DXC Technology Co
For the period ended Mar 31, 2026. Filed May 8, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed May 8, 2026
DXC$14.86-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-03-31; filed 2025-05-15.
0001688568-25-000029
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-03-31; filed 2026-05-08.
0001688568-26-000022
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 177 current paragraphs.
100 unchanged; 50 reworded; 27 added; 31 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
DXC is a leading enterprise technology and innovation partner delivering software, services, and solutions to global enterprises and public sector organizations — helping them harness AI to drive outcomes at a time of exponential change with speed. With deep expertise in Managed Infrastructure Services, Application Modernization, and Industry-Specific Software Solutions, DXC modernizes, secures, and operates some of the world’s most complex technology estates.
Current report
We generate revenue by offering a wide range of information technology services and solutions primarily in North America, Europe, Asia, and Australia. Effective April 1, 2025 (fiscal year 2026), we began reporting our financial results under a new segment structure designed to better reflect the Company’s operational structure and the delivery of end-to-end IT services. The new structure includes three reportable segments: Consulting & Engineering Services ("CES"), Global Infrastructure Services ("GIS"), and Insurance Software & Services ("Insurance").
Current report
•Revenues of $12.64 billion, down 1.8% year-over-year (down 4.8% on an organic basis);
Current report
•EBIT was $353 million with a corresponding margin of 2.8%. Adjusted EBIT was $970 million, down 4.8% year-over-year with a corresponding margin of 7.7%;
Current report
Segment Highlights - Fiscal Year 2026
Current report
Consulting & Engineering Services
Current report
•Revenue was $5,023 million, down 0.8% year-over-year (down 3.8% on an organic basis).
Current report
•Segment profit was $518 million, down 10.7% year-over-year, with a corresponding margin of 10.3%.
Current report
•Book-to-bill ratio of 1.10x, compared to 1.08x during fiscal 2025.
Current report
•Revenue was $6,342 million, down 3.9% year-over-year (down 7.2% on an organic basis).
Current report
•Segment profit was $432 million, up 0.2% year-over-year, with a corresponding margin of 6.8%.
Current report
•Book-to-bill ratio of 0.94x, compared to 1.04x during fiscal 2025.
Current report
Insurance Software & Services
Current report
•Revenue was $1,279 million, up 5.4% year-over-year (up 3.6% on an organic basis).
Current report
•Segment profit was $129 million, down 20.4% year-over-year, with a corresponding margin of 10.1%.
Current report
•Book-to-bill ratio of 0.76x, compared to 0.77x during fiscal 2025.
Current report
Costs of services, excluding depreciation and amortization and restructuring costs ("COS"), consist of expenses directly associated with revenue-generating activities. These expenses primarily include payroll and related employee benefit costs, subcontractor costs and other contract-related expenses, as well as technology, facilities, and other supporting infrastructure costs.
Current report
Selling, general and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), consist of the costs associated with personnel in non-client facing positions. These expenses primarily include payroll and related employee benefit costs, business development efforts, marketing and advertising activities, and other expenses such as information systems and office space.
Current report
SG&A was $1,402 million for fiscal 2026, an increase of $54 million (+4.0%) compared to the prior-year period. The increase was primarily driven by the realignment of business development and certain other costs from COS, an unfavorable foreign currency exchange rate impact, and a gain from a legal settlement in the second quarter of fiscal 2025, partially offset by lower levels of merger-related indemnification expenses and transaction, separation, and integration ("TSI") costs in fiscal 2026.
Current report
Other Expense (Income), Net
Current report
Other expense (income), net, increased $377 million compared to the prior fiscal year, primarily due to:
Current report
•real estate and facility sales ($23 million) - losses on real estate and facility sales in fiscal 2025, with insignificant net sales in fiscal 2026;
Current report
•miscellaneous items ($9 million) - the Company recognized a $14 million impairment of goodwill in the first quarter of fiscal 2026 related to the change in operating segments, partially offset by fewer impairment losses recognized in fiscal 2026 and a gain on the sale of a strategic investment in the second quarter of fiscal 2025.
Current report
•Debt extinguishment costs – costs associated with early retirement, redemption, repayment or repurchase of debt and debt-like items including any breakage, make-whole premium, prepayment penalty or similar costs as well as solicitation and other legal and advisory expenses.
