector enterprises.
In addition, during fiscal 2023, we completed the sale of our German financial services subsidiary to the FNZ Group. See Note 2 - "Divestitures" for further information. Sales and Marketing We market and sell our services to customers through our direct sales force, which operates out of various locations around the world.
Global Business Services GBS provides innovative technology solutions that help our customers address key business challenges and accelerate transformations tailored to each customer’s industry and specific objectives. GBS offerings include: • Analytics and Engineering. Our portfolio of analytics services and extensive partner ecosystem help customers gain rapid insights, automate operations, and accelerate their transformation journeys.
DXC was formed on April 1, 2017 by the merger of CSC and HPES (the "HPES Merger"). Segments and Services Global Business Services GBS provides innovative technology solutions that help our customers address key business challenges and accelerate transformations tailored to each customer’s industry and specific objectives. GBS offerings include: • Consulting & Engineering Services (“CES”).
We believe that our patents and patent applications are important for maintaining the competitive differentiation of our solutions and services and enhancing our freedom to sell solutions and services in markets in which we choose to participate. 5 Additionally, we own or have rights to various trademarks, service marks, and trade names that are used in the operation of our business.
As our patent portfolio has been built over time, the remaining terms of the individual patents across the patent portfolio vary. We believe that our patents and patent applications are important for maintaining the competitive differentiation of our solutions and services and enhancing our freedom to sell solutions and services in markets in which we choose to participate.
Training and Development At DXC, we consider professional development a corporate responsibility and a strategic investment in both our employees’ growth and the Company’s future. Through our global learning management ecosystem, we provide a wide range of learning programs and a robust career development system to empower employees to reach their full potential.
Through our global learning management ecosystem, we provide a wide range of learning programs and a robust career development system to empower employees to reach their full potential. Encouraging continuous learning, personal growth, and exploration of new opportunities contributes to our ability to retain a motivated and knowledgeable workforce.
Prior to NetApp, Mr. Fawcett was Senior Vice President and General Counsel for JDS Uniphase from 1999 until August 2010. Mary E. Finch serves as Executive Vice President, Chief Human Resources Officer and Global Lead, Marketing of DXC since April 2023.
Prior to NetApp, Mr. Fawcett was Senior Vice President and General Counsel for JDS Uniphase from 1999 until August 2010. Jennifer Ragone serves as Executive Vice President and Chief People Officer of DXC since February 2025. With more than 30 years at DXC, she has held leadership positions across multiple HR disciplines.
He also served as Chairman and CEO for ObjectVideo, a leading developer of intelligent video surveillance software, which was sold to Alarm.com in 2017. He was also a member of President George W. Bush’s Council of Advisors on Science and Technology. Mr.
He was also a member of President George W. Bush’s Council of Advisors on Science and Technology. Mr.
We also own or have the rights to copyrights that protect the content of our products and other proprietary materials. In addition to developing our intellectual property portfolio, we license intellectual property rights from third parties as we deem appropriate.
Additionally, we own or have rights to various trademarks, service marks, and trade names that are used in the operation of our business. We also own or have the rights to copyrights that protect the content of our products and other proprietary materials.
Brady 57 2023 Indefinite Executive Vice President and Chief Operating Officer None Christopher R. Drumgoole 49 2021 Indefinite General Manager, Cloud Infrastructure & ITO None Matthew K. Fawcett 56 2024 Indefinite Executive Vice President and General Counsel None Mary E. Finch 55 2019 Indefinite Executive Vice President, Chief Human Resources Officer and Global Lead, Marketing & Communication None Christopher A.
Drumgoole 50 2021 Indefinite Executive Vice President, Global Infrastructure Services None Matthew K. Fawcett 57 2024 Indefinite Executive Vice President and General Counsel None Jennifer Ragone 54 2025 Indefinite Executive Vice President and Chief People Officer None Christopher A.
We have also granted and plan to continue to grant licenses to others under our intellectual property rights when we consider these arrangements to be in our interest. Environmental, Social and Governance (ESG) The governance of DXC's ESG program is a multitiered process involving our Board of Directors (the "Board"), members of our executive staff and internal leadership.
In addition to developing our intellectual property portfolio, we license intellectual property rights from third parties as we deem appropriate. We have also granted and plan to continue to grant licenses to others under our intellectual property rights when we consider these arrangements to be in our interest.
He is also on the Strategic Advisory Board of Volition Capital, a Boston-based growth equity firm, and is a Special Advisor to Carrick Capital Partners, a growth-oriented investment firm. Rob Del Bene serves as the Executive Vice President and Chief Financial Officer of DXC since June 2023. Before joining DXC, Mr.
Fernandez has had an extensive and successful career as an active investor, executive, board member and advisor at numerous disruptive technology companies. Rob Del Bene serves as the Executive Vice President and Chief Financial Officer of DXC since June 2023. Before joining DXC, Mr.
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ITEM 1. BUSINESS Overview DXC, a Nevada corporation, is a global IT services market leader. We provide mission-critical IT services that transform global businesses. We deliver excellence for our customers and colleagues around the world. Our approximately 130,000 people in about 65 countries are entrusted by our customers, who represent close to half of today’s Fortune 500 companies.
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ITEM 1. BUSINESS Overview DXC Technology is a leading global provider of information technology ("IT") services. We are a trusted partner to many of the world’s most innovative organizations, building solutions that move industries and companies forward.
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We provide software engineering, consulting, and data analytics solutions that enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business. • Applications. We help simplify, modernize and accelerate mission-critical applications that support business agility and growth through our Applications services.
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Our engineering, consulting, and technology experts help clients simplify, optimize, and modernize their systems and processes, manage their most critical workloads, integrate AI-powered intelligence into their operations, and put security and trust at the forefront. Through innovative solutions, we help clients to achieve competitive advantages in the marketplace.
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We are the engineers that enable our customers to take advantage of the latest digital platforms with both customized and pre-packaged applications, ensure resiliency, launch new products and enter new markets with minimal disruption. We help customers define, execute and manage their enterprise applications strategy. • Insurance Software and Business Process Services.
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Helps businesses use artificial intelligence ("AI") and data analytics to improve operations, automate tasks, and speed up their digital transformation. We provide software engineering, consulting, as well as custom and enterprise applications solutions that help companies manage essential functions, modernize processes, and drive innovation.
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We partner with insurance clients, to modernize and run IT systems, provide proprietary modular insurance software and platforms, and operate the full spectrum of insurance business process services.
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We have strong expertise in industries like finance, automotive, manufacturing, healthcare, life sciences, travel, and the public sector. Our solutions help businesses stay competitive by improving efficiency, launching new products faster, expanding into new markets, and achieving their strategic goals. • Insurance Software and Business Process Services.
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We also help operate and continuously improve bank cards, payment and lending processes and operations, and customer experience operations. 3 Global Infrastructure Services GIS provides a portfolio of technology offerings that deliver predictable outcomes and measurable results while reducing business risk and operational costs for customers. GIS offerings include: • Security.
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DXC is a leader in software and services for Life and Wealth, Property & Casualty and Reinsurance providers, helping them optimize, run and digitally transform their operations. We help insurers modernize their technology landscape from heritage systems to advanced AI-powered solutions that enhances operational efficiency, improves customer experiences, and enables insurers to adopt a digital-first approach.
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Our Security services help customers assess risk and proactively address all facets of the security environment, from threat intelligence to compliance. We leverage proven methodologies, intelligent automation and industry-leading partners to tailor security solutions to customers’ unique business needs. Our experts weave cyber resilience into IT security, operations and culture.
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Beyond our software solutions, we provide comprehensive business process services, leveraging deep industry expertise to support the full spectrum of insurance operations. We also help operate and continuously improve bank cards, payment and lending processes and operations, and customer experience operations. 3 Global Infrastructure Services GIS implements and operates the technology underpinning the critical systems of global businesses and governments.
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Whether migrating to the cloud, protecting data with a Zero Trust strategy or managing a security operations center, our Security services enable our customers to focus on their business. • Cloud Infrastructure and IT Outsourcing (“ITO”) . We enable customers to do Cloud Right™, making the right investments at the right time and on the right platforms.
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Our clients trust us to help secure, modernize and operate their critical systems and improve their workplace experience to support business growth. GIS offerings include: • Cloud ITO & Security . We design, implement, run and optimize the essential IT infrastructure that underpins our clients’ hybrid IT environments, spanning data centers, public cloud, mainframes, and networks.
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We orchestrate hybrid cloud and multicloud environments, ensuring private and public clouds, servers and mainframes operate effectively together. We provide companies with tailored plans for cloud migration and optimization to enable successful transformation.
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Our comprehensive set of services encompass strategic planning, migration, and the management of complex data center and cloud ecosystems. By integrating security, compliance, scalability, and cost efficiency, we empower clients to drive innovation while maintaining operational resilience. Leveraging a human-led, AI-driven Intelligent Operations approach, we deliver secure, reliable IT operations that clients trust.
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We leverage our deep expertise in legacy IT and drive innovation with reliable, secure, mission-critical IT Outsourcing services – from compute and data center, to storage and backup, to network, to mainframe and to business continuity – providing a clear path to modernization. • Modern Workplace.
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Our security practice safeguards businesses against cyber threats across all environments with a secure-by-design approach. Backed by 3,500 security professionals and eight global Security Operations Centers, we are one of the largest security providers to deliver 24/7 protection at scale.
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Our Modern Workplace services put the employee experience first, helping them achieve new levels of productivity, engagement and collaboration while working seamlessly and securely on any device. Organizations are empowered to deliver a consumer-like experience, centralize IT management and support services, and improve the total cost of ownership.
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Our expertise in regulatory compliance and strong ties with global government agencies make us a trusted partner for organizations with the most demanding security requirements. • Modern Workplace. We provide clients and their employees with secure, reliable technology that enhances productivity and streamlines daily operations, including device management, helpdesk support, and more.
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Important Divestitures During the past three fiscal years, we completed certain divestitures, including: • During fiscal 2023, DXC completed the sale of its German financial services subsidiary to the FNZ Group. • During fiscal 2022, DXC completed the sale of its healthcare provider software business to Dedalus Holding S.p.A. • In addition, during the past three fiscal years, DXC completed the sale of certain insignificant businesses.
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We reduce the burden on internal IT teams and enhance employee experience by transforming how people connect, create, and collaborate. We deliver AI-powered, secure workplaces where employees work seamlessly on their preferred devices, resolving most issues through intuitive, automated self-service—boosting productivity, engagement, and efficiency, while reducing support costs and complexity.
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No individual customer exceeded 10% of our consolidated revenues for fiscal 2024, fiscal 2023, or fiscal 2022. Seasonality General economic conditions have an impact on our business and financial results. The markets in which we sell our solutions, services and products occasionally experience weak economic conditions that may negatively affect sales.
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Our customers include commercial businesses of many sizes and across many industries, as well as public sector enterprises. No individual customer exceeded 10% of our consolidated revenues for fiscal 2025, fiscal 2024, or fiscal 2023.
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We also experience some seasonal trends in the sale of our services.
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Seasonality Our business results may vary from period to period with overall demand for our services impacted by factors such as customer budget cycles, industry-specific trends, and year-end project activity. While these seasonal variations do not materially affect our long-term performance, they may contribute to periodic fluctuations in revenue, expenses, and profitability.
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For example, contract awards and certain revenue are often tied to the timing of our customers' fiscal year-ends, and we also experience seasonality related to our own fiscal year-end selling activities. 4 Competition The IT and professional services markets we compete in are highly competitive and are not dominated by a single company or a small number of companies.
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We continue to monitor these trends and adjust our operations as needed to optimize performance throughout the year.
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A substantial number of companies offer services that overlap our offerings and are competitive with our services. In addition, the increased importance of offshore labor centers has brought several foreign-based competitors into our markets.
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Additionally, global recognition efforts contribute to fostering positive employee experiences and engagement. 6 Training and Development At DXC, we consider professional development a corporate responsibility and a strategic investment in both our employees’ growth and the Company’s future.
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Our ability to obtain new business and retain existing business is dependent upon the following: • technology, industry and systems know-how with an independent perspective on best solutions across software, hardware, and service providers; • ability to offer improved strategic frameworks and technical solutions; • investments in our services and solutions; • focus on responsiveness to proactively address customer needs, provide quality services and competitive prices; • successful management of our relationships with leading strategic and solution partners in hardware, networking, cloud, applications and software; • project management experience and capabilities, including delivery; • end-to-end spectrum of IT and professional services we provide; and • financial stability and strong corporate governance.
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Most recently, she served as Vice President, Global Head of Business HR from February 2023 to February 2025.
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As our patent portfolio has been built over time, the remaining terms of the individual patents across the patent portfolio vary.
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Prior to that, she served as Vice President, Global Head of Talent from November 2021 to February 2023, as Vice President, Global Head of Talent Acquisition and Human Capital Consulting from August 2020 to November 2021, and as Vice President, Human Capital Consulting, Digital Labor Growth and Optimization from April 2017 to August 2020. Christopher A.
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Additionally, we emphasize the critical role of managers in supporting and guiding our people toward success. Inclusion & Diversity We are committed to an inclusive and diverse workforce and seek to promote inclusion and diversity in legally compliant manners, including maintenance of policies regarding non-discrimination, anti-harassment, and equal employment opportunity.
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Fernandez currently serves on the board of directors of NeuroSync, a neuro health technology company that utilizes artificial intelligence to develop eye-tracking software and analytic technologies to diagnose and treat neurological impairments and brain health conditions, RemoteRetail, a technology and services company that offers enterprise customers a cloudbased marketplace for their hybrid workforces, and URBANEER, an urban innovation company designing and engineering next generation living spaces.
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Brady serves as Executive Vice President and Chief Operating Officer of DXC since April 2023. He previously served as Executive Vice President of Global Delivery from April 2022 to April 2023 and as President of the Americas Region from June 2020 to April 2022.
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Before joining DXC, he served as Chief Operating Officer of Accumen Inc., a tech-enabled healthcare performance company, from July 2012 until June 2020. Before joining Accumen Inc., Mr. Brady served in a variety of leadership positions at Accenture from June 2006 until July 2012. Prior to that, Mr.
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Brady served 20 years at Honeywell in a variety of leadership roles, most recently as vice president of Integrated Supply Chain for the aerospace engines business. Christopher R. Drumgoole serves as General Manager, Cloud Infrastructure and ITO since April 2023.
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She previously served as Executive Vice President and Chief Human Resources Officer of DXC from October 2019 to April 2023. Before joining DXC, Ms. Finch served as Executive Vice President and Chief Human Resources Officer of AECOM from September 2015 to October 2019.
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Prior to that, she served at Accenture as Senior Managing Director from September 2013 to August 2015 and as Managing Director Human Resources from January 2001 to September 2013, where she held various roles across the company including COO of Human Resources where she drove global delivery of HR services, overseeing operations supporting approximately 320,000 employees across 56 countries and multiple Accenture businesses.
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Before joining DXC, he served as Chief Digital Officer and Corporate Vice President of Microsoft from January 2020 to December 2022. Prior to that, he served in a variety of leadership positions at Accenture during his 27-year tenure with the company, including as Chief Information Officer from September 2013 to December 2019. Mr.
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Wilson also served as Chief Executive Officer of GE Capital IT Solutions. 9

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

78 edited+16 added−37 removed237 unchanged
Biggest changeFederal Reserve, along with central banks around the world, has raised benchmark interest rates significantly; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability for debt financing; • reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • placing us at a competitive disadvantage compared to less leveraged competitors; • increasing our vulnerability to the impact of adverse economic and industry conditions; and • causing us to reduce or eliminate our return of cash to our stockholders, including via dividends and share repurchases. 18 In addition, we could be unable to refinance our outstanding indebtedness on reasonable terms or at all.
