DXC Technology Reports Second Quarter Fiscal Year 2027 Results

First-half free cash flow improved despite weaker second-quarter earnings, while DXC expects full-year organic revenue to decline.

Rhea-AI Summary

DXC Technology (NYSE: DXC) reported second-quarter fiscal 2027 revenue of $3.03 billion, down from the same quarter last year. Revenue fell 4.0%, including on an organic basis, which adjusts for currency movements and acquisitions and divestitures. Diluted earnings per share fell to $0.15 from $0.20; adjusted earnings per share declined 20.2% to $0.67. Adjusted earnings before interest and taxes fell 26.4% to $187 million, with a 6.2% margin.

Quarterly free cash flow fell to $91 million from $240 million, but first-half free cash flow rose to $405 million from $337 million. Bookings declined 10% to $2.4 billion. DXC repurchased $60 million of shares and is discussing a possible insurance-business sale. Insurance revenue rose 23.1%, while both other segments declined. DXC expects fiscal 2027 revenue of $11.91 billion–$11.98 billion, an organic decline of 5.5%–5.0%, and non-GAAP diluted earnings per share of $2.25–$2.50.

13 points · 0 major

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0 major · 20 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointFirst-half free cash flow rose to $405 million from $337 million a year earlier.
• Moderate pointQ2 share repurchases returned $60 million, retiring approximately 5.7 million shares. 2.3% of market cap
• Moderate pointFirst-half diluted earnings per share increased to $0.89 from $0.29 a year earlier.
• Moderate pointFirst-half principal payments on long-term debt totaled $400 million. 16% of market cap
• Moderate point. Forward-looking: it has not happened yet and may not happen.DXC forecasts FY27 adjusted operating margin of 5.75%–6.25% and non-GAAP diluted EPS of $2.25–$2.50.
• Moderate point. Forward-looking: it has not happened yet and may not happen.DXC forecasts FY27 free cash flow of approximately $600 million.
• Moderate point. Forward-looking: it has not happened yet and may not happen.DXC forecasts Q3 adjusted operating margin of approximately 6.0% and non-GAAP diluted EPS of approximately $0.55.

6 minor points

• Minor pointInsurance revenue rose 23.1% to $394 million, including a favorable contract modification; organic growth was also 23.1%.
• Minor pointInsurance segment profit rose 60.7% to $45 million, with an 11.4% margin.
• Minor pointInsurance bookings increased 43.5% year-over-year.
• Minor pointFirst-half operating cash flow rose to $635 million from $595 million a year earlier.
• Minor pointQ2 selling, general and administrative expenses decreased to $319 million from $366 million a year earlier.
• Minor pointQ2 restructuring costs decreased to $23 million from $35 million a year earlier.

Negative

• Moderate pointQ2 revenue declined 4.0% year-over-year to $3.03 billion, also down 4.0% organically.
• Moderate pointQ2 earnings before interest and taxes fell 52.2% to $66 million, with a 2.2% margin.
• Moderate pointQ2 adjusted earnings before interest and taxes fell 26.4% to $187 million, with a 6.2% margin.
• Moderate pointQ2 diluted earnings per share fell to $0.15 from $0.20 a year earlier.
• Moderate pointQ2 non-GAAP diluted earnings per share declined 20.2% year-over-year to $0.67.
• Moderate pointQ2 operating cash flow declined 46.9% year-over-year to $217 million.
• Moderate pointQ2 free cash flow fell to $91 million from $240 million a year earlier.
• Moderate pointQ2 bookings declined 10% to $2.4 billion; the quarterly bookings-to-revenue ratio was 0.80x.
• Moderate pointGlobal Infrastructure Services revenue fell 10.0% to $1,427 million, also down 10.0% organically.
• Moderate pointGlobal Infrastructure Services profit fell 45.9% to $66 million, with a 4.6% margin.
• Moderate point. Forward-looking: it has not happened yet and may not happen.DXC expects FY27 revenue of $11.91 billion–$11.98 billion, declining 5.5%–5.0% organically year-over-year.
• Moderate point. Forward-looking: it has not happened yet and may not happen.DXC expects Q3 revenue of approximately $2.98 billion, declining approximately 6.0% organically year-over-year.
• Moderate pointShort-term debt and current long-term debt maturities rose to $935 million from $520 million at March 31, 2026.