Current report
•$26 million in cash inflows from business dispositions in fiscal 2025 that did not occur in fiscal 2026.
Current report
•principal payments on long term debt, net of proceeds from bond issuance in fiscal 2026 of $320 million,
Current report
The $324 million decrease in total debt during fiscal 2026 was primarily attributable to principal payments on long-term debt, net of proceeds from our bond issuance in fiscal 2026 (see Note 10 - "Debt”), decreases in finance lease liabilities and borrowings for asset financing attributable to payments exceeding minimal additions, partially offset by the impact of the foreign currency exchange rate of U.S. dollar against the Euro.
Removed paragraphs (31)
Previous report
DXC helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. Many of the world’s largest companies and public sector organizations trust DXC to deploy services to drive new levels of performance, competitiveness, and customer experience across their IT estates.
Previous report
We generate revenue by offering a wide range of information technology services and solutions primarily in North America, Europe, Asia, and Australia. We operate through two segments: Global Business Services ("GBS") and Global Infrastructure Services ("GIS"). We market and sell our services directly to customers through our direct sales force around the world. Our customers include commercial businesses of many sizes and in many industries and public sector clients.
Previous report
•Revenues of $12.87 billion, down 5.8% compared to prior year period, and down 4.6% on an organic basis;
Previous report
•Income before income taxes was $630 million; adjusted earnings before income taxes was $1,019 million, an increase of 1.0% on an adjusted basis;
Previous report
Reportable Segment Results
Previous report
Global Business Services
Previous report
•Revenue was $6.6 billion, down 2.6% year-over-year (down 1.0% on an organic basis).
Previous report
•Segment profit was $797 million, down 4.6% year-over-year, with a corresponding margin of 12.0%.
Previous report
•Book-to-bill ratio of 1.03x, compared to 0.96x during fiscal 2024.
Previous report
•Revenue was $6.2 billion, down 9.1% year-over-year (down 8.2% on an organic basis).
Previous report
•Segment profit was $451 million, up 4.2% year-over-year, with a corresponding margin of 7.2%.
Previous report
•Book-to-bill ratio of 1.03x, compared to 0.86x during fiscal 2024.
Previous report
Selling, general and administrative expense ("SG&A") was $1.3 billion for fiscal 2025, an increase of $104 million compared to the prior fiscal year. The increase in expenses against the prior fiscal year was primarily due to an alignment of business development expenses from COS in support of the offering model and an increase in transaction, separation and integration-related (“TSI”) costs, partially offset by lower merger-related indemnification expenses, lower share-based compensation and a gain from a legal settlement in fiscal 2025.
Previous report
Amortization expense was $936 million for fiscal 2025, a decrease of $35 million compared to the prior fiscal year. The decrease in amortization expense was primarily due to lower software amortization.
Previous report
The decrease in net interest expense against the comparative period was primarily due to decreased interest expense from lower levels of asset financing and commercial paper, and higher net interest income from cash deposits.
Previous report
Other (Income) Expense, Net
Previous report
Other (income) expense, net, was $(376) million in fiscal 2025, a change of $594 million against the prior fiscal year. The change against the prior fiscal year was primarily due to:
Previous report
•losses (gains) on real estate and facility were $23 million and $(7) million, respectively, a change of $30 million;
Previous report
•a decrease in other miscellaneous (gains) and losses of $65 million, primarily from impairment losses in fiscal 2025 and the gain on the sale of a strategic investment in fiscal 2024.
Previous report
In fiscal 2025, the ETR was primarily impacted by:
Previous report
•The global mix of income and changes in foreign statutory tax rates, which increased the foreign tax rate differential and the ETR by $145 million and 23.0%, respectively.
Previous report
•Income tax and foreign tax credits, which decreased income tax expense and the ETR by $84 million and 13.3%, respectively, offset by tax expense on U.S. international tax inclusions, which increased tax expense and the ETR by $59 million and 9.4%, respectively.
Previous report
•The tax benefit of changes in uncertain tax positions related to the expiration of the statute of limitations and capitalized research and experimental expenditures, offset by the impact of increases in other uncertain tax positions and accrued interest, which decreased income tax expense and the ETR by $52 million and 8.3%, respectively.
