DXC Technology reported results for the first quarter fiscal 2026.
"We delivered first quarter results at the high end of our guidance for both organic revenue growth and adjusted EBIT margin, with non-GAAP EPS exceeding expectations. For the third straight quarter, we reported double digit bookings growth, a clear sign we are connecting better with clients," said DXC Technology President and CEO, Raul Fernandez. "We're embedding AI across our solutions and combining it with our full-stack expertise to help clients unlock insights and drive outcomes. With a strong foundation in place, we're confident in our direction."
Financial Highlights - First Quarter Fiscal Year 2026
- Total revenue was $3.16 billion, down 2.4% year-over-year (down 4.3% on an organic basis).(1)
- EBIT was $75 million, down 15.7% year-over-year with a corresponding margin of 2.4%. Adjusted EBIT(2) was $216 million, down 3.6% year-over-year, with a corresponding margin(2) of 6.8%.
- Diluted earnings per share was $0.09, down 35.7% year-over-year. Non-GAAP diluted earnings per share(3) was $0.68, down 9.3% year-over-year.
- Cash generated from operations was $186 million, down 21.8% year-over-year. Free cash flow(4) was $97 million, compared to $45 million in the first quarter of fiscal year 2025.
- Bookings of $2.8 billion increased 14% year-over-year, with a book to bill ratio of 0.90x.
- Returned $50 million of capital to shareholders by repurchasing approximately 3.3 million shares.
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(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. |
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(2) |
Adjusted EBIT and Adjusted EBIT margin are non-GAAP measures. Reconciliations of GAAP Net Income to such measures are attached to this release. |
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(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. |
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(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 - First Quarter Fiscal Year 2026
Consulting and Engineering Services ("CES")
- Revenue was $1,246 million, down 2.7% year-over-year (down 4.4% on an organic basis).(1)
- Segment profit was $105 million, down 14.6% year-over-year, with a corresponding margin of 8.4%.
- Bookings increased 32% year-over-year, with a book to bill ratio of 1.19x, compared to 0.88x during the first quarter of fiscal 2025.
Global Infrastructure Services ("GIS")
- Revenue was $1,600 million, down 3.5% year-over-year (down 5.7% on an organic basis).(1)
- Segment profit was $97 million, down 4.0% year-over-year, with a corresponding margin of 6.1%.
- Bookings increased 4% year-over-year, with a book to bill ratio of 0.74x, compared to 0.69x during the first quarter of fiscal 2025.
Insurance Services ("Insurance")
- Revenue was $313 million, up 5.4% year-over-year (up 3.6% on an organic basis).(1)
- Segment profit was $33 million, down 25.0% year-over-year, with a corresponding margin of 10.5%.
- Bookings declined 19% year-over-year, with a book to bill ratio of 0.54x, compared to 0.70x during the first quarter of fiscal 2025.
Full Year Fiscal 2026 and Second Quarter Fiscal Year 2026 Guidance
Full Year Fiscal 2026
- Total revenue in the range of $12.61 billion and $12.87 billion, a decline of 5.0% to 3.0% year-over-year on an organic basis.(1)
- Adjusted EBIT margin(2) in the range of 7.0% to 8.0%.
- Non-GAAP diluted EPS(3) in the range of $2.85 to $3.35, compared to the prior guidance of $2.75 to $3.25.
- Free Cash Flow(4) of ~$600 million.
Second Quarter Fiscal 2026
- Total revenue in the range of $3.15 billion and $3.18 billion, a decline of 4.5% to 3.5% year-over-year on an organic basis.(1)
- Adjusted EBIT margin(2) in the range of 6.5% to 7.5%.
- Non-GAAP Diluted EPS(3) in the range of $0.65 to $0.75.
Additional metrics for the second quarter and full year fiscal 2026 guidance are presented in the table below.
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Revenue |
Q2 FY26 Guidance |
FY26 Guidance |
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Lower |
Higher |
Lower |
Higher |
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YoY Organic Revenue % |
(4.5) % |
(3.5) % |
(5.0) % |
(3.0) % |
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Acquisition & Divestitures Revenues % |
(0.2) % |
(0.1) % |
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Foreign Exchange Impact on Revenues % |
1.8 % |
3.1 % |
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Others |
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Net Interest Expense ($M) |
~$12 |
~$60 |
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Non-GAAP Tax Rate |
~40% |
~35% |
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Foreign Exchange Assumptions |
Current Estimate |
Current Estimate |
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$/Euro Exchange Rate |
$1.15 |
$1.15 |
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$/GBP Exchange Rate |
$1.35 |
$1.35 |
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$/AUD Exchange Rate |
$0.66 |
$0.66 |
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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 first quarter fiscal 2026 results at 5:00 p.m. ET on July 31, 2025. The dial-in number for domestic callers is 888-330-2455. Callers who reside outside of the United States should dial +1-240-789-2717. The passcode for all participants is 4164760#. 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 approximately two hours after its conclusion until 11:59 PM ET on August 7, 2025, at 800-770-2030 for domestic callers and at +1-647-362-9199 for international callers. The replay passcode is 4164760#. A transcript of the conference call will be posted on DXC Technology's Investor Relations website.