7 minor points

• Minor pointConsulting and Engineering Services revenue declined 3.3% to $1,213 million, also down 3.3% organically.
• Minor pointConsulting and Engineering Services profit fell 13.8% to $125 million, with a 10.3% margin.
• Minor pointConsulting and Engineering Services bookings fell 17.0%; its quarterly bookings-to-revenue ratio was 0.79x.
• Minor pointGlobal Infrastructure Services bookings fell 12.7%; its quarterly bookings-to-revenue ratio was 0.80x.
• Minor pointInsurance's quarterly bookings-to-revenue ratio was 0.79x.
• Minor pointCash fell to $1,599 million at September 30, 2026, from $1,737 million at March 31, 2026.
• Minor pointFirst-half impairment losses and contract write-offs increased to $39 million from $3 million a year earlier.

News Explained

Reported EBIT was $66 million at a 2.2% margin, versus adjusted EBIT of $187 million at a 6.2% margin.

Reported EBIT was $66 million with a 2.2% margin, compared with adjusted EBIT of $187 million and a 6.2% margin.

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Key Figures

Q2 revenue: $3.03 billion; down 4.0% YoY Non-GAAP diluted EPS: $0.67; down 20.2% YoY First-half free cash flow: $405 million, compared to $337 million +5 more

Q2 revenue

$3.03 billion; down 4.0% YoY

Second quarter FY27

Non-GAAP diluted EPS

$0.67; down 20.2% YoY

Second quarter FY27

First-half free cash flow

$405 million, compared to $337 million

First half FY27

Bookings

$2.4 billion; declined 10% YoY

Second quarter FY27; book-to-bill ratio was 0.80x

FY27 revenue guidance

$11.91 billion to $11.98 billion

Organic revenue decline of 5.5% to 5.0% YoY

FY27 adjusted EBIT margin guidance

5.75% to 6.25%

Full fiscal year 2027

FY27 non-GAAP diluted EPS guidance

$2.25 to $2.50

Full fiscal year 2027

FY27 free cash flow guidance

~$600 million

Full fiscal year 2027

Previous Earnings Reports

1 past event · Latest: Jul 30

Same Type 1 event

1. Jul 30

   Q1 FY27 earnings

   24h Move

   +0.0%

   Revenue and adjusted EBIT declined year over year; free cash flow increased, including litigation-judgment proceeds.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

non-gaap, free cash flow, book to bill ratio, ebit

4 terms

non-gaap financial

"Non-GAAP diluted earnings per share(3) of $0.67, down 20.2% YoY"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

free cash flow financial

"Free cash flow(4) for the first half of FY27 was $405 million"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

View in glossary

book to bill ratio financial

"trailing twelve month book to bill ratio of 1.0x"

The book-to-bill ratio compares new orders received (bookings) to goods or services actually billed (revenue) over the same period; a ratio above 1 means a company is taking in more orders than it is filling, while below 1 means it is billing more than it is receiving in new orders. Investors use it like a pipeline gauge—high ratios suggest future revenue growth and possible capacity strain, while low ratios can signal weakening demand or excess capacity, helping anticipate earnings and operational pressure.

ebit financial

"Q2 FY27 EBIT margin of 2.2%, and adjusted EBIT(2) margin of 6.2%"

EBIT (Earnings Before Interest and Taxes) measures a company's profit from normal business operations after paying direct running costs but before subtracting interest on debt and income taxes. Think of it as how well a store does at selling its goods once everyday expenses are covered, ignoring loan payments and tax bills. Investors use EBIT to compare operational performance across companies without the distortion of different financing or tax situations.

View in glossary

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• Total revenue for Q2 FY27 of $3.03 billion, down 4.0% YoY, down 4.0% on an organic basis⁽¹⁾
• Q2 FY27 EBIT margin of 2.2%, and adjusted EBIT⁽²⁾ margin of 6.2%
• Q2 FY27 Diluted earnings per share of $0.15; Non-GAAP diluted earnings per share⁽³⁾ of $0.67, down 20.2% YoY
• Free cash flow⁽⁴⁾ for the first half of FY27 was $405 million, compared to $337 million last year
• Q2 FY27 Bookings of $2.4 billion, trailing twelve month book to bill ratio of 1.0x
• Repurchased $60 million of shares

ASHBURN, Va., Oct. 29, 2026 /PRNewswire/ -- DXC Technology (NYSE: DXC) today reported results for the second quarter fiscal 2027.

