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Financial Performance - Revenues for the three months ended September 30, 2025, were $3,161 million, a decrease of 2.5% compared to $3,241 million for the same period in 2024[10]. - Net income for the six months ended September 30, 2025, was $58 million, down 17.1% from $70 million for the same period in 2024[10]. - As of September 30, 2025, DXC Technology Company reported a net income of $36 million, compared to $42 million for the same period in 2024, reflecting a decrease of approximately 14.3% year-over-year[19]. - The company experienced a comprehensive loss attributable to DXC common stockholders of $44 million for the three months ended September 30, 2025[14]. - DXC's total comprehensive loss for the three months ended September 30, 2025, was $(80) million, compared to a comprehensive income of $64 million for the same period in 2024[19]. - Net income attributable to DXC common shareholders for the three months ended September 30, 2025, was $36 million, compared to $42 million for the same period in 2024, representing a decrease of 14.3%[30]. - Basic earnings per share (EPS) for the three months ended September 30, 2025, was $0.20, down from $0.23 in the same period of 2024, a decline of 13.0%[30]. - Diluted earnings per share were $0.20, down from $0.23 in the same period a year ago; adjusted diluted earnings per share were $0.84, down from $0.93[137]. - Net income for the six months ended September 30, 2025, was $276 million, compared to $308 million for the same period in 2024, reflecting a decrease of 10.4%[170]. Assets and Liabilities - Total current assets increased to $5,439 million as of September 30, 2025, compared to $5,363 million as of March 31, 2025[16]. - Total liabilities increased to $10,246 million as of September 30, 2025, compared to $9,715 million as of March 31, 2025[16]. - Goodwill increased slightly to $531 million as of September 30, 2025, from $526 million as of March 31, 2025[16]. - The total debt of the Company as of September 30, 2025, was $3.982 billion, compared to $3.876 billion as of March 31, 2025[69]. - The estimated fair value of the Company's long-term debt, excluding finance lease liabilities, was $3.6 billion as of September 30, 2025[70]. - The company had total liquidity of $5.1 billion as of September 30, 2025, including $1.9 billion in cash and cash equivalents and $3.2 billion in available borrowings[187]. Cash Flow and Investments - Net cash provided by operating activities for the six months ended September 30, 2025, was $595 million, compared to $433 million for the same period in 2024[18]. - Year-to-date cash generated from operations was $595 million, resulting in free cash flow of $337 million, compared to $93 million in the prior year[137]. - Cash paid for interest during the six months ended September 30, 2025, was $102 million, compared to $137 million in the same period of 2024[105]. - The company reported a total of $508 million in capital expenditures in accounts payable and accrued expenses for the six months ended September 30, 2025[105]. - The cash conversion cycle improved to 9 days for the three months ended September 30, 2025, down from 15 days in the prior year[177]. Shareholder Actions - The company repurchased 5,318 thousand shares under its share repurchase program, resulting in a treasury stock acquisition of $76 million during the three months ended September 30, 2025[19]. - For the first six months of fiscal 2026, the company repurchased a total of 8,593,166 shares at an average price of $14.55, totaling $125 million[95]. - During the quarter ended September 30, 2025, DXC repurchased a total of 5,317,898 shares at an average price of $14.12 per share[200]. - As of September 30, 2025, approximately $467 million worth of shares remained available for repurchase under the company's share repurchase plans[200]. - The company announced an incremental $1.0 billion share repurchase authorization on May 18, 2023[200]. Segment Performance - Segment revenues for the three months ended September 30, 2025, were $3,161 million, a decrease from $3,241 million in the same period of 2024[111]. - Segment profit for the six months ended September 30, 2025, was $530 million, down from $600 million in the same period of 