Rob Del Bene
Chief Financial Officer at DXC Technology
Thank you, Raul, and good afternoon. Today, I'll go over our 3rd-quarter results, provide our view for the 4th-quarter and update our full-fiscal year 2025 guidance. While facing incremental FX headwinds, 3Q total revenue of $3.2 billion fell in-line with our expectation, while organic revenue declined 4.2% ahead of the top-end of our guidance range. As Raul mentioned earlier, our book-to-bill ratio significantly improved to 1.33, driving the trailing 12-month ratio to 0.96, up from 0.88% last quarter.
Adjusted EBIT margin expanded 140 basis-points year-over-year to 8.9%, ahead of our expectations. This performance was primarily driven by higher yields from cost management initiatives as well as the deferral of certain planned marketing and IT investments to ensure they are more closely aligned with our evolving business priorities. In the quarter, we also recognized a 50 basis-point benefit from equity compensation savings associated with executive leadership changes made during the quarter as we continue to reshape and strengthen our senior team. These tailwinds were partially offset by a $10 million charge related to the disposal of hardware assets as we consolidate our data centers.
Non-GAAP gross margin for the 3rd-quarter came in at 25.1%, an improvement of 150 basis-points year-to-year. This expansion was primarily driven by savings from disciplined resource management practices and the impact from restructuring, more than offsetting lower revenue and the data center hardware asset disposal. Non-GAAP SG&A as a percentage of revenue increased 70 basis-points year-over-year to 10.3%. This was primarily driven by lower revenue and investments in our sales team as well as IT infrastructure-related to our ERP consolidation efforts. These impacts were partially offset by the equity savings from recent executive leadership changes.
As a reminder, the year-to-year changes in our non-GAAP gross margin and non-GAAP SG&A are normalized for the reclassification of certain business development costs to SG&A that I discussed last quarter. Non-GAAP EPS was $0.92, up from $0.86 in the 3rd-quarter of last year. The $0.06 increase was primarily driven by higher adjusted EBIT of $0.10, lower net interest expense and taxes of $0.02 each and the impact of a lower share count of $0.03, partially offset by an $0.11 decline to non-controlling interest that included a non-recurring benefit in the 3rd-quarter of last year. Now turning to our segments.
GBS, which represents 52% of total revenue, was down 50 basis-points year-to-year organically. The GBS profit margin increased by 150 basis-points year-to-year to 13.4%, largely due to more efficient resource management. Within the GBS segment, Consulting and Engineering Services organic revenue declined 2.2% year-to-year. This was primarily driven by ongoing market pressures affecting custom application projects, which account for roughly two-thirds of CES revenue. However, this decline was partially offset by momentum in our enterprise applications business as we continue to increase our capabilities.
The book-to-bill ratio improved in the quarter to 1.28 due to 3rd-quarter seasonality and our improving go-to-market execution. The trailing 12-month book-to-bill ratio remained stable at slightly more than 1.0. Insurance and horizontal BPS organic revenue grew 5.6% year-to-year. Our insurance services and software business, representing approximately 80% of the total continued to deliver mid-single-digit growth. This performance was driven in-part by expanding software license revenue that increased at a mid-teen rate.
The book-to-bill ratio for insurance and horizontal BPS was 1.05, including a higher mix of new work compared to bookings during the first-half of the year. On a trailing 12-month basis, that book-to-bill ratio was 0.82. GIS, which represents 48% of total revenue, declined 7.8% year-to-year organically and services revenue was down approximately 7% and resale fell approximately 16% the profit margin declined 50 basis-points year-to-year to 6.5%, reflecting the impact of lower revenue and the hardware asset disposal charge that I've referred to earlier. These headwinds offset the benefit of our ongoing efforts in resource management and optimizing software and data center costs.