"On the quarter, we delivered revenue, adjusted EBIT, and Non-GAAP diluted EPS above our expectations, while making progress with the agentic and AI-based solutions that we expect will contribute to future growth. The revenue ramp for agentic solutions is more clear in terms of average deal size, close cycle timing, and pace of follow-on work," said Raul Fernandez, CEO of DXC Technology. "While our core revenue recovery will take time, I am confident that our role operating mission-critical systems gives DXC a differentiated position as enterprises look to deploy AI at scale."

Financial Highlights - Second Quarter Fiscal Year 2027

• Total revenue was $3.03 billion, down 4.0% year-over-year (down 4.0% on an organic basis).⁽¹⁾
• EBIT was $66 million, down 52.2% year-over-year with a corresponding margin of 2.2%. Adjusted EBIT⁽²⁾ was $187 million, down 26.4% year-over-year, with a corresponding margin⁽²⁾ of 6.2%.
• Diluted earnings per share was $0.15. Non-GAAP diluted earnings per share⁽³⁾ was $0.67, down 20.2% year-over-year.
• Cash generated from operations was $217 million, down 46.9% year-over-year. Free cash flow⁽⁴⁾ was $91 million, compared to $240 million in the second quarter of fiscal year 2026. Free cash flow⁽⁴⁾ for the first half of FY27 was $405 million, compared to $337 million last year.
• Bookings of $2.4 billion declined 10% year-over-year, with a book to bill ratio of 0.80x.
• Returned $60 million of capital to shareholders by repurchasing approximately 5.7 million shares.
• DXC acknowledges ongoing discussions regarding a possible sale of its insurance business.

(1)	Revenue growth on an organic basis is a non-GAAP measure and is calculated by restating current-period activity using the prior fiscal period's foreign currency exchange rates, adjusted for the impact of acquisitions and divestitures. A reconciliation of GAAP to non-GAAP measure are attached to this release.
(2)	Adjusted EBIT and Adjusted EBIT margin are non-GAAP measures. Reconciliations of GAAP Net Income to such measures are attached to this release.
(3)	Non-GAAP diluted earnings per share is a non-GAAP measure. A reconciliation of GAAP diluted earnings per share to non-GAAP diluted per share is attached to this release.
(4)	Free cash flow is a non-GAAP measure, calculated by subtracting capital expenditures (Purchase of Property, Plant & Equipment, Transition and Transformation Contract Costs and Software Purchased or Developed) from cash flow from operations.

Segment Highlights - Second Quarter Fiscal Year 2027

Consulting and Engineering Services ("CES")

• Revenue was $1,213 million, down 3.3% year-over-year (down 3.3% on an organic basis).⁽¹⁾
• Segment profit was $125 million, down 13.8% year-over-year, with a corresponding margin of 10.3%.
• Bookings declined 17.0% year-over-year, with a book to bill ratio of 0.79x.

Global Infrastructure Services ("GIS")

• Revenue was $1,427 million, down 10.0% year-over-year (down 10.0% on an organic basis).⁽¹⁾
• Segment profit was $66 million, down 45.9% year-over-year, with a corresponding margin of 4.6%.
• Bookings declined 12.7% year-over-year, with a book to bill ratio of 0.80x.

Insurance Software & Services ("Insurance")

• Revenue was $394 million, up 23.1% year-over-year (up 23.1% on an organic basis).⁽¹⁾ Organic revenue growth includes a favorable contract modification entered into during the second quarter of fiscal 2027.
• Segment profit was $45 million, up 60.7% year-over-year, with a corresponding margin of 11.4%.
• Bookings increased 43.5% year-over-year, with a book to bill ratio of 0.79x.

Full Fiscal Year 2027 and Third Quarter Fiscal Year 2027 Guidance

Full Fiscal Year 2027

• Total revenue in the range of $11.91 billion and $11.98 billion, a decline of 5.5% to 5.0% year-over-year on an organic basis.⁽¹⁾
• Adjusted EBIT margin⁽²⁾ in the range of 5.75% to 6.25%.
• Non-GAAP diluted EPS⁽³⁾ in the range of $2.25 to $2.50. 
• Free Cash Flow⁽⁴⁾ of ~$600 million.

Third Quarter Fiscal 2027

• Total revenue of ~$2.98 billion, a decline of ~6.0% year-over-year on an organic basis.⁽¹⁾
• Adjusted EBIT margin⁽²⁾ of ~6.0%.
• Non-GAAP Diluted EPS⁽³⁾ of ~$0.55.

