# DXC Technology Co: Form 10-Q for the period ended Sep 30, 2026

- Company: [DXC Technology Co](/companies/dxc.md) (CIK 1688568)
- Form: 10-Q
- Filed: 2026-10-30
- Accepted by EDGAR: Oct 29, 2026, 20:31 ET
- Period: 2026-09-30
- Accession: 0001688568-26-000090
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1688568/000168856826000090/dxc-20260930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1688568/000168856826000090/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-07-01 to 2026-09-30 | $3.03bn | us-gaap:Revenues |
| Revenue | 6 months, 2026-04-01 to 2026-09-30 | $6.03bn | us-gaap:Revenues |
| Selling, general and administrative | 3 months, 2026-07-01 to 2026-09-30 | $319.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2026-04-01 to 2026-09-30 | $647.0m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-07-01 to 2026-09-30 | $187.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2026-04-01 to 2026-09-30 | $337.0m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2026-07-01 to 2026-09-30 | $57.0m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2026-04-01 to 2026-09-30 | $112.0m | us-gaap:InterestExpense |
| Income tax | 3 months, 2026-07-01 to 2026-09-30 | $41.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2026-04-01 to 2026-09-30 | $156.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-07-01 to 2026-09-30 | $24.0m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2026-04-01 to 2026-09-30 | $146.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-07-01 to 2026-09-30 | $0.15 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2026-04-01 to 2026-09-30 | $0.89 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-07-01 to 2026-09-30 | $0.15 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2026-04-01 to 2026-09-30 | $0.91 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-07-01 to 2026-09-30 | 161,990,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2026-04-01 to 2026-09-30 | 164,390,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2026-04-01 to 2026-09-30 | $635.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2026-04-01 to 2026-09-30 | $133.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 6 months, 2026-04-01 to 2026-09-30 | $132.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2026-09-30 | $1.60bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-09-30 | $4.98bn | us-gaap:AssetsCurrent |
| Total assets | at 2026-09-30 | $12.21bn | us-gaap:Assets |
| Current liabilities | at 2026-09-30 | $4.35bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-09-30 | $8.89bn | us-gaap:Liabilities |
| Shareholders' equity | at 2026-09-30 | $3.06bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 43,798 characters.

### Introduction

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.

The MD&A is organized in the following sections:

- Background
- Results of Operations
- Liquidity and Capital Resources
- Critical Accounting Estimates

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.

### Background

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.

We generate revenue by offering a broad range of information technology services and solutions to customers primarily in North America, Europe, Asia, and Australia. Our financial results are reported through three reportable segments that reflect the Company’s operational structure and how we deliver end-to-end IT solutions: Consulting & Engineering Services ("CES"), Global Infrastructure Services ("GIS"), and Insurance Software & Services ("Insurance").

### Key Metrics

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.”

- Revenues of $3.0 billion, down 4.0% on an organic basis;
- 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%;
- 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;
- 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”;
- Book-to-bill ratio (contract awards divided by quarterly revenue) of 0.80x, compared to 0.85x in the prior-year period.

### Segment Highlights - Second Quarter Fiscal 2027

Consulting & Engineering Services

- Revenue was $1,213 million, down 3.3% year-over-year on an organic basis.
- Segment profit was $125 million, down 13.8% year-over-year, with a corresponding margin of 10.3%.
- Book-to-bill ratio of 0.79x, compared to 0.92x during the second quarter of fiscal 2026.

Global Infrastructure Services

- Revenue was $1,427 million, down 10.0% year-over-year on an organic basis.
- Segment profit was $66 million, down 45.9% year-over-year, with a corresponding margin of 4.6%.
- Book-to-bill ratio of 0.80x, compared to 0.82x during the second quarter of fiscal 2026.

Insurance Services

- 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.
- Segment profit was $45 million, up 60.7% year-over-year, with a corresponding margin of 11.4%.
- Book-to-bill ratio of 0.79x, compared to 0.68x during the second quarter of fiscal 2026.