Biggest changeOur existing indebtedness, together with the incurrence of additional indebtedness and the restrictive covenants contained in, or expected to be contained in the documents evidencing such indebtedness, could have significant consequences on our future operations, including: • events of default if we fail to comply with the financial and other covenants contained in the agreements governing our debt instruments, which could, if material and not cured, result in all of our debt becoming immediately due and payable or require us to negotiate an amendment to financial or other covenants that could cause us to incur additional fees and expenses; • subjecting us to the risk of increased sensitivity to interest rate increases in our outstanding variable-rate indebtedness that could cause our debt service obligations to increase significantly; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability for debt financing; • reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • placing us at a competitive disadvantage compared to less leveraged competitors; • increasing our vulnerability to the impact of adverse economic and industry conditions; and • causing us to reduce or eliminate our return of cash to our stockholders, including via dividends and share repurchases. 18 In addition, we could be unable to refinance our outstanding indebtedness on reasonable terms or at all.
Risk Factor Summary Risks Related to Our Business • We may not succeed in our strategic objectives. • We are vulnerable to security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data. • We are subject to obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data. • We are vulnerable to product and service quality issues. • We may fail to continue to develop and expand service offerings to address emerging demands. • We may fail to compete in certain markets or continue to expand our capacity, and are subject to risks, in certain offshore locations. • We may fail to maintain our credit rating, manage working capital, refinance and raise additional capital. • Changes to our business model may be hard to understand by the market and we may fail to meet our guidance. • Our business and financial results could be materially adversely affected by public health crises. • Our indebtedness could have a material adverse effect on our financial condition and results of operations. • Our primary markets are highly competitive. • We may fail to accurately estimate the cost of services and the timeline for completion of contracts. • We or our third parties may fail to deliver on commitments or otherwise breach obligations to our customers. • We are subject to a series of risks relating to climate change and natural disasters; and increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could also adversely impact our business. • We may fail to attract and retain qualified personnel. • Prolonged periods of inflation have an adverse effect on general economic conditions and consumer budgeting, and could adversely impact our profitability and results of operations. • Our international operations are exposed to risks, including fluctuations in exchange rates. 10 • Failure to comply with federal, state, local and foreign laws and regulations could result in costs or sanctions that adversely affect our business.
Risk Factor Summary Risks Related to Our Business • We may not succeed in our strategic objectives. • We are vulnerable to security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data. • We are subject to obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data. • We are vulnerable to product and service quality issues. • We may fail to continue to develop and expand service offerings to address emerging demands in the highly competitive markets we serve. • We may fail to compete in certain markets or continue to expand our capacity, and are subject to risks, in certain offshore locations. • We may fail to maintain our credit rating, manage working capital, refinance and raise additional capital. • Changes to our business model may be hard to understand by the market and we may fail to meet our guidance. • Our business and financial results could be materially adversely affected by public health crises. • Our indebtedness could have a material adverse effect on our financial condition and results of operations. • We may fail to accurately estimate the cost of services and the timeline for completion of contracts. • We or our third parties may fail to deliver on commitments or otherwise breach obligations to our customers. • We are subject to a series of risks relating to climate change and natural disasters; and increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could also adversely impact our business. • We may fail to attract and retain qualified personnel. • Prolonged periods of inflation have an adverse effect on general economic conditions and consumer budgeting, and could adversely impact our profitability and results of operations. • Our international operations are exposed to risks, including fluctuations in exchange rates. 10 • Failure to comply with federal, state, local and foreign laws and regulations could result in costs or sanctions that adversely affect our business.
Divestiture transactions also involve significant challenges and risks, including: • the potential loss of key customers, suppliers, vendors and other key business partners; • declining employee morale and retention issues affecting employees, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or perceived expectations; • difficulty in making new and strategic hires of new employees; • diversion of management time and a shift of focus from operating the businesses to transaction execution considerations; • customers delaying or deferring decisions or ending their relationships with us; • the need to provide transition services, which may result in stranded costs and the diversion of resources and focus; • the need to separate operations, systems (including accounting, management, information, human resources and other administrative systems), technologies, products and personnel, which is an inherently risky and potentially lengthy and costly process; 31 • the inefficiencies and lack of control that may result if such separation is delayed or not implemented effectively, and unforeseen difficulties and expenditures that may arise as a result including potentially significant stranded costs; • our desire to maintain an investment grade credit rating may cause us to use cash proceeds, if any, from any divestitures or other strategic transactions that we might otherwise have used for other purposes in order to reduce our financial leverage; • the inability to obtain necessary regulatory approvals or otherwise satisfy conditions required in order consummate any such transactions; • our dependence on accounting, financial reporting, operating metrics and similar systems, controls and processes of divested businesses could lead to challenges in preparing our consolidated financial statements or maintaining effective financial control over financial reporting; and • contractual terms limiting our ability to compete for or perform certain contracts or services.
Divestiture transactions also involve significant challenges and risks, including: • the potential loss of key customers, suppliers, vendors and other key business partners; • declining employee morale and retention issues affecting employees, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or perceived expectations; • difficulty in making new and strategic hires of new employees; • diversion of management time and a shift of focus from operating the businesses to transaction execution considerations; • customers delaying or deferring decisions or ending their relationships with us; • the need to provide transition services, which may result in stranded costs and the diversion of resources and focus; • the need to separate operations, systems (including accounting, management, information, human resources and other administrative systems), technologies, products and personnel, which is an inherently risky and potentially lengthy and costly process; 30 • the inefficiencies and lack of control that may result if such separation is delayed or not implemented effectively, and unforeseen difficulties and expenditures that may arise as a result including potentially significant stranded costs; • our desire to maintain an investment grade credit rating may cause us to use cash proceeds, if any, from any divestitures or other strategic transactions that we might otherwise have used for other purposes in order to reduce our financial leverage; • the inability to obtain necessary regulatory approvals or otherwise satisfy conditions required in order consummate any such transactions; • our dependence on accounting, financial reporting, operating metrics and similar systems, controls and processes of divested businesses could lead to challenges in preparing our consolidated financial statements or maintaining effective financial control over financial reporting; and • contractual terms limiting our ability to compete for or perform certain contracts or services.
As competition for highly skilled employees in our industry has grown increasingly intense, we have experienced, and may experience in the future, higher than anticipated levels of employee attrition. These risks to attracting and retaining the necessary talent may be exacerbated by recent labor constraints and inflationary pressures on employee wages and benefits.
As competition for highly skilled employees in our industry has grown increasingly intense, we have experienced, and may experience in the future, higher than anticipated levels of employee attrition. These risks to attracting and retaining the necessary talent may be exacerbated by labor constraints and inflationary pressures on employee wages and benefits.
As a result, we may invest less in certain business areas than our competitors do, and competitors may have greater financial, technical and marketing resources available to them compared to the resources allocated to our services. Industry consolidation may also affect competition by creating larger, more homogeneous and potentially stronger competitors in the markets in which we operate.
As a result, we may invest less in certain business areas than our competitors do, and competitors may have greater financial, technical and marketing resources available to them compared to the resources allocated to our services. Industry consolidation may also affect competition by creating larger, more homogeneous and 15 potentially stronger competitors in the markets in which we operate.
In addition to economic, political and market conditions, our stock price may be adversely impacted if our financial results are inconsistent with earlier projections or market expectations, announcements of new products or new technologies by us, our competitors or our customers, or announcements of major transactions, litigation developments or management changes.
In 33 addition to economic, political and market conditions, our stock price may be adversely impacted if our financial results are inconsistent with earlier projections or market expectations, announcements of new products or new technologies by us, our competitors or our customers, or announcements of major transactions, litigation developments or management changes.
Federal Government or the European Union may enact legislation that creates significant disincentives for customers to locate certain of their operations offshore, which would reduce the demand for the services we provide in such locations and may adversely impact our cost structure and profitability.
Federal Government or the European Union (the "EU") may enact legislation that creates significant disincentives for customers to locate certain of their operations offshore, which would reduce the demand for the services we provide in such locations and may adversely impact our cost structure and profitability.
If we or our partners fail to deliver services or products on time, our ability to complete the contract may be adversely affected. If any third-party providers unexpectedly terminate our agreement, we would be forced to incur additional expenses to locate alternative providers and may experience outages or disruptions to our service.
If we or our partners fail to deliver services or products on time, our ability to complete the contract may be adversely affected. If any third-party providers unexpectedly terminate our agreement, we would be forced to incur 19 additional expenses to locate alternative providers and may experience outages or disruptions to our service.
Competitive bidding is expensive and presents a number of risks, including: • the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that may or may not be awarded to us; • the need to estimate accurately the resources and costs that will be required to service any contracts we are awarded, sometimes in advance of the final determination of their full scope and design; 29 • the expense and delay that may arise if our competitors protest or challenge awards made to us pursuant to competitive bidding; • the requirement to resubmit bids protested by our competitors and in the termination, reduction, or modification of the awarded contracts; and • the opportunity cost of not bidding on and winning other contracts we might otherwise pursue.
Competitive bidding is expensive and presents a number of risks, including: • the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that may or may not be awarded to us; • the need to estimate accurately the resources and costs that will be required to service any contracts we are awarded, sometimes in advance of the final determination of their full scope and design; 28 • the expense and delay that may arise if our competitors protest or challenge awards made to us pursuant to competitive bidding; • the requirement to resubmit bids protested by our competitors and in the termination, reduction, or modification of the awarded contracts; and • the opportunity cost of not bidding on and winning other contracts we might otherwise pursue.
Any future economic downturn induced by COVID-19 or any other public health crisis, depending upon its severity and duration, could also lead to a deterioration of worldwide credit and financial markets that could negatively affect the financial health of customers, lower their demand for our services, limit their ability or willingness to pay us in a timely manner and our ability to obtain external financing to fund our operations and capital expenditures, result in losses on our holdings of cash and investments due to failures of financial institutions and other parties, and result in a higher rate of losses on our accounts receivables due to credit defaults.
Any future economic downturn induced by a public health crisis, depending upon its severity and duration, could also lead to a deterioration of worldwide credit and financial markets that could negatively affect the financial health of customers, lower their demand for our services, limit their ability or willingness to pay us in a timely manner and our ability to obtain external financing to fund our operations and capital expenditures, result in losses on our holdings of cash and investments due to failures of financial institutions and other parties, and result in a higher rate of losses on our accounts receivables due to credit defaults.
In a time of uncertainty, our customers may reduce spending or have difficulty in budgeting for external IT services, delay procurement of products and services from us or delay their payment for products and services we have already provided, and we may have difficulty closing new deals in the event of an economic slowdown, all of which could adversely affect our profitability, results of operations and cash flow. 23 Our international operations are exposed to risks, including fluctuations in exchange rates, which may be beyond our control.
In a time of uncertainty, our customers may reduce spending or have difficulty in budgeting for external IT services, delay procurement of products and services from us or delay their payment for products and services we have already provided, and we may have difficulty closing new deals in the event of an economic slowdown, all of which could adversely affect our profitability, results of operations and cash flow. 22 Our international operations are exposed to risks, including fluctuations in exchange rates, which may be beyond our control.
To the extent our customers are required by laws, rules, or regulations to impose such contractual obligations on us, we may have no or limited ability to reject them or negotiate them in our favor.
To the extent our customers are required by laws, rules, or regulations to impose such contractual obligations on us, we may have limited ability to reject them or negotiate them in our favor.
The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations, subject us to litigation or regulatory scrutiny and cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us and the market price of our common stock. 27 We could suffer additional losses due to asset impairment charges.
The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations, subject us to litigation or regulatory scrutiny and cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us and the market price of our common stock. 26 We could suffer additional losses due to asset impairment charges.
Information regarding our credit ratings is included in Part II, Item 7 of this Annual Report on Form 10-K under the caption "Liquidity and Capital Resources." 17 If financial or industry analysts have difficulty in understanding the changes to our business model, or we fail to meet our publicly announced financial guidance, our stock price and trading volume could decline.
Information regarding our credit ratings is included in Part II, Item 7 of this Annual Report on Form 10-K under the caption "Liquidity and Capital Resources." 17 If industry or equity research analysts have difficulty in understanding the changes to our business model, or we fail to meet our publicly announced financial guidance, our stock price and trading volume could decline.
When and how these Pillar Two rules are adopted or enacted by the various countries in which we do business could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in the U.S. and non-U.S. jurisdictions. 32 The OECD is also issuing guidelines that are different, in some respects, than current international tax principles.
When and how these Pillar Two rules are adopted or enacted by the various countries in which we do business could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in the U.S. and non-U.S. jurisdictions. 31 The OECD is also issuing guidelines that are different, in some respects, than current international tax principles.
Such increased scrutiny may result in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations. 21 While we have in the past and may at times continue to engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others), such initiatives may be costly and may not have the desired effect.
Such increased scrutiny may result in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations. 20 While we have in the past and may at times continue to engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others), such initiatives may be costly and may not have the desired effect.
Despite our efforts to protect our intellectual property rights, unauthorized third parties may attempt to use, copy, market or distribute our intellectual property rights or technology, and our competitive position and results of operations could be harmed and our legal costs could increase. 26 Our inability to procure third-party licenses required for the operation of our products and service offerings may result in decreased revenue or increased costs.
Despite our efforts to protect our intellectual property rights, unauthorized third parties may attempt to use, copy, market or distribute our intellectual property rights or technology, and our competitive position and results of operations could be harmed and our legal costs could increase. 25 Our inability to procure third-party licenses required for the operation of our products and service offerings may result in decreased revenue or increased costs.
Additionally, the inability to adequately develop and train personnel and assimilate key new hires or promoted employees could have a material adverse effect on relationships with third parties, our financial condition and results of operations and cash flows. 22 We also must manage leadership development and succession planning throughout our business.
Additionally, the inability to adequately develop and train personnel and assimilate key new hires or promoted employees could have a material adverse effect on relationships with third parties, our financial condition and results of operations and cash flows. 21 We also must manage leadership development and succession planning throughout our business.
Any failure to achieve our financial goals could negatively impact our reputation, harm investor confidence in us, and cause the market price of our common stock to decline. 28 We are defendants in pending litigation that may have a material and adverse impact on our profitability and liquidity.
Any failure to achieve our financial goals could negatively impact our reputation, harm investor confidence in us, and cause the market price of our common stock to decline. 27 We are defendants in pending litigation that may have a material and adverse impact on our profitability and liquidity.
We have acquired and may continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to cybersecurity, operational, and financial risks. In addition, continued remote and hybrid working arrangements post-COVID present potentially increased risk associated with security vulnerabilities present in non-corporate and home networks.
We have acquired and may continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to cybersecurity, operational, and financial risks. In addition, continued remote and hybrid working arrangements present potentially increased risk associated with security vulnerabilities present in non-corporate and home networks.
For more information, see our risk factor “Increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business." 25 We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business.
For more information, see our risk factor “Increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business." 24 We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business.
Our data centers require water for cooling purposes, and severe droughts or other extreme weather events or atmospheric changes that result in water scarcity, particularly in high-stress water areas, could adversely impact our ability to continue to operate or utilize data centers that we own or lease.
Many of our data centers require water for cooling purposes, and severe droughts or other extreme weather events or atmospheric changes that result in water scarcity, particularly in high-stress water areas, could adversely impact our ability to continue to operate or utilize data centers that we own or lease.
There can be no assurance that our cybersecurity risk management strategy and processes will be fully complied with or effective in protecting any IT Systems, data or business operations. 12 Threat actors are increasingly sophisticated and using tools and techniques, including artificial intelligence (“AI”), designed to circumvent security controls, to evade detection and to remove or obfuscate forensic evidence, which makes it more difficult for us to detect, identify, investigate, contain or recover from, future cyberattacks and security incidents.
There can be no assurance that our cybersecurity risk management strategy and processes will be fully complied with or effective in protecting any IT Systems, data or business operations. 12 Threat actors are increasingly sophisticated and using tools and techniques, including AI, designed to circumvent security controls, to evade detection and to remove or obfuscate forensic evidence, which makes it more difficult for us to detect, identify, investigate, contain or recover from, future cyberattacks and security incidents.
Certain of our licenses are concentrated in one or more third-party licensors where multiple licenses are up for renewal at the same time, which could decrease our ability to negotiate reasonable license fees and could result in our loss of rights under such licenses. Disruption of our supply chain could adversely impact our business.