Additional metrics for the third quarter and full fiscal year 2027 guidance are presented in the table below.

Revenue		Q3 FY27 Guidance		FY27 Guidance
				Low	High
YoY Organic Revenue %		~(6.0)%		(5.5) %	(5.0) %
Acquisition & Divestitures Revenues %		— %		— %
Foreign Exchange Impact on Revenues %		(0.8) %		(0.3) %
Others
Non-GAAP Net Interest Expense ($M)*		~$15		~$54
Non-GAAP Tax Rate		~44%		~42%
Foreign Exchange Assumptions		Current Estimate		Current Estimate
$/Euro Exchange Rate		$1.12		$1.14
$/GBP Exchange Rate		$1.32		$1.33
$/AUD Exchange Rate		$0.70		$0.70

_________

* Excludes $46 million of interest income from the full year for the TCS litigation judgment

DXC does not provide reconciliations of non-GAAP measures included in its guidance because certain key information necessary for such reconciliations—most notably the impact of significant non-recurring items—is unavailable without unreasonable effort or may not be available at all. As a result, DXC believes any such reconciliation would not be meaningful.

Earnings Conference Call and Webcast

DXC Technology senior management will host a conference call and webcast to discuss second quarter fiscal 2027 results at 5:00 p.m. ET on October 29, 2026. The dial-in number for domestic callers is 833-461-5787. Callers who reside outside of the United States should dial +1-585-542-9983. The passcode for all participants is 964068. The webcast audio and any presentation slides will be available through a link posted on DXC Technology's Investor Relations website.

A replay of the conference call will be available until 11:59 p.m. ET on November 5, 2026, at 833-309-1852. The replay passcode is 964068. A transcript of the conference call will be posted on DXC Technology's Investor Relations website.

About DXC Technology

DXC Technology (NYSE: DXC) is a leading enterprise technology and innovation partner delivering software, services, and solutions to global enterprises and public sector organizations — helping them harness AI to drive outcomes at a time of exponential change with speed.  With deep expertise in Managed Infrastructure Services, Application Modernization, and Industry-Specific Software Solutions, DXC modernizes, secures, and operates some of the world's most complex technology estates. Learn more at DXC.com.

Forward-Looking Statements

Except for historical information, statements in this document may constitute "forward-looking statements" based on our current assumptions regarding future performance. These statements involve numerous risks, uncertainties, and other factors outside our control that could cause actual results to differ materially, including: inability to effectively manage our sales organization, including execution, pipeline, and talent management; our inability to expand service offerings to address emerging technological trends and competitive pressures; failure to attract and retain key personnel, including artificial intelligence (AI) and technical experts, or maintain partner relationships; risks associated with AI, including adoption, deployment, and governance, reliance on third-party platforms, cybersecurity, privacy, evolving regulations, and competitive displacement; inability to accurately estimate contract costs and timelines, or failure by us or third parties to deliver on commitments; systems failures, catastrophic events, and resulting service interruptions; liability or reputational damage from security breaches, cyber-attacks, or disclosure of confidential or personal data; failure to comply with new or existing laws, regulations, and customer contracts, including those relating to data privacy, economic sanctions, export controls, AI, and environmental, social, and governance (ESG) expectations; failure to maintain our credit rating, manage indebtedness, or raise capital, adversely affecting our liquidity and borrowing costs; risks associated with international operations, including exchange rate fluctuations and geopolitical conflicts (such as in Russia/Ukraine and the Middle East); macroeconomic challenges, including inflation, reduced customer spending, and economic slowdowns affecting deal closures and cost-takeout efforts; inability to compete effectively, maintain customer relationships, collect receivables, or comply with government contracting regulations; failure to succeed in strategic transactions, acquisitions, or partnerships; securities price volatility; supply chain disruptions, supplier non-performance, or increased procurement costs due to trade tensions, tariffs, or hostilities; climate change, natural disasters, and increased scrutiny of ESG initiatives; infringement of intellectual property rights, or inability to procure necessary third-party licenses; failure to achieve expected benefits of restructuring plans, workforce reductions, and automation/AI reliance; failure to maintain effective disclosure controls and internal control over financial reporting; asset impairment charges, including but not limited to intangibles and deferred tax assets; inability to pay dividends or repurchase shares; pending investigations, claims, and disputes; changes in tax rates, tax laws, and the timing and outcome of tax examinations; and risks related to completed strategic transactions. For a written description of these factors, see our most recently filed Annual Report on Form 10-K, and any updating information in subsequent SEC filings. Forward-looking statements speak only as of the date made. Except as required by law, we assume no obligation to update or revise any forward-looking statements.

