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Sep 30, 2025
DXC Technology Q2 2026 Earnings Report
DXC Technology reported its second quarter fiscal year 2026 results, with total revenue of $3.16 billion and diluted EPS of $0.20.
Key Takeaways
DXC Technology delivered Adjusted EBIT margin and Non-GAAP diluted EPS above its guidance and generated very strong free cash flow in the second quarter of fiscal year 2026. Revenue performance remained consistent, and the company is focused on execution and pipeline conversion, while also introducing a strategic game plan for the AI global economy.
Total revenue for the quarter was $3.16 billion, a decrease of 2.5% year-over-year.
Diluted earnings per share was $0.20, a decrease of 13.0% year-over-year, while Non-GAAP diluted earnings per share was $0.84.
Free cash flow was $240 million, a significant increase of $192 million year-over-year.
Adjusted EBIT margin reached 8.0%, exceeding guidance, and bookings were $2.7 billion with a book to bill ratio of 0.85x.
Revenue by Segment
Forward Guidance
DXC Technology provided guidance for the full fiscal year 2026 and the third quarter of fiscal year 2026. For the full year, total revenue is expected to be between $12.67 billion and $12.81 billion, with an Adjusted EBIT margin of 7.0% to 8.0% and Non-GAAP diluted EPS in the range of $2.85 to $3.35. Free Cash Flow is projected to be approximately $650 million. For the third quarter, revenue is anticipated to be between $3.18 billion and $3.22 billion, with an Adjusted EBIT margin of 7.0% to 8.0% and Non-GAAP diluted EPS of $0.75 to $0.85.
Positive Outlook
- Full year fiscal 2026 free cash flow guidance increased to ~$650 million from $600 million.
- Adjusted EBIT margin for both Q3 and full year fiscal 2026 is projected to be strong, ranging from 7.0% to 8.0%.
- Non-GAAP diluted EPS for the full year fiscal 2026 is expected to be between $2.85 and $3.35.
- The company is introducing a strategic and tactical game plan to win in a rapidly evolving AI global economy.
- The game plan includes formalizing a two-track approach to running the business (core track and fast track) and launching the Xponential AI framework.
Challenges Ahead
- Full year fiscal 2026 total revenue guidance was slightly adjusted to a decline of 4.5% to 3.5% year-over-year on an organic basis, compared to the prior guide of 5.0% to 3.0%.
Historical Earnings Impact
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