Certain of our licenses are concentrated in one or more third-party licensors where multiple licenses are up for renewal at the same time, which could decrease our ability to negotiate reasonable license fees and could result in our loss of rights under such licenses. Disruption of our supply chain or increases in procurement costs could adversely impact our business.
Social and environmental responsibility regulations, policies and provisions, as well as customer and investor demands, may adversely affect our relationships with customers and investors. • Our restructuring plans may not benefit us and may adversely affect our business. • We may be subject to intellectual property related risks and may fail to procure necessary third-party licenses. • Disruption of our supply chain could adversely impact our business. • We may fail to maintain effective disclosure controls and internal control over financial reporting. • We could suffer additional losses due to asset impairment charges. • We may fail to pay dividends or repurchase shares of our common stock that we announced previously. • Pending litigations may have a material and adverse impact on our profitability and liquidity. • Disruptions in the credit markets may reduce our customers' access to credit and increase the costs to our customers of obtaining credit, and our hedging program is subject to counterparty default risk. • We may not achieve revenue and profit objectives if we fail to competitively bid on our projects effectively. • If our customers experience financial difficulties, we may not be able to collect our receivables. • We may fail to maintain and grow our customer relationships over time or to comply with customer contracts or government contracting regulations or requirements. • Our strategic transactions may prove unsuccessful. • Changes in tax rates, tax laws, and uncertainty of tax examinations could affect our results of operations. • The price of our securities may be volatile.
Social and environmental responsibility regulations, policies and provisions, as well as customer and investor demands, may adversely affect our relationships with customers and investors. • Our restructuring plans may not benefit us and may adversely affect our business. • We may be subject to intellectual property related risks and may fail to procure necessary third-party licenses. • Disruption of our supply chain or increases in procurement costs, including as a result of ongoing trade tensions and tariff charges, could adversely impact our business. • We may fail to maintain effective disclosure controls and internal control over financial reporting. • We could suffer additional losses due to asset impairment charges. • We may fail to pay dividends or repurchase shares of our common stock. • Pending litigations may have a material and adverse impact on our profitability and liquidity. • Disruptions in the credit markets may reduce our customers' access to credit and increase the costs to our customers of obtaining credit, and our hedging program is subject to counterparty default risk. • We may not achieve revenue and profit objectives if we fail to competitively bid on our projects effectively. • If our customers experience financial difficulties, we may not be able to collect our receivables. • We may fail to maintain and grow our customer relationships over time or to comply with customer contracts or government contracting regulations or requirements. • Our strategic transactions may prove unsuccessful. • Changes in tax rates, tax laws, and uncertainty of tax examinations could affect our results of operations. • The price of our securities may be volatile.
Additionally, any future impasse impacting the U.S. federal government’s ability to reach an agreement on the federal budget, debt ceiling or any future U.S. federal government shut downs could result in material payment delays, payment reductions or contract terminations by the U.S. federal government, which in turn may adversely impact the results of operations and financial condition of our government contractor customers and cause those customers to become unable to meet their obligations under contracts with us, or reduce their demand for our products and services, which could have an adverse effect on our financial condition, results of operations and/or cash flows. 30 If our customer contracts are terminated, if we are suspended or disbarred from government work, or our ability to compete for new contracts is adversely affected, our financial performance could suffer.
Additionally, impasses impacting the U.S. federal government’s ability to reach an agreement on the federal budget, debt ceiling or extended U.S. federal government shut downs could result in material payment delays, payment reductions or contract terminations by the U.S. federal government, which in turn may adversely impact the results of operations and financial condition of our government contractor customers and cause those customers to become unable to meet their obligations under contracts with us, or reduce their demand for our products and services, which could have an adverse effect on our financial condition, results of operations and/or cash flows. 29 If our customer contracts are terminated, if we are suspended or disbarred from government work, or our ability to compete for new contracts is adversely affected, our financial performance could suffer.
We operate in approximately 65 countries in an increasingly complex regulatory environment. Among other things, we provide complex industry-specific insurance processing in the U.K., which is regulated by authorities in the U.K. and elsewhere, such as the U.K.’s Financial Conduct Authority and His Majesty’s Treasury and the U.S. Department of Treasury, which increases our exposure to compliance risk.
We operate in over 60 countries countries in an increasingly complex regulatory environment. Among other things, we provide complex industry-specific insurance processing in the U.K., which is regulated by authorities in the U.K. and elsewhere, such as the U.K.’s Financial Conduct Authority and His Majesty’s Treasury and the U.S. Department of Treasury, which increases our exposure to compliance risk.
We may not be able to implement our strategic priorities and progress on our transformation journey in accordance with our expectations for a variety of reasons, including failure to execute on our plans in a timely fashion, lack of adequate skills, ineffective management, inadequate incentives, customer resistance to new initiatives, inability to control costs or maintain competitive offerings.
We may not be able to implement our strategic priorities in accordance with our expectations for a variety of reasons, including failure to execute on our plans in a timely fashion, lack of adequate skills, ineffective management, inadequate incentives, customer resistance to new initiatives, inability to control costs or maintain competitive offerings.
We acquired substantial goodwill and other intangibles as a result of the HPES Merger and the Luxoft Acquisition, increasing our exposure to this risk.
We acquired substantial goodwill and other intangibles as a result of the HPES Merger, increasing our exposure to this risk.
It is difficult to predict the impact of such events on us, our third-party partners or customers or economic markets more broadly, which have been and will continue to be highly dependent upon the actions of governments and businesses in response to macroeconomic events, and the effectiveness of those actions.
It is difficult to predict the impact of increased borrowing costs on us, our third-party partners or customers or economic markets more broadly, which have been and will continue to be highly dependent upon the actions of governments and businesses in response to macroeconomic events, and the effectiveness of those actions.
Additionally, the rapid evolution and increased adoption of artificial intelligence technologies and our obligations to comply with emerging laws and regulations may require us to develop additional artificial intelligence-specific compliance programs. 24 Adjusting business operations to changing environments and regulations may be costly and could potentially render the particular business operations uneconomical, which may adversely affect our profitability or lead to a change in the business operations.
Additionally, the rapid evolution and increased adoption of AI technologies and our obligations to comply with emerging laws and regulations may require us to develop additional AI-specific compliance programs. 23 Adjusting business operations to changing environments and regulations may be costly and could potentially render the particular business operations uneconomical, which may adversely affect our profitability or lead to a change in the business operations.
If the fair value of a reporting unit is revised downward due to declines in business performance or other factors or if the Company suffers further declines in share price, an impairment could result and a non-cash charge could be required.
If the fair value of a reporting unit is revised downward due to declines in business performance or other factors or if we suffer further declines in share price, an impairment could result and a non-cash charge could be required.
Approximately 71% of revenues earned during fiscal 2024 were derived from sales denominated in currencies other than the U.S. dollar and are expected to continue to represent a significant portion of our revenues.
Approximately 72% of revenues earned during fiscal 2025 were derived from sales denominated in currencies other than the U.S. dollar and are expected to continue to represent a significant portion of our revenues.
Our ability to develop and implement innovative technology solutions that meet evolving customer needs in analytics, software engineering, applications, business process services, digital cloud, information technology (“IT”) outsourcing and consulting, and in areas such as AI, automation, Internet of Things and software as-a-service solutions, in a timely or cost-effective manner, will impact our ability to retain and attract customers and our future revenue growth and earnings.
Our ability to develop and implement innovative technology solutions that meet evolving customer needs and industry standards in analytics, software engineering, applications, business process services, digital cloud, IT outsourcing and consulting, and in areas such as AI, automation, Internet of Things and software as-a-service solutions, among others, in a timely or cost-effective manner, will impact our ability to retain and attract customers and our future revenue growth and earnings.
We have indebtedness, which could have a material adverse effect on our business, financial condition and results of operations. We have indebtedness totaling approximately $4.1 billion as of March 31, 2024 (including capital lease obligations). We may incur substantial additional indebtedness in the future for many reasons, including to fund acquisitions.
We have indebtedness, which could have a material adverse effect on our business, financial condition and results of operations. We have indebtedness totaling approximately $3.9 billion as of March 31, 2025 (including capital lease obligations). We may incur substantial additional indebtedness in the future for many reasons, including to fund acquisitions.
There can be no assurance that our business will generate sufficient cash flow from operations, or that current or future borrowings will be sufficient to meet our current debt obligations and to fund other liquidity needs. Our primary markets are highly competitive.
There can be no assurance that our business will generate sufficient cash flow from operations, or that current or future borrowings will be sufficient to meet our current debt obligations and to fund other liquidity needs.
Negative or uncertain political climates in countries or locations where we operate, such as Ukraine, including but not limited to, military activities or civil hostilities, criminal activities and other acts of violence, infrastructure disruption, natural disasters or other conditions could adversely affect our operations or cause us to exit certain markets.
Negative or uncertain political climates in countries or locations where we operate, including but not limited to, military activities or civil hostilities, criminal activities and other acts of violence, infrastructure disruption, natural disasters or other conditions could adversely affect our operations or cause us to exit certain markets. We are subject to the U.S.
In addition, our liability insurance may not adequately cover liabilities incurred, and uncovered losses could be large and harm our financial condition. Our ability to continue to develop and expand our service offerings to address emerging business demands and technological trends, including our ability to sell differentiated services, may impact our future growth.
In addition, our liability insurance may not adequately cover liabilities incurred, and uncovered losses could be large and harm our financial condition. 14 Our ability to continue to develop and expand our service offerings to address emerging business demands and technological trends, including our ability to sell differentiated services and compete in the highly competitive markets we serve, may impact our future growth.
If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations, and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected. 15 Our ability to compete in certain markets we serve is dependent on our ability to continue to expand our capacity in certain offshore locations.
If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations, and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected.
Given the complexity of the transition process and the uncertain global economic conditions, we may not be able to progress on our transformation journey in accordance with our expectations, and it is likely that our prior forecasts will prove to be incorrect.
Given the complexity of implementing our strategic priorities and the uncertain global economic conditions, we may not be able to progress on our strategic priorities in accordance with our expectations, and it is likely that our prior forecasts will prove to be incorrect.
As a result, we are exposed to the risks inherent in operating in India or other locations, including (1) public health crisis such as the COVID-19 pandemic and government responses, (2) a highly competitive labor market for skilled workers, which may result in significant increases in labor costs, as well as shortages of qualified workers in the future, (3) currency exchange risks, and (4) the possibility that the U.S.
As a result, we are exposed to the risks inherent in operating in India or other locations, including (1) a highly competitive labor market for skilled workers, which may result in significant increases in labor costs, as well as shortages of qualified workers in the future, (2) currency exchange risks, and (3) the possibility that the U.S.
Pillar Two consists of two interrelated rules referred to as Global Anti-Base Erosion (“GloBE”) Rules, which operate to impose a minimum tax rate of 15% calculated on a jurisdictional basis. Such rules are being or may be implemented in many jurisdictions, including the United States.
Pillar Two consists of two interrelated rules referred to as Global Anti-Base Erosion (“GloBE”) Rules, which operate to impose a minimum tax rate of 15% calculated on a jurisdictional basis. Such rules have been or may be implemented in many jurisdictions.
If, notwithstanding the conclusions expressed in these opinions, the NPS Separation were determined to be taxable, CSC and CSC stockholders that received CSRA Inc.
If, notwithstanding the conclusions expressed in these opinions, the NPS Separation were determined to be taxable, CSC and CSC stockholders that received CSRA Inc. ("CSRA") stock in the NPS Separation could incur significant tax liabilities.
Inflation and government efforts to combat inflation, such as raising benchmark interest rate, could increase market volatility and have an adverse effect on the financial market and general economic conditions.
Inflation and government efforts to combat inflation could increase market volatility and have an adverse effect on the financial market and general economic conditions.
Our products and services are highly technical and complex and may contain errors, defects or security vulnerabilities that cannot be discovered before a product or service is released, installed and used by customers.
Product and service quality issues could impact our business, operating results and financial condition. Our products and services are highly technical and complex and may contain errors, defects or security vulnerabilities that cannot be discovered before a product or service is released, installed and used by customers.
Additionally, industry or financial analysts that publish reports about our business may not accurately capture and reflect our transition process. As a result, we may fail to meet their expectations.
Additionally, industry and equity research analysts that publish reports about our business may not accurately capture and reflect our turnaround progress. As a result, we may fail to meet their expectations.
While we strive to comply with all applicable data protection laws and regulations, as well as internal privacy policies, any failure or perceived failure to comply or any misappropriation, loss or other unauthorized disclosure of personal data and other sensitive information may result in proceedings or actions against us by government or other entities, private lawsuits against us (including class actions) or the loss of customers, which could potentially have an adverse effect on our business, reputation and results of operations. 14 Product and service quality issues could impact the Company’s business, operating results and financial condition.
While we strive to comply with all applicable data protection laws and regulations, as well as internal privacy policies, any failure or perceived failure to comply or any misappropriation, loss or other unauthorized disclosure of confidential or sensitive information may result in legal proceedings or actions against us or the loss of customers, which could potentially have an adverse effect on our business, reputation and results of operations.
("CSRA") stock in the NPS Separation could incur significant tax liabilities. 34 The opinions of counsel we received were based on, among other things, various factual representations and assumptions, as well as certain undertakings made by DXC, Perspecta and CSRA.
The opinions of counsel we received were based on, among other things, various factual representations and assumptions, as well as certain undertakings made by DXC, Perspecta and CSRA.
Our stock price is subject to changes in financial analysts’ earnings estimates, valuation and recommendations, our credit ratings and other factors beyond our control such as the inflationary pressures, other macroeconomic factors and the impact on customer demand. Speculation and market sentiment over our results of operations, financial condition and transformation journey can also cause changes in our stock price.
Our stock price is subject to changes in financial analysts’ earnings estimates, valuation and recommendations, our credit ratings and other factors beyond our control such as the inflationary pressures, other macroeconomic factors and the impact on customer demand.
There is no assurance that our policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our employees and intermediaries.
We require our employees, partners, subcontractors, agents, and others to comply with the FCPA and other anti-bribery laws. There is no assurance that our policies or procedures will protect us against liability under the FCPA or other laws for actions taken by our employees and intermediaries.
These alliances may result in more compelling product and service offerings than those we offer. 20 Additionally, our customers may perform audits or require us to perform audits and provide audit reports with respect to the controls and procedures that we use in the performance of services for such customers.
Additionally, our customers may perform audits or require us to perform audits and provide audit reports with respect to the controls and procedures that we use in the performance of services for such customers.
Such delays can negatively impact our results of operations if the pace and level of spending on new technologies by some of our customers are not sufficient to make up any shortfall by other customers. In addition, we face significant competition from competitors, new players and our own customers in developing AI capabilities.
Such delays can negatively impact our results of operations if the pace and level of spending on new technologies by some of our customers are not sufficient to make up any shortfall by other customers.
Technological developments may materially affect the cost and use of technology by our customers. Some of these technologies have reduced and replaced some of our traditional services and solutions and may continue to do so in the future. For example, our competitors may introduce new product and service offerings that utilize AI and machine learning.
Technological developments may materially affect the cost and use of technology by our customers. Some of these technologies have reduced and replaced some of our traditional services and solutions and may continue to do so in the future.
We may not be able to pay dividends or repurchase shares of our common stock in accordance with our announced intent or at all. Our Board may authorize share repurchases from time to time. On May 18, 2023, DXC announced that its Board approved an incremental $1.0 billion share repurchase authorization.
We may not be able to pay dividends or repurchase shares of our common stock in accordance with our announced intent or at all. Our Board may authorize share repurchases from time to time.
Compliance with privacy and security laws, requirements and regulations may result in cost increases due to expanded compliance obligations, potential systems changes, the development of additional administrative processes and increased enforcement actions, litigation, fines and penalties.
Compliance with privacy and security laws, requirements and regulations may result in cost increases due to expanded compliance obligations, potential systems changes, the development of additional administrative processes and increased enforcement actions, litigation, fines and penalties. Some of our customers have sought, and may continue to seek, to contractually impose certain strict data privacy and information security obligations on us.