About Non-GAAP Measures

In an effort to provide investors with supplemental financial information, in addition to the preliminary and unaudited financial information presented on a GAAP basis, we also disclose in this press release preliminary non-GAAP information including: earnings before interest and taxes ("EBIT"), EBIT margin, adjusted EBIT, adjusted EBIT margin, non-GAAP diluted EPS, organic revenues, organic revenue growth, free cash flow, and non-GAAP tax rate.

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.

We believe constant currency revenues provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars in the periods presented. See below for a description of the methodology we use to present constant currency revenues.

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. We exclude amortization of certain acquired intangible assets as these non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Although DXC management excludes amortization of acquired intangible assets, primarily customer-related intangible assets, from its non-GAAP expenses, we believe it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and support revenue generation. Any future transactions may result in a change to the acquired intangible asset balances and associated amortization expense.

Another 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 impairment losses, which, if included, may result in a significant difference in period-over-period expense on a GAAP basis. We exclude impairment losses as these non-cash amounts reflect generally an acceleration of what would be multiple periods of expense and are not expected to occur frequently. Further, assets such as goodwill may be significantly impacted by market conditions outside of management's control.

Selected references are made to revenue growth on an "organic basis" in order that certain financial results can be viewed without the impact of fluctuations in foreign currency rates and without the impacts of acquisitions and divestitures, thereby providing comparisons of operating performance from period to period of the business that we have owned during both periods presented. Organic revenue growth is calculated by dividing the year-over-year change in GAAP revenues attributed to organic growth by the GAAP revenues reported in the prior comparable period. Organic revenue is calculated as constant currency revenue excluding the impact of mergers, acquisitions or similar transactions until the one-year anniversary of the transaction and excluding revenues of divestitures during the reporting period. This approach is used for all results where the functional currency is not the U.S. dollar. We believe organic revenue growth provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars and the effects of acquisitions and divestitures in both periods presented.

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 for normal business operations, to pay debt, repurchase shares, and provide further investment in the business.

There are limitations to the use of the non-GAAP financial measures presented in this report. One of the limitations is that they do not reflect complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Additionally, other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes between companies. Selected references are made on a "constant currency basis" so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby providing comparisons of operating performance from period to period. Financial results on a "constant currency basis" are non-GAAP measures calculated by translating current period activity into U.S. Dollars using the comparable prior period's currency conversion rates. This approach is used for all results where the functional currency is not the U.S. Dollar.

Condensed Consolidated Statements of Operations
(preliminary and unaudited)

		Three Months Ended				Six Months Ended
(in millions, except per-share amounts)		September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Revenues		$           3,034		$           3,161		$           6,033		$             6,320
Costs of services		2,374		2,383		4,762		4,771
Selling, general and administrative		319		366		647		760
Depreciation and amortization		286		295		553		599
Restructuring costs		23		35		49		72
Interest expense		57		53		112		107
Interest income		(45)		(46)		(134)		(92)
Other income, net		(34)		(56)		(251)		(95)
Total costs and expenses		2,980		3,030		5,738		6,122
Income before income taxes		54		131		295		198
Income tax expense		41		91		156		140
Net income		13		40		139		58
Less: net (loss) income attributable to non-controlling interest, net of tax		(11)		4		(7)		6
Net income attributable to DXC common stockholders		$              24		$              36		$             146		$                52
Income per common share:
Basic		$            0.15		$            0.20		$            0.91		$              0.29
Diluted		$            0.15		$            0.20		$            0.89		$              0.29
Weighted average common shares outstanding for:
Basic EPS		158.16		177.43		160.50		179.26
Diluted EPS		161.99		179.15		164.39		181.76

Selected Condensed Consolidated Balance Sheet Data
(preliminary and unaudited)