### Segment Highlights - First Six Months Fiscal 2027

Consulting & Engineering Services

- Revenue was $2,444 million, down 3.1% year-over-year on an organic basis.
- Segment profit was $225 million, down 10.0% year-over-year, with a corresponding margin of 9.2%.

Global Infrastructure Services

- Revenue was $2,876 million, down 10.6% year-over-year on an organic basis.
- Segment profit was $104 million, down 52.5% year-over-year, with a corresponding margin of 3.6%.

Insurance Services

- Revenue was $713 million, up 12.4% year-over-year on an organic basis.
- Segment profit was $79 million, up 29.5% year-over-year, with a corresponding margin of 11.1%.

### Revenues

Our revenues by geography and operating segment are provided below:

*(in millions)*

| Geographic Market | Three Months Ended September 30, 2026 | September 30, 2025 | Percentage Change U.S. Dollars | Constant Currency(1) | Percentage of Revenue for the Three Months Ended September 30, 2026 | September 30, 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| United States | $747 | $821 | (9.0)% | (9.0)% | 24.6% | 26.0% |
| United Kingdom | 465 | 464 | 0.2% | 0.4% | 15.3% | 14.7% |
| Other Europe | 995 | 1,040 | (4.3)% | (3.2)% | 32.8% | 32.9% |
| Australia | 283 | 275 | 2.9% | (4.4)% | 9.3% | 8.7% |
| Other International | 544 | 561 | (3.0)% | (1.8)% | 17.9% | 17.7% |
| Total Revenues | $3,034 | $3,161 | (4.0)% | (4.0)% | 100.0% | 100.0% |
| Operating Segments |  |  |  |  |  |  |
| CES | $1,213 | $1,255 | (3.3)% | (3.3)% | 40.0% | 39.7% |
| GIS | 1,427 | 1,586 | (10.0)% | (10.0)% | 47.0% | 50.2% |
| Insurance | 394 | 320 | 23.1% | 23.1% | 13.0% | 10.1% |
| Total Revenues | $3,034 | $3,161 | (4.0)% | (4.0)% | 100.0% | 100.0% |

*(in millions)*

| Geographic Market | Six Months Ended September 30, 2026 | September 30, 2025 | Percentage Change U.S. Dollars | Constant Currency(1) | Percentage of Revenue for the Six Months Ended September 30, 2026 | September 30, 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| United States | $1,489 | $1,649 | (9.7)% | (9.7)% | 24.7% | 26.1% |
| United Kingdom | 866 | 944 | (8.3)% | (8.3)% | 14.4% | 14.9% |
| Other Europe | 2,034 | 2,078 | (2.1)% | (2.6)% | 33.7% | 32.9% |
| Australia | 571 | 534 | 6.9% | (2.1)% | 9.5% | 8.4% |
| Other International | 1,073 | 1,115 | (3.8)% | (3.0)% | 17.8% | 17.6% |
| Total Revenues | $6,033 | $6,320 | (4.5)% | (5.3)% | 100.0% | 100.0% |
| Operating Segments |  |  |  |  |  |  |
| CES | $2,444 | $2,501 | (2.3)% | (3.1)% | 40.5% | 39.6% |
| GIS | 2,876 | 3,186 | (9.7)% | (10.6)% | 47.7% | 50.4% |
| Insurance | 713 | 633 | 12.6% | 12.4% | 11.8% | 10.0% |
| Total Revenues | $6,033 | $6,320 | (4.5)% | (5.3)% | 100.0% | 100.0% |

*(1) Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. This information is consistent with how management views our revenues and evaluates our operating performance and trends. For more information, see "Non-GAAP Financial Measures."*

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."

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.