If our financial results fail to meet our publicly announced financial guidance or market expectations, analysts could downgrade our common stock or publish unfavorable research that could cause our stock price or trading volume to decline, potentially significantly. Our business and financial results have been adversely affected and could continue to be materially adversely affected by public health crises.
If our financial results fail to meet our publicly announced financial guidance or market expectations, equity research analysts could downgrade our common stock or publish unfavorable research that could cause our stock price or trading volume to decline, potentially significantly.
For example, if we are unable to comply with fast-moving regulatory requirements, we could be disqualified from requests for proposal processes, leading to a loss of sales as well as unfavorable operating cost impacts.
For example, if we are unable to comply with fast-moving regulatory requirements, we could be disqualified from requests for proposal processes, leading to a loss of sales as well as unfavorable operating cost impacts. In addition, changing expectations from stakeholders and the evolving landscape of regulatory and disclosure requirements regarding ESG could affect our business.
We pursue opportunities in certain parts of the world that experience government corruption and in certain circumstances, compliance with anti-bribery laws may conflict with local customs and practices. Our internal policies mandate compliance with all applicable anti-bribery laws. We require our employees, partners, subcontractors, agents, and others to comply with the FCPA and other anti-bribery laws.
Foreign Corrupt Practices Act of 1977, as amended ("FCPA") and similar anti-bribery laws in other jurisdictions. We pursue opportunities in certain parts of the world that experience government corruption and in certain circumstances, compliance with anti-bribery laws may conflict with local customs and practices. Our internal policies mandate compliance with all applicable anti-bribery laws.
If changes in our credit ratings were to occur, it could result in higher interest costs under certain of our credit facilities. It would also cause our future borrowing costs to increase and limit our access to capital markets. For example, we currently fund a portion of our working capital requirements in the U.S. and European commercial paper markets.
If changes in our credit ratings were to occur, it could result in higher interest costs under certain of our credit facilities. It would also cause our future borrowing costs to increase and limit our access to capital markets.
Public health crises, such as the COVID-19 pandemic, have caused disruptions in global economies, financial and commodities markets and rapid shifts in governmental and public health policies.
Our business and financial results have been adversely affected and could continue to be materially adversely affected by public health crises. Public health crises, such as the COVID-19 pandemic, have caused disruptions in global economies, financial and commodities markets and rapid shifts in governmental and public health policies.
Risks Related to Our Completed Strategic Transactions • We could have an indemnification obligation to HPE if the stock distribution in connection with the HPES business separation were determined not to qualify for tax-free treatment. • If the HPES Merger does not qualify as a reorganization under Section 368(a) of the Code, CSC's former stockholders may incur significant tax liabilities. • We assumed certain material pension benefit obligations following the HPES Merger.
Risks Related to Our Completed Strategic Transactions • We could have an indemnification obligation to HPE if the stock distribution in connection with the HPES business separation were determined not to qualify for tax-free treatment. • If the HPES Merger does not qualify as a reorganization under Section 368(a) of the Code, CSC's former stockholders may incur significant tax liabilities. • The USPS Separation and Mergers and NPS Separation could result in substantial tax liability to DXC and our stockholders. 11 Risks Related to Our Business We may not succeed in our strategic objectives, which could adversely affect our business, financial condition, results of operations and cash flows.
If we are unable to continue to execute our strategy and grow our GBS business and expand margins while stabilizing our GIS business in a highly competitive and rapidly evolving environment or if we are unable to commercialize such services and solutions, expand and scale them with sufficient speed and versatility, our growth, productivity objectives and profit margins could be negatively affected.
The markets we serve are highly competitive and characterized by rapid technological change. If we are unable to continue to execute our strategy or if we are unable to commercialize our services and solutions, expand and scale them with sufficient speed and versatility, our growth, productivity objectives and profit margins could be negatively affected.
Our contracts are complex and, in some instances, may require that we partner with other parties, including software and hardware vendors, to provide the complex solutions required by our customers. For example, we recently entered a strategic partnership with a third-party cloud infrastructure provider to accelerate customer cloud adoption and digital transformation.
Our contracts are complex and, in some instances, may require that we partner with other parties, including software and hardware vendors, to provide the complex solutions required by our customers.
Further, any negative publicity with respect to customer contracts or any related proceedings, regardless of accuracy, may damage our business by harming our ability to compete for new contracts. Our customers' contracts with the U.S. federal government and related agencies are also subject to issues with respect to federal budgetary and spending limits or matters.
Further, any negative publicity with respect to customer contracts or any related proceedings, regardless of accuracy, may damage our business by harming our ability to compete for new contracts.
Our cash flows, results of operations and financial condition may be adversely affected by these and other industry-wide pricing pressures. 19 If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. Our commercial contracts are typically awarded on a competitive basis.
If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. Our commercial contracts are typically awarded on a competitive basis. Our bids are based upon, among other items, the expected cost to provide the services.
If the HPES Merger were determined to be taxable, previous holders of CSC common stock would be considered to have made a taxable disposition of their shares to HPES, and such stockholders would generally recognize taxable gain or loss on their receipt of HPES common stock in the HPES Merger. 33 We assumed certain material pension benefit obligations in connection with the HPES Merger.
If the HPES Merger were determined to be taxable, previous holders of CSC common stock would be considered to have made a taxable disposition of their shares to HPES, and such stockholders would generally recognize taxable gain or loss on their receipt of HPES common stock in the HPES Merger. 32 The USPS Separation and Mergers and NPS Separation could result in substantial tax liability to DXC and our stockholders.
If we experience pressure from competitors to lower our prices, we may have lower than expected profit margins and lost business opportunities if we are unable to match the price declines.
If we experience pressure from competitors to lower our prices, we may have lower than expected profit margins and lost business opportunities if we are unable to match the price declines. Our cash flows, results of operations and financial condition may be adversely affected by these and other industry-wide pricing pressures.
This shortage may increase component delivery lead times and costs to source available components and delay the delivery of our hardware products and services, which may adversely affect our ability to comply with our contracts and our ability to support our existing customers and our growth through sales to new customers.
Delays and shortages of certain necessary components to the services and solutions we offer our clients, whether caused by natural disasters, pandemics, geopolitical events, labor strikes, or transportation delays, may increase component delivery lead times and costs to source available components and delay the delivery of our hardware products and services, which may adversely affect our ability to comply with our contracts and our ability to support our existing customers and our growth through sales to new customers.
An increase in our borrowing costs, limitations on our ability to access the global capital and credit markets or a reduction in our liquidity can adversely affect our financial condition and results of operations. For example, in response to increasing inflation, the U.S. Federal Reserve, along with central banks around the world, has been raising interest rates.
An increase in our borrowing costs, limitations on our ability to access the global capital and credit markets or a reduction in our liquidity can adversely affect our financial condition and results of operations.
In addition, as climate change laws, regulations, treaties and national and global initiatives are adopted and implemented regionally or throughout the world, we may be required to comply or potentially face market access limitations, fines or reputational injury.
As these new laws, regulations, treaties and national and global initiatives are adopted and implemented regionally or throughout the world, we may be required to comply or potentially face market access limitations, fines or reputational injury, and we expect to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors.
Our bids are based upon, among other items, the expected cost to provide the services. We generally provide services under time and materials contracts, unit-price contracts, fixed-price contracts, and multiple-element software sales.
We generally provide services under time and materials contracts, unit-price contracts, fixed-price contracts, and multiple-element software sales.
Our transformation journey focuses on our customers, optimizing costs and seizing the market.
Our strategic priorities are focused on our customers, optimizing costs and seizing the market.
However, as our presence in these locations increases, we are exposed to risks inherent to these locations which may adversely affect our revenue and profitability. A significant portion of our application outsourcing and software development activities has been shifted to India and other lower-cost locations.
A significant portion of our application outsourcing and software development activities has been shifted to India and other lower-cost locations.
In addition, many public cloud infrastructure providers have also entered into strategic partnerships with our competitors.
In addition, many public cloud infrastructure providers have also entered into strategic partnerships with our competitors. These alliances may result in more compelling product and service offerings than those we offer.
Such offerings could render some of our offerings obsolete or harm our ability to negotiate for favorable terms. This has caused, and may in the future cause, customers to delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies.
Technological developments have caused, and may in the future cause, customers to delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies.
There is no guarantee that our products or services that integrate AI capabilities will achieve market acceptance and help us maintain or enhance our competitive position. Our growth strategy focuses on responding to these types of developments by driving innovation that will enable us to expand our business into new growth areas.
There is no guarantee that our products or services that integrate AI capabilities will achieve market acceptance and help us maintain or enhance our competitive position. We encounter aggressive competition from numerous and varied competitors.
In the event of a component shortage or interruptions at a supplier, we may not be able to develop alternate sources quickly, cost effectively, or at all. Supply chain interruptions could harm our relationships with our customers, prevent us from acquiring new customers, and materially and adversely affect our business.
We may not be able to quickly replace or secure alternative suppliers, and we may be forced to absorb higher costs, reduce margins, or adjust our pricing. Supply chain interruptions could harm our relationships with our customers, prevent us from acquiring new customers, harm our operational efficiency, financial performance, and reputation, and materially and adversely affect our business.
However, market for new technologies, such as AI, may not develop as we have anticipated.
Our growth strategy focuses on responding to these types of developments by driving innovation that will enable us to expand our business into new growth areas. However, markets for new technologies, such as AI, may not develop as we have anticipated.
Removed
These liabilities and future funding obligations could restrict our cash available for operations, capital expenditures and other requirements. • The USPS Separation and Mergers and NPS Separation could result in substantial tax liability to DXC and our stockholders. 11 Risks Related to Our Business We may not succeed in our strategic objectives, which could adversely affect our business, financial condition, results of operations and cash flows.
Added
The regulatory landscape in these areas continues to evolve rapidly, varying in requirements, restrictions and potential legal risk, requiring additional investment in compliance programs. This could impact our strategies regarding the use of new technologies, such as artificial intelligence, and availability of previously collected data.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSee “Risk Factors – We could be held liable for damages, our reputation could suffer, and our business may be materially impacted due to service interruptions, from security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data” .
Biggest changeSee “Risk Factors – We could be held liable for damages, our reputation could suffer, and our business may be materially impacted due to service interruptions from security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data. ” There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.
Similarly, the Audit Committee oversees our disclosure controls and procedures, which include cybersecurity reporting disclosure controls. 36 The Nominating/Corporate Governance Committee receives reports from the Global Chief Information Security Officer (“Global CISO”) on the Company’s information security program at each regular quarterly Committee meeting.
Similarly, the Audit Committee oversees our disclosure controls and procedures, which include cybersecurity reporting disclosure controls. 35 The Nominating/Corporate Governance Committee receives reports from the Global Chief Information Security Officer (“Global CISO”) on the Company’s information security program at each regular quarterly Committee meeting.
The SCC also analyzes emerging global cyber security risks and uses the expertise of its members to review DXC’s current security posture and consider steps to take to mitigate such risks and implement improvements where it deems necessary. 37
The SCC also analyzes emerging global cyber security risks and uses the expertise of its members to review DXC’s current security posture and consider steps to take to mitigate such risks and implement improvements where it deems necessary. 36
Our Global CISO and our General Manager of Cloud Infrastructure and ITO have primary responsibility for our overall cybersecurity risk management program and supervise both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our Global CISO has extensive experience assessing and managing cybersecurity-related risks and implementing related policies, procedures, and strategies.
Our Global CISO and our Managing Director of Global Infrastructure Services have primary responsibility for our overall cybersecurity risk management program and supervise both our internal cybersecurity personnel and our retained external cybersecurity consultants. Our Global CISO has extensive experience assessing and managing cybersecurity-related risks and implementing related policies, procedures, and strategies.
Our Global CISO has served in leadership roles related to information security for over 28 years, including serving as a Deputy CISO at another company since 2005, then as its CISO since 2017 and as DXC’s Global CISO since May 2019.
Our Global CISO has served in leadership roles related to information security for over 23 years, including serving as a CISO at another company since 2015, then as DXC's IT CISO since May 2022 and as DXC’s Global CISO since August 2024.
Similarly, our General Manager of Cloud Infrastructure and ITO is a well-known industry leader with more than 20 years of experience in the technology industry and has been with DXC since 2020.
Our Global CISO reports to our Managing Director of Global Infrastructure Services who is a well-known industry leader with more than 20 years of experience in the technology industry and has been with DXC since 2020.
Our management team, including our Global CISO, Chief Operating Officer ("COO"), Chief Information Officer ("CIO"), General Manager of Cloud Infrastructure and ITO, and General Counsel, comprise our Security Steering Committee ("SCC") and are responsible for assessing and managing our material risks from cybersecurity threats.
Our management team, including our Global CISO, Chief Information Officer, Managing Director of Global Infrastructure Services, and General Counsel, along with other key business and functional leaders, constitute our Security Steering Committee ("SCC") which is responsible for assessing and managing our material risks from cybersecurity threats.
Removed
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.
Removed
In fiscal 2024, the full Board also received a briefing from management on our enterprise risk management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table provides a summary of properties we owned and leased as of March 31, 2024: Approximate Square Feet (in millions) Geographic Area Owned Leased Total United States 2.1 0.8 2.9 EMEA 0.9 2.8 3.7 APAC 0.9 1.8 2.7 All other 0.8 0.1 0.9 Real estate in restructuring — 1.7 1.7 Inactive space 1.0 0.4 1.4 Sublet space 0.4 — 0.4 Assets held for sale 0.1 — 0.1 Total 6.2 7.6 13.8 Approximate Square Feet (in millions) Type Owned Leased Total Offices 1.7 4.1 5.8 Data centers 3.0 1.4 4.4 Real estate in restructuring — 1.7 1.7 Inactive space 1.0 0.4 1.4 Sublet space 0.4 — 0.4 Assets held for sale 0.1 — 0.1 Total 6.2 7.6 13.8 We believe that the facilities described above are suitable and adequate to meet our current and anticipated requirements.
Biggest changeThe following table provides a summary of properties we owned and leased as of March 31, 2025: Approximate Square Feet (in millions) Geographic Area Owned Leased Total United States 1.3 1.0 2.3 EMEA 1.1 2.3 3.4 APAC 0.2 2.1 2.3 All other 0.6 0.1 0.7 Real estate in restructuring — 0.9 0.9 Inactive space 0.7 0.1 0.8 Sublet space 0.2 — 0.2 Total 4.1 6.5 10.6 Approximate Square Feet (in millions) Type Owned Leased Total Offices 0.9 4.1 5.0 Data centers 2.3 1.4 3.7 Real estate in restructuring — 0.9 0.9 Inactive space 0.7 0.1 0.8 Sublet space 0.2 — 0.2 Total 4.1 6.5 10.6 We believe that the facilities described above are suitable and adequate to meet our current and anticipated requirements.
ITEM 2. PROPERTIES Our corporate headquarters is located at a leased facility in Ashburn, VA. We own or lease numerous offices and data centers in approximately 360 locations around the world. We do not identify properties by segment, as they are interchangeable in nature and used by both segments.
ITEM 2. PROPERTIES Our corporate headquarters is located at a leased facility in Ashburn, VA. We own or lease numerous offices and data centers in approximately 340 locations around the world. We do not identify properties by segment, as they are interchangeable in nature and used by both segments.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe timing, volume, and nature of share repurchases pursuant to the share repurchase plan are at the discretion of management and may be suspended or discontinued at any time. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (the "IRA") into law. The IRA imposes a 1% excise tax on share repurchases completed after December 31, 2022.
Biggest changeOn August 16, 2022, the U.S. government enacted the Inflation Reduction Act (the "IRA") into law. The IRA imposes a 1% excise tax on share repurchases completed after December 31, 2022. We reflect the excise tax within equity as part of the repurchase of the common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the New York Stock Exchange under the symbol "DXC." Number of Holders As of May 6, 2024, there were 37,204 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the New York Stock Exchange under the symbol "DXC." Number of Holders As of May 5, 2025, there were 34,247 holders of record of our common stock.