2024[112]. - Revenues for the CES segment for the six months ended September 30, 2025, were $2,501 million, a decrease from $2,560 million in the same period of 2024[112]. Tax and Compliance - The effective tax rate for the three months ended September 30, 2025, was 69.5%, compared to 51.6% for the same period in 2024[81]. - The effective tax rate for the six months ended September 30, 2025, was 38.0%, down from 56.5% in the same period of 2024[170]. - The company has a deferred tax liability of $23 million related to undistributed earnings from foreign subsidiaries as of September 30, 2025[82]. - The company expects to resolve tax return years 2014 through 2021 no earlier than fiscal year 2027[93]. Restructuring and Costs - The company reported restructuring costs of $35 million for the three months ended September 30, 2025, compared to $42 million for the same period in 2024[10]. - Restructuring liabilities totaled $36 million as of September 30, 2025, down from $39 million as of March 31, 2025[76]. - The company expects to incur restructuring costs associated with global cost savings initiatives during fiscal 2026[77]. - Corporate expenses for the three months ended September 30, 2025, were $41 million, down from $53 million in the same period of 2024, reflecting a reduction of 22.6%[113]. Market and Economic Factors - The company was awarded a total of $194 million in a lawsuit against Tata Consultancy Services, including $56 million in compensatory damages and $112 million in punitive damages[119]. - The Inflation Reduction Act imposes a 1% excise tax on share repurchases completed after December 31, 2022, which is reflected within equity[201]. - There have been no material changes to the risk factors affecting the company as of September 30, 2025[197].

Core Insights - DXC Technology reported revenue of $3.16 billion for the quarter ended September 2025, reflecting a year-over-year decline of 2.5% [1] - The earnings per share (EPS) for the quarter was $0.84, down from $0.93 in the same quarter last year, but exceeded the consensus estimate of $0.71 by 18.31% [1] - The reported revenue fell short of the Zacks Consensus Estimate of $3.18 billion, resulting in a surprise of -0.58% [1] Revenue Performance - Total revenues decreased by 2.5% year-over-year, compared to an average estimate of -1.9% from three analysts [4] - Global Infrastructure Services (GIS) revenue also declined by 4.2% year-over-year, against an estimated decline of 1% [4] - GIS revenues were reported at $1.59 billion, slightly above the three-analyst average estimate of $1.58 billion, showing a year-over-year increase of 1.7% [4] Stock Performance - Over the past month, DXC Technology's shares have returned -4.6%, contrasting with a +3.6% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Insights - DXC Technology Company reported quarterly earnings of $0.84 per share, exceeding the Zacks Consensus Estimate of $0.71 per share, but down from $0.93 per share a year ago, resulting in an earnings surprise of +18.31% [1] - The company posted revenues of $3.16 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 0.58% and down from $3.24 billion year-over-year [2] - DXC Technology shares have declined approximately 34.1% year-to-date, contrasting with the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.87 on revenues of $3.21 billion, and for the current fiscal year, it is $3.14 on revenues of $12.76 billion [7] - The estimate revisions trend for DXC Technology was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Computers - IT Services industry, to which DXC Technology belongs, is currently in the top 25% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $3.2 billion, a decline of 4.2% year-over-year on an organic basis, consistent with previous quarters [14] - Adjusted EBIT margin was 8%, above the high end of guidance, but down 60 basis points year-over-year due to productivity savings and higher investment levels [15] - Non-GAAP EPS was $0.84, down from $0.93 in the same quarter last year, primarily due to lower adjusted EBIT and higher taxes [16] - Free cash flow generated was $240 million, significantly up from $48 million last year, bringing first-half free cash flow to $337 million, an increase of $244 million year-over-year [18][20] Business Line Data