DXC Technology reported results for the first quarter fiscal 2027.
Our first quarter results were in line with our expectations, and we are maintaining our full-year guidance," said DXC Technology President and CEO, Raul Fernandez. "Through our Fast Track approach to innovation, we are bringing a new generation of AI-enabled platforms to market that help customers modernize operations and deliver measurable business outcomes. The momentum we are building is strengthening our capabilities, deepening customer engagement, and creating a clearer path to long-term value creation. The recent addition of Paul Taylor as incoming President further strengthens our leadership team and positions us to execute our strategy with greater speed and focus."
Financial Highlights - First Quarter Fiscal Year 2027
- Total revenue was $3.00 billion, down 5.1% year-over-year (down 6.7% on an organic basis).(1)
- EBIT was $207 million, up 176.0% year-over-year with a corresponding margin of 6.9%. Adjusted EBIT(2) was $150 million, down 30.6% year-over-year, with a corresponding margin(2) of 5.0%.
- Diluted earnings per share was $0.73. Non-GAAP diluted earnings per share(3) was $0.40, down 41.2% year-over-year.
- Cash generated from operations was $418 million, up 124.7% year-over-year. Free cash flow(4) was $314 million, compared to $97 million in the first quarter of fiscal year 2026. Free cash flow in fiscal 2027 includes cash proceeds of $214 million related to a litigation judgment.
- Bookings of $3.0 billion increased 5% year-over-year, with a book to bill ratio of 0.99x.
- Returned $70 million of capital to shareholders by repurchasing approximately 6.7 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 2027
Consulting and Engineering Services ("CES")
- Revenue was $1,231 million, down 1.2% year-over-year (down 3.0% on an organic basis).(1)
- Segment profit was $100 million, down 4.8% year-over-year, with a corresponding margin of 8.1%.
- Bookings declined 18.5% year-over-year, with a book to bill ratio of 0.98x.
Global Infrastructure Services ("GIS")
- Revenue was $1,449 million, down 9.4% year-over-year (down 11.1% on an organic basis).(1)
- Segment profit was $38 million, down 60.8% year-over-year, with a corresponding margin of 2.6%.
- Bookings increased 34.7% year-over-year, with a book to bill ratio of 1.11x.
Insurance Software & Services ("Insurance")
- Revenue was $319 million, up 1.9% year-over-year (up 1.4% on an organic basis).(1)
- Segment profit was $34 million, up 3.0% year-over-year, with a corresponding margin of 10.7%.
- Bookings increased 3.6% year-over-year, with a book to bill ratio of 0.54x.
Full Year Fiscal 2027 and Second Quarter Fiscal Year 2027 Guidance
Full Year Fiscal 2027
- Total revenue in the range of $12.10 billion and $12.35 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 6.0% to 7.0%.
- Non-GAAP diluted EPS(3) in the range of $2.40 to $2.90.
- Free Cash Flow(4) of ~$685 million compared to the prior guide of ~$600 million. The increase is the reflection of litigation related matters.
Second Quarter Fiscal 2027
- Total revenue in the range of $2.97 billion and $3.00 billion, a decline of 6.5% to 5.5% year-over-year on an organic basis.(1)
- Adjusted EBIT margin(2) of ~6.0%.
- Non-GAAP Diluted EPS(3) of ~$0.55.
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.