Comparison of Five Year Cumulative Total Return The following table provides total shareholder returns assuming $100 was invested on April 1, 2019, with annual returns using our fiscal year-end date: Company/Market/Peer Group 2020 2021 2022 2023 2024 DXC Technology Company (80.0) % 140.0 % 4.0 % (22.0) % (17.0) % S&P 500 Index (10.0) % 54.0 % 14.0 % (9.0) % 28.0 % S&P North American Technology Index 1.0 % 71.0 % 8.0 % (12.0) % 52.0 % S&P 600 Index (28.0) % 93.0 % — % (10.0) % 14.0 % S&P 600 Information Technology Index (13.0) % 92.0 % 2.0 % (5.0) % 6.0 % Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 of this Annual Report on Form 10-K for information regarding our equity compensation plans.
Comparison of Five Year Cumulative Total Return The following table provides total shareholder returns assuming $100 was invested on April 1, 2020, with annual returns using our fiscal year-end date: Company/Market/Peer Group 2021 2022 2023 2024 2025 DXC Technology Company 140.0 % 4.0 % (22.0) % (17.0) % (20.0) % S&P 600 Index 95.0 % 1.0 % (9.0) % 16.0 % (3.0) % S&P 600 Information Technology Index 93.0 % 2.0 % (5.0) % 6.0 % (14.0) % Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 of this Annual Report on Form 10-K for information regarding our equity compensation plans.
The graph assumes that $100 was invested at the market close on April 1, 2019 (the first trading day of fiscal 2020) in our common stock, and the relevant comparison indices. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The graph assumes that $100 was invested at the market close on March 31, 2020 (the last trading day of fiscal 2020) in our common stock, and the relevant comparison indices and that dividends have been reinvested. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
See Note 15 - "Stockholders' Equity" for more information. 39 Performance Graph The following graph compares the cumulative return on our common stock for the most recent five years, with the cumulative return on the Standard & Poor’s 600 Stock Index ("S&P 600 Index"), Standard & Poor's 600 Information Technology Index ("S&P 600 Information Technology Index"), Standard & Poor’s 500 Stock Index ("S&P 500 Index"), and Standard & Poor’s North American Technology Index ("S&P North American Technology Index").
See Note 15 - "Stockholders' Equity" to the financial statements in this Annual Report on Form 10-K for more information. 38 Performance Graph The following graph compares the cumulative return on our common stock for the most recent five years, with the cumulative return on the Standard & Poor’s 600 Stock Index ("S&P 600 Index") and Standard & Poor's 600 Information Technology Index ("S&P 600 Information Technology Index").
Dividends The Board indefinitely suspended the Company’s cash dividend payment beginning in the first quarter of fiscal 2021. As of March 31, 2024, the Company does not intend to reinstate its quarterly cash dividends.
Dividends The Board indefinitely suspended the Company’s cash dividend payment beginning in the first quarter of fiscal 2021. As of March 31, 2025, the Company does not intend to reinstate its quarterly cash dividends. Issuer Purchases of Equity Securities On May 18, 2023, DXC announced that its Board approved an incremental $1.0 billion share repurchase authorization.
Removed
Issuer Purchases of Equity Securities Share repurchase activity during the three months ended March 31, 2024 was as follows: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs January 1, 2024 to January 31, 2024 3,644,527 $ 23.05 3,644,527 $ 645,471,510 February 1, 2024 to February 29, 2024 1,372,062 $ 21.57 1,372,062 $ 615,871,715 March 1, 2024 to March 31, 2024 1,153,314 $ 20.81 1,153,314 $ 591,871,924 Total 6,169,903 $ 22.30 6,169,903 On April 3, 2017, we announced the establishment of a share repurchase plan approved by the Board with an initial authorization of $2.0 billion for future repurchases of outstanding shares of our common stock.
Added
The timing, volume, and nature of share repurchases pursuant to the share repurchase plan are at the discretion of management and may be suspended or discontinued at any time. As of March 31, 2025, approximately $592 million worth of shares remained available for repurchase under the plans or programs. There were no share repurchases during fiscal 2025.
Removed
On November 8, 2018, our Board approved an incremental $2.0 billion share repurchase authorization. During fiscal 2024, DXC completed the remaining share repurchases under the above authorizations. On May 18, 2023, DXC announced that its Board approved an incremental $1.0 billion share repurchase authorization.
Added
During the third quarter of fiscal 2025, the Company made a $12 million payment for the excise tax associated with prior year share repurchases in compliance with the IRA.
Removed
We reflect the excise tax within equity as part of the repurchase of the common stock.
Removed
Going forward, the Company will replace the S&P 500 Index and the S&P North American Technology Index with the S&P 600 Index and the S&P 600 Information Technology Index, as we concluded that the companies included therein are our closer competitors or are of a more similar size with us.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeTax adjustments for fiscal 2023 include $(5) million changes in valuation allowances on deferred tax assets, $(28) million of adjustments to transition tax, and $(87) million of revaluation of deferred taxes resulting from changes in non-U.S. jurisdiction tax rates. 49 A reconciliation of reported results to non-GAAP results is as follows: Fiscal Year Ended March 31, 2024 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration-Related Costs Amortization of Acquired Intangible Assets Merger Related Indemnification Gains and Losses on Dispositions Impairment Losses Pension and OPEB Actuarial and Settlement Gains and Losses Tax Adjustment Non-GAAP Results Income before income taxes 109 111 7 354 16 (115) 5 445 — 932 Income tax expense 23 23 1 75 14 (26) 1 109 97 317 Net income 86 88 6 279 2 (89) 4 336 (97) 615 Less: net loss attributable to non-controlling interest, net of tax (5) — — — — — (4) 2 — (7) Net income attributable to DXC common stockholders $ 91 $ 88 $ 6 $ 279 $ 2 $ (89) $ 8 $ 334 (97) $ 622 Effective Tax Rate 21.1 % 34.0 % Basic EPS $ 0.46 $ 0.45 $ 0.03 $ 1.42 $ 0.01 $ (0.45) $ 0.04 $ 1.71 $ (0.50) $ 3.18 Diluted EPS $ 0.46 $ 0.44 $ 0.03 $ 1.40 $ 0.01 $ (0.45) $ 0.04 $ 1.68 $ (0.49) $ 3.13 Weighted average common shares outstanding for: Basic EPS 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 Diluted EPS 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 Fiscal Year Ended March 31, 2023 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration- Related Costs Amortization of Acquired Intangible Assets Merger Related Indemnification, Arbitration Loss, and SEC Matter Gains and Losses on Dispositions Impairment Losses Pension and OPEB Actuarial and Settlement Gains and Losses Tax Adjustment Non-GAAP Results (Loss) income before income taxes (885) 216 16 402 83 (190) 19 1,431 — 1,092 Income tax (benefit) expense (319) 44 3 81 31 25 4 291 120 280 Net (loss) income (566) 172 13 321 52 (215) 15 1,140 (120) 812 Less: net income attributable to non-controlling interest, net of tax 2 — — — — — — 2 — 4 Net (loss) income attributable to DXC common stockholders $ (568) $ 172 $ 13 $ 321 $ 52 $ (215) $ 15 $ 1,138 $ (120) $ 808 Effective Tax Rate 36.0 % 25.6 % Basic EPS $ (2.48) $ 0.75 $ 0.06 $ 1.40 $ 0.23 $ (0.94) $ 0.07 $ 4.97 $ (0.52) $ 3.53 Diluted EPS $ (2.48) $ 0.74 $ 0.06 $ 1.38 $ 0.22 $ (0.92) $ 0.06 $ 4.89 $ (0.52) $ 3.47 Weighted average common shares outstanding for: Basic EPS 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 Diluted EPS 228.99 232.62 232.62 232.62 232.62 232.62 232.62 232.62 232.62 232.62 50 Reconciliations of revenue growth to organic revenue growth are as follows: Fiscal Years Ended March 31, 2024 March 31, 2023 Total revenue growth (5.3) % (11.3) % Foreign currency (0.7) % 6.0 % Acquisitions and divestitures 1.9 % 2.6 % Organic revenue growth (4.1) % (2.7) % GBS revenue growth (2.0) % (8.4) % Foreign currency (0.4) % 5.9 % Acquisitions and divestitures 3.8 % 4.9 % GBS organic revenue growth 1.4 % 2.4 % GIS revenue growth (8.3) % (13.8) % Foreign currency (1.0) % 6.0 % Acquisitions and divestitures — % 0.6 % GIS organic revenue growth (9.3) % (7.2) % Reconciliations of net income (loss) to adjusted EBIT are as follows: Fiscal Years Ended (in millions) March 31, 2024 March 31, 2023 Net income (loss) $ 86 $ (566) Income tax expense (benefit) 23 (319) Interest income (214) (135) Interest expense 298 200 EBIT 193 (820) Restructuring costs 111 216 Transaction, separation and integration-related costs 7 16 Amortization of acquired intangible assets 354 402 Merger-related indemnification 16 46 SEC Matter — 8 Gains on dispositions (115) (190) Arbitration loss — 29 Impairment losses 5 19 Pension and OPEB actuarial and settlement losses 445 1,431 Adjusted EBIT $ 1,016 $ 1,157 51 Liquidity and Capital Resources Cash and Cash Equivalents and Cash Flows As of March 31, 2024, our cash and cash equivalents ("cash") were $1.2 billion, of which $0.6 billion was held outside of the U.S.
Biggest changeFor comparability purposes, historical non-GAAP financial measures set forth herein have been recast to reflect this change, which included gains on dispositions of real property of approximately $7 million for the fiscal year ended March 31, 2024. 48 A reconciliation of reported results to non-GAAP results is as follows: Fiscal Year Ended March 31, 2025 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration-Related Costs Amortization of Acquired Intangible Assets Merger Related Indemnification Impairment Losses Gains and Losses on Dispositions Gains and Losses on Real Estate and Facility Sales Pension and OPEB Actuarial and Settlement Gains and Losses Tax Adjustment Non-GAAP Results Income before income taxes 630 153 25 348 2 17 (13) 23 (232) — 953 Income tax expense 234 33 5 77 6 1 (3) 9 (66) 17 313 Net income 396 120 20 271 (4) 16 (10) 14 (166) (17) 640 Less: net income attributable to non-controlling interest, net of tax 7 — — — — — — — (1) — 6 Net income attributable to DXC common stockholders $ 389 $ 120 $ 20 $ 271 $ (4) $ 16 $ (10) $ 14 $ (165) (17) $ 634 Effective Tax Rate 37.1 % 32.8 % Basic EPS $ 2.15 $ 0.66 $ 0.11 $ 1.50 $ (0.02) $ 0.09 $ (0.06) $ 0.08 $ (0.91) $ (0.09) $ 3.51 Diluted EPS $ 2.10 $ 0.65 $ 0.11 $ 1.47 $ (0.02) $ 0.09 $ (0.05) $ 0.08 $ (0.89) $ (0.09) $ 3.43 Weighted average common shares outstanding for: Basic EPS 180.68 180.68 180.68 180.68 180.68 180.68 180.68 180.68 180.68 180.68 180.68 Diluted EPS 184.92 184.92 184.92 184.92 184.92 184.92 184.92 184.92 184.92 184.92 184.92 Fiscal Year Ended March 31, 2024 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration- Related Costs Amortization of Acquired Intangible Assets Merger Related Indemnification Impairment Losses Gains and Losses on Dispositions Gains and Losses on Real Estate and Facility Sales Pension and OPEB Actuarial and Settlement Gains and Losses Tax Adjustment Non-GAAP Results Income before income taxes 109 111 7 354 16 5 (115) (7) 445 — 925 Income tax expense 23 23 1 75 14 1 (26) (2) 109 97 315 Net income 86 88 6 279 2 4 (89) (5) 336 (97) 610 Less: net loss attributable to non-controlling interest, net of tax (5) — — — — (4) — — 2 — (7) Net income attributable to DXC common stockholders $ 91 $ 88 $ 6 $ 279 $ 2 $ 8 $ (89) $ (5) $ 334 $ (97) $ 617 Effective Tax Rate 21.1 % 34.1 % Basic EPS $ 0.46 $ 0.45 $ 0.03 $ 1.42 $ 0.01 $ 0.04 $ (0.45) $ (0.03) $ 1.71 $ (0.50) $ 3.15 Diluted EPS $ 0.46 $ 0.44 $ 0.03 $ 1.40 $ 0.01 $ 0.04 $ (0.45) $ (0.03) $ 1.68 $ (0.49) $ 3.10 Weighted average common shares outstanding for: Basic EPS 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 Diluted EPS 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 49 Reconciliations of revenue growth to organic revenue growth are as follows: Fiscal Years Ended March 31, 2025 March 31, 2024 Total revenue growth (5.8) % (5.3) % Foreign currency 1.0 % (0.7) % Acquisitions and divestitures 0.2 % 1.9 % Organic revenue growth (4.6) % (4.1) % GBS revenue growth (2.6) % (2.0) % Foreign currency 1.2 % (0.4) % Acquisitions and divestitures 0.4 % 3.8 % GBS organic revenue growth (1.0) % 1.4 % GIS revenue growth (9.1) % (8.3) % Foreign currency 0.9 % (1.0) % Acquisitions and divestitures — % — % GIS organic revenue growth (8.2) % (9.3) % Reconciliations of net income to adjusted EBIT are as follows: Fiscal Years Ended (in millions) March 31, 2025 March 31, 2024 Net income $ 396 $ 86 Income tax expense 234 23 Interest income (199) (214) Interest expense 265 298 EBIT 696 193 Restructuring costs 153 111 Transaction, separation and integration-related costs 25 7 Amortization of acquired intangible assets 348 354 Merger-related indemnification 2 16 Gains on dispositions (13) (115) Losses (gains) on real estate and facility sales 23 (7) Impairment losses 17 5 Pension and OPEB actuarial and settlement (gains) losses (232) 445 Adjusted EBIT $ 1,019 $ 1,009 50 Liquidity and Capital Resources Cash and Cash Equivalents and Cash Flows As of March 31, 2025, our cash and cash equivalents ("cash") were $1.8 billion, of which $0.8 billion was held outside of the U.S.
Background 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. The world’s largest companies and public sector organizations trust DXC to deploy services to drive new levels of performance, competitiveness, and customer experience across their IT estates.
Background 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. Many of the world’s largest companies and public sector organizations trust DXC to deploy services to drive new levels of performance, competitiveness, and customer experience across their IT estates.
One category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS is incremental amortization of intangible assets acquired through business combinations, if included, may result in a significant difference in period over period amortization expense on a GAAP basis.
One category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS, incremental amortization of intangible assets acquired through business combinations, if included, may result in a significant difference in period over period amortization expense on a GAAP basis.
The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal 2009 through the tax year ended October 31, 2018. With respect to CSC’s fiscal 2009 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals.
The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal years 2009 through the tax year ended October 31, 2018. With respect to CSC’s fiscal years 2009 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals.
However, valuation allowances are subject to change in future reporting periods due to changes in various factors such as when inputs or estimates used in determining valuation allowances significantly change or upon the receipt of new information. 56 We determine whether it is more likely than not a tax position will be sustained upon examination by the appropriate taxing authorities before any portion of the tax benefit is recorded in our financial statements and only the portion of the tax benefit that is measured as greater than 50% likely to be realized upon settlement with a taxing authority (that has full knowledge of all relevant information) is recognized.
However, valuation allowances are subject to change in future reporting periods due to changes in various factors such as when inputs or estimates used in determining valuation allowances significantly change or upon the receipt of new information. 55 We determine whether it is more likely than not a tax position will be sustained upon examination by the appropriate taxing authorities before any portion of the tax benefit is recorded in our financial statements and only the portion of the tax benefit that is measured as greater than 50% likely to be realized upon settlement with a taxing authority (that has full knowledge of all relevant information) is recognized.
Free cash flow represents cash flow from operations, less capital expenditures. Free cash flow is utilized by our management, investors, and analysts to evaluate cash available to pay debt, repurchase shares, and provide further investment in the business. 47 There are limitations to the use of the non-GAAP financial measures presented in this report.