Previous report
In fiscal 2024, the ETR was primarily impacted by:
Previous report
•Changes in foreign jurisdictional losses that decreased the ETR by $160 million and 146.8%, respectively, with an offsetting increase in the ETR due to an increase in the valuation allowance of the same amount.
Previous report
•Income tax and foreign tax credits, which decreased income tax expense and decreased the ETR by $101 million and 92.7%, respectively, offset by tax expense on U.S. international tax inclusions, which increased tax expense and increased the ETR by $39 million and 35.8%, respectively.
Previous report
•Foreign withholding taxes, which increased income tax expense and increased the ETR by $64 million and 58.7%, respectively.
Previous report
(1) Starting in the fiscal quarter ended September 30, 2024, the Company’s reported non-GAAP financial results reflect an adjustment for gains and losses on real estate and facilities dispositions, which the Company’s current management believes are not reflective of the core operating performance of our business. For comparability purposes, historical non-GAAP financial measures set forth herein have been recast to reflect this change, which included gains on dispositions of real property of approximately $7 million for the fiscal year ended March 31, 2024.
Previous report
•a $101 million decrease in cash outflows from commercial paper payments, net of borrowings; and
Previous report
The $213 million decrease in total debt during fiscal 2025 was primarily due to the net decreases in finance lease liabilities and borrowings for asset financing. The $609 million increase in short-term debt and current maturities of long-term debt reflects the fiscal year 2026 maturity of the €650 million senior note.
Previous report
In the U.S., the IRA was signed into law on August 16, 2022. We do not currently expect the IRA to have a material impact on our Consolidated Financial Statements.
Reworded paragraphs (50)
Previous wording
Key profitability and cash flow metrics for fiscal 2025 compared to fiscal 2024 are included below. We have presented organic revenue, adjusted earnings before income taxes, and adjusted diluted earnings per share on a non-GAAP basis. For more information see “Non-GAAP Financial Measures.”
Current wording
Key revenue, profitability and cash flow metrics for fiscal 2026 compared to fiscal 2025 are included below. We have presented organic revenue, adjusted earnings before income taxes, and adjusted diluted earnings per share on a non-GAAP basis. For more information see “Non-GAAP Financial Measures.”
Previous wording
•Diluted earnings per share of $2.10, compared to $0.46 in fiscal 2024; adjusted diluted earnings per share of $3.43, compared to $3.10 in fiscal 2024, an increase of 10.6%;
Current wording
•Diluted earnings per share of $0.10, compared to $2.10 in fiscal 2025; adjusted diluted earnings per share of $3.23, compared to $3.43 in fiscal 2025;
Previous wording
•Cash generated from operations was $1,398 million, less capital expenditures of $711 million, resulted in free cash flow of $687 million.
Current wording
•Cash generated from operations was $1,248 million, less capital expenditures of $535 million, resulted in free cash flow of $713 million, compared to free cash flow of $687 million in the prior-year
Previous wording
•Book-to-bill ratio (contract awards divided by annual revenue) of 1.03x, compared to 0.91x during fiscal 2024.
Current wording
•Book-to-bill ratio (contract awards divided by annual revenue) of 0.98x, compared to 1.03x during fiscal 2025.
Previous wording
(1)Income before income taxes, Net income, and Diluted earnings per common share include Pension and OPEB actuarial and settlement (gains) and losses that were $(232) million and $445 million for the fiscal years ended March 31, 2025 and March 31, 2024, respectively.
Current wording
(1)Income before income taxes, Net income, Net income attributable to DXC common stockholders, and Diluted earnings per common share include Pension and OPEB actuarial and settlement losses and (gains) that were $169 million and $(232) million for the fiscal years ended March 31, 2026 and March 31, 2025, respectively.
Previous wording
Total revenue for fiscal 2025 was $12.9 billion, a decline of $796 million or 5.8%, compared to the prior fiscal year, primarily driven by a 4.6% decline in organic revenue and a 1.0% unfavorable foreign currency exchange rate impact. Organic revenue is a non-GAAP measure, as discussed in our "Non-GAAP Financial Measures." In addition, for a discussion of risks associated with our foreign operations, see Part I, Item 1A - "Risk Factors."
