DXC Technology Co
For the period ended Sep 30, 2026. Filed Oct 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 30, 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-Q
Period ended 2026-06-30; filed 2026-07-31.
0001688568-26-000069
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-30.
0001688568-26-000090
Item 2. 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 131 previous paragraphs and 145 current paragraphs.
81 unchanged; 26 reworded; 37 added; 23 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 12 previous and 15 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 (37)
Current report
•Revenues of $3.0 billion, down 4.0% on an organic basis;
Current report
•EBIT was $66 million, down 52.2% with a corresponding margin of 2.2%. Adjusted EBIT was $187 million, down 26.4% with a corresponding margin of 6.2%;
Current report
Segment Highlights - Second Quarter Fiscal 2027
Current report
• Revenue was $1,213 million, down 3.3% year-over-year on an organic basis.
Current report
• Segment profit was $125 million, down 13.8% year-over-year, with a corresponding margin of 10.3%.
Current report
• Book-to-bill ratio of 0.79x, compared to 0.92x during the second quarter of fiscal 2026.
Current report
• Revenue was $1,427 million, down 10.0% year-over-year on an organic basis.
Current report
• Segment profit was $66 million, down 45.9% year-over-year, with a corresponding margin of 4.6%.
Current report
• Book-to-bill ratio of 0.80x, compared to 0.82x during the second quarter of fiscal 2026.
Current report
Insurance Services
Current report
• Revenue was $394 million, up 23.1% year-over-year on an organic basis. Organic revenue growth includes a favorable contract modification entered into during the second quarter of fiscal 2027.
Current report
• Segment profit was $45 million, up 60.7% year-over-year, with a corresponding margin of 11.4%.
Current report
• Book-to-bill ratio of 0.79x, compared to 0.68x during the second quarter of fiscal 2026.
Current report
Segment Highlights - First Six Months Fiscal 2027
Current report
Consulting & Engineering Services
Current report
• Revenue was $2,444 million, down 3.1% year-over-year on an organic basis.
Current report
• Segment profit was $225 million, down 10.0% year-over-year, with a corresponding margin of 9.2%.
Current report
Global Infrastructure Services
Current report
• Revenue was $2,876 million, down 10.6% year-over-year on an organic basis.
Current report
• Segment profit was $104 million, down 52.5% year-over-year, with a corresponding margin of 3.6%.
Current report
Insurance Services
Current report
• Revenue was $713 million, up 12.4% year-over-year on an organic basis.
Current report
• Segment profit was $79 million, up 29.5% year-over-year, with a corresponding margin of 11.1%.
Current report
COS was $2.4 billion for the second quarter of fiscal 2027, a decrease of $9 million (-0.4%) compared to the prior-year period. COS was $4.8 billion for the first six months of fiscal 2027, a decrease of $9 million (-0.2%) compared to the prior-year period. The decline in both periods primarily reflects lower revenue levels and reduced professional services and contractor-related expenses resulting from our cost optimization initiatives, partially offset by a one-time impairment of transition and transformation costs related to a customer contract modification in the second quarter of fiscal 2027.
Current report
Gross margin was 21.8% and 21.1% for the second quarter and first six months of fiscal 2027, respectively, a decrease of 280 basis points and 340 basis points against the comparative periods.
Current report
SG&A as a percentage of revenue was 10.5% and 10.7% for the second quarter and first six months of fiscal 2027, respectively, an improvement of 110 basis points and 130 basis points against the comparative periods.
Current report
Depreciation and amortization was $286 million for the second quarter of fiscal 2027, a decrease of $9 million (-3.1%) compared to the prior-year period. Depreciation expense decreased by $10 million due to lower average net property and equipment balances. Amortization expense increased by $1 million, as a one-time acceleration of software amortization related to a customer contract modification more than offset lower amortization associated with software assets and transition and transformation contract costs.
Current report
Net interest expense (interest expense less interest income) was $12 million for the second quarter of fiscal 2027, an increase of $5 million, as compared to the prior-year period. The increase was primarily driven by lower net income from cash deposits, notional pooling arrangements, and leases.
Current report
Other income, net was $34 million in the second quarter of fiscal 2027, a decrease of $22 million, as compared to the prior-year period. The decrease was primarily due to a $17 million unfavorable change in gains and losses on real estate and facility sales.