For the discussion of risks associated with our foreign operations, see Part 1, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

### Costs and Expenses

Our total costs and expenses are provided below:

*(in millions)*

|  | Three Months Ended September 30, 2026 | 2025 | Change Dollar | Percent | Six Months Ended September 30, 2026 | 2025 | Change Dollar | Percent |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Costs of services | $2,374 | $2,383 | $(9) | (0.4)% | $4,762 | $4,771 | $(9) | (0.2)% |
| Selling, general and administrative | 319 | 366 | (47) | (12.8)% | 647 | 760 | (113) | (14.9)% |
| Depreciation and amortization | 286 | 295 | (9) | (3.1)% | 553 | 599 | (46) | (7.7)% |
| Restructuring costs | 23 | 35 | (12) | (34.3)% | 49 | 72 | (23) | (31.9)% |
| Interest expense | 57 | 53 | 4 | 7.5% | 112 | 107 | 5 | 4.7% |
| Interest income | (45) | (46) | 1 | (2.2)% | (134) | (92) | (42) | 45.7% |
| Other income, net | (34) | (56) | 22 | (39.3)% | (251) | (95) | (156) | 164.2% |
| Total costs and expenses | $2,980 | $3,030 | $(50) | (1.7)% | $5,738 | $6,122 | $(384) | (6.3)% |

### Costs of Services

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.

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.

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.

### Selling, General and Administrative

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.

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.

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.

### Depreciation and Amortization

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.

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.

### Restructuring Costs

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.

See Note 10 – “Restructuring Costs” for additional information about our restructuring actions.

### Interest Income and Interest Expense

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.

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.

### Other Income, Net

The components of Other income, net for the second quarters and first six months of fiscal 2027 and 2026 were as follows:

*(in millions)*

|  | Three Months Ended September 30, 2026 | 2025 | Dollar Change | Six Months Ended September 30, 2026 | 2025 | Dollar Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Non-service cost components of net periodic pension income | $(46) | $(43) | $(3) | $(91) | $(86) | $(5) |
| Foreign currency loss (gain) | 1 | (2) | 3 | — | (7) | 7 |
| Gain on litigation | — | — | — | (168) | — | (168) |
| Loss (gain) on real estate and facility sales | 10 | (7) | 17 | 10 | (7) | 17 |
| Other (gain) loss | 1 | (4) | 5 | (2) | 5 | (7) |
| Total | $(34) | $(56) | $22 | $(251) | $(95) | $(156) |

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.

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.

### Taxes

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.

### Net loss attributable to non-controlling interest

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.

### Earnings Per Share

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.

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.

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.

### Non-GAAP Financial Measures

We present non-GAAP financial measures of performance which are derived from the statements of operations of DXC. These non-GAAP financial measures include earnings before interest and taxes (“EBIT”), adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, non-GAAP EPS, organic revenue growth, constant currency revenues, and free cash flow.

We believe EBIT, adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS provide investors with useful supplemental information about our operating performance after excluding certain categories of expenses as well as gains and losses on certain dispositions and certain tax adjustments.

We believe constant currency revenues provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars in the periods presented. See below for a description of the methodology we use to present constant currency revenues.

One category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS, incremental amortization of intangible assets acquired through business combinations, if included, may result in a significant difference in period over period amortization expense on a GAAP basis. We exclude amortization of certain acquired intangible assets as these non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Although DXC management excludes amortization of acquired intangible assets, primarily customer-related intangible assets, from its non-GAAP expenses, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and support revenue generation. Any future transactions may result in a change to the acquired intangible asset balances and associated amortization expense.

Another category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS is impairment losses, which, if included, may result in a significant difference in period-over-period expense on a GAAP basis. We exclude impairment losses as these non-cash amounts reflect generally an acceleration of what would be multiple periods of expense and are not expected to occur frequently. Further, assets such as goodwill may be significantly impacted by market conditions outside of management’s control.

