Financial Data and Key Metrics Changes - The company delivered FFO and DPS of 20.7¢ per security, slightly above guidance of 20.6¢, with like-for-like income growth of 2.9% and occupancy reaching 99.9% [4][7][8] - Gearing stands at 29.4%, positioned at the lower end of the target range, expected to increase with capital deployment into growth opportunities [5][9] - NTA per security grew by 8¢ or 2.2% to $3.64, supported by underlying rental growth and cap rate compression [8][10] Business Line Data and Key Metrics Changes - The portfolio consists of over 90 assets valued at over $700 million, with a significant focus on metro and highway locations [2][3] - The company executed $38.8 million in divestments in the first half, enhancing portfolio quality and providing balance sheet capacity for future growth [4][12] Market Data and Key Metrics Changes - Property valuations increased by 2.3%, driven by rental growth and cap rate compression of eight basis points [10] - The portfolio capitalization rate is 6.32%, supported by strength in the underlying transaction market [10] Company Strategy and Development Direction - The company is focused on developing the Glasshouse Mountains project, which will enhance overall portfolio quality and increase strategic weighting to highway assets [11][12] - Future growth initiatives include progressing the redevelopment of Glasshouse Mountain southbound and securing other growth opportunities [13] Management's Comments on Operating Environment and Future Outlook - Management noted a slowdown in momentum leading up to the federal election, but a strong increase in volumes post-election [11] - For FY '26, the company expects to deliver FFO and distributions per security of 20.9¢, reflecting year-on-year growth of 1.2% [13] Other Important Information - The company maintains a carbon-neutral position across controlled assets and engages with tenants to support their ESG objectives [6] - Environmental initiatives are integral to development plans, including EV charging bays and renewable energy sources [7] Q&A Session Summary Question: Can you walk us through the bridge in FY '26 regarding key moving parts and drivers? - Management indicated that like-for-like NOI growth will be similar, offset by a moderate increase in the cost of debt and dilution from asset sales [16] Question: Are you assuming any more capital deployment during the period? - Guidance does not assume capital deployment beyond the Glasshouse Mountains northbound project [17] Question: What is the focus on the pipeline for restocking? - The focus is on convenience retail hubs and highway sites with truck stop facilities, with ongoing discussions with developers [18][19] Question: How much are you willing to spend on new projects? - The company has a buying capacity of approximately $50 to $60 million while remaining within the target gearing range [20] Question: What are the key metrics for the development project? - Expected development IRR is around 20%, with a long-term hold IRR of about 10% [22]

Financial Performance - FY25 FFO was 20.7 cents per security, slightly above the guidance of 20.6 cents per security[17] - Distributions were also 20.7 cents per security[17] - Net property income was $46.445 million in FY25 compared to $48.350 million in FY24[74] - Portfolio valuation increased by $16.6 million, representing a 2.3% increase[41] - NTA per security increased by 2.2% from $3.56 to $3.64[32] Portfolio and Operations - Portfolio occupancy remained high at 99.9%[12] - The portfolio Weighted Average Lease Expiry (WALE) is 7.9 years[12] - Like-for-like income growth was +2.9%[17] - Average rent review achieved +3.1%[17] - $38.8 million of strategic divestments were executed[15] Capital Management - Gearing was 29.4%, at the lower end of the target range of 25-40%[14] - Average debt hedged was 72%[14] - Total borrowings amounted to $215.5 million[35] Future Outlook - FY26 FFO and distributions are expected to be 20.9 cents per security, reflecting growth of 1.2%[54]

Core Viewpoint - DXC Technology has officially opened a new office in Buenos Aires, Argentina, as part of its strategy to expand its presence in Latin America and enhance collaboration and innovation [1][2]. Company Expansion - The new office in Buenos Aires will serve as a strategic hub for DXC's Go-to-Market teams and leaders across various services including Business Process Services, Cloud, ITO, Applications, and Modern Workplace [2][5]. - This expansion follows recent office openings in Farnborough, UK, and Toronto, indicating a broader commitment to growth and customer success [5]. Commitment to Innovation - DXC's investment in Argentina reflects a long-term commitment to supporting customers and talent in the region, aligning with the country's role as an innovation hub in Latin America [4][5]. - The Buenos Aires office is designed to deepen partnerships with regional customers and accelerate project delivery, showcasing the company's focus on delivering excellence [2][5]. Market Context - According to IDC, Argentina's IT services market is expected to experience renewed momentum, highlighting the potential for digital transformation in the region [4].