Current report
Other income, net was $251 million for the first six months of fiscal 2027, an increase of $156 million, as compared to the prior-year period. The increase was primarily due to the $168 million litigation judgment against TCS recognized in the first quarter, partially offset by a $17 million unfavorable change in gains and losses on real estate and facility sales.
Current report
Net loss attributable to non-controlling interest
Current report
The net loss attributable to non-controlling interest, net of tax, was $11 million and $7 million for the second quarter and first six months of fiscal 2027, respectively, a change of $15 million and $13 million as compared to both periods of the prior fiscal year. These increases were primarily attributable to a one-time impairment of transition and transformation costs related to a customer contract modification within a joint venture.
Current report
Diluted EPS for the second quarter and first six months of fiscal 2027 was $0.15 and $0.89, respectively, a decrease of $0.05 and an increase of $0.60 compared with the prior-year periods.
Current report
Diluted EPS for the second quarter of fiscal 2027 includes $0.10 per share of restructuring costs, $0.01 per share of transaction, separation and integration-related costs, $0.36 per share of amortization of acquired intangible assets, $0.04 per share of losses on real estate, facility sales, and dispositions, and $0.01 per share of tax adjustments.
Current report
•a $22 million unfavorable change in working capital, including $122 million of deposits made with the IRS, as discussed in Note 12 - “Income Taxes.”
Current report
•a $400 million principal payment on long-term debt in the first six months of fiscal 2027; and
Current report
The Company has $3.0 billion of available borrowings under our revolving credit facility through November 1, 2030. On October 27, 2026, the Company extended $2.8 billion of our revolving credit facility for one additional year to November 1, 2031. The Company believes this revised facility continues to provide ample financial flexibility to support our operating and strategic objectives.
Removed paragraphs (23)
Previous report
•Revenues of $2,999 million, down 5.1% year-over-year (down 6.7% on an organic basis);
Previous report
•EBITwas $207 million, with a corresponding margin of 6.9%. Adjusted EBIT was $150 million, down 30.6% year-over-year with a corresponding margin of 5.0%;
Previous report
Segment Highlights
Previous report
•Revenue was $1,231 million, down 1.2% year-over-year (down 3.0% on an organic basis).
Previous report
•Segment profit was $100 million, down 4.8% year-over-year, with a corresponding margin of 8.1%.
Previous report
•Book-to-bill ratio of 0.98x, compared to 1.19x during the first quarter of fiscal 2026.
Previous report
•Revenue was $1,449 million, down 9.4% year-over-year (down 11.1% on an organic basis).
Previous report
•Segment profit was $38 million, down 60.8% year-over-year, with a corresponding margin of 2.6%.
Previous report
•Book-to-bill ratio of 1.11x, compared to 0.74x during the first quarter of fiscal 2026.
Previous report
Insurance Software & Services
Previous report
•Revenue was $319 million, up 1.9% year-over-year (up 1.4% on an organic basis).
Previous report
•Segment profit was $34 million, up 3.0% year-over-year, with a corresponding margin of 10.7%.
Previous report
•Book-to-bill ratio of 0.54x, compared to 0.54x during the first quarter of fiscal 2026.
Previous report
COS was $2.4 billion for the first quarter of fiscal 2027, unchanged from the prior-year period. While the Company’s cost optimization initiatives reduced payroll and related employee benefit costs, professional services, and contractor-related expenses, cost reductions did not keep pace with the decline in revenue. As a result, gross margin was 20.4% for the first quarter of fiscal 2027, a decline of 400 basis points against the prior-year period.
Previous report
Other 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 report
Other income, net, increased $178 million compared to the prior-year period primarily due to:
Previous report
•pension income ($2 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions;
Previous report
•foreign currency impact ($4 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 report
•gain on litigation ($168 million) - compensatory and punitive damages from the litigation judgment obtained against TCS; and
Previous report
•other miscellaneous items ($12 million) - the Company recognized a $14 million impairment of goodwill in the first quarter of fiscal 2026 related to the change in operating segments.
Previous report
Diluted EPS for the first quarter of fiscal 2027 was $0.73, compared to $0.09 in the first quarter of fiscal 2026. The increase in earnings per share was primarily due to the Company's increase in net income attributable to DXC common stockholders and a lower weighted average share count from the Company’s share repurchases.