		As of
(in millions)		September 30, 2026		March 31, 2026
Assets
Cash and cash equivalents		$              1,599		$              1,737
Receivables, net		2,815		2,973
Prepaid expenses		447		526
Other current assets		119		126
Total current assets		4,980		5,362
Intangible assets, net		1,370		1,612
Operating right-of-use assets, net		601		663
Goodwill		527		527
Deferred income taxes, net		785		802
Property and equipment, net		1,083		1,122
Other assets		2,864		2,802
Total Assets		$             12,210		$             12,890
Liabilities
Short-term debt and current maturities of long-term debt		$                935		$                520
Accounts payable		614		561
Accrued payroll and related costs		568		564
Operating lease liabilities		231		232
Accrued expenses and other current liabilities		1,222		1,261
Deferred revenue and advance contract payments		667		748
Income taxes payable		112		53
Total current liabilities		4,349		3,939
Long-term debt, net of current maturities		2,124		3,032
Non-current deferred revenue		468		559
Non-current operating lease liabilities		403		463
Non-current income tax liabilities and deferred tax liabilities		375		502
Other long-term liabilities		1,172		1,186
Total Liabilities		8,891		9,681
Total Equity		3,319		3,209
Total Liabilities and Equity		$             12,210		$             12,890

Condensed Consolidated Statements of Cash Flows
(preliminary and unaudited)

		Six Months Ended
(in millions)		September 30, 2026		September 30, 2025
Cash flows from operating activities:
Net income		$                139		$                 58
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		560		611
Goodwill impairment losses		—		14
Operating right-of-use expense		140		153
Share-based compensation		33		46
Deferred taxes		13		22
Loss (gain) on dispositions		7		(5)
Provision for losses on accounts receivable		1		3
Unrealized foreign currency exchange gain		(6)		(38)
Impairment losses and contract write-offs		39		3
Other non-cash charges, net		(5)		(8)
Changes in assets and liabilities:
Decrease in assets		119		211
Decrease in operating lease liability		(140)		(153)
Decrease in other liabilities		(265)		(322)
Net cash provided by operating activities		635		595
Cash flows from investing activities:
Purchases of property and equipment		(133)		(87)
Payments for transition and transformation contract costs		(49)		(58)
Software purchased and developed		(48)		(113)
Proceeds from sale of assets		32		23
Other investing activities, net		11		13
Net cash used in investing activities		(187)		(222)
Cash flows from financing activities:
Principal payments on long-term debt		(400)		—
Payments on finance leases and borrowings for asset financing		(73)		(107)
Taxes paid related to net share settlements of share-based compensation awards		(11)		(13)
Repurchase of common stock		(132)		(124)
Other financing activities, net		(2)		(2)
Net cash used in financing activities		(618)		(246)
Effect of exchange rate changes on cash and cash equivalents		32		(35)
Net (decrease) increase in cash and cash equivalents		(138)		92
Cash and cash equivalents at beginning of year		1,737		1,796
Cash and cash equivalents at end of period		$              1,599		$              1,888

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 third party 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.
• Merger-related indemnification – represents the Company's estimate of potential net liability for tax related indemnifications.
• Gain on litigation award – reflects a gain related to the TCS Litigation judgment.
• Gains and losses on real estate and facility sales – gains and losses related to dispositions of real property.
• Gains and losses on dispositions – gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities.
• 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). 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 the impact of merger and divestitures. Income tax expense of all other (non-discrete) non-GAAP adjustments is based on the difference in the GAAP annual effective tax rate (AETR) and overall non-GAAP provision (consistent with the GAAP methodology).

Non-GAAP Results

A reconciliation of reported results to non-GAAP results is as follows:

		Three Months Ended September 30, 2026
(in millions, except per-share amounts)		As Reported		Restructuring Costs		Transaction, Separation and Integration- Related Costs		Amortization  of Acquired Intangible Assets		(Gains) and Losses on Real Estate, Facility Sales and  Dispositions		Tax Adjustment		Non-GAAP Results
Income before income taxes		$       54		$        23		$         3		$        86		$         9		$         —		$      175
Income tax expense		41		7		1		28		3		(2)		78
Net income		13		16		2		58		6		2		97
Less: net income attributable to non-controlling interest, net of tax		(11)		—		—		—		—		—		(11)
Net income attributable to DXC common stockholders		$       24		$        16		$         2		$        58		$         6		$         2		$      108
Effective Tax Rate		75.9 %												44.6 %
Basic EPS from continuing operations		$     0.15		$       0.10		$       0.01		$       0.37		$       0.04		$       0.01		$     0.68
Diluted EPS from continuing operations		$     0.15		$       0.10		$       0.01		$       0.36		$       0.04		$       0.01		$     0.67
Weighted average common shares outstanding for:
Basic EPS		158.16		158.16		158.16		158.16		158.16		158.16		158.16
Diluted EPS		161.99		161.99		161.99		161.99		161.99		161.99		161.99