Free cash flow represents cash flow from operations, less capital expenditures. Free cash flow is utilized by our management, investors, and analysts to evaluate cash available to pay debt, repurchase shares, and provide further investment in the business. 46 There are limitations to the use of the non-GAAP financial measures presented in this report.
We generate revenue by offering a wide range of information technology services and solutions primarily in North America, Europe, Asia, and Australia. We operate through two segments: Global Business Services ("GBS") and Global Infrastructure Services ("GIS"). We market and sell our services directly to customers through our direct sales offices around the world.
We generate revenue by offering a wide range of information technology services and solutions primarily in North America, Europe, Asia, and Australia. We operate through two segments: Global Business Services ("GBS") and Global Infrastructure Services ("GIS"). We market and sell our services directly to customers through our direct sales force around the world.
We have $0.1 billion in cash held by foreign subsidiaries used for local operations that is subject to country-specific limitations, which may restrict or result in increased costs in the repatriation of these funds. In addition, other practical considerations may limit our use of consolidated cash.
We have $0.2 billion in cash held by foreign subsidiaries used for local operations that is subject to country-specific limitations, which may restrict or result in increased costs in the repatriation of these funds. In addition, other practical considerations may limit our use of consolidated cash.
As of March 31, 2024, our credit ratings were as follows: Rating Agency Long Term Ratings Short Term Ratings Outlook Fitch BBB F-2 Stable Moody's Baa2 P-2 Stable S&P BBB- - Stable For information on the risk s of ratings downgrades, see Part I, Item 1A - "Risk Factors" subsection titled " Failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets .
As of March 31, 2025, our credit ratings were as follows: Rating Agency Long Term Ratings Short Term Ratings Outlook Fitch BBB F-2 Negative Moody's Baa2 P-2 Negative S&P BBB- - Stable For information on the risk s of ratings downgrades, see Part I, Item 1A - "Risk Factors" subsection titled " Failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets .
(2) Amounts represent scheduled interest payments on long-term debt. 54 Critical Accounting Estimates The preparation of the financial statements, in accordance with GAAP, requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities.
(2) Amounts represent scheduled interest payments on long-term debt. 53 Critical Accounting Estimates The preparation of the financial statements, in accordance with GAAP, requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities.
If the likelihood of an adverse outcome is probable and the amount is estimable, we accrue a liability in accordance with ASC 450 "Contingencies." Significant changes in the estimates or assumptions used in assessing the likelihood of an adverse outcome could have a material effect on our results of operations. 58
If the likelihood of an adverse outcome is probable and the amount is estimable, we accrue a liability in accordance with ASC 450 "Contingencies." Significant changes in the estimates or assumptions used in assessing the likelihood of an adverse outcome could have a material effect on our results of operations. 57
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction The purpose of the Management's Discussion and Analysis ( “ MD&A ”) is to present information that management believes is relevant to an assessment and understanding of our results of operations and cash flows for the fiscal year ended March 31, 2024 and our financial condition as of March 31, 2024.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction The purpose of the Management's Discussion and Analysis ( “ MD&A ”) is to present information that management believes is relevant to an assessment and understanding of our results of operations and cash flows for the fiscal year ended March 31, 2025 and our financial condition as of March 31, 2025.
This determination requires significant judgment, which could impact the timing of revenue recognition. 55 Costs to obtain contracts with customers Accounting for the costs to obtain contracts with customers requires significant judgments and estimates with regards to the determination of sales commission payments that qualify for deferral of costs and the related amortization period.
This determination requires significant judgment, which could impact the timing of revenue recognition. 54 Costs to obtain contracts with customers Accounting for the costs to obtain contracts with customers requires significant judgments and estimates with regards to the determination of sales commission payments that qualify for deferral of costs and the related amortization period.
" 53 Liquidity We expect our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our normal operating requirements for the next 12 months and beyond.
" 52 Liquidity We expect our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our normal operating requirements for the next 12 months and beyond.
The MD&A is organized in the following sections: • Background • Results of Operations • Liquidity and Capital Resources • Critical Accounting Estimates The following discussion includes a comparison of our results of operations and liquidity and capital resources for fiscal 2024 and fiscal 2023.
The MD&A is organized in the following sections: • Background • Results of Operations • Liquidity and Capital Resources • Critical Accounting Estimates The following discussion includes a comparison of our results of operations and liquidity and capital resources for fiscal 2025 and fiscal 2024.
Future discrete reversals of valuation allowances are likewise excluded. (2) • Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation, and adjustments to transition tax. Income tax expense (benefit) from the impact of merger and divestitures is separately computed based on the underlying transaction.
Future discrete reversals of valuation allowances are likewise excluded. • Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation, and adjustments to transition tax. Income tax expense (benefit) from the impact of mergers and divestitures is separately computed based on the underlying transaction.
Our other cash commitments as of March 31, 2024, were as follows: (in millions) Less than 1 year 2-3 years 4-5 years More than 5 years Total U.S.
Our other cash commitments as of March 31, 2025, were as follows: (in millions) Less than 1 year 2-3 years 4-5 years More than 5 years Total U.S.
Our weighted average rates used were: March 31, 2024 March 31, 2023 Discount rates 4.5 % 2.7 % Expected long-term rates of return on assets 6.0 % 4.3 % The assumption for the expected long-term rate of return on plan assets is impacted by the expected asset mix of the plan; judgments regarding the correlation between historical excess returns and future excess returns and expected investment expenses.
Our weighted average rates used were: March 31, 2025 March 31, 2024 Discount rates 4.4 % 4.5 % Expected long-term rates of return on assets 6.3 % 6.0 % The assumption for the expected long-term rate of return on plan assets is impacted by the expected asset mix of the plan; judgments regarding the correlation between historical excess returns and future excess returns and expected investment expenses.
This includes cash of $0.1 billion held by majority owned consolidated subsidiaries where third parties or public shareholders hold minority interests.
This includes cash of $0.2 billion held by majority owned consolidated subsidiaries where third parties or public shareholders hold minority interests.
A comparison of our results of operations and liquidity and capital resources for fiscal 2023 and fiscal 2022 may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” on Form 10-K filed with the Securities and Exchange Commission on May 19, 2023.
A comparison of our results of operations and liquidity and capital resources for fiscal 2024 and fiscal 2023 may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” on Form 10-K filed with the Securities and Exchange Commission on May 16, 2024.
We recorded a valuation allowance against deferred tax assets of approximately $2.3 billion as of March 31, 2024, due to uncertainties related to the ability to utilize these assets.
We recorded a valuation allowance against deferred tax assets of approximately $2.2 billion as of March 31, 2025, due to uncertainties related to the ability to utilize these assets.
Tax Court, these matters are not fully reserved and would result in incremental federal and state tax expense of approximately $507 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $582 million, if we do not prevail.
Tax Court, the above matters are not fully reserved and would result in incremental federal and state tax expense of approximately $544 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $623 million if we do not prevail.
The following table provides the impact that changes in the weighted-average assumptions would have had on our net periodic pension benefits and settlement and contractual termination charges for fiscal 2024: (in millions) Change Approximate Change in Net Periodic Pension Expense Approximate Change in Settlement, Contractual Termination, and Mark-to-Market Charges Expected long-term return on plan assets 50 basis points $ (38) $ 38 Expected long-term return on plan assets (50) basis points $ 38 $ (38) Discount rate 50 basis points $ 10 $ (441) Discount rate (50) basis points $ (13) $ 497 57 Valuation of Assets We review long-lived assets, intangible assets, and goodwill for impairment in accordance with our accounting policy disclosed in Note 1 - "Summary of Significant Accounting Policies." Assessing the fair value of assets involves significant judgment including estimation of future cash flows, the timing of such cash flows, and discount rates reflecting the risk inherent in projecting future cash flows.
The following table provides the impact that changes in the weighted-average assumptions would have had on our net periodic pension benefits and settlement and contractual termination charges for fiscal 2025: (in millions) Change Approximate Change in Net Periodic Pension Expense Approximate Change in Settlement, Contractual Termination, and Mark-to-Market Charges Expected long-term return on plan assets 50 basis points $ (36) $ 36 Expected long-term return on plan assets (50) basis points $ 36 $ (36) Discount rate 50 basis points $ 10 $ (363) Discount rate (50) basis points $ (12) $ 400 56 Valuation of Assets We review long-lived assets, intangible assets, and goodwill for impairment in accordance with our accounting policy disclosed in Note 1 - "Summary of Significant Accounting Policies." Assessing the fair value of assets involves significant judgment including estimation of future cash flows, the timing of such cash flows, and discount rates reflecting the risk inherent in projecting future cash flows.
The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carryforwards, would be approximately $17 million. Earnings Per Share (EPS) Diluted EPS for fiscal 2024 was $0.46, an increase of $2.94 compared to the prior fiscal year.
The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carryforwards, would be approximately $2 million. Earnings Per Share (EPS) Diluted EPS for fiscal 2025 was $2.10, an increase of $1.64 compared to the prior fiscal year.
Although the U.S. has not yet enacted legislation implementing Pillar Two Rules, other countries where the Company does business, including the U.K. and Germany, have enacted legislation implementing Pillar Two Rules, which are effective from January 1, 2024, and several other countries are also considering changes to their tax laws to implement it.
Although the U.S. has not yet enacted legislation implementing Pillar Two Rules, other countries where the Company does business, including the U.K. and Germany, have enacted legislation implementing Pillar Two Rules recently and several other countries are also considering changes to their tax laws to implement it.
Our remaining liability from the originally computed transition tax in 2018 is $128 million. We are in the process of amending our tax return for historical transactions and other adjustments which are expected to reduce our overall transition tax obligation by approximately $109 million, resulting in a net refund due in the final installment period.
Our remaining liability from the originally computed transition tax in 2018 is $71 million. We are in the process of amending our tax return for historical transactions and other adjustments which are expected to reduce our overall transition tax obligation by approximately $108 million, resulting in a net refund due of $37 million.
Gain on Disposition of Businesses During fiscal 2024, the Company sold insignificant businesses and a strategic investment, and made adjustments to estimated amounts from prior years' dispositions that resulted in a net gain of $79 million.
Gain on Disposition of Businesses During fiscal 2025 and fiscal 2024, the Company sold insignificant businesses and made adjustments to estimated amounts from prior years’ dispositions that resulted in a gain of $7 million and $79 million, respectively.
The following table contains certain key working capital metrics: Three months ended March 31, 2024 March 31, 2023 March 31, 2022 Days of sales outstanding in accounts receivable 69 67 70 Days of purchases outstanding in accounts payable (64) (51) (45) Cash conversion cycle 5 16 25 52 Investing cash flow Net cash used in investing activities was $491 million and $635 million, respectively, in fiscal 2024 and fiscal 2023, reflecting a year-over-year change of $144 million.
The following table contains certain key working capital metrics: Three months ended March 31, 2025 March 31, 2024 March 31, 2023 Days of sales outstanding in accounts receivable 68 69 67 Days of purchases outstanding in accounts payable (43) (64) (51) Cash conversion cycle 25 5 16 51 Investing cash flow Net cash used in investing activities was $512 million and $491 million, respectively, in fiscal 2025 and fiscal 2024, reflecting a year-over-year change of $21 million.
Our customers include commercial businesses of many sizes and in many industries and public sector clients. Key Metrics Key metrics for fiscal 2024 compared to fiscal 2023 are included below. We have presented organic revenue and diluted earnings per share on a non-GAAP basis.
Our customers include commercial businesses of many sizes and in many industries and public sector clients. Key Metrics Key profitability and cash flow metrics for fiscal 2025 compared to fiscal 2024 are included below. We have presented organic revenue, adjusted earnings before income taxes, and adjusted diluted earnings per share on a non-GAAP basis.
Taxes Our effective tax rate ("ETR") on income (loss) from continuing operations, before taxes, for fiscal 2024 and 2023 was 21.1% and (36.0)%, respectively.
Taxes Our effective tax rate ("ETR") on income (loss) from continuing operations, before taxes, for fiscal 2025 and 2024 was 37.1% and 21.1%, respectively.
We believe EBIT, adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS provide investors with useful supplemental information about our operating performance after excluding certain categories of expenses.
We believe EBIT, adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS provide investors with useful supplemental information about our operating performance after excluding certain categories of expenses as well as gains and losses on certain dispositions and certain tax adjustments.
Financing cash flow Net cash used in financing activities was $1,487 million and $1,507 million, respectively, in fiscal 2024 and fiscal 2023, reflecting a year-over-year change of $20 million.
Financing cash flow Net cash used in financing activities was $317 million and $1,487 million, respectively, in fiscal 2025 and fiscal 2024, reflecting a year-over-year change of $1,170 million.
The decrease in depreciation expense was primarily due to lower average net property and equipment balances. Amortization expense was $971 million for fiscal 2024, a decrease of $29 million compared to the prior fiscal year.
The decrease in depreciation expense was primarily due to lower average net property and equipment balances. 42 Amortization expense was $936 million for fiscal 2025, a decrease of $35 million compared to the prior fiscal year. The decrease in amortization expense was primarily due to lower software amortization.
(1) • Arbitration loss - reflects losses arising from arbitration decisions in the third and fourth quarters of fiscal 2023. • Impairment losses – non-cash charges associated with the permanent reduction in the value of the Company’s assets (e.g., impairment of goodwill and other long-term assets including fixed assets and impairments to deferred tax assets for discrete changes in valuation allowances).
(1) • Impairment losses – non-cash charges associated with the permanent reduction in the value of the Company’s assets (e.g., impairment of goodwill and other long-term assets including fixed assets and impairments to deferred tax assets for discrete changes in valuation allowances).
Diluted EPS for fiscal 2024 includes $0.44 per share of restructuring costs, $0.03 per share of transaction, separation and integration-related costs, $1.40 per share of amortization of acquired intangible assets, $0.01 per share of merger-related indemnification, $0.04 per share of impairment losses, $1.68 per share of pension and OPEB actuarial and settlement losses, $(0.45) per share of net gains on dispositions, and $(0.49) per share of tax adjustments primarily relating to tax adjustments to impair or recognize certain deferred tax assets and adjustments for changes in tax legislation. 46 Non-GAAP Financial Measures We present non-GAAP financial measures of performance which are derived from the statements of operations of DXC.
Diluted EPS for fiscal 2025 includes $0.65 per share of restructuring costs, $0.11 per share of transaction, separation and integration-related costs, $1.47 per share of amortization of acquired intangible assets, $(0.02) per share of merger-related indemnification, $0.09 per share of impairment losses, $(0.05) per share of net gains on dispositions, $0.08 per share of net losses on real estate and facility sales, $(0.89) per share of pension and OPEB actuarial and settlement gains, and $(0.09) per share of tax adjustments primarily relating to tax adjustments to impair or recognize certain deferred tax assets and adjustments for changes in tax legislation. 45 Non-GAAP Financial Measures We present non-GAAP financial measures of performance which are derived from the statements of operations of DXC.
Debt Financing The following table summarizes our total debt: As of (in millions) March 31, 2024 March 31, 2023 Short-term debt and current maturities of long-term debt $ 271 $ 500 Long-term debt, net of current maturities 3,818 3,900 Total debt $ 4,089 $ 4,400 The $0.3 billion decrease in total debt during fiscal 2024 was primarily due to net decreases in finance lease liabilities, borrowings for asset financing, and commercial paper borrowings.
Debt Financing The following table summarizes our total debt: As of (in millions) March 31, 2025 March 31, 2024 Short-term debt and current maturities of long-term debt $ 880 $ 271 Long-term debt, net of current maturities 2,996 3,818 Total debt $ 3,876 $ 4,089 The $213 million decrease in total debt during fiscal 2025 was primarily due to the net decreases in finance lease liabilities and borrowings for asset financing.
The Company may settle certain other tax examinations for different amounts than the Company has accrued as uncertain tax positions. Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future.
Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future.
