Australia serves up over $2B in revenues for DXC Technology

Mike Lawrie - DXC Technology chairman, president and CEO, ringing the opening bell at the New York Stock Exchange.

DXC Technology’s business in Australia pulled in revenues of just over US$1.69 billion (A$2.26 billion) for the company’s financial year ending March 2018, topping off a lengthy period of acquisition and consolidation for the multinational IT services giant.

The latest figures, outlined in the US-headquartered company’s annual report for the year ending March, largely reflect the additional earnings the company has picked up since its merger with Hewlett Packard Enterprise’s (HPE) Enterprise Services business.

The US$8.5 billion spin-merger of the Computer Sciences Corporation (CSC) and HPE’s Enterprise Services business closed on 3 April last year, resulting in a new combined company, DXC Technology.

When the proposed spin-merger was first announced in May 2016, the resulting entity was billed as a “pure-play, global IT services powerhouse,” and was expected to see US$26 billion in annual revenues, while claiming nearly 6,000 clients in over 70 countries, many of them in Australia and New Zealand.

In August last year, the company revealed its first post-merger financials, reporting US$245 million in earnings before interest and tax (EBIT) in its first quarterly financials since the company officially launched its new brand.

The combined entity’s second 2017 quarter revenues of US$5.9 billion came in under that of the former businesses of both HPE ES and CSC, which together reported approximately US$6.5 billion during the 2Q16 quarter.

However, DXC Technology reported fourth quarter growth in revenue on 24 May, revealing a 4.3 per cent year-on-year increase for the combined entity, to US$6.29 billion for the three month period.

At the same time, the company released its full year results, reporting revenues of US$24.56 billion in its latest full fiscal year, compared to US$7.61 billion during the same period the year prior.

The company said that revenue declined by 3.3 per cent compared with the US$25.39 billion in revenues it pulled in on a pro forma combined company basis – that is, including combined revenue figures from the individual businesses prior to the completion of its landmark merger.

On 28 May, the company lodged its annual financial report with US regulators, revealing that Australia’s share in the company’s total revenue came to about US$1.69 billion (A$2.26 billion), or roughly 6.9 per cent of the company’s global revenue tally. By comparison, the US represents 44.2 per cent, the UK 13.8 per cent.

For the financial year ending 31 March last year, the company’s revenues in Australia topped out at about US$921 million (A$1.23 billion).

It is not clear whether this result includes any earnings contribution by Australian Oracle partner M-Power Solution, which DXC Technology said in early March had signed a deal to be acquired by the global integrator.  

Overall, DXC Technology reported adjusted earnings before interest and tax (EBIT) of US$3.5 billion in the 2018 fiscal year, compared to US$2.45 billion in the prior year -- on a pro forma combined company basis.