Current wording
For fiscal 2026, our total revenue was $12.6 billion, a decrease of $227 million or 1.8%, compared to the prior fiscal year. The decrease against the comparative period includes a 4.8% decline in organic revenue partially offset by a 3.1% favorable foreign currency exchange rate impact. Organic revenue is a non-GAAP measure, as discussed in our "Non-GAAP Financial Measures." In addition, for a discussion of risks associated with our foreign operations, see Part I, Item 1A - "Risk Factors."
Previous wording
Costs of services ("COS") were $9.8 billion for fiscal 2025, a decrease of $806 million compared to the prior fiscal year. The decrease in expenses against the prior fiscal year was primarily due to a decline in costs from lower revenue levels and a reduction in professional services and contractor-related expenses from our cost optimization efforts.
Current wording
COS was $9.6 billion for fiscal 2026, a decrease of $157 million (-1.6%) compared to the prior-year period. The decline was primarily driven by a decrease in costs from lower revenue levels, the alignment of business development expenses to selling, general and administrative expenses in support of the offering model, and a reduction in professional services and contractor-related expenses from our cost optimization initiatives, partially offset by an unfavorable foreign currency exchange rate impact. In connection with the Company’s new segment structure in fiscal 2026, certain costs for personnel in non-client facing positions are now included in selling, general and administrative expenses.
Previous wording
Gross margin (Revenues less COS as a percentage of revenue) was 24.1% for fiscal 2025, an increase of 150 basis points against the prior fiscal year.
Current wording
Gross margin (Revenues less COS as a percentage of revenue) was 24.0% for fiscal 2026, a decline of 10 basis points against the prior fiscal year.
Previous wording
SG&A as a percentage of revenue was 10.5% for fiscal 2025, an increase of 140 basis points against the prior fiscal year.
Current wording
SG&A as a percentage of revenue was 11.1% for fiscal 2026, an increase of 60 basis points against the prior fiscal year.
Previous wording
Depreciation expense was $351 million for fiscal 2025, a decrease of $82 million compared to the prior fiscal year. The decrease in depreciation expense was primarily due to lower average net property and equipment balances.
Current wording
Depreciation and amortization was $1,160 million for fiscal 2026, a decrease of $127 million (-9.9%) compared to the prior-year period. Depreciation expense decreased by $57 million due to lower average net property and equipment balances. Amortization expense decreased by $70 million due to lower transition and transformation contract cost balances and lower software amortization.
Previous wording
During fiscal 2025, management approved global cost savings initiatives designed to better align our workforce, facility, and data center requirements. Total restructuring costs recorded, net of reversals, during fiscal 2025 were $153 million, an increase of $42 million compared to the prior fiscal year, primarily from a reduction in workforce-related expenses.
Current wording
During fiscal 2026, management approved global cost savings initiatives designed to better align our workforce, facility and data center requirements. Total restructuring costs recorded, net of reversals, during fiscal 2026 were $115 million, a decrease of $38 million (-24.8%) compared to the prior fiscal year, primarily from a reduction in workforce-related expenses.
Previous wording
For fiscal 2025, net interest expense (interest expense less interest income) was $66 million, a decrease of $18 million as compared to the prior fiscal year.
Current wording
Net interest expense (interest expense less interest income) was $35 million for fiscal 2026, a decrease of $31 million (-47.0%) as compared to the prior-year. The improvement was primarily from higher net interest income from our cash deposits and multi-currency notional pools and lower finance lease and asset financing costs, partially offset by higher interest expense on our Senior notes (see Note 10 - Debt).
Previous wording
During fiscal 2025 and fiscal 2024, the Company sold insignificant businesses and made adjustments to estimated amounts from prior years’ dispositions that resulted in a gain of $7 million and $79 million, respectively.
Current wording
During fiscal 2025, the Company sold insignificant businesses and made adjustments to estimated amounts from prior years’ dispositions that resulted in a gain of $7 million. The Company had no business dispositions during fiscal 2026.