When and how these rules are adopted or enacted by the various countries in which we do business could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in the U.S. and non-U.S. jurisdictions. The majority of our global unremitted foreign earnings have been taxed or would be exempt from U.S. tax upon repatriation.
When and how these rules are adopted or enacted by the various countries in which we do business could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in the U.S. and non-U.S. jurisdictions.
During the third quarter of fiscal 2024, the Company determined there were inadvertent omissions on previously filed tax returns related to gain recognition agreements and certain related tax forms and disclosures. The Company notified the IRS in December of 2023 and filed for relief under Treas. Reg. Sec. 1.367(a)-8(p) in January 2024 to correct the issue.
These amounts are net of an expected $71 million interest deduction tax benefit. During fiscal 2024, the Company determined there were inadvertent omissions on previously filed tax returns related to gain recognition agreements and certain related tax forms and disclosures. The Company notified the IRS promptly and filed for relief under Treas. Reg. Sec. 1.367(a)-8(p) to correct the issue.
The change against the prior fiscal year was primarily due to: • net periodic pension income decreased by $106 million primarily due to changes in expected returns on assets and other actuarial assumptions; • pension and OPEB actuarial and settlement losses decreased by $986 million from mark-to-market adjustments and other settlement gains and losses; • foreign currency gains decreased $8 million primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program; • a decrease in gains from sales of assets of $50 million; and • an increase in other gains of $44 million, primarily from the sale of a strategic investment in fiscal 2024 and an impairment loss recorded in fiscal 2023.
The change against the prior fiscal year was primarily due to: • net periodic pension income increased by $15 million primarily due to changes in expected returns on assets and other actuarial assumptions; • pension and OPEB actuarial and settlement (gains) losses were $(232) million and $445 million, respectively, a change of $677 million, from mark-to-market adjustments and other settlement (gains) losses; • foreign currency gains decreased $3 million, primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program; • losses (gains) on real estate and facility were $23 million and $(7) million, respectively, a change of $30 million; • a decrease in other miscellaneous (gains) and losses of $65 million, primarily from impairment losses in fiscal 2025 and the gain on the sale of a strategic investment in fiscal 2024.
The change was primarily due to: • a $140 million decrease in cash outflows from commercial paper payments, net of borrowings; • an $81 million decrease in payments on capital leases and borrowings for asset financings, as the Company continues reducing the volume of these financing arrangements; and • $63 million in payments on long term debt in fiscal 2023 that did not occur in fiscal 2024; partially offset by • a $249 million increase in cash used for share repurchase activity and related taxes paid on net share settlements; and • a $15 million increase in cash outflows from other financing activities.
The change was primarily due to: • an $899 million decrease in cash used for share repurchase activity and related taxes paid on net share settlements; • a $132 million decrease in payments on capital leases and borrowings for asset financings, as the Company continues reducing the volume of these financing arrangements; • a $101 million decrease in cash outflows from commercial paper payments, net of borrowings; and • a $38 million increase in cash inflows from other financing activities.
Gross margin (Revenues less COS as a percentage of revenue) was 22.6% for fiscal 2024, an increase of 50 basis points against the prior fiscal year. Selling, General and Administrative Selling, general and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), was $1.2 billion for fiscal 2024, a decrease of $131 million compared to the prior fiscal year.
Gross margin (Revenues less COS as a percentage of revenue) was 24.1% for fiscal 2025, an increase of 150 basis points against the prior fiscal year. Selling, General and Administrative Selling, general and administrative expense ("SG&A") was $1.3 billion for fiscal 2025, an increase of $104 million compared to the prior fiscal year.
The following table summarizes our cash flow activity: Fiscal Year Ended (in millions) March 31, 2024 March 31, 2023 Change Net cash provided by (used in): Operating activities $ 1,361 $ 1,415 $ (54) Investing activities (491) (635) 144 Financing activities (1,487) (1,507) 20 Effect of exchange rate changes on cash and cash equivalents (17) (97) 80 Cash classified within current assets held for sale — 10 (10) Net decrease in cash and cash equivalents $ (634) $ (814) $ 180 Cash and cash equivalents at beginning of year 1,858 2,672 Cash and cash equivalents at end of year $ 1,224 $ 1,858 Operating cash flow Net cash provided by operating activities was $1,361 million and $1,415 million, respectively, in fiscal 2024 and fiscal 2023, reflecting a year-over-year decrease of $54 million.
The following table summarizes our cash flow activity: Fiscal Year Ended (in millions) March 31, 2025 March 31, 2024 Change Net cash provided by (used in): Operating activities $ 1,398 $ 1,361 $ 37 Investing activities (512) (491) (21) Financing activities (317) (1,487) 1,170 Effect of exchange rate changes on cash and cash equivalents 3 (17) 20 Net increase (decrease) in cash and cash equivalents $ 572 $ (634) $ 1,206 Cash and cash equivalents at beginning of year 1,224 1,858 Cash and cash equivalents at end of year $ 1,796 $ 1,224 Operating cash flow Net cash provided by operating activities was $1,398 million and $1,361 million, respectively, in fiscal 2025 and fiscal 2024, reflecting a year-over-year increase of $37 million.
Costs and Expenses Our total costs and expenses were as follows: Dollar Amount Fiscal Years Ended Change (in millions) March 31, 2024 March 31, 2023 Dollar Percent Costs of services (excludes depreciation and amortization and restructuring costs) $ 10,576 $ 11,246 $ (670) (6.0) % Selling, general and administrative (excludes depreciation and amortization and restructuring costs) 1,244 1,375 (131) (9.5) Depreciation and amortization 1,404 1,519 (115) (7.6) Restructuring costs 111 216 (105) (48.6) Interest expense 298 200 98 49.0 Interest income (214) (135) (79) 58.5 Gain on disposition of businesses (79) (190) 111 (58.4) Other expense (income), net 218 1,084 (866) (79.9) Total costs and expenses $ 13,558 $ 15,315 $ (1,757) (11.5) % Costs of Services Costs of services, excluding depreciation and amortization and restructuring costs ("COS"), were $10.6 billion for fiscal 2024, a decrease of $670 million compared to the prior fiscal year.
Costs and Expenses Our total costs and expenses were as follows: Dollar Amount Fiscal Years Ended Change (in millions) March 31, 2025 March 31, 2024 Dollar Percent Costs of services (excludes depreciation and amortization and restructuring costs) $ 9,770 $ 10,576 $ (806) (7.6) % Selling, general and administrative (excludes depreciation and amortization and restructuring costs) 1,348 1,244 104 8.4 Depreciation and amortization 1,287 1,404 (117) (8.3) Restructuring costs 153 111 42 37.8 Interest expense 265 298 (33) (11.1) Interest income (199) (214) 15 (7.0) Gain on disposition of businesses (7) (79) 72 (91.1) Other (income) expense, net (376) 218 (594) (272.5) Total costs and expenses $ 12,241 $ 13,558 $ (1,317) (9.7) % Costs of Services Costs of services ("COS") were $9.8 billion for fiscal 2025, a decrease of $806 million compared to the prior fiscal year.
The Company’s fiscal years 2009, 2010, and 2013 are in the U.S. Tax Court, and consequently these years will remain open until such proceedings have concluded. The statute of limitations on assessments related to a refund claim for fiscal year 2012 is open through February 28, 2025.
The Company’s fiscal years 2009, 2010, and 2013 are in the U.S. Tax Court, and consequently these years will remain open until such proceedings have concluded. The Company has agreed to extend the statute of limitations for fiscal and tax return years 2014 through 2021 to December 31, 2025.
SG&A as a percentage of revenue was 9.1% for fiscal 2024, a favorable decrease of 40 basis points against the prior fiscal year. 43 Depreciation and Amortization Depreciation expense was $433 million for fiscal 2024, a decrease of $86 million compared to the prior fiscal year.
SG&A as a percentage of revenue was 10.5% for fiscal 2025, an increase of 140 basis points against the prior fiscal year. Depreciation and Amortization Depreciation expense was $351 million for fiscal 2025, a decrease of $82 million compared to the prior fiscal year.
A reconciliation of the differences between the U.S. federal statutory rate and the ETR, as well as other information about our income tax provision, is provided in Note 14 - "Income Taxes." In fiscal 2024, the ETR was primarily impacted by: • Changes in foreign jurisdictional losses that decreased the ETR by $160 million and 146.8%, respectively, with an offsetting increase in the ETR due to an increase in the valuation allowance of the same amount. • Income tax and foreign tax credits, which decreased income tax expense and decreased the ETR by $101 million and 92.7%, respectively, offset by tax expense on U.S. international tax inclusions, which increased tax expense and increased the ETR by $39 million and 35.8%, respectively. • Foreign withholding taxes, which increased income tax expense and increased the ETR by $64 million and 58.7%, respectively. 45 In fiscal 2023, the ETR was primarily impacted by: • A reduction in base erosion and transition taxes, which increased income tax benefit and decreased the ETR by $81 million and 9.1%, respectively. • Income tax and foreign tax credits, which increased income tax benefit and decreased the ETR by $71 million and 8.0%, respectively, offset by tax expense on U.S. international tax inclusions which decreased tax benefit and increased the ETR by $51 million and 5.8%, respectively. • Non-taxable gains and losses on business divestitures, which increased income tax benefit and decreased the ETR by $67 million and 7.6%, respectively.
In fiscal 2024, the ETR was primarily impacted by: • Changes in foreign jurisdictional losses that decreased the ETR by $160 million and 146.8%, respectively, with an offsetting increase in the ETR due to an increase in the valuation allowance of the same amount. • Income tax and foreign tax credits, which decreased income tax expense and decreased the ETR by $101 million and 92.7%, respectively, offset by tax expense on U.S. international tax inclusions, which increased tax expense and increased the ETR by $39 million and 35.8%, respectively. • Foreign withholding taxes, which increased income tax expense and increased the ETR by $64 million and 58.7%, respectively.
The components of other expense (income), net for fiscal 2024 and 2023 were as follows: Fiscal Years Ended (in millions) March 31, 2024 March 31, 2023 Dollar Change Non-service cost components of net periodic pension (income) expense $ (145) $ (251) $ 106 Pension and OPEB actuarial and settlement losses (gains) 445 1,431 (986) Foreign currency (gain) loss (7) (15) 8 Gain on sale of assets (40) (90) 50 Other (gain) loss (35) 9 (44) Total $ 218 $ 1,084 $ (866) Other expense (income), net, was $218 million in fiscal 2024, a decrease of $866 million against the prior fiscal year.
The components of other (income) expense, net were as follows: Fiscal Years Ended (in millions) March 31, 2025 March 31, 2024 Dollar Change Non-service cost components of net periodic pension income $ (160) $ (145) $ (15) Pension and OPEB actuarial and settlement (gains) losses (232) 445 (677) Foreign currency gains (4) (7) 3 Loss (gain) on real estate and facility sales 23 (7) 30 Other miscellaneous (gains) and losses (3) (68) 65 Total $ (376) $ 218 $ (594) 43 Other (income) expense, net, was $(376) million in fiscal 2025, a change of $594 million against the prior fiscal year.
Tax Reform - Transition Tax (1) 57 (38) — — 19 Interest payments (2) 57 85 39 18 199 Total $ 114 $ 47 $ 39 $ 18 $ 218 (1) The transition tax is payable over eight years. We have remitted the first six installment payments.
Tax Reform - Transition Tax (1) — (37) — — (37) Interest payments (2) 53 57 20 12 142 Total $ 53 $ 20 $ 20 $ 12 $ 105 (1) The transition tax is payable over eight years. We have remitted the first seven installment payments.
During fiscal 2023, the Company had a net gain of $190 million from the disposition of certain businesses, including a pre-tax gain of $215 million from the sale of its FDB business, partially offset by a loss of $25 million from the sale of certain insignificant businesses. 44 Other Expense (Income), Net Other expense (income), net comprises non-service cost components of net periodic pension income, pension and OPEB actuarial and settlement losses, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, gains on sales of assets, and other miscellaneous gains and losses.
Other (Income) Expense, Net Other (income) expense, net comprises non-service cost components of net periodic pension income, pension and OPEB actuarial and settlement (gains) losses, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, losses (gains) on real estate and facility sales, and other miscellaneous (gains) and losses.
The Company expects to reach resolution for fiscal and tax return years 2009 through 2021 no earlier than the end of fiscal year 2026, except fiscal year 2012 for which the statute closes in fiscal year 2025, and potentially the years subject to litigation which may be resolved in fiscal year 2025.
The Company expects to reach resolution for fiscal and tax return years 2009 through 2011 no earlier than fiscal year 2026. The Company expects to reach resolution for fiscal and tax return years 2012 and 2013 no earlier than fiscal year 2028.
Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Revenues.” Certain non-GAAP financial measures and the respective most directly comparable financial measures calculated and presented in accordance with GAAP include: Dollar Amount Fiscal Years Ended Change (in millions) March 31, 2024 March 31, 2023 Dollar (1) Percent (1) Income (loss) before income taxes $ 109 $ (885) $ 994 112.3 % Non-GAAP income before income taxes $ 932 $ 1,092 $ (160) (14.7) % Net income (loss) $ 86 $ (566) $ 652 115.2 % Adjusted EBIT $ 1,016 $ 1,157 $ (141) (12.2) % (1) The dollar and percent change for the Income (loss) before income taxes and Net income (loss) includes the Pension and OPEB actuarial and settlement gains and losses that were $445 million and $1,431 million for the fiscal years ended March 31, 2024 and March 31, 2023, respectively. 48 Reconciliation of Non-GAAP Financial Measures Our non-GAAP adjustments include: • Restructuring costs – includes costs, net of reversals, related to workforce and real estate optimization and other similar charges. • Transaction, separation and integration-related (“TSI”) costs – includes costs related to integration, separation, planning, financing and advisory fees and other similar charges associated with mergers, acquisitions, strategic investments, joint ventures, and dispositions and other similar transactions incurred within one year of such transactions closing, except for costs associated with related disputes, which may arise more than one year after closing. • Amortization of acquired intangible assets – includes amortization of intangible assets acquired through business combinations. • Pension and OPEB actuarial and settlement gains and losses – pension and OPEB actuarial mark to market adjustments and settlement gains and losses. • Merger related indemnification – in fiscal 2024, primarily represents the Company’s current estimate of potential liability to HPE for tax related indemnifications; and in fiscal 2023, represents the Company’s then current estimate of potential liability to HPE for tax related indemnifications; indemnification on the Forsyth v.
(2) Calculation is not meaningful ("NM") due to inclusion of Pension and OPEB actuarial and settlement gains and losses. 47 Reconciliation of Non-GAAP Financial Measures Our non-GAAP adjustments include: • Restructuring costs – includes costs, net of reversals, related to workforce and real estate optimization and other similar charges. • Transaction, separation and integration-related (“TSI”) costs – includes costs related to integration, separation, planning, financing and advisory fees and other similar charges associated with mergers, acquisitions, strategic investments, joint ventures, and dispositions and other similar transactions incurred within one year of such transactions closing, except for costs associated with related disputes, which may arise more than one year after closing. • Amortization of acquired intangible assets – includes amortization of intangible assets acquired through business combinations. • Pension and OPEB actuarial and settlement gains and losses – pension and OPEB actuarial mark to market adjustments and settlement gains and losses. • Merger related indemnification – in fiscal 2025 and fiscal 2024, represents the Company’s estimate of potential net liability to HPE for tax related indemnifications. • Gains and losses on dispositions – gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities. • Gains and losses on real estate and facility sales – gains and losses related to dispositions of real property.
Our liquidity of $4.4 billion as of March 31, 2024, includes $1.2 billion of cash and cash equivalents and $3.2 billion of available borrowings under our revolving credit facility. Share Repurchases S ee Note 15 - "Stockholders' Equity." Dividends To maintain our financial flexibility, we continued to suspend payment of quarterly dividends for fiscal 2024.
Share Repurchases S ee Note 15 - "Stockholders' Equity." Dividends To maintain our financial flexibility, we continued to suspend payment of quarterly dividends for fiscal 2025.
