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Dec 31, 2025
DXC Technology Q3 2026 Earnings Report
DXC Technology reported its third quarter fiscal year 2026 results, showing a slight revenue decline but improved profit margins and strong free cash flow.
Key Takeaways
DXC Technology reported third quarter fiscal 2026 results with total revenue of $3.19 billion, a 1.0% year-over-year decrease. Despite the revenue dip, the company achieved an EBIT margin of 5.6% and an adjusted EBIT margin of 8.2%. Diluted earnings per share increased by 96.8% year-over-year to $0.61, with non-GAAP diluted earnings per share at $0.96, up 4.3% year-over-year. Free cash flow was strong at $266 million, contributing to a year-to-date total of $603 million.
Total revenue for Q3 FY26 was $3.19 billion, a 1.0% decrease year-over-year (4.3% decrease on an organic basis).
EBIT margin improved to 5.6%, and adjusted EBIT margin was 8.2%, reflecting disciplined execution.
Diluted EPS increased significantly by 96.8% to $0.61, while non-GAAP diluted EPS rose by 4.3% to $0.96.
Free cash flow reached $266 million for the quarter, bringing the year-to-date total to $603 million, an increase of 4.7% year-over-year.
Revenue by Segment
Forward Guidance
For the fourth quarter fiscal 2026, DXC Technology expects total revenue between $3.16 billion and $3.19 billion, representing a year-over-year organic decline of 5.0% to 4.0%. Adjusted EBIT margin is projected to be in the range of 6.5% to 7.5%, with non-GAAP diluted EPS between $0.65 and $0.75. For the full fiscal year 2026, total revenue is anticipated to be approximately $12.69 billion, a ~4.3% organic decline year-over-year. Adjusted EBIT margin is expected around 7.5%, and non-GAAP diluted EPS around $3.15. Free cash flow for the full year is projected at approximately $650 million.
Positive Outlook
- Full year non-GAAP diluted EPS guidance of ~$3.15 is an improvement from the prior range of $2.85 to $3.35.
- Full year free cash flow guidance of ~$650 million indicates continued strong cash generation.
- Adjusted EBIT margin for Q4 FY26 is expected to be between 6.5% and 7.5%, showing continued profitability.
- The company is investing across its offerings to energize its Core business and develop new Fast Track solutions.
- Expansion of AI use in solutions is expected to help clients work smarter and create new sources of value.
Challenges Ahead
- Q4 FY26 total revenue is expected to decline 5.0% to 4.0% year-over-year on an organic basis.
Historical Earnings Impact
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