Selected references are made to revenue growth on an “organic basis” so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates and without the impacts of acquisitions and divestitures, thereby providing comparisons of operating performance from period to period of the business that we have owned during both periods presented. Organic revenue growth is calculated by dividing the year-over-year change in GAAP revenues attributed to organic growth by the GAAP revenues reported in the prior comparable period. Organic revenue is calculated as constant currency revenue excluding the impact of mergers, acquisitions or similar transactions until the one-year anniversary of the transaction and excluding revenues of divestitures during the reporting period. This approach is used for all results where the functional currency is not the U.S. dollar. We believe organic revenue growth provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars and the effects of acquisitions and divestitures in both periods presented.

Free cash flow represents cash flow from operations, less capital expenditures. Free cash flow is utilized by our management, investors, and analysts to evaluate cash available to pay debt, repurchase shares, and provide further investment in the business.

There are limitations to the use of the non-GAAP financial measures presented in this report. One of the limitations is that they do not reflect complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Additionally, other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes between companies. Selected references are made on a “constant currency basis” so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby providing comparisons of operating performance from period to period. Financial results on a “constant currency basis” are non-GAAP measures calculated by translating current period activity into U.S. Dollars using the comparable prior period’s currency conversion rates. This approach is used for all results where the functional currency is not the U.S. Dollar. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Revenues.”

Certain non-GAAP financial measures and the respective most directly comparable financial measures calculated and presented in accordance with GAAP include:

*(in millions)*

|  | Three Months Ended September 30, 2026 | 2025 | Change Dollar | Percent | Six Months Ended September 30, 2026 | 2025 | Change Dollar | Percent |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Income before income taxes | $54 | $131 | $(77) | (58.8)% | $295 | $198 | $97 | 49.0% |
| Non-GAAP income before income taxes | $175 | $247 | $(72) | (29.1)% | $313 | $455 | $(142) | (31.2)% |
| Net income | $13 | $40 | $(27) | (67.5)% | $139 | $58 | $81 | 139.7% |
| Adjusted EBIT | $187 | $254 | $(67) | (26.4)% | $337 | $470 | $(133) | (28.3)% |

### Reconciliation of Non-GAAP Financial Measures

Our non-GAAP adjustments include:

- Restructuring costs – includes costs, net of reversals, related to workforce and real estate optimization and other similar charges.
- 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.
- Amortization of acquired intangible assets – includes amortization of intangible assets acquired through business combinations.
- Merger-related indemnification – represents the Company’s estimate of potential net liability for tax related indemnifications.
- Gain on litigation award – reflects a gain related to the TCS litigation judgment.
- Gains and losses on real estate and facility sales – gains and losses related to dispositions of real property.
- Gains and losses on dispositions – gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities.
- Impairment losses – non-cash charges associated with the permanent reduction in the value of the Company’s assets (e.g., impairment of goodwill and other long-term assets including fixed assets and impairments to deferred tax assets for discrete changes in valuation allowances). Future discrete reversals of valuation allowances are likewise excluded.
- Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation and the impact of merger and divestitures. Income tax expense of all other (non-discrete) non-GAAP adjustments is based on the difference in the GAAP annual effective tax rate (AETR) and overall non-GAAP provision (consistent with the GAAP methodology).

A reconciliation of reported results to non-GAAP results is as follows:

*(in millions, except per-share amounts)*

|  | Three Months Ended September 30, 2026 As Reported | Restructuring Costs | Transaction, Separation and Integration-Related Costs | Amortization of Acquired Intangible Assets | (Gains) and Losses on Real Estate, Facility Sales and Dispositions | Tax Adjustment | Non-GAAP Results |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Income before income taxes | $54 | $23 | $3 | $86 | $9 | $— | $175 |
| Income tax expense | 41 | 7 | 1 | 28 | 3 | (2) | 78 |
| Net income | 13 | 16 | 2 | 58 | 6 | 2 | 97 |
| Less: net loss attributable to non-controlling interest, net of tax | (11) | — | — | — | — | — | (11) |
| Net income attributable to DXC common stockholders | $24 | $16 | $2 | $58 | $6 | $2 | $108 |
| Effective Tax Rate | 75.9% |  |  |  |  |  | 44.6% |
| Basic EPS from continuing operations | $0.15 | $0.10 | $0.01 | $0.37 | $0.04 | $0.01 | $0.68 |
| Diluted EPS from continuing operations | $0.15 | $0.10 | $0.01 | $0.36 | $0.04 | $0.01 | $0.67 |
| Weighted average common shares outstanding for: |  |  |  |  |  |  |  |
| Basic EPS | 158.16 | 158.16 | 158.16 | 158.16 | 158.16 | 158.16 | 158.16 |
| Diluted EPS | 161.99 | 161.99 | 161.99 | 161.99 | 161.99 | 161.99 | 161.99 |

