Before the DXC Q3 earnings call begins grab your DXC Bullsh-t Bingo card and listen closely for the following phrases:
“Strategic realignment under the new brand”
"AI-enabled transformation”
“Strong pipeline”
“More to come as the brand matures”
“We’re pleased with the progress”
18 replies (most recent on top)
@jt still shedding data centres at quite a rate and still more scope for shedding more...
I agree with many of the people posting. A few years ago DXC was shedding offices, real estate, data centers, etc. they don’t have those to shed anymore, and they’ve started to open new offices and are going to a lot more industry conferences. They are starving the business and employees to maintain Free Cash Flow, hoping that they will grow. Not a real business strategy.
DXC reports "free cash flow" annually but this is after severely under investing in the business. Their capital expenditures as a percentage of revenue are far below their peers.
They're essentially starving the business of investments and their employees of a decent income to generate "free cash flow" that isn't actually free. This is cash borrowed from their future.
DXC stuck on a refinancing treadmill, it is running hard to go nowhere and scraping together what little cash they can generate to delay the inevitable dead reckoning when its creditors will eventually stop funding it.
A company that refinances debt while revenues shrink and profits decline is essentially asking its creditors to fund hope. Hope is not a strategy and no credible investor is allocating capital based on hope and empty gimmicks of a new logo.
DXC keeps a large cash surplus because it’s managing decline, not growth.
Cash gives leadership flexibility and protection while the business shrinks.
• No pay rises → avoids permanent costs
• Overpaid execs + buybacks → boost EPS and hit bonus targets
• Big cash pile → protects credit rating, reassures clients, funds restructuring
• Buybacks > investment → financial optics over long-term capability
In simple terms:
Cash is optional. Pay rises are a commitment.
The obvious - DXC is choosing control and shareholder optics over investing in itself or people.
@f9 When the fundamentals are weak debt is a ticking time bo-b. But hey, I can see how that would be too complicated for you to comprehend.
@f7 my defence was that the debt was significantly lower over the last couple of years.
My criticism was that they had cash to cover about half of the debt.
Which is OK if you can think of ways to use the cash to gain more than the debt interest... But they don't.
That cash holding is a mystery.
The volume of the debt isn't in itself a red flag.
You're the guy who thinks corporate debt is the same as personal debt aren't you...
@f5 That’s not reassuring given their deteriorating fundamentals. Holding excess cash instead of paying down debt is a red flag. It means management doesn’t believe its own turnaround story. If they did, they would be aggressively de-leveraging to cut interest expense and improve margins. Companies with stable cash flows don’t sit on cash while paying 5 to 6% interest on debt. The management is keeping a liquidity buffer because the business is fragile. They do it because they’re worried. This should signal to you that they have no credible growth investments, no attractive M&A and that they have very little confidence in their own operating outlook. What you wrote is not a defense, it is an indictment.
Comparing DXC favorably to IBM on debt is misleading because IBM has two things DXC desperately lacks actual growth drivers and pricing power, and using Atos as your benchmark is like saying "our house is only slightly on fire compared to that building that completely burned down".
Your remarks only deepen the sense that this is a workforce trained to keep fax machines running not to compete in today’s landscape.
@f3 to give them some credit (excuse the pun) the debt is not a crisis. It does continue to fall and isn't nearly as bad as say IBM or atos...
Doesn't make much since to hold so much cash when you have debt though.
Not when you can't find anything else to do with the cash.
@ev you do not need AI to know these:
Revenue keeps shrinking. DXC has now posted eight straight years of decline and organic revenue fell another 4.3% in the first half of fiscal 2026.
Most of the business is in trouble. About 73% of revenue comes from legacy IT outsourcing which management expects to decline at high single-digit rates.
Profits are expected to fall fast. Analysts forecast revenue to drop 1.7% per year while earnings fall 12% per year. EPS is expected to decline by more than 20% annually.
The stock usually loses money. Over the past 8 years, the stock fell in 7 of them with an average annual decline of about 19%.
Debt is a serious issue. The company has an Altman Z-Score of 0.64 signaling financial stress with a debt-to-EBITDA ratio of 6.8 and a cash-to-debt ratio of just 0.29.
Interest costs are heavy. DXC’s interest coverage ratio is only 1.34 worse than roughly 94% of traded companies.
DXC is behind the industry shift. Competitors are focused on digital and AI services while DXC remains heavily tied to legacy contracts.
AI won’t move the needle. Management’s AI “Fast Track” plan targets only 10% of revenue after 3 years leaving most of the business still in decline.
Using AI to review investors calls since 2017, here's the top ten bs phrases:
- Cost Take-out / Cost Efficiency / Cost Structure - 250+ times
- Free Cash Flow - 200+ times
- Transformation / Transformation Program - 180+ times
- Global Business Services (GBS) - 170+ times
- Revenue Growth / Return to Growth - 160+ times
- Book-to-Bill - 150+ times
- Disciplined Execution / Operational Execution - 140+ times
- Shareholder Value - 130+ times
- Deal Pipeline / Pipeline Strength - 120+ times
- Portfolio Rationalization / Strategic Review - 100+ times
@e0 They do, in fact sometimes over market rate just to get people to sign up and ignore all the warning signs. But that's it. You negotiated your salary. Yes I know it was 15 years ago. If you want to negotiate a new one you can do that elsewhere!
@e0 You’re bending over backwards so much that management thinks your rear end is a pivot point for their 'personal' growth.
Just hang in there. We are simply pivoting for growth. By next quarter will be much clear. BTW we pay market rates so be quiet!
@a5
Thanks for the link and it’s basically more of the same repeated platitudes and wordplay to basically say nothing has changed.
This stood out for me:
“Our new operating model gives our organization clarity and places seven of our most experienced leaders into the market, focused on growth, differentiation, coaching our people, and actively managing the details of our business. GBS is a great example.”
This sounds like what Raul said last year and less than two years ago there was another reorganisation with GBS lauded as the highlight, I’m not too sure Raul will be saying the same this year, but, interestingly and as expected, both leaders that MS mentions have gone.
The one thing that DXC is obviously good at is having reorganisations and rotating through a pool of ‘world class leaders’ who don’t appear to be able to deliver world-class personnel.
Another interesting point is that MS announced free cashflow of $700m - where on earth is this free cash consistently coming from?
Expect more of the same from Raul.
This place is a corporate trash pile built to extract every last ounce of value out of you until there’s nothing left. This place exists to hollow people out and remaining here is a public admission that you think that’s all you deserve. Staying here isn’t loyalty. Staying here isn’t resilience. It’s a loud signal to the job market that you lack dignity, self-respect and any belief in yourself that you could be worth more elsewhere. It’s your acknowledgment that you belong in the trash pile decaying with everyone else who gave up.
This isn’t about your wellbeing or moral values — it’s about money and protecting the few at the top. When leaders are already worth tens of millions, ethics become optional and blame is conveniently redirected at employees. The impact on people’s lives and mental health is collateral damage. Power corrupts, accountability disappears, and the as brand feels like it’s slowly becoming irrelevant anyway. It's every man for himself.
Special sauce.
Every single earnings call transcript is loaded with reusable material. Q42023 is one of the best:
https://www.fool.com/earnings/call-transcripts/2023/05/19/dxc-technology-dxc-q4-2023-earnings-call-transcrip/