and Key Metrics Changes - Consulting and Engineering Services (CES) revenue declined 3.4% year-over-year, with a book-to-bill ratio of 0.92 [16] - Global Infrastructure Services (GIS) revenue declined 6.3% year-over-year, with a book-to-bill ratio of 0.82 [17] - Insurance Services revenue grew 3.6% year-over-year, driven by software growth and volume increases in existing accounts [18] Market Data and Key Metrics Changes - The trailing 12-month book-to-bill ratio for CES improved to 1.15, indicating potential revenue growth in the latter part of the year [16] - The trailing 12-month book-to-bill ratio for GIS remained at approximately 1.1, reflecting a strong pipeline despite longer closing cycles [17] Company Strategy and Development Direction - The company is focusing on a two-track approach: Core Track for existing business and Fast Track for new AI-native solutions [4][5] - Fast Track solutions aim to become 10% of the business within 36 months, targeting large and growing markets with measurable results [6] - The company is enhancing its offerings with AI-enabled solutions and has plans to pilot new products like Oasis in the coming months [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in revenue and bookings but remains focused on building a predictable and growing company [4] - The company anticipates a book-to-bill ratio greater than one in the third quarter, supported by a robust pipeline of new large opportunities [14] - Management is confident in the ability to close large deals based on strong customer interest and the deployment of new tools [43] Other Important Information - The company has reduced total debt by approximately $107 million, bringing it to around $4 billion, while increasing cash balance to $1.9 billion [20][21] - The full-year revenue guidance has been narrowed to a decline of 3.5% to 4.5%, with expectations for adjusted EBIT margin between 7% and 8% [22][23] Q&A Session Summary Question: Update on CES performance under new leadership - Management highlighted targeted goals and go-to-market plans to improve CES performance, leveraging strong SAP capabilities [26][27] Question: Trends in GIS business and Hogan - Management noted improved customer-related metrics in GIS and emphasized the importance of new product development for revenue generation [36][38] Question: Free cash flow sustainability - Management indicated that the improved free cash flow performance is expected to be sustainable moving forward [33][70] Question: Headcount strategy in light of AI integration - Management discussed the evolving labor model, emphasizing the need for workforce skills to adapt to AI deployment [62][63] Question: Fast Track solution plans and milestones - Management attributed the pivot to new talent acquisition and the development of a product framework for Fast Track opportunities [68]

Financial Performance - Q2 FY26 organic revenue growth was (4.2%) [21], exceeding guidance of (3.5%) – (4.5%) [21] - Adjusted EBIT margin for Q2 FY26 was 8.0% [21], also exceeding guidance of 6.5% – 7.5% [21] - Non-GAAP diluted EPS for Q2 FY26 reached $0.84 [22], surpassing guidance of $0.65 – $0.75 [22] - The company reported strong free cash flow of $240 million in Q2 FY26 [25], compared to $48 million in Q2 FY25 [25] Segment Results - CES (Consulting and Enterprise Solutions) revenue was $1,255 million with YoY organic revenue growth of (3.4%) [23] - GIS (Global Infrastructure Services) revenue amounted to $1,586 million with YoY organic revenue growth of (6.3%) [23] - Insurance segment revenue was $320 million, demonstrating YoY organic revenue growth of 3.6% [23] Balance Sheet and Guidance - Net debt decreased, with gross debt reduction from capital leases [28] - Full Fiscal Year 2026 guidance includes YoY organic revenue growth of (3.5%) – (4.5%) [33], adjusted EBIT margin of 7.0% – 8.0% [33], and Non-GAAP diluted EPS of $2.85 – $3.35 [33] - The company anticipates approximately $650 million in free cash flow for the full fiscal year 2026 [33]