*(in millions, except per-share amounts)*

|  | Six Months Ended September 30, 2026 As Reported | Restructuring Costs | Transaction, Separation and Integration-Related Costs | Amortization of Acquired Intangible Assets | Gain on Litigation Award | (Gains) and Losses on Real Estate, Facility Sales and Dispositions | Tax Adjustment | Non-GAAP Results |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Income before income taxes | $295 | $49 | $3 | $173 | $(214) | $7 | $— | $313 |
| Income tax expense | 156 | 19 | 1 | 68 | (99) | 2 | (2) | 145 |
| Net income | 139 | 30 | 2 | 105 | (115) | 5 | 2 | 168 |
| Less: net loss attributable to non-controlling interest, net of tax | (7) | — | — | — | — | — | — | (7) |
| Net income attributable to DXC common stockholders | $146 | $30 | $2 | $105 | $(115) | $5 | $2 | $175 |
| Effective Tax Rate | 52.9% |  |  |  |  |  |  | 46.3% |
| Basic EPS from continuing operations | $0.91 | $0.19 | $0.01 | $0.65 | $(0.72) | $0.03 | $0.01 | $1.09 |
| Diluted EPS from continuing operations | $0.89 | $0.18 | $0.01 | $0.64 | $(0.70) | $0.03 | $0.01 | $1.06 |
| Weighted average common shares outstanding for: |  |  |  |  |  |  |  |  |
| Basic EPS | 160.50 | 160.50 | 160.50 | 160.50 | 160.50 | 160.50 | 160.50 | 160.50 |
| Diluted EPS | 164.39 | 164.39 | 164.39 | 164.39 | 164.39 | 164.39 | 164.39 | 164.39 |

42

*(in millions, except per-share amounts)*

|  | Three Months Ended September 30, 2025 As Reported | Restructuring Costs | Transaction, Separation and Integration-Related Costs | Amortization of Acquired Intangible Assets | Merger Related Indemnification | (Gains) and Losses on Real Estate, Facility Sales and Dispositions | Tax Adjustment | Non-GAAP Results |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Income before income taxes | $131 | $35 | $1 | $88 | $— | $(8) | $— | $247 |
| Income tax expense | 91 | 6 | — | 15 | (2) | (1) | (16) | 93 |
| Net income | 40 | 29 | 1 | 73 | 2 | (7) | 16 | 154 |
| Less: net income attributable to non-controlling interest, net of tax | 4 | — | — | — | — | — | — | 4 |
| Net income attributable to DXC common stockholders | $36 | $29 | $1 | $73 | $2 | $(7) | $16 | $150 |
| Effective Tax Rate | 69.5% |  |  |  |  |  |  | 37.7% |
| Basic EPS | $0.20 | $0.16 | $0.01 | $0.41 | $0.01 | $(0.04) | $0.09 | $0.85 |
| Diluted EPS | $0.20 | $0.16 | $0.01 | $0.41 | $0.01 | $(0.04) | $0.09 | $0.84 |
| Weighted average common shares outstanding for: |  |  |  |  |  |  |  |  |
| Basic EPS | 177.43 | 177.43 | 177.43 | 177.43 | 177.43 | 177.43 | 177.43 | 177.43 |
| Diluted EPS | 179.15 | 179.15 | 179.15 | 179.15 | 179.15 | 179.15 | 179.15 | 179.15 |