Previous wording
Other (income) expense, net comprises non-service cost components of net periodic pension income, pension and OPEB actuarial and settlement (gains) losses, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, losses (gains) on real estate and facility sales, and other miscellaneous (gains) and losses.
Current wording
Other expense (income), net includes non-service cost components of net periodic pension income, pension and other post-retirement benefit (“OPEB”) actuarial and settlement losses and (gains), movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, losses on real estate and facility sales, and other miscellaneous losses and (gains).
Previous wording
The components of other (income) expense, net were as follows:
Current wording
The components of Other expense (income), net were as follows:
Previous wording
•net periodic pension income increased by $15 million primarily due to changes in expected returns on assets and other actuarial assumptions;
Current wording
•pension income ($12 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions;
Previous wording
•pension and OPEB actuarial and settlement (gains) losses were $(232) million and $445 million, respectively, a change of $677 million, from mark-to-market adjustments and other settlement (gains) losses;
Current wording
•pension and OPEB actuarial and settlement losses (gains) ($401 million) - primarily due to mark-to-market adjustments and other settlement losses (gains);
Previous wording
•foreign currency gains decreased $3 million, primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program;
Current wording
•foreign currency impact ($2 million) - change in foreign currency, primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program;
Previous wording
Our effective tax rate ("ETR") on income (loss) from continuing operations, before taxes, for fiscal 2025 and 2024 was 37.1% and 21.1%, respectively. A reconciliation of the differences between the U.S. federal statutory rate and the ETR, as well as other information about our income tax provision, is provided in Note 14 - "Income Taxes."
Current wording
Our effective tax rate ("ETR") on income (loss) from continuing operations, before taxes, for fiscal 2026 and 2025 was 91.2% and 37.1%, respectively. A reconciliation of the differences between the U.S. federal statutory rate and the ETR, as well as other information about our income tax provision, is provided in Note 14 - "Income Taxes."
Previous wording
The U.S. Tax Court cases generally involve three primary issues. The first issue pertains to a capital loss the Company claimed in fiscal year 2013 in the amount of $651 million, which the IRS subsequently disallowed, and for which it proposed a substantial understatement penalty. The total cash tax payment the IRS is seeking is approximately $469 million, inclusive of penalties and interest, which continues to accrue. The matter is currently scheduled for trial in August 2025.
Current wording
The U.S. Tax Court cases generally involve three primary issues. The first issue pertains to a capital loss the Company claimed in fiscal year 2013 in the amount of $651 million, which the IRS subsequently disallowed, and for which it proposed a substantial understatement penalty. The total cash tax payment the IRS is seeking is approximately $503 million, inclusive of penalties and interest, which continues to accrue. The U.S. Tax Court held a trial on this matter in two sessions in August and October 2025. Post-trial briefing concluded in April 2026. A decision from the court is now pending.
Previous wording
The second issue pertains to the Company’s deduction for restructuring expenses in fiscal year 2013 in the amount of $146 million, which the IRS has disputed. The total cash tax payment the IRS is seeking is approximately $101 million, inclusive of penalties and interest, which continues to accrue. In January 2025, the Court denied the IRS’s motion for summary judgment. A trial date is pending.
Current wording
The second issue pertains to the Company’s deduction for restructuring expenses in fiscal year 2013 in the amount of $139 million, which the IRS has disputed. The total cash tax payment the IRS is seeking is approximately $108 million, inclusive of penalties and interest, which continues to accrue. In January 2025, the Court denied the IRS’ motion for summary judgment. A trial date is pending.
Previous wording
The third issue primarily pertains to foreign currency losses from 2009 that the Company claimed in fiscal years 2010 and 2011 in the amount of $165 million, resulting from the depreciation of the U.S. dollar against the Euro over an eight-year period (from 2001 to 2009) upon termination of a partnership interest involving two entities with different functional currencies. The total cash tax payment the IRS is seeking is approximately $124 million, inclusive of penalties and interest, which continues to accrue. This matter is currently pending a summary judgment motion from the IRS.