Financial Performance - Total revenue for Q2 FY26 was $3.16 billion, down 2.5% year-over-year and down 4.2% on an organic basis[5]. - Non-GAAP diluted earnings per share was $0.84, down 9.7% year-over-year[5]. - Segment profit for Consulting and Engineering Services was $145 million, down 17.1% year-over-year[7]. - Revenues for the three months ended September 30, 2025, were $3,161 million, a decrease of 2.5% compared to $3,241 million for the same period in 2024[23]. - Net income attributable to DXC common stockholders for the six months ended September 30, 2025, was $52 million, down 23.5% from $68 million in the same period of 2024[23]. - Basic earnings per share (EPS) for the three months ended September 30, 2025, was $0.20, compared to $0.23 for the same period in 2024, reflecting a decrease of 13.0%[23]. - For the six months ended September 30, 2025, net income attributable to DXC common stockholders was $276 million, compared to $308 million for the same period in 2024, reflecting a decrease of 10.4%[28]. - The company reported a net income of $58 million for the three months ended September 30, 2025, compared to $174 million for the same period in 2024[28]. - Net income for Q3 2025 was $40 million, a decrease of 11.1% from $45 million in Q3 2024[33]. Cash Flow and Capital Management - Free cash flow increased to $240 million, up $192 million year-over-year[6]. - The company repurchased $75 million of shares, returning capital to shareholders[6]. - Cash and cash equivalents at the end of the period were $1,888 million, an increase from $1,796 million at the beginning of the year, marking a rise of 5.1%[25]. - Net cash provided by operating activities for the six months ended September 30, 2025, was $595 million, an increase of 37.5% compared to $433 million for the same period in 2024[25]. Guidance and Projections - Revenue guidance for FY26 is projected between $12.67 billion and $12.81 billion, reflecting a decline of 4.5% to 3.5% year-over-year on an organic basis[7]. - Non-GAAP diluted EPS guidance for Q3 FY26 is estimated to be between $0.75 and $0.85[8]. Operational Metrics - Bookings totaled $2.7 billion, with a trailing twelve-month book to bill ratio of 1.08x[5]. - The company plans to implement a two-track approach to business operations, focusing on core and fast track initiatives[2]. - Organic revenue growth for the three months ended September 30, 2025, was reported at (4.2)%, an improvement from (5.6)% in the same period of 2024[30]. - Total revenue growth for the six months ended September 30, 2025, was (2.4)%, compared to (5.9)% for the same period in 2024[30]. Balance Sheet and Liabilities - Total assets increased to $13,582 million as of September 30, 2025, up from $13,205 million as of March 31, 2025, representing a growth of 2.8%[24]. - Total liabilities rose to $10,246 million as of September 30, 2025, compared to $9,715 million as of March 31, 2025, indicating an increase of 5.5%[24]. Tax and Interest Expenses - The effective tax rate for the three months ended September 30, 2025, was 69.5%, compared to 37.7% for the same period in 2024[26]. - The effective tax rate for the six months ended September 30, 2025, was 38.0%, compared to 33.2% for the same period in 2024[28]. - Interest expense for the three months ended September 30, 2025, was $53 million, a decrease of 23.2% from $69 million in the same period of 2024[23]. - Interest income for Q3 2025 was $46 million, a decrease of 9.8% from $51 million in Q3 2024[33]. Segment Performance - GIS organic revenue growth for the three months ended September 30, 2025, was (6.3)%, compared to (9.0)% in the same period of 2024[30]. - Insurance organic revenue growth for the six months ended September 30, 2025, was 3.6%, consistent with the same period in 2024[30]. - CES profit for Q3 2025 was $145 million, a decrease of 17.1% from $175 million in Q3 2024[33]. - GIS profit for Q3 2025 was $122 million, an increase of 1.7% from $120 million in Q3 2024[33]. - Insurance profit for Q3 2025 was $28 million, a decrease of 24.3% from $37 million in Q3 2024[33]. Other Financial Metrics - Adjusted EBIT margin was 8.0%, while EBIT margin was 4.4%[6]. - Adjusted EBIT for Q3 2025 was $254 million, down 8.9% from $279 million in Q3 2024[33]. - Total Company adjusted EBIT margin for Q3 2025 was 8.0%, compared to 8.6% in Q3 2024[33]. - Income before income tax for Q3 2025 was $131 million, an increase of 40.9% from $93 million in Q3 2024[33]. - Corporate expenses for Q3 2025 were $(41) million, a decrease of 22.6% from $(53) million in Q3 2024[33].