*(in millions, except per-share amounts)*

|  | Six Months Ended September 30, 2025 As Reported | Restructuring Costs | Transaction, Separation and Integration-Related Costs | Amortization of Acquired Intangible Assets | Merger Related Indemnification | (Gains) and Losses on Real Estate, Facility Sales and Dispositions | Impairment Losses | Tax Adjustment | Non-GAAP Results |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Income before income taxes | $198 | $72 | $2 | $175 | $2 | $(8) | $14 | $— | $455 |
| Income tax expense | 140 | 15 | — | 35 | (2) | (1) | 4 | (18) | 173 |
| Net income | 58 | 57 | 2 | 140 | 4 | (7) | 10 | 18 | 282 |
| Less: net income attributable to non-controlling interest, net of tax | 6 | — | — | — | — | — | — | — | 6 |
| Net income attributable to DXC common stockholders | $52 | $57 | $2 | $140 | $4 | $(7) | $10 | $18 | $276 |
| Effective Tax Rate | 70.7% |  |  |  |  |  |  |  | 38.0% |
| Basic EPS | $0.29 | $0.32 | $0.01 | $0.78 | $0.02 | $(0.04) | $0.06 | $0.10 | $1.54 |
| Diluted EPS | $0.29 | $0.31 | $0.01 | $0.77 | $0.02 | $(0.04) | $0.06 | $0.10 | $1.52 |
| Weighted average common shares outstanding for: |  |  |  |  |  |  |  |  |  |
| Basic EPS | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 |
| Diluted EPS | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 |

43

Reconciliations of revenue growth to organic revenue growth are as follows:

*(in millions)*

|  | Three Months Ended September 30, 2026 | September 30, 2025 | Six Months Ended September 30, 2026 | September 30, 2025 |
| --- | ---: | ---: | ---: | ---: |
| Total revenue growth | (4.0)% | (2.5)% | (4.5)% | (2.4)% |
| Foreign currency | —% | (1.9)% | (0.8)% | (2.0)% |
| Acquisitions and Divestitures | —% | 0.2% | —% | 0.1% |
| Organic revenue growth | (4.0)% | (4.2)% | (5.3)% | (4.3)% |
| CES revenue growth | (3.3)% | (1.9)% | (2.3)% | (2.3)% |
| Foreign currency | —% | (1.9)% | (0.8)% | (2.0)% |
| Acquisitions and Divestitures | —% | 0.4% | —% | 0.4% |
| CES organic revenue growth | (3.3)% | (3.4)% | (3.1)% | (3.9)% |
| GIS revenue growth | (10.0)% | (4.2)% | (9.7)% | (3.9)% |
| Foreign currency | —% | (2.1)% | (0.9)% | (2.1)% |
| Acquisitions and Divestitures | —% | —% | —% | —% |
| GIS organic revenue growth | (10.0)% | (6.3)% | (10.6)% | (6.0)% |
| Insurance revenue growth | 23.1% | 4.6% | 12.6% | 5.0% |
| Foreign currency | —% | (1.0)% | (0.2)% | (1.4)% |
| Acquisitions and Divestitures | —% | —% | —% | —% |
| Insurance organic revenue growth | 23.1% | 3.6% | 12.4% | 3.6% |

Reconciliations of segment profit and adjusted EBIT to net income are as follows:

*(in millions)*

|  | Three Months Ended September 30, 2026 | September 30, 2025 | Six Months Ended September 30, 2026 | September 30, 2025 |
| --- | ---: | ---: | ---: | ---: |
| Total profit for reportable segments | $236 | $295 | $408 | $530 |
| Corporate expenses | (49) | (41) | (71) | (60) |
| Adjusted EBIT | 187 | 254 | 337 | 470 |
| Restructuring costs | (23) | (35) | (49) | (72) |
| Transaction, separation and integration-related costs | (3) | (1) | (3) | (2) |
| Amortization of acquired intangible assets | (86) | (88) | (173) | (175) |
| Merger related indemnification | — | — | — | (2) |
| Gain on litigation award | — | — | 168 | — |
| (Losses) gains on real estate, facility sales and dispositions | (9) | 8 | (7) | 8 |
| Impairment losses | — | — | — | (14) |
| EBIT | 66 | 138 | 273 | 213 |
| Interest income | 45 | 46 | 134 | 92 |
| Interest expense | (57) | (53) | (112) | (107) |
| Income before income taxes | 54 | 131 | 295 | 198 |
| Income tax expense | (41) | (91) | (156) | (140) |
| Net income | $13 | $40 | $139 | $58 |

44

### Liquidity and Capital Resources

### Cash and Cash Equivalents and Cash Flows

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.

A significant portion of the cash held by our foreign subsidiaries is not expected to be impacted by U.S. federal income tax upon repatriation. However, a portion of this cash may still be subject to foreign and U.S. state income tax consequences upon future remittance. Therefore, if additional funds held outside the U.S. are needed for our operations in the U.S., we plan to repatriate these funds not designated as indefinitely reinvested.

We have $0.1 billion in cash held by foreign subsidiaries used for local operations that is subject to country-specific limitations which may restrict or result in increased costs in the repatriation of these funds. In addition, other practical considerations may limit our use of consolidated cash. This includes cash of $0.2 billion held by majority-owned consolidated subsidiaries where third-parties or public shareholders hold minority interests.

The following table summarizes our cash flow activity:

*(in millions)*

| Net cash provided by (used in): | Six Months Ended September 30, 2026 | September 30, 2025 | Change |
| --- | ---: | ---: | ---: |
| Operating activities | $635 | $595 | $40 |
| Investing activities | (187) | (222) | 35 |
| Financing activities | (618) | (246) | (372) |
| Effect of exchange rate changes on cash and cash equivalents | 32 | (35) | 67 |
| **Net (decrease) increase in cash and cash equivalents** | $(138) | $92 | $(230) |
| Cash and cash equivalents at beginning of year | 1,737 | 1,796 |  |
| Cash and cash equivalents at the end of period | $1,599 | $1,888 |  |

#### Operating cash flow

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:

- a $62 million increase in net income, net of adjustments, including $214 million of proceeds related to the TCS litigation judgment; partially offset by
- a $22 million unfavorable change in working capital, including $122 million of deposits made with the IRS, as discussed in Note 12 - “Income Taxes.”

The following table contains certain key working capital metrics:

|  | Three Months Ended September 30, 2026 | September 30, 2025 |
| --- | ---: | ---: |
| Days of sales outstanding in accounts receivable | 68 | 66 |
| Days of purchases outstanding in accounts payable | (49) | (57) |
| Cash conversion cycle | 19 | 9 |

45

#### Investing cash flow

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:

- a $28 million decrease in capital expenditures primarily from lower levels of software purchased and developed; and
- a $7 million increase in proceeds from sales of assets and other net investing activities.

#### Financing cash flow

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:

- a $400 million principal payment on long-term debt in the first six months of fiscal 2027; and
- a $6 million increase in cash used for share repurchases and related tax payments on net share settlements; partially offset by
- a $34 million reduction in payments on capital leases and asset financing arrangements, as the Company continues reducing the volume of these financing activities.

### Debt Financing

The following table summarizes our total debt:

*(in millions)*

|  | As of September 30, 2026 | March 31, 2026 | Change |
| --- | ---: | ---: | ---: |
| Short-term debt and current maturities of long-term debt | $935 | $520 | $415 |
| Long-term debt, net of current maturities | 2,124 | 3,032 | (908) |
| Total debt | $3,059 | $3,552 | $(493) |

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.

We were in compliance with all financial covenants associated with our borrowings as of September 30, 2026.