Core Insights - DXC Technology and 7AI have formed a strategic partnership to launch the DXC Agentic Security Operations Center (SOC), integrating fully autonomous AI agents into managed security operations, enhancing speed, accuracy, and coverage for customers globally [1][2][3] Company Overview - DXC Technology is a leading global provider of information technology services, focusing on simplifying, optimizing, and modernizing systems and processes for innovative organizations [6] - 7AI, founded in 2024 by cybersecurity veterans, specializes in agentic security, utilizing AI agents to autonomously manage essential security operations tasks [7] Partnership Details - The partnership aims to revolutionize managed security services by automating core SOC tasks, moving away from traditional manual approaches [2][3] - The DXC Agentic SOC is expected to save customers between 30 minutes to 2.5 hours per investigation and reduce false positive rates, enhancing overall security outcomes [2][3] Performance Metrics - The 7AI platform has saved security teams over 224,000 analyst hours, equivalent to 112 full-time analyst years and more than $11.2 million in productivity [3][4] - The platform is projected to save customers over $100 million in 2025, showcasing significant financial benefits [3] Technological Innovation - 7AI's Dynamic Reasoning technology allows AI agents to autonomously determine investigative approaches for new threats in real time, without needing pre-written playbooks [3][4] - DXC's extensive cybersecurity operations process 4.5 million daily security threats, providing a rich data environment for advancing AI capabilities [4] Customer Engagement - Live demonstrations of the DXC Agentic SOC will be available at the Black Hat 2025 event, reinforcing DXC's position as a cybersecurity innovator [5][6]

Core Insights - DXC Technology reported Q1 FY2026 GAAP revenue of $3.16 billion and non-GAAP EPS of $0.68, both exceeding analyst expectations [1][5] - Year-over-year, GAAP revenue declined by 2.4%, and non-GAAP EPS fell by 9.3% [5][10] - The company experienced strong bookings growth, reaching $2.8 billion, up 14% year-over-year, marking the third consecutive quarter of double-digit growth [6][10] Financial Performance - GAAP revenue for Q1 FY2026 was $3.16 billion, surpassing estimates by $80.9 million, while non-GAAP EPS was $0.68, exceeding estimates by $0.01 [1][5] - Free cash flow (non-GAAP) increased significantly to $97 million, up from $45 million in Q1 FY2025, reflecting a 115.6% increase [2][7] - Net income on a GAAP basis was $16 million, down from $26 million in Q1 FY2025, with GAAP diluted EPS decreasing from $0.14 to $0.09 [5][9] Business Segments - Consulting and Engineering Services saw a 32% increase in bookings but a 2.7% decline in revenue, with profit margin dropping from 9.6% to 8.4% [6][9] - Global Infrastructure Services bookings grew by 4%, while revenue fell by 3.5% year-over-year [6] - Insurance Services revenue increased by 5.4% year-over-year, but segment profit fell by 25%, reducing the margin to 10.5% [6][9] Strategic Focus - The company is focusing on integrating AI and advanced data analytics into its services, enhancing cybersecurity capabilities, and expanding its talent pool [4][8] - Management emphasized the importance of building a stronger client pipeline and streamlining sales processes [4][10] - A major contract was secured with Carnival Cruise Line for technology management across its fleet, showcasing the company's capabilities in infrastructure [8] Future Outlook - Management raised full-year guidance for non-GAAP diluted EPS to a range of $2.85–$3.35 for FY2026, while expecting organic revenue to decline by 3.0% to 5.0% [10][11] - For Q2 FY2026, non-GAAP EPS is projected between $0.65 and $0.75, with revenue expected to be approximately $3.15–$3.18 billion [10] - The company aims for approximately $600 million in free cash flow (non-GAAP) for FY2026 and plans to continue share repurchases [11]