Previous report
(1) Calculation is not meaningful ("NM") due to the gain from the TCS litigation judgment, as discussed in Note 18 - “Commitments and Contingencies.
Previous report
•an $85 million favorable change in working capital due to lower working capital outflows during the first quarter of fiscal 2027 primarily as a result of lower annual executive compensation payments.
Reworded paragraphs (26)
Previous wording
The purpose of the Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to present information that management believes is relevant to an assessment and understanding of our results of operations and cash flows for the first quarter of fiscal 2027 and our financial condition as of June 30, 2026. The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and accompanying notes.
Current wording
The purpose of the Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to present information that management believes is relevant to an assessment and understanding of our results of operations and cash flows for the second quarter and first six months of fiscal 2027 and our financial condition as of September 30, 2026. The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and accompanying notes.
Previous wording
The following discussion includes a comparison of our results of operations and liquidity and capital resources for the first quarters of fiscal 2027 and fiscal 2026. References are made throughout to the numbered Notes to the Condensed Consolidated Financial Statements (“Notes”) in this Quarterly Report on Form 10-Q.
Current wording
The following discussion includes a comparison of our results of operations and liquidity and capital resources for the second quarters and first six months of fiscal 2027 and fiscal 2026. References are made throughout to the numbered Notes to the Condensed Consolidated Financial Statements (“Notes”) in this Quarterly Report on Form 10-Q.
Previous wording
Key revenue, profitability and cash flow metrics for the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 are included below. Organic revenue, adjusted earnings before income taxes, and adjusted diluted earnings per share are non-GAAP financial measures. For more information see “Non-GAAP Financial Measures.”
Current wording
Key revenue, profitability and cash flow metrics for the second quarter of fiscal 2027 compared to the second quarter of fiscal 2026 as well as year to date cash flow comparisons are included below. Organic revenue, adjusted earnings before income taxes, and adjusted diluted earnings per share are non-GAAP financial measures. For more information see “Non-GAAP Financial Measures.”
Previous wording
•Diluted earnings per share of $0.73, compared to $0.09 in the same period a year ago; adjusted diluted earnings per share of $0.40, compared to $0.68 in the same period a year ago;
Current wording
•Diluted earnings per share of $0.15, compared to $0.20 in the same period a year ago; adjusted diluted earnings per share of $0.67, compared to $0.84 in the same period a year ago;
Previous wording
•Cash generated from operations was $418 million, less capital expenditures of $104 million, resulted in free cash flow of $314 million, compared to free cash flow of $97 million in the prior-year period. Free cash flow in fiscal 2027 includes cash proceeds of $214 million related to the litigation judgment obtained against TCS, as discussed further in Note 18 - “Commitments and Contingencies”;
Current wording
•Year-to-date fiscal 2027 cash generated from operations was $635 million, less capital expenditures of $230 million, resulted in free cash flow of $405 million, compared to free cash flow of $337 million in the prior-year period. Free cash flow in fiscal 2027 includes cash proceeds of $214 million related to the litigation judgment obtained against TCS and also a cash outflow of $122 million related to tax deposits made with the IRS, as discussed in Note 12 - “Income Taxes”;
Previous wording
•Book-to-bill ratio (contract awards divided by quarterly revenue) of 0.99x, compared to 0.90x during fiscal 2026.
Current wording
•Book-to-bill ratio (contract awards divided by quarterly revenue) of 0.80x, compared to 0.85x in the prior-year period.
Previous wording
For the first quarter of fiscal 2027, our total revenue was $3.0 billion, a decrease of $160 million or 5.1%, compared to the same period a year ago. The decrease against the comparative period includes a 6.7% decline in organic revenue partially offset by a 1.6% favorable foreign currency exchange rate impact. Organic revenue growth is a non-GAAP measure. For more information, see "Non-GAAP Financial Measures".
Current wording
For the first six months of fiscal 2027, our total revenue was $6.0 billion, a decrease of $287 million or 4.5%, as compared to the same period a year ago. The decrease against the comparative period includes a 5.3% decline in organic revenue partially offset by a 0.8% favorable foreign currency exchange rate impact.
Previous wording
SG&A was $328 million for the first quarter of fiscal 2027, a decrease of $66 million (-16.8%) compared to the prior-year period. The decline was primarily driven by lower payroll and related employee benefit costs, as well as reduced professional services and contractor related expenses. SG&A as a percentage of revenue was 10.9% for the first quarter of fiscal 2027, an improvement of 160 basis points against the prior-year period.