The $670 million decrease in expenses against the prior fiscal year was primarily due to a reduction in labor costs from lower revenue levels and a reduction in professional services and contractor-related expenses from our cost optimization efforts, partially offset by a $9 million severance expense in the third quarter of fiscal 2024 related to the departure of the Company’s prior Chief Executive Officer and an unfavorable foreign currency exchange rate impact of $64 million.
The decrease in expenses against the prior fiscal year was primarily due to a decline in costs from lower revenue levels and a reduction in professional services and contractor-related expenses from our cost optimization efforts.
Total restructuring costs recorded, net of reversals, during fiscal 2024 were $111 million, a decrease of $105 million compared to the prior fiscal year, primarily from a reduction in workforce-related expenses. See Note 12 - "Restructuring Costs" for additional information about our restructuring actions.
See Note 12 - "Restructuring Costs" for additional information about our restructuring actions. Interest Expense and Interest Income For fiscal 2025, net interest expense (interest expense less interest income) was $66 million, a decrease of $18 million as compared to the prior fiscal year.
We were in compliance with all financial covenants associated with our borrowings as of March 31, 2024 and March 31, 2023.
The $609 million increase in short-term debt and current maturities of long-term debt reflects the fiscal year 2026 maturity of the €650 million senior note. We were in compliance with all financial covenants associated with our borrowings as of March 31, 2025 and March 31, 2024.
Income tax expense of all other (non-discrete) non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis. (3) (1) During fiscal 2024, the Company sold insignificant businesses and a strategic investment and made adjustments to estimated amounts from prior years’ dispositions that resulted in a net gain of $115 million.
Income tax expense of all other (non-discrete) non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.
We have received notices of deficiency with respect to fiscal 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S. Tax Court. During fiscal 2024, some of these cases were dismissed, but the dismissals were procedural in nature only and do not impact the Company’s potential liability for the aforementioned fiscal years.
We have received notices of deficiency and a final partnership administrative adjustment with respect to fiscal years 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S. Tax Court. The U.S. Tax Court cases generally involve three primary issues.
The decrease in amortization expense was primarily due to lower software amortization and customer related intangible amortization, partially offset by an increase in transition and transformation contract cost amortization. Restructuring Costs During fiscal 2024, management approved global cost savings initiatives designed to better align our workforce, facility and data center requirements.
Restructuring Costs During fiscal 2025, management approved global cost savings initiatives designed to better align our workforce, facility, and data center requirements. Total restructuring costs recorded, net of reversals, during fiscal 2025 were $153 million, an increase of $42 million compared to the prior fiscal year, primarily from a reduction in workforce-related expenses.
As we believe we will ultimately prevail on the technical merits of the disagreed items and are challenging them in the U.S.
The total cash tax payment the IRS is seeking is approximately $124 million, inclusive of penalties and interest, which continues to accrue. This matter is currently pending a summary judgment motion from the IRS. As we believe we will ultimately prevail on the technical merits of the disagreed items and are challenging them in the U.S.
The change was primarily due to: • cash inflows of $26 million in fiscal 2024 resulting from various business divestitures, compared with cash outflows from business dispositions of $147 million in fiscal 2023 caused by net cash deposit outflows from the sale of the FDB Business; and • a $73 million year-over-year decrease in cash outflows from capital expenditures; partially offset by • a decrease in proceeds from sale of assets and other investing activities of $96 million and $6 million, respectively.
The change was primarily due to: • a $106 million year-over-year increase in cash outflows from capital expenditures primarily from software purchased and developed; partially offset by • an increase in proceeds from sale of assets of $86 million.
The $131 million decrease in expenses against the prior fiscal year was primarily due to a reduction of $30 million in costs related to merger related indemnification expenses, a decrease of $9 million in transaction, separation and integration-related (“TSI”) costs, and lower professional services and other vendor-related expenses in fiscal 2024.
The increase in expenses against the prior fiscal year was primarily due to an alignment of business development expenses from COS in support of the offering model and an increase in transaction, separation and integration-related (“TSI”) costs, partially offset by lower merger-related indemnification expenses, lower share-based compensation and a gain from a legal settlement in fiscal 2025.
For more information see “Non-GAAP Financial Measures.” • Revenues of $13.67 billion, down 5.3% compared to prior year period, and down 4.1% on an organic basis; • Diluted earnings (loss) per share of $0.46, compared to $(2.48) in fiscal 2023; adjusted diluted earnings per share of $3.13, compared to $3.47 in fiscal 2023, a decrease of 9.8%; • Operating cash flow of $1,361 million, less capital expenditures of $605 million, resulted in free cash flow of $756 million; • Returned $883 million to shareholders through share repurchases in fiscal 2024. 41 Results of Operations The following table provides financial data for fiscal 2024 and 2023: Fiscal Years Ended (In millions, except per-share amounts) March 31, 2024 March 31, 2023 Revenues $ 13,667 $ 14,430 Income (loss) before income taxes 109 (885) Income tax expense (benefit) 23 (319) Net income (loss) $ 86 $ (566) Diluted income (loss) per common share: $ 0.46 $ (2.48) Revenues Our revenues by geography and operating segments are provided below: Fiscal Years Ended Fiscal Year Ended (in millions) March 31, 2024 March 31, 2023 Percentage Change Constant Currency March 31, 2024 (1) Percentage Change in Constant Currency (1) Geographic Market United States $ 3,909 $ 4,320 (9.5) % $ 3,909 (9.5) % United Kingdom 1,881 1,883 (0.1) % 1,802 (4.3) % Other Europe 4,267 4,429 (3.7) % 4,130 (6.8) % Australia 1,261 1,449 (13.0) % 1,312 (9.5) % Other International 2,349 2,349 — % 2,418 2.9 % Total Revenues $ 13,667 $ 14,430 (5.3) % $ 13,571 (6.0) % Reportable Segments GBS $ 6,820 $ 6,960 (2.0) % $ 6,796 (2.4) % GIS 6,847 7,470 (8.3) % 6,775 (9.3) % Total Revenues $ 13,667 $ 14,430 (5.3) % $ 13,571 (6.0) % (1) Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates.
Revenues Our revenues by geography and operating segments are provided below: Fiscal Years Ended Fiscal Year Ended (in millions) March 31, 2025 March 31, 2024 Percentage Change Constant Currency March 31, 2025 (1) Percentage Change in Constant Currency (1) Geographic Market United States $ 3,560 $ 3,909 (8.9) % $ 3,560 (8.9) % United Kingdom 1,817 1,881 (3.4) % 1,791 (4.8) % Other Europe 4,128 4,267 (3.3) % 4,162 (2.5) % Australia 1,145 1,261 (9.2) % 1,154 (8.5) % Other International 2,221 2,349 (5.4) % 2,347 (0.1) % Total Revenues $ 12,871 $ 13,667 (5.8) % $ 13,014 (4.8) % Reportable Segments GBS $ 6,646 $ 6,820 (2.6) % $ 6,727 (1.4) % GIS 6,225 6,847 (9.1) % 6,287 (8.2) % Total Revenues $ 12,871 $ 13,667 (5.8) % $ 13,014 (4.8) % (1) Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates.
Interest Expense and Interest Income For fiscal 2024, net interest expense (interest expense less interest income) was $84 million, an increase of $19 million as compared to the prior fiscal year. The increase in net interest expense against the comparative period was primarily due to higher interest rates globally that increased interest expense from securitization and commercial paper borrowings.
The decrease in net interest expense against the comparative period was primarily due to decreased interest expense from lower levels of asset financing and commercial paper, and higher net interest income from cash deposits.
For a discussion of risks associated with our foreign operations, see Part I, Item 1A - "Risk Factors." Global Business Services GBS revenues were $6.8 billion for fiscal 2024, a decrease of $140 million or 2.0% compared to fiscal 2023.
Organic revenue is a non-GAAP measure, as discussed in our "Non-GAAP Financial Measures." In addition, for a discussion of risks associated with our foreign operations, see Part I, Item 1A - "Risk Factors." 41 Reportable Segment Results Global Business Services • Revenue was $6.6 billion, down 2.6% year-over-year (down 1.0% on an organic basis). • Segment profit was $797 million, down 4.6% year-over-year, with a corresponding margin of 12.0%. • Book-to-bill ratio of 1.03x, compared to 0.96x during fiscal 2024.
The decrease was primarily due to: • a decrease in net income, net of adjustments of $214 million; partially offset by • a $160 million favorable change in working capital primarily from improvements in our cash conversion cycle.
Operating cash flow against the comparative period included: • an increase in net income, net of adjustments of $48 million; partially offset by • a $11 million unfavorable change in working capital due to higher working capital outflows during fiscal 2025.
Global Infrastructure Services GIS revenues were $6.8 billion for fiscal 2024, a decrease of $623 million or 8.3% compared to fiscal 2023. The 8.3% decrease against the comparative period includes a 1.0% favorable foreign currency exchange rate impact offset by a 9.3% decline in organic revenue from project completions, early terminations, and lower resale revenue.
For more information, see "Non-GAAP Financial Measures." Total revenue for fiscal 2025 was $12.9 billion, a decline of $796 million or 5.8%, compared to the prior fiscal year, primarily driven by a 4.6% decline in organic revenue and a 1.0% unfavorable foreign currency exchange rate impact.
Removed
This information is consistent with how management views our revenues and evaluates our operating performance and trends. For more information, see "Non-GAAP Financial Measures." Total revenue for fiscal 2024 was $13.7 billion, a decrease of $763 million or 5.3%, compared to the prior fiscal year.
Added
For more information see “Non-GAAP Financial Measures.” • Revenues of $12.87 billion, down 5.8% compared to prior year period, and down 4.6% on an organic basis; • Income before income taxes was $630 million; adjusted earnings before income taxes was $1,019 million, an increase of 1.0% on an adjusted basis; • Diluted earnings per share of $2.10, compared to $0.46 in fiscal 2024; adjusted diluted earnings per share of $3.43, compared to $3.10 in fiscal 2024, an increase of 10.6%; • Cash generated from operations was $1,398 million, less capital expenditures of $711 million, resulted in free cash flow of $687 million. • Book-to-bill ratio (contract awards divided by annual revenue) of 1.03x, compared to 0.91x during fiscal 2024. 40 Results of Operations The following table provides financial data for fiscal 2025 and 2024: Fiscal Years Ended (In millions, except per-share amounts) March 31, 2025 March 31, 2024 Revenues $ 12,871 $ 13,667 Income before income taxes (1) 630 109 Income tax expense 234 23 Net income (1) $ 396 $ 86 Diluted earnings per common share: (1) $ 2.10 $ 0.46 (1) Income before income taxes, Net income, and Diluted earnings per common share include Pension and OPEB actuarial and settlement (gains) and losses that were $(232) million and $445 million for the fiscal years ended March 31, 2025 and March 31, 2024, respectively.
Removed
The 5.3% decrease against the comparative period includes a 0.7% favorable foreign currency exchange rate impact, a 1.9% decline in revenue from the disposition of certain businesses, and a 4.1% decline in organic revenue. Organic revenue growth is a non-GAAP measure.
Added
This information is consistent with how management views our revenues and evaluates our operating performance and trends.
Removed
For more information, see "Non-GAAP Financial Measures." The favorable foreign currency exchange rate impact is primarily driven by the weakening of the U.S. dollar against the British Pound and Euro.
Added
Global Infrastructure Services • Revenue was $6.2 billion, down 9.1% year-over-year (down 8.2% on an organic basis). • Segment profit was $451 million, up 4.2% year-over-year, with a corresponding margin of 7.2%. • Book-to-bill ratio of 1.03x, compared to 0.86x during fiscal 2024.
Removed
The 2.0% decrease against the comparative period includes a 3.8% decline in revenue from the disposition of certain businesses, 42 partially offset by 1.4% organic revenue growth from additional services provided to new and existing customers and a 0.4% favorable foreign currency exchange rate impact.
Added
A reconciliation of the differences between the U.S. federal statutory rate and the ETR, as well as other information about our income tax provision, is provided in Note 14 - "Income Taxes." In fiscal 2025, the ETR was primarily impacted by: • The global mix of income and changes in foreign statutory tax rates, which increased the foreign tax rate differential and the ETR by $145 million and 23.0%, respectively. • Income tax and foreign tax credits, which decreased income tax expense and the ETR by $84 million and 13.3%, respectively, offset by tax expense on U.S. international tax inclusions, which increased tax expense and the ETR by $59 million and 9.4%, respectively. • The tax benefit of changes in uncertain tax positions related to the expiration of the statute of limitations and capitalized research and experimental expenditures, offset by the impact of increases in other uncertain tax positions and accrued interest, which decreased income tax expense and the ETR by $52 million and 8.3%, respectively.
Removed
In addition, the prior year included a $29 million expense for arbitration-related losses and an $8 million expense for the SEC Matter. These decreases in expense were partially offset by a $5 million unfavorable foreign currency exchange rate impact.
Added
The first issue pertains to a capital loss the Company claimed in fiscal year 2013 in the amount of $651 million, which the IRS subsequently disallowed, and for which it proposed a substantial understatement penalty. The total cash tax payment the IRS is seeking is approximately $469 million, inclusive of penalties and interest, which continues to accrue.
Removed
We expect court proceedings to progress during calendar year 2024 that may result in resolution of some or all of the litigation matters by the end of fiscal year 2025.
Added
The matter is currently scheduled for trial in August 2025. 44 The second issue pertains to the Company’s deduction for restructuring expenses in fiscal year 2013 in the amount of $146 million, which the IRS has disputed. The total cash tax payment the IRS is seeking is approximately $101 million, inclusive of penalties and interest, which continues to accrue.
Removed
The Company has agreed to extend the statute of limitations for fiscal and tax return years 2014 through 2021 to December 31, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+1 added−0 removed13 unchanged
Biggest changeHowever, due to our increased use of offshore labor centers, we have become more exposed to fluctuations in foreign currency exchange rates. We experienced significant foreign currency fluctuations during both fiscal years 2024 and 2023 due primarily to the volatility of the Euro, British Pound, and Australian Dollar in relation to the U.S. dollar.
Biggest changeHowever, due to our increased use of offshore labor centers, we have become more exposed to fluctuations in foreign currency exchange rates. We experienced significant foreign currency fluctuations during fiscal year 2024 due primarily to the volatility of the Euro, British Pound, and Australian Dollar in relation to the U.S. dollar.
A change in interest rates related to our long-term debt would not have a material impact on our balance sheet as we do not record our debt at fair value. 59
A change in interest rates related to our long-term debt would not have a material impact on our balance sheet as we do not record our debt at fair value. 58
We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than U.S. dollar; see Note 11 - "Revenue." During fiscal 2024, approximately 71% of our revenues were generated outside of the United States.
We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than U.S. dollar; see Note 11 - "Revenue." During fiscal 2025, approximately 72% of our revenues were generated outside of the United States.
For the year ended March 31, 2024, a hypothetical 10% increase (decrease) in the value of the U.S. dollar against all currencies would have decreased (increased) revenues by approximately 7.1%, or $1.0 billion. The majority of this fluctuation would be offset by expenses incurred in local currency.
For the year ended March 31, 2025, a hypothetical 10% increase (decrease) in the value of the U.S. dollar against all currencies would have decreased (increased) revenues by approximately 7.2%, or $0.9 billion. The majority of this fluctuation would be offset by expenses incurred in local currency.
Interest Rate Risk As of March 31, 2024, we had outstanding debt with varying maturities for an aggregate carrying amount of $4.1 billion, of which none was floating interest rate debt. As of March 31, 2024, an assumed 10% unfavorable change in interest rates would not be material to our consolidated results of operations or cash flows.
Interest Rate Risk As of March 31, 2025, we had outstanding debt with varying maturities for an aggregate carrying amount of $3.9 billion, of which none was floating interest rate debt. As of March 31, 2025, an assumed 10% unfavorable change in interest rates would not be material to our consolidated results of operations or cash flows.
Added
Significant foreign currency fluctuations continued to impact the U.S dollar during fiscal 2025 due primarily to the volatility of the British Pound and other foreign currencies in the Americas.

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