Core Insights - DXC Technology, Inc. reported better-than-expected financial results for Q1 of fiscal 2026, with shares rising 4% in extended trading after reporting non-GAAP earnings of 68 cents per share, exceeding the Zacks Consensus Estimate by 6.3% despite a 10.5% year-over-year decline in earnings [1][9] - The company has a strong track record of beating earnings estimates, surpassing the Zacks Consensus Estimate in the last four quarters with an average surprise of 22.3% [2] Financial Performance - DXC reported revenues of $3.16 billion for Q1, beating the Zacks Consensus Estimate by 2.9%, but showing a 2.5% decline year over year; on an organic basis, revenues decreased by 4.3% [2] - The new reporting segment structure includes Consulting & Engineering Services (CES), Global Infrastructure Services (GIS), and Insurance Services, effective April 1, 2025, to better align financial disclosures with operational organization [3] - CES revenues declined 2.7% year over year to $1.25 billion, while GIS revenues were $1.6 billion, down 3.5% year over year; Insurance Services saw a 5.4% increase to $313 million [4] Margins and Cash Flow - The non-GAAP gross margin increased by 140 basis points, while non-GAAP operating income was $216 million, down 3.6% year over year; the non-GAAP operating margin contracted by 10 basis points to 6.8% [5] - DXC ended Q1 with $1.79 billion in cash and cash equivalents, with long-term debt increasing to $3.1 billion; operating cash flow was $186 million, and free cash flow was $97 million [6] Guidance and Outlook - DXC updated its fiscal 2026 revenue guidance to between $12.61 billion and $12.87 billion, up from the previous range of $12.18 billion to $12.44 billion; the Zacks Consensus Estimate for revenue is $12.29 billion, indicating a 4.5% decline [7] - The company projects an adjusted EBIT margin of 7%-8% and adjusted EPS in the range of $2.85-$3.35, compared to the previous guidance of $2.75-$3.25; the consensus for fiscal 2025 EPS is $3.05, suggesting an 11.1% increase [8] Q2 Expectations - For Q2, DXC anticipates revenues between $3.15 billion and $3.18 billion, with an adjusted EBIT margin of approximately 6.5% to 7.5%; adjusted EPS is projected to be between 65 cents and 75 cents [10]

Core Insights - DXC Technology has been selected by Banco Sabadell to enhance the accessibility of its digital services through a new testing framework that incorporates manual testing, automation, and AI-driven analysis [1][2][3] Group 1: Partnership Details - The initiative aims to create a more inclusive experience for Banco Sabadell's 12 million customers in Spain by addressing accessibility barriers, which is expected to reduce user drop-off and improve customer satisfaction [2][3] - DXC will provide 350,000 hours of advanced testing annually to support this initiative [2] Group 2: Methodology and Compliance - DXC and Banco Sabadell have developed a methodology that integrates accessibility testing throughout the product development lifecycle, including a real-time monitoring system for evaluating issues based on business impact [3] - The approach ensures compliance with accessibility standards set by Spanish and EU regulations, helping Banco Sabadell meet regulatory obligations and broader inclusion goals [3] Group 3: Industry Expertise - DXC Technology has over 45 years of experience in banking and capital markets, providing the necessary technology and expertise for financial institutions to remain competitive [4] - The collaboration is seen as a significant step towards a more equitable digital future for all citizens [4]

