DXC Reports Q2 FY27 Results: Revenue Declines 4%, Adjusted EPS Beats Expectations

DXC Technology Company reported its financial results for the second quarter of fiscal year 2027, which ended September 30, 2026. According to the filing, total revenue for the quarter was $3.03 billion, a decrease of 4.0% year-over-year on both a reported and organic basis. The company reported an EBIT margin of 2.2% and an adjusted EBIT margin of 6.2%. Diluted earnings per share were $0.15, while non-GAAP diluted earnings per share were $0.67, a decrease of 20.2% compared to the prior year.

Regarding cash flow, cash generated from operations was $217 million, down 46.9% year-over-year. Free cash flow for the second quarter was $91 million, compared to $240 million in the prior year's second quarter. However, free cash flow for the first half of fiscal 2027 totaled $405 million, an increase from $337 million during the same period last year. The company also reported bookings of $2.4 billion, which declined 10% year-over-year, resulting in a trailing twelve-month book-to-bill ratio of 0.80x.

During the quarter, DXC repurchased approximately 5.7 million shares for $60 million. The company also noted ongoing discussions regarding a possible sale of its insurance business. Segment performance varied, with Consulting and Engineering Services seeing revenue of $1.213 billion (down 3.3% YoY) and Global Infrastructure Services seeing revenue of $1.427 billion (down 10.0% YoY). Conversely, the Insurance Software & Services segment saw revenue of $394 million, up 23.1% year-over-year.

Looking forward, DXC provided guidance for the remainder of fiscal 2027 and the third quarter. For the full fiscal year, the company expects total revenue between $11.91 billion and $11.98 billion, representing a decline of 5.5% to 5.0% year-over-year on an organic basis. Adjusted EBIT margin is expected to be between 5.75% and 6.25%, and non-GAAP diluted EPS is expected to be between $2.25 and $2.50. For the third quarter, revenue is expected to be approximately $2.98 billion, with an adjusted EBIT margin of approximately 6.0% and non-GAAP diluted EPS of approximately $0.55.