 

		Six Months Ended September 30, 2026
(in millions, except per-share amounts)		As Reported		Restructuring Costs		Transaction, Separation and Integration- Related Costs		Amortization  of Acquired Intangible Assets		Gain on Litigation Award		(Gains) and Losses on Real Estate, Facility Sales and Dispositions		Tax Adjustment		Non-GAAP Results
Income before income taxes		$      295		$        49		$         3		$       173		$       (214)		$         7		$         —		$      313
Income tax expense		156		19		1		68		(99)		2		(2)		145
Net income		139		30		2		105		(115)		5		2		168
Less: net income attributable to non-controlling interest, net of tax		(7)		—		—		—		—		—		—		(7)
Net income attributable to DXC common stockholders		$      146		$        30		$         2		$       105		$       (115)		$         5		$         2		$      175
Effective Tax Rate		52.9 %														46.3 %
Basic EPS from continuing operations		$     0.91		$       0.19		$       0.01		$       0.65		$      (0.72)		$       0.03		$       0.01		$     1.09
Diluted EPS from continuing operations		$     0.89		$       0.18		$       0.01		$       0.64		$      (0.70)		$       0.03		$       0.01		$     1.06
Weighted average common shares outstanding for:
Basic EPS		160.50		160.50		160.50		160.50		160.50		160.50		160.50		160.50
Diluted EPS		164.39		164.39		164.39		164.39		164.39		164.39		164.39		164.39

 

		Three Months Ended September 30, 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		(Gains) and Losses on Real Estate, Facility Sales and Dispositions		Tax Adjustment		Non-GAAP Results
Income before income taxes		131		35		1		88		—		(8)		—		247
Income tax expense		91		6		—		15		(2)		(1)		(16)		93
Net income		40		29		1		73		2		(7)		16		154
Less: net income attributable to non-controlling interest, net of tax		4		—		—		—		—		—		—		4
Net income attributable to DXC common stockholders		$       36		$          29		$            1		$          73		$            2		$           (7)		$          16		$      150
Effective Tax Rate		69.5 %														37.7 %
Basic EPS		$     0.20		$       0.16		$       0.01		$       0.41		$       0.01		$      (0.04)		$       0.09		$     0.85
Diluted EPS		$     0.20		$       0.16		$       0.01		$       0.41		$       0.01		$      (0.04)		$       0.09		$     0.84
Weighted average common shares outstanding for:
Basic EPS		177.43		177.43		177.43		177.43		177.43		177.43		177.43		177.43
Diluted EPS		179.15		179.15		179.15		179.15		179.15		179.15		179.15		179.15

 

		Six Months Ended September 30, 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		(Gains) and Losses on Real Estate, Facility Sales and Dispositions		Impairment Losses		Tax Adjustment		Non-GAAP Results
Income before income taxes		198		72		2		175		2		(8)		14		—		455
Income tax expense		140		15		—		35		(2)		(1)		4		(18)		173
Net income		58		57		2		140		4		(7)		10		18		282
Less: net income attributable to non- controlling interest, net of tax		6		—		—		—		—		—		—		—		6
Net income attributable to DXC common stockholders		$       52		$        57		$         2		$       140		$         4		$        (7)		$        10		$        18		$      276
Effective Tax Rate		70.7 %																38.0 %
Basic EPS		$     0.29		$       0.32		$       0.01		$       0.78		$       0.02		$      (0.04)		$       0.06		$       0.10		$     1.54
Diluted EPS		$     0.29		$       0.31		$       0.01		$       0.77		$       0.02		$      (0.04)		$       0.06		$       0.10		$     1.52
Weighted average common shares outstanding for:
Basic EPS		179.26		179.26		179.26		179.26		179.26		179.26		179.26		179.26		179.26
Diluted EPS		181.76		181.76		181.76		181.76		181.76		181.76		181.76		181.76		181.76

The above tables serve to reconcile the non-GAAP financial measures to the most directly comparable GAAP measures. Please refer to the "About Non-GAAP Measures" section of the press release for further information on the use of these non-GAAP measures.