On a sequential basis, the GIS profit margin declined 170 basis-points, primarily due to the hardware asset charge and last quarter's discrete benefit-related to the settlement of a legal matter. Within GIS, cloud IT-owned security organic revenue declined 6.6% year-to-year with services down approximately 7%, narrowing the rate of year-to-year decline by 2 points from last quarter. 3Q resale was down approximately 2%, improving from steeper declines in recent quarters, and we continue to be selective on our resale opportunities based on deal economics. The book-to-bill ratio of 1.51 was driven by timing of renewals and our improving go-to-market effectiveness.
The trailing 12-month book-to-bill ratio equal 0.90%. Modern Workplace declined 11.3% year-to-year organically with services revenue down approximately 5% and resale revenue down about 30%. The book-to-bill ratio equaled 1.25 and the trailing 12-month book-to-bill ratio was 1.04. Turning to our cash-flow and balance sheet. During the quarter, we generated $483 million of free-cash flow compared to $585 million in the same-period last year with the delta primarily driven by working capital. Additionally, CapEx increased by $46 million to $167 million, largely reflecting our efforts to reduce new financial lease originations, which were limited to just $3 million in the quarter.
Taken together, capex and lease originations as a percent of revenue equal 5.3%. As a reminder, financial lease originations are not included in free-cash flow. Fiscal year-to-date free-cash flow-through, 31 December 2024, totaled $576 million, exceeding our prior full-year guidance of approximately $550 million. This outperformance was primarily driven by adjusted EBIT for the first-nine months of the year, exceeding our expectations along with lower-than-anticipated restructuring charges. Our disciplined resource management practices, which have driven a net headcount reduction of nearly 5,900 since the start of the year have enabled us to remain on-track to meet our cost-saving targets for the year.
With our measured and deliberate approach on directing actions to the right areas across our organization, we are now expecting restructuring charges to be a maximum of $100 million above last year compared to the $250 million we initially outlined. We will continue to drive targeted restructuring reductions across our operations into fiscal 2026, utilizing the remaining funding planned for fiscal '25. The total debt at the end-of-the quarter was equal to $3.8 billion, reflecting approximately $80 million of capital lease paydown and the currency impact on our euro-denominated bonds. Total cash on our balance sheet increased by approximately $480 million quarter-over-quarter. This was driven by strong free-cash flow and asset sale proceeds of more than $80 million from facility sales and the divestiture of a non-core business in Asia-Pacific.
Through December 31, we've generated approximately $150 million of cash through dispositions and sale of other assets with line-of-sight to additional transactions. As a reminder, these proceeds are not included in our reported free-cash flow. As a result of our strong free-cash flow generation, asset sales and debt reduction over the first-nine months of the fiscal year, we have lowered net-debt by more than $750 million to $2.1 billion. With approximately $1.7 billion of cash-on-hand, we have delivered on our objective of strengthening our capital structure and we'll update our capital deployment priorities as we enter the new fiscal year.
Now let me provide you with a view of our 4th-quarter. We expect total organic revenue to decline 5.5% to 4.5%. We anticipate adjusted EBIT margin to be about 7%, reflecting the expected sequential decline in revenue, the impact from merit increases and increased investments in sales, marketing and IT. We expect non-GAAP diluted EPS of about $0.75. And now for the full-year, we now expect total revenue to decline between 4.7% and 4.9% year-to-year organically compared to the prior guide, calling for a decline of 5.5% to 4.5%. We continue to anticipate full-year GBS revenue to decline slightly year-to-year and GIS to decline at high single-digit rates. We now expect our full-year adjusted EBIT margin to be approximately 7.9%, up from our prior guide range of 7.0 to 7.5%. This being the third time this year that the guide has been increased.
We now expect a full-year non-GAAP effective tax-rate of approximately 33%, bringing our full-year non-GAAP diluted EPS to be about $3.35, an increase from our prior guide of $3 to $3.25. Free-cash flow for the year is now expected to be approximately $625 million, an increase from our prior view of about $550 million. This improvement is largely due to the increase in our adjusted EBIT guidance and the lower anticipated restructuring spending.
And with that, let me turn the call-back over to Roger.
