DXC Technology reported results for the third quarter fiscal 2026.
"We delivered third quarter results with solid profit margins, continued strong free cash flow generation and improved bookings. This reflects disciplined execution across our business," said DXC Technology President and CEO Raul Fernandez. "We are investing across our offerings to energize our Core business while also developing new, differentiated Fast Track solutions for improved future revenue performance. As we continue to expand the use of AI in our solutions, we are helping clients work smarter, move faster and create new sources of value. This is repositioning DXC as a strategic partner in the marketplace."
Financial Highlights - Third Quarter Fiscal Year 2026
- Total revenue was $3.19 billion, down 1.0% year-over-year (down 4.3% on an organic basis).(1)
- EBIT was $179 million, up 22.6% year-over-year with a corresponding margin of 5.6%. Adjusted EBIT(2) was $263 million, down 8.0% year-over-year, with a corresponding margin(2) of 8.2%.
- Diluted earnings per share was $0.61, up 96.8% year-over-year. Non-GAAP diluted earnings per share(3) was $0.96, up 4.3% year-over-year.
- Cash generated from operations was $414 million, down $236 million year-over-year. Free cash flow(4) was $266 million, down $217 million year-over-year. On a year to date basis, free cash flow was $603 million, up $27 million or 4.7% year-over-year.
- Bookings of $3.6 billion declined 17% year-over-year, with a book to bill ratio of 1.12x. The trailing twelve month book to bill ratio was 1.02x.
- Returned $65 million of capital to shareholders by repurchasing approximately 4.5 million shares.
- Redeemed $300 million of the $700 million senior notes that mature in September 2026.
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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 - Third Quarter Fiscal Year 2026
Consulting and Engineering Services ("CES")
- Revenue was $1,266 million, down 0.1% year-over-year (down 3.6% on an organic basis).(1)
- Segment profit was $144 million, down 12.2% year-over-year, with a corresponding margin of 11.4%.
- Bookings declined 6% year-over-year, with a book to bill ratio of 1.20x.
- Trailing Twelve month book to bill ratio of 1.13x.
Global Infrastructure Services ("GIS")
- Revenue was $1,607 million, down 2.7% year-over-year (down 6.2% on an organic basis).(1)
- Segment profit was $113 million, up 0.9% year-over-year, with a corresponding margin of 7.0%.
- Bookings declined 26% year-over-year, with a book to bill ratio of 1.09x.
- Trailing Twelve month book to bill ratio of 0.99x.
Insurance Services ("Insurance")
- Revenue was $321 million, up 4.6% year-over-year (up 3.2% on an organic basis).(1)
- Segment profit was $35 million, down 30.0% year-over-year, with a corresponding margin of 10.9%.
- Bookings declined 6% year-over-year, with a book to bill ratio of 0.93x.
- Trailing Twelve month book to bill ratio of 0.73x.
Fourth Quarter and Full Fiscal Year 2026 Guidance
Fourth Quarter Fiscal 2026
- Total revenue in the range of $3.16 billion to $3.19 billion, a decline of 5.0% to 4.0% 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.
Full Year Fiscal 2026
- Total revenue of ~$12.69 billion, a decline of ~4.3% year-over-year on an organic basis compared to the prior range of $12.67 billion and $12.81 billion, a decline of 4.5% to 3.5% year-over-year on an organic basis.(1)
- Adjusted EBIT margin(2) of ~7.5% compared to the prior guide in the range of 7.0% to 8.0%.
- Non-GAAP diluted EPS(3) of ~$3.15, compared to the prior range of $2.85 to $3.35.
- Free Cash Flow(4) of ~$650 million.
Additional metrics for the fourth quarter and full year fiscal 2026 guidance are presented in the table below.
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Revenue |
Q4 FY26 |
FY26 Guidance |
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Low |
High |
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YoY Organic Revenue % |
(5.0) % |
(4.0) % |
(4.3) % |
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Acquisition & Divestitures Revenues % |
— % |
(0.1) % |
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Foreign Exchange Impact on Revenues % |
4.6 % |
3.0 % |
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Others |
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Non-GAAP Net Interest Expense ($M) |
$16 |
$37 |
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Non-GAAP Tax Rate |
~40% |
~37% |
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Foreign Exchange Assumptions |
Current Estimate |
Current Estimate |
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$/Euro Exchange Rate |
$1.16 |
$1.16 |
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$/GBP Exchange Rate |
$1.34 |
$1.34 |
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$/AUD Exchange Rate |
$0.65 |
$0.65 |
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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 third quarter fiscal 2026 results at 5:00 p.m. ET on January 29, 2026. 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 February 5, 2026, 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.