Year-over-Year Organic Revenue Growth

		Three Months Ended				Six Months Ended
		September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Total revenue growth		(4.0) %		(2.5) %		(4.5) %		(2.4) %
Foreign currency		— %		(1.9) %		(0.8) %		(2.0) %
Acquisitions and Divestitures		— %		0.2 %		— %		0.1 %
Organic revenue growth		(4.0) %		(4.2) %		(5.3) %		(4.3) %
CES revenue growth		(3.3) %		(1.9) %		(2.3) %		(2.3) %
Foreign currency		— %		(1.9) %		(0.8) %		(2.0) %
Acquisitions and Divestitures		— %		0.4 %		— %		0.4 %
CES organic revenue growth		(3.3) %		(3.4) %		(3.1) %		(3.9) %
GIS revenue growth		(10.0) %		(4.2) %		(9.7) %		(3.9) %
Foreign currency		— %		(2.1) %		(0.9) %		(2.1) %
Acquisitions and Divestitures		— %		— %		— %		— %
GIS organic revenue growth		(10.0) %		(6.3) %		(10.6) %		(6.0) %
Insurance revenue growth		23.1 %		4.6 %		12.6 %		5.0 %
Foreign currency		— %		(1.0) %		(0.2) %		(1.4) %
Acquisitions and Divestitures		— %		— %		— %		— %
Insurance organic revenue growth		23.1 %		3.6 %		12.4 %		3.6 %

Segment Profit

Segment profit is defined as segment revenues less costs of services, selling, general and administrative, depreciation and amortization, and other segment items. The Company does not allocate to its segments certain operating expenses managed at the corporate level. These unallocated expenses generally include certain corporate function costs, pension and OPEB actuarial and settlement gains and losses, restructuring costs, transaction, separation, and integration-related costs, amortization of acquired intangible assets, impairment losses, gains/(losses) on dispositions of businesses, gains/(losses) on real estate and facility sales, and other costs that do not reflect ongoing segment operating performance. As part of the transition to the new segment structure, the Company updated the assumptions that define which expenses remain in corporate post allocation. The tables below reflect those revised assumptions.

		Three Months Ended				Six Months Ended
(in millions)		September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
CES profit		$              125		$              145		$              225		$              250
GIS profit		66		122		104		219
Insurance profit		45		28		79		61
Corporate expenses		(49)		(41)		(71)		(60)
Adjusted EBIT		187		254		337		470
Restructuring costs		(23)		(35)		(49)		(72)
Transaction, separation and integration-related costs		(3)		(1)		(3)		(2)
Amortization of acquired intangible assets		(86)		(88)		(173)		(175)
Merger related indemnification		—		—		—		(2)
Gain on litigation award		—		—		168		—
(Losses) gains on real estate, facility sales and dispositions		(9)		8		(7)		8
Impairment losses		—		—		—		(14)
EBIT		66		138		273		213
Interest income		45		46		134		92
Interest expense		(57)		(53)		(112)		(107)
Income before income taxes		54		131		295		198
Income tax expense		(41)		(91)		(156)		(140)
Net income		13		40		139		58
Segment profit margins
CES		10.3 %		11.6 %		9.2 %		10.0 %
GIS		4.6 %		7.7 %		3.6 %		6.9 %
Insurance		11.4 %		8.8 %		11.1 %		9.6 %
Total Company margins
Adjusted EBIT margin		6.2 %		8.0 %		5.6 %		7.4 %
EBIT margin		2.2 %		4.4 %		4.5 %		3.4 %

 

 

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SOURCE DXC Technology Company

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were DXC's second-quarter fiscal 2027 revenue and earnings?

DXC reported revenue of $3.03 billion and diluted earnings per share of $0.15. Revenue declined 4.0% year-over-year, including on an organic basis. Non-GAAP diluted earnings per share were $0.67, down 20.2% year-over-year.

What is DXC's fiscal 2027 outlook?

DXC expects revenue of $11.91 billion–$11.98 billion and non-GAAP diluted earnings per share of $2.25–$2.50. Its outlook includes an organic revenue decline of 5.5%–5.0%, adjusted operating margin of 5.75%–6.25%, and free cash flow of approximately $600 million.

How does DXC calculate free cash flow?

DXC calculates free cash flow by subtracting capital expenditures from operating cash flow. Those expenditures include purchases of property and equipment, transition and transformation contract costs, and software purchased or developed. Free cash flow is a non-GAAP financial measure.