Current wording
The third issue primarily pertains to foreign currency losses from 2009 that the Company claimed in fiscal years 2010 and 2011 in the amount of $163 million, resulting from the depreciation of the U.S. dollar against the Euro over an eight-year period (from 2001 to 2009) upon termination of a partnership interest involving two entities with different functional currencies. The total cash tax payment the IRS is seeking is approximately $125 million, inclusive of penalties and interest, which continues to accrue. In March 2026, the Court granted the IRS’ motion for summary judgment. A final decision on the Company’s tax liability is pending. During the current year, the Company increased its accrual to fully reserve the net amount of its expected tax liability in this matter.
Previous wording
As we believe we will ultimately prevail on the technical merits of the disagreed items and are challenging them in the U.S. Tax Court, the above matters are not fully reserved and would result in incremental federal and state tax expense of approximately $544 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $623 million if we do not prevail. These amounts are net of an expected $71 million interest deduction tax benefit.
Current wording
As we believe we will ultimately prevail on the technical merits of the first and second issues above and are continuing to challenge them in the U.S. Tax Court, the first and second issues are not fully reserved and would result in incremental federal and state tax expense of approximately $523 million (including estimated interest and penalties) for the unreserved portion of these items, if we do not prevail. The total cash tax exposure across all three issues above is approximately $655 million. These amounts are net of an expected $81 million interest deduction tax benefit.
Previous wording
The Company may settle certain other tax examinations for different amounts than the Company has accrued as uncertain tax positions. Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future. The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carryforwards, would be approximately $2 million.
Current wording
The Company may settle certain other tax examinations for different amounts than the Company has accrued as uncertain tax positions. Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future.
Previous wording
Diluted EPS for fiscal 2025 was $2.10, an increase of $1.64 compared to the prior fiscal year. The increase in diluted EPS against the prior fiscal year was primarily due to an increase in net income attributable to DXC common stockholders and a lower weighted average share count from the Company’s share repurchases.
Current wording
Diluted EPS for fiscal 2026 was $0.10, a decrease of $2.00 compared to the prior fiscal year. The decrease in diluted EPS against the prior fiscal year was primarily due to the Company's decrease in net income attributable to DXC common stockholders partially offset by a lower weighted average share count from the Company’s share repurchases.
Previous wording
Diluted EPS for fiscal 2025 includes $0.65 per share of restructuring costs, $0.11 per share of transaction, separation and integration-related costs, $1.47 per share of amortization of acquired intangible assets, $(0.02) per share of merger-related indemnification, $0.09 per share of impairment losses, $(0.05) per share of net gains on dispositions, $0.08 per share of net losses on real estate and facility sales, $(0.89) per share of pension and OPEB actuarial and settlement gains, and $(0.09) per share of tax adjustments primarily relating to tax adjustments to impair or recognize certain deferred tax assets and adjustments for changes in tax legislation.
Current wording
Diluted EPS for fiscal 2026 includes $0.51 per share of restructuring costs, $0.02 per share of transaction, separation and integration-related costs, $1.56 per share of amortization of acquired intangible assets, $(0.19) per share of merger-related indemnification, $(0.01) per share of gains on real estate, facility sales, and dispositions, $0.01 per share of debt extinguishment costs, $0.07 per share of impairment losses, $0.73 per share of pension and OPEB actuarial and settlement losses, and $0.45 per share of tax adjustments primarily relating to tax litigation matters, to impair or recognize certain deferred tax assets, and adjustments for changes in tax legislation.
Previous wording
(1)The dollar and percent change for Income before income taxes and Net income include Pension and OPEB actuarial and settlement (gains) and losses that were $(232) million and $445 million for the fiscal years ended March 31, 2025 and March 31, 2024, respectively.
Current wording
(1)The dollar and percent change for Income before income taxes and Net income include Pension and OPEB actuarial and settlement losses and (gains) that were $169 million and $(232) million for the fiscal years ended March 31, 2026 and March 31, 2025, respectively.
Previous wording
(2) Calculation is not meaningful ("NM") due to inclusion of Pension and OPEB actuarial and settlement gains and losses.
Current wording
(2) Calculation is not meaningful ("NM") due to inclusion of Pension and OPEB actuarial and settlement losses and (gains).
Previous wording
•Transaction, separation and integration-related (“TSI”) costs – includes costs related to integration, separation, planning, financing and advisory fees and other similar charges associated with mergers, acquisitions, strategic investments, joint ventures, and dispositions and other similar transactions incurred within one year of such transactions closing, except for costs associated with related disputes, which may arise more than one year after closing.