Our credit ratings are as follows:

| Rating Agency Fitch Moody’s | Long Term Ratings BBB- Baa3 | Short Term Ratings F3 P-3 | Outlook Stable Stable |
| --- | --- | ---: | --- |
| S&P | BBB- | - | Stable |

For information on the risks of ratings downgrades, see Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

### Liquidity

We expect our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our normal operating requirements for the next 12 months and beyond. We expect to continue using cash generated by operations as a primary source of liquidity; however, should we require funds greater than that generated from our operations to fund discretionary investment activities, such as business acquisitions, we have the ability to raise capital through debt financing, including the issuance of capital market debt instruments such as commercial paper, and bonds. In addition, we currently utilize, and will further utilize accounts receivables, sales facilities, and our cross-currency cash pool for liquidity needs. However, there is no guarantee that we will be able to obtain debt financing, if required, on terms and conditions acceptable to us, if at all, in the future.

Our exposure to operational liquidity risk is primarily from long-term contracts that require significant investment of cash during the initial phases of the contracts. The recovery of these investments is over the life of the contracts and is dependent upon our performance as well as customer acceptance.

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.

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.

### Share Repurchases

See Note 13 – “Stockholders’ Equity.”

### Dividends

To maintain our financial flexibility, we continue to suspend payment of quarterly dividends for fiscal 2027.

### Off-Balance Sheet Arrangements

In the normal course of business, we are a party to arrangements that include guarantees, the receivables securitization facility and certain other financial instruments with off-balance sheet risk, such as letters of credit and surety bonds. We also use performance letters of credit to support various risk management insurance policies. No liabilities related to these arrangements are reflected in our condensed consolidated balance sheets. There have been no material changes to our off-balance-sheet arrangements reported under Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, other than as disclosed in Note 3 – “Receivables” and Note 18 – “Commitments and Contingencies.”

### Cash Commitments

There have been no material changes, outside the ordinary course of business, to our cash commitments since March 31, 2026. For further information see “Cash Commitments” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

For our minimum purchase cash commitments in connection with our long-term purchase agreements with certain software, hardware, telecommunication, and other service providers, see Note 18 – “Commitments and Contingencies.”

### Critical Accounting Estimates

The preparation of consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities. These estimates may change in the future if underlying assumptions or factors change. Accordingly, actual results could differ materially from our estimates under different assumptions, judgments or conditions. We consider the following policies to be critical because of their complexity and the high degree of judgment involved in implementing them: revenue recognition, income taxes, defined benefit plans, valuation of assets and loss accruals for contingencies and litigation. We have discussed the selection of our critical accounting policies and the effect of estimates with the Audit Committee of our Board of Directors. During the three months ended September 30, 2026, there were no changes to our critical accounting policies and estimates from those described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026 except as mentioned in Note 1 – “Summary of Significant Accounting Policies.”

## Market risk

As filed, 315 characters.

For quantitative and qualitative disclosures about market risk affecting DXC, see “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. Our exposure to market risk has not changed materially since March 31, 2026.

## Controls and procedures

As filed, 923 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2026.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,171 characters.

*Our operations and financial results are subject to various risks and uncertainties, which may materially and adversely affect our business, financial condition, and results of operations, and the actual outcome of matters as to which forward-looking statements are made in this Quarterly Report on Form 10-Q. In such case, the trading price for DXC common stock could decline, and you could lose all or part of your investment. Past performance may not be a reliable indicator of future financial performance and historical trends should not be used to anticipate results or trends in future periods. Future performance and historical trends may be adversely affected by the aforementioned risks, and other variables and risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect our business, financial condition, and results of operations or the price of our common stock in the future. There have been no material changes in the three months ended September 30, 2026 to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026.*

Filed Oct 30, 2026.
Source: SEC EDGAR, the filing index for accession 0001688568-26-000090. Last ingested by Listed: Oct 31, 2026, 02:14 ET. No prices; not investment advice.