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) DXC Technology reported Q1 FY2026 revenues of $3.16 billion, a 2.4% decrease, with net income of $18 million, and implemented a new three-segment structure [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (unaudited, in millions, except EPS) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Revenues** | $3,159 | $3,236 | | Income before income taxes | $67 | $68 | | **Net income** | $18 | $25 | | Net income attributable to DXC | $16 | $26 | | **Diluted EPS** | $0.09 | $0.14 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (unaudited, in millions) | Metric | As of June 30, 2025 | As of March 31, 2025 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,792 | $1,796 | | **Total Assets** | $13,438 | $13,205 | | Total current liabilities | $4,497 | $4,411 | | Long-term debt | $3,100 | $2,996 | | **Total Liabilities** | $10,008 | $9,715 | | **Total Equity** | $3,430 | $3,490 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Cash Flow Highlights (unaudited, in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $186 | $238 | | Net cash used in investing activities | $(77) | $(188) | | Net cash (used in) provided by financing activities | $(110) | $41 | | **Net (decrease) increase in cash** | $(4) | $93 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - In Q1 fiscal 2026, the company implemented a new segment structure with three reportable segments: Consulting & Engineering Services (CES), Global Infrastructure Services (GIS), and Insurance Services[18](index=18&type=chunk)[49](index=49&type=chunk)[88](index=88&type=chunk) - Following a segment realignment, the company reallocated goodwill and recorded a full impairment of **$14 million** for the goodwill balance allocated to the GIS segment[51](index=51&type=chunk)[53](index=53&type=chunk) Segment Revenue and Profit (Q1 FY2026, in millions) | Segment | Revenues | Segment Profit | | :--- | :--- | :--- | | Consulting & Engineering Services (CES) | $1,246 | $105 | | Global Infrastructure Services (GIS) | $1,600 | $97 | | Insurance Services | $313 | $33 | - As of June 30, 2025, the company has approximately **$16.7 billion** in remaining performance obligations, with about **32%** expected to be recognized as revenue in fiscal 2026[57](index=57&type=chunk) - The company is involved in ongoing tax disputes with the IRS, with potential unreserved federal and state tax expense of approximately **$552 million** if the company does not prevail[68](index=68&type=chunk)[73](index=73&type=chunk) - In the TCS litigation, a court affirmed a jury verdict in DXC's favor, awarding a total of **$194 million** plus attorney's fees and costs. The decision is pending appeal and has not been recognized in the financial statements[99](index=99&type=chunk)[100](index=100&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a 2.4% revenue decline to $3.16 billion for Q1 FY2026, with varied segment performance and total liquidity of $5.0 billion Q1 FY2026 Financial Highlights vs. Q1 FY2025 (in millions, except EPS and ratios) | Metric | Q1 FY2026 | Change (YoY) | | :--- | :--- | :--- | | Revenues | $3,159 | -2.4% | | Organic Revenue | N/A | -4.3% | | Adjusted EBIT | $216 | -3.6% | | Adjusted Diluted EPS | $0.68 | -9.3% | | Free Cash Flow | $97 | +115.6% | | Book-to-bill ratio | 0.90x | +0.13x | Segment Performance (YoY Change) | Segment | Revenue Change | Organic Revenue Change | Segment Profit Change | | :--- | :--- | :--- | :--- | | CES | -2.7% | -4.4% | -14.6% | | GIS | -3.5% | -5.7% | -4.0% | | Insurance | +5.4% | +3.6% | -25.0% | - The decrease in operating cash flow was primarily due to lower net income and an unfavorable change in working capital. The cash conversion cycle increased from **14 days** to **17 days** year-over-year[149](index=149&type=chunk) - Total liquidity as of June 30, 2025, was **$5.0 billion**, consisting of **$1.8 billion** in cash and **$3.2 billion** available under the revolving credit facility. The company continues to suspend dividend payments to maintain financial flexibility[156](index=156&type=chunk)[157](index=157&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that its exposure to market risk has not materially changed since the end of the previous fiscal year, March 31, 2025 - There have been no material changes to the company's market risk exposure since March 31, 2025[161](index=161&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025 - Based on an evaluation as of the end of the quarter, the CEO and CFO concluded that disclosure controls and procedures were effective[162](index=162&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[163](index=163&type=chunk) [PART II – OTHER INFORMATION](index=50&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 17 of the financial statements for details on legal proceedings, including a securities class action settlement and ongoing TCS litigation - For information regarding legal proceedings, the report directs readers to Note 17 – "Commitments and Contingencies" in the financial statements[165](index=165&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes to the risk factors disclosed in its Annual Report on Form 10-K - There have been no material changes in the three months ended June 30, 2025, to the risk factors described in the company's most recent Form 10-K[166](index=166&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 FY2026, the company repurchased approximately 3.28 million shares for $50 million, with $542 million remaining for future repurchases Issuer Purchases of Equity Securities (Q1 FY2026) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | — | — | | May 2025 | 1,010,414 | $15.14 | | June 2025 | 2,264,854 | $15.32 | - As of June 30, 2025, approximately **$542 million** remained available for repurchase under the company's share repurchase programs[170](index=170&type=chunk) [Other Information](index=53&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[174](index=174&type=chunk) [Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including various agreements, plan amendments, and CEO/CFO certifications - The report includes exhibits such as executive compensation agreements, amendments to the receivables purchase agreement, and CEO/CFO certifications pursuant to Sarbanes-Oxley Sections 302 and 906[175](index=175&type=chunk)

Core Insights - DXC Technology Company reported $3.16 billion in revenue for the quarter ended June 2025, reflecting a year-over-year decline of 2.4% [1] - The earnings per share (EPS) for the same period was $0.68, down from $0.74 a year ago, but exceeded the consensus EPS estimate of $0.64 by 6.25% [1] - The reported revenue surpassed the Zacks Consensus Estimate of $3.07 billion by 2.92% [1] Revenue Performance - Total revenues experienced a year-over-year change of -2.4%, which was better than the three-analyst average estimate of -5.1% [4] - Global Infrastructure Services (GIS) revenues were reported at $1.6 billion, showing a year-over-year change of +2.6%, compared to the three-analyst average estimate of $1.47 billion [4] - The year-over-year change for GIS was -3.5%, which also outperformed the average estimate of -6.1% based on three analysts [4] Stock Performance - Shares of DXC Technology have returned -14% over the past month, contrasting with the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance against the broader market in the near term [3]

DXC Technology Company. (DXC) came out with quarterly earnings of $0.68 per share, beating the Zacks Consensus Estimate of $0.64 per share. This compares to earnings of $0.74 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.25%. A quarter ago, it was expected that this company would post earnings of $0.76 per share when it actually produced earnings of $0.84, delivering a surprise of +10.53%. Over the last four quarters, th ...