Current wording
SG&A was $319 million for the second quarter of fiscal 2027, a decrease of $47 million (-12.8%) compared to the prior-year period. SG&A was $647 million for the first six months of fiscal 2027, a decrease of $113 million (-14.9%) compared to the prior-year period. The decline in both periods was primarily driven by lower payroll and related employee benefit costs, as well as reduced professional services and contractor related expenses.
Previous wording
Depreciation and amortization was $267 million for the first quarter of fiscal 2027, a decrease of $37 million (-12.2%) compared to the prior-year period. Depreciation expense decreased by $12 million due to lower average net property and equipment balances. Amortization expense decreased by $25 million due to lower software amortization and transition and transformation contract cost balances.
Current wording
Depreciation and amortization was $553 million for the first six months of fiscal 2027, a decrease of $46 million (-7.7%) compared to the prior-year period. Depreciation expense decreased by $22 million due to lower average net property and equipment balances. Amortization expense decreased by $24 million due to lower software amortization and transition and transformation contract cost balances, partially offset by a one-time acceleration of software amortization during the second quarter of fiscal 2027.
Previous wording
During fiscal 2027, management approved global cost savings initiatives designed to better align our workforce, facility and data center requirements. Total restructuring costs recorded, net of reversals, was $26 million for the first quarter of fiscal 2027, an $11 million decrease (-29.7%) compared to the prior-year period.
Current wording
During fiscal 2027, management approved global cost savings initiatives designed to better align our workforce, facility and data center requirements. During the second quarter and first six months of fiscal 2027, total restructuring costs recorded, net of reversals, were $23 million and $49 million, respectively, a decrease of $12 million (-34.3%) and $23 million (-31.9%), respectively, as compared to the prior-year periods.
Previous wording
Net interest income (interest expense less interest income) was $34 million for the first quarter of fiscal 2027, an increase of $42 million as compared to the prior-year period. Included in this amount is $46 million of interest income from the TCS litigation judgment, as discussed in Note 18 - “Commitments and Contingencies.”
Current wording
Net interest income was $22 million for the first six months of fiscal 2027 an increase of $37 million, as compared to the prior-year period. Included in this amount is $46 million of interest income from the TCS litigation judgment, partially offset by lower net income from cash deposits, notional pooling arrangements, and leases.
Previous wording
The components of Other income, net were as follows:
Current wording
The components of Other income, net for the second quarters and first six months of fiscal 2027 and 2026 were as follows:
Previous wording
Our effective tax rate (“ETR”) was 47.7% and 73.1% for the first quarter of fiscal 2027 and the first quarter of fiscal 2026, respectively. For the first quarter of fiscal 2027, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, and a reduction in a deferred tax asset for stock based compensation. For the first quarter of fiscal 2026, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, the tax benefit of a worthless stock deduction under section 165(g) of the Internal Revenue Code related to DXC’s investment in a wholly owned subsidiary, and a reduction in a deferred tax asset for stock based compensation.
Current wording
Our effective tax rate (“ETR”) was 75.9% and 69.5% for the three months ended September 30, 2026, and September 30, 2025, respectively, and 52.9% and 70.7% for the six months ended September 30, 2026, and September 30, 2025, respectively. For the three months ended September 30, 2026, the primary drivers of the ETR were the global mix of income, and U.S. tax on foreign income. For the six months ended September 30, 2026, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, and a decrease in a deferred tax asset for stock based compensation. For the three months ended September 30, 2025, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, and the tax benefit of a worthless stock deduction under section 165(g) of the Internal Revenue Code related to the Company's investment in a wholly owned subsidiary. For the six months ended September 30, 2025, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, the tax benefit of a worthless stock deduction under section 165(g) of the Internal Revenue Code related to the Company’s investment in a wholly owned subsidiary, and a decrease in a deferred tax asset for stock based compensation.
Previous wording
Diluted EPS for the first quarter of fiscal 2027 includes $0.08 per share of restructuring costs, $0.28 per share of amortization of acquired intangible assets, $(0.69) per share of gain on litigation award, and $(0.01) per share of gains on dispositions.
