DXC Technology Co (NYSE:DXC) stock fell 4.83% (As on May 15, 11:40:29 AM UTC-4, Source: Google Finance) after the company issued weak forward guidance despite reporting a quarterly beat and signaling its intention to restart the stock repurchase program. The technology services company reported an organic revenue decline of 4.2% year-over-year for Q4 FY2025, with adjusted EBIT margin contracting to 7.3%, down 110 basis points from the same period last year. Cash generated from operations was $1,398 million, up 2.7% year-over-year. Free cash flow was $687 million in the full year of fiscal year 2025, compared to $756 million in the full year fiscal 2024. Book to Bill ratio of 1.03x, compared to 0.91x in the full year fiscal 2024. For the second consecutive quarter, the company has reported bookings growth of more than 20% and book to bill ratios of greater than 1.

Moreover, DXC’s Global Business Services (GBS) segment, which includes consulting, engineering services, and insurance software, posted revenue of $1.63 billion with an organic revenue decline of 2.4% year-over-year. The segment maintained a relatively healthy profit margin of 10.9% and achieved a book-to-bill ratio of 1.16x, indicating potential future revenue growth. The Global Infrastructure Services (GIS) segment experienced a more significant organic revenue decline of 6.0% year-over-year, with revenue of $1.54 billion. Despite the revenue challenges, the segment achieved a profit margin of 7.0% and a strong book-to-bill ratio of 1.28x.

DXC in the first quarter of FY25 has reported the adjusted earnings per share of 84 cents, beating the analysts’ estimates for the adjusted earnings per share of 77 cents. The company had reported the adjusted revenue decline of 6.4 percent to $3.17 billion in the first quarter of FY25, beating the analysts’ estimates for revenue of $3.14 billion.

For the first quarter of fiscal 2026, DXC forecasts EPS of $0.55-$0.65, well below the $0.79 analysts were expecting. The company sees Q1 revenue of $3.04-$3.09 billion, also short of the $3.11 billion consensus. For the first quarter, the company expects Adjusted EBIT margin to be in the range of 6.0% to 7.0%.

Full year fiscal 2026 guidance also disappointed, with DXC projecting EPS of $2.75-$3.25 versus estimates of $3.40. The company expects revenue of $12.18-$12.44 billion, below the $12.52 billion analysts had modeled. The company expects to generate Free Cash Flow of ~$600 million.