Core Insights - DXC Technology reported strong financial performance for the second quarter of fiscal 2026, exceeding guidance in adjusted EBIT margin and non-GAAP diluted EPS, while generating robust free cash flow [2][8] - The company is implementing a strategic plan to adapt to the evolving AI global economy, which includes a two-track business approach and the launch of the Xponential AI framework [2] Financial Highlights - Total revenue for the quarter was $3.16 billion, a decrease of 2.5% year-over-year, and down 4.2% on an organic basis [8] - Adjusted EBIT was $254 million, down 9.0% year-over-year, with an adjusted EBIT margin of 8.0% [8] - Non-GAAP diluted earnings per share was $0.84, down 9.7% year-over-year, while diluted earnings per share was $0.20, down 13.0% year-over-year [8] - Free cash flow increased to $240 million, up $192 million year-over-year [8] Segment Performance - Consulting and Engineering Services (CES) revenue was $1,255 million, down 1.9% year-over-year, with a segment profit of $145 million [8] - Global Infrastructure Services (GIS) revenue was $1,586 million, down 4.2% year-over-year, but segment profit increased by 1.7% to $122 million [8] - Insurance Services revenue was $320 million, up 4.6% year-over-year, with bookings increasing by 24.9% [8] Guidance - Full year fiscal 2026 revenue guidance is projected between $12.67 billion and $12.81 billion, reflecting a decline of 4.5% to 3.5% year-over-year on an organic basis [8] - Third quarter fiscal 2026 revenue guidance is expected to be between $3.18 billion and $3.22 billion, with an organic decline of 5.0% to 4.0% year-over-year [8]

Core Insights - DXC Technology has launched Xponential, a next-generation AI orchestration blueprint aimed at simplifying large-scale AI adoption for enterprises [1][2] - The framework integrates people, processes, and technology to deliver measurable results and accelerate modernization while ensuring secure and responsible AI operationalization [1][2] Company Overview - DXC Technology is a leading global provider of information technology services, recognized as a trusted partner for innovative organizations [6] - The company employs a global team of 50,000 full-stack engineers and operates AI-first facilities across six continents to support AI deployment and scaling [3] Xponential Framework - Xponential consists of five interdependent pillars: Insight, Accelerators, Automation, Approach, and Process, designed to facilitate AI orchestration across enterprises [4] - The framework emphasizes embedded governance, compliance, and observability to ensure responsible AI usage from the outset [4] Case Studies - At Textron, DXC implemented AI-powered automation, resulting in a 20% reduction in service desk tickets and proactive resolution of network issues for 32,000 employees [4] - The European Space Agency is collaborating with DXC to develop ASK ESA, an AI platform that enhances data unification and research acceleration [4] - Singapore General Hospital partnered with DXC to create the AI2D solution, achieving 90% accuracy in guiding antibiotic choices for respiratory infections [4] - Ferrovial is utilizing DXC's AI Workbench to enhance operations for over 25,500 employees through generative AI solutions [4]

Core Insights - DXC Technology has opened a new office in downtown Detroit, focusing on AI-first innovation and collaboration with employees, partners, and customers [1] - The Detroit office is located in the historic Fowler Building and aims to enhance Detroit's status as a technology hub [1] - DXC has over 500 employees in Michigan and a 40-year presence in the area, serving various industries including automotive, advanced manufacturing, energy, and finance [1] Company Expansion - The new office is part of DXC's global network of collaboration spaces designed to accelerate innovation for customers [1] - DXC is committed to investing in early career talent and upskilling experts in AI technology to support digital transformation [1] Industry Impact - The opening of the Detroit office aligns with the city's historical drive for innovation and the growing importance of AI technology [1] - DXC provides AI-powered solutions and a comprehensive suite of technology services, including application, cloud, infrastructure, and cybersecurity [1]