Current wording
•Transaction, separation and integration-related (“TSI”) costs – includes third party costs related to integration, separation, planning, financing and advisory fees and other similar charges associated with mergers, acquisitions, strategic investments, joint ventures, and dispositions and other similar transactions incurred within one year of such transactions closing, except for costs associated with related disputes, which may arise more than one year after closing.
Previous wording
•Merger related indemnification – in fiscal 2025 and fiscal 2024, represents the Company’s estimate of potential net liability to HPE for tax related indemnifications.
Current wording
•Merger related indemnification – represents the Company’s estimate of potential net liability for tax related indemnifications.
Previous wording
•Gains and losses on real estate and facility sales – gains and losses related to dispositions of real property.(1)
Current wording
•Gains and losses on real estate and facility sales – gains and losses related to dispositions of real property.
Previous wording
•Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation, and adjustments to transition tax. Income tax expense (benefit) from the impact of mergers and divestitures is separately computed based on the underlying transaction. Income tax expense of all other (non-discrete) non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.
Current wording
•Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation, tax litigation matters, and adjustments to transition tax. Income tax expense (benefit) from the impact of mergers and divestitures is separately computed based on the underlying transaction. Income tax expense of all other (non-discrete) non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis. In fiscal 2026, includes the unfavorable summary judgment in a tax matter relating to a foreign exchange tax case.
Previous wording
As of March 31, 2025, our cash and cash equivalents ("cash") were $1.8 billion, of which $0.8 billion was held outside of the U.S. We maintain various multi-currency, multi-entity, cross-border, physical and notional cash pool arrangements with various counterparties to manage liquidity efficiently that enable participating subsidiaries to draw on the Company’s pooled resources to meet liquidity needs.
Current wording
As of March 31, 2026, our cash and cash equivalents ("cash") were $1.7 billion, of which $0.8 billion was held outside of the U.S. We maintain various multi-currency, multi-entity, cross-border, physical and notional cash pool arrangements with various counterparties to manage liquidity efficiently that enable participating subsidiaries to draw on the Company’s pooled resources to meet liquidity needs.
Previous wording
Net cash provided by operating activities was $1,398 million and $1,361 million, respectively, in fiscal 2025 and fiscal 2024, reflecting a year-over-year increase of $37 million. Operating cash flow against the comparative period included:
Current wording
Net cash provided by operating activities was $1,248 million and $1,398 million, respectively, in fiscal 2026 and fiscal 2025, reflecting a year-over-year decrease of $150 million. Operating cash flow against the comparative period included:
Previous wording
•an increase in net income, net of adjustments of $48 million; partially offset by
Current wording
•a decrease in net income, net of adjustments of $132 million; and
Previous wording
•a $11 million unfavorable change in working capital due to higher working capital outflows during fiscal 2025.
Current wording
•a $18 million unfavorable change in working capital due to higher working capital outflows during fiscal 2026.
Previous wording
Net cash used in investing activities was $512 million and $491 million, respectively, in fiscal 2025 and fiscal 2024, reflecting a year-over-year change of $21 million. The change was primarily due to:
Current wording
Net cash used in investing activities was $484 million and $512 million, respectively, in fiscal 2026 and fiscal 2025, reflecting a year-over-year change of $28 million. The change was primarily due to:
Previous wording
•a $106 million year-over-year increase in cash outflows from capital expenditures primarily from software purchased and developed; partially offset by
Current wording
•a $176 million decrease in capital expenditures primarily from lower levels of software purchased and developed; partially offset by
Previous wording
•an increase in proceeds from sale of assets of $86 million.
Current wording
•a decrease in proceeds from sale of assets of $126 million, and
Previous wording
Net cash used in financing activities was $317 million and $1,487 million, respectively, in fiscal 2025 and fiscal 2024, reflecting a year-over-year change of $1,170 million. The change was primarily due to:
Current wording
Net cash used in financing activities was $776 million and $317 million, respectively, in fiscal 2026 and fiscal 2025, reflecting a year-over-year change of $459 million. The change was primarily due to:
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