Current wording
Diluted EPS for the first six months of fiscal 2027 includes $0.18 per share of restructuring costs, $0.01 per share of transaction, separation and integration-related costs, $0.64 per share of amortization of acquired intangible assets, $(0.70) per share of gain on litigation award, $0.03 per share of losses on real estate, facility sales, and dispositions, and $0.01 per share of tax adjustments.
Previous wording
As of June 30, 2026, our cash and cash equivalents (“cash”) were $2.0 billion, of which $0.7 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 September 30, 2026, our cash and cash equivalents (“cash”) were $1.6 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 $418 million and $186 million, respectively, during the first quarters of fiscal 2027 and fiscal 2026, reflecting a year-over-year increase of $232 million. The increase was primarily due to:
Current wording
Net cash provided by operating activities was $635 million and $595 million, respectively, during the first six months of fiscal 2027 and fiscal 2026, reflecting a year-over year increase of $40 million. The increase was primarily due to:
Previous wording
•a $147 million favorable change in net income, net of adjustments, primarily driven by the $214 million TCS litigation judgment; and
Current wording
•a $62 million increase in net income, net of adjustments, including $214 million of proceeds related to the TCS litigation judgment; partially offset by
Previous wording
Net cash used in investing activities was $99 million and $77 million, respectively, during the first quarters of fiscal 2027 and fiscal 2026, reflecting a year-over-year change of $22 million. The change was primarily due to:
Current wording
Net cash used in investing activities was $187 million and $222 million, respectively, during the first six months of fiscal 2027 and fiscal 2026, reflecting a year-over-year change of $35 million. The change was primarily due to:
Previous wording
•a $15 million increase in capital expenditures primarily from higher purchases of property and equipment; and
Current wording
•a $28 million decrease in capital expenditures primarily from lower levels of software purchased and developed; and
Previous wording
•a $7 million decrease in proceeds from asset sales and other net investing activities.
Current wording
•a $7 million increase in proceeds from sales of assets and other net investing activities.
Previous wording
Net cash used in financing activities was $120 million and $110 million, respectively, during the first quarters of fiscal 2027 and fiscal 2026, reflecting a year-over-year change of $10 million. The change was primarily due to:
Current wording
Net cash used in financing activities was $618 million and $246 million, respectively, during the first six months of fiscal 2027 and fiscal 2026, reflecting a year-over-year change of $372 million. The change was primarily due to:
Previous wording
•a $21 million increase in share repurchase activity and related taxes paid on net share settlements; partially offset by
Current wording
•a $6 million increase in cash used for share repurchases and related tax payments on net share settlements; partially offset by
Previous wording
•an $11 million decrease in payments on capital leases and borrowings for asset financing, as the Company continues reducing the volume of these financing arrangements.
Current wording
•a $34 million reduction in payments on capital leases and asset financing arrangements, as the Company continues reducing the volume of these financing activities.
Previous wording
The $48 million decrease in total debt during the first quarter of fiscal 2027 was driven by cash payments for finance leases and borrowings for asset financing exceeding new additions and the impact of the foreign currency exchange rate of U.S. dollar against the Euro.
Current wording
The $493 million decrease in total debt during the first six months of fiscal 2027 was primarily attributable to $400 million in principal payments on long-term debt, reduction in finance leases and borrowings for asset financing attributable to payments exceeding additions, and a favorable foreign currency exchange rate of the U.S. dollar against the Euro.
Previous wording
We were in compliance with all financial covenants associated with our borrowings as of June 30, 2026 and June 30, 2025.
Current wording
We were in compliance with all financial covenants associated with our borrowings as of September 30, 2026.
Previous wording
Our total liquidity of $5.0 billion as of June 30, 2026, includes $2.0 billion of cash and cash equivalents and $3.0 billion of available borrowings under our revolving credit facility.
Current wording
Our total liquidity of $4.6 billion as of September 30, 2026, includes $1.6 billion of cash and cash equivalents and $3.0 billion of available borrowings under our revolving credit facility.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the second quarter of fiscal 2027, our total revenue was $3.0 billion, a decrease of $127 million or 4.0% on an organic basis, compared to the same period a year ago. Organic revenue growth is a non-GAAP measure. For more information, see "Non-GAAP Financial Measures."
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Results of Operations for the Three Months Ended June 30, 2026 and June 30, 2025