Key Highlights

  • Second quarter Revenue was $3.0 billion, down 4.0% on an organic basis.
  • Diluted EPS was $0.15, compared with $0.20 a year earlier, while adjusted diluted EPS was $0.67, versus $0.84.
  • Insurance revenue grew 23.1% organically, while Global Infrastructure Services revenue fell 10.0%.
  • Free Cash Flow for the first six months reached $405 million, up from $337 million a year ago.
  • Total Debt declined to $3,059 million from $3,552 million at March 31, 2026.

Revenue slips 4.0% as segments move in opposite directions

DXC Technology (NYSE:DXC) is an enterprise technology services provider that operates managed infrastructure, modernizes applications and sells industry-specific software to businesses and public sector bodies worldwide. In its Quarterly Report for the second quarter of fiscal 2027, covering the period ended September 30, 2026, the company posted revenue of $3,034 million, down 4.0% organically from $3,161 million a year earlier.

Consulting & Engineering Services generated $1,213 million, down 3.3% organically, with a segment Margin of 10.3%. Global Infrastructure Services revenue came in at $1,427 million, down 10.0%, and segment profit fell 45.9% to $66 million, a margin of 4.6%.

Insurance Software & Services revenue reached $394 million, up 23.1%, with segment profit of $45 million, up 60.7%. The company said this growth includes a favorable contract modification.

Why GAAP EPS of $0.15 sits so far below adjusted EPS of $0.67

Diluted EPS was $0.15, versus $0.20 in the prior year quarter, while Net Income was $13 million, down from $40 million. Adjusted diluted EPS was $0.67, compared with $0.84. EBIT was $66 million, down 52.2%, while adjusted EBIT was $187 million, down 26.4%, for a margin of 6.2%.

Most of the gap between the two EPS figures comes from amortization of acquired intangible assets at $0.36 per share, followed by restructuring costs of $0.10 per share. Gross margin was 21.8%, down 280 basis points, partly because of a one-time Impairment of transition and transformation costs tied to a customer contract modification.

Cost cuts lower SG&A by 12.8% but do not offset the revenue decline

Selling, general and administrative expense was $319 million, down $47 million, and fell to 10.5% of revenue, an improvement of 110 basis points.

Book-to-bill, which divides contract awards by quarterly revenue, was 0.80x versus 0.85x a year earlier. Global Infrastructure Services came in at 0.80x and Insurance at 0.79x, up from 0.68x.

Litigation proceeds lift first-half cash flow while debt falls by $493 million

For the first six months, cash generated from operations was $635 million, less capital expenditures of $230 million, leaving free cash flow of $405 million versus $337 million a year earlier. That figure includes $214 million of proceeds from the litigation judgment against Tata Consultancy Services and a $122 million outflow for tax deposits made to the IRS.

Cash and cash equivalents stood at $1,599 million at September 30, 2026, compared with $1,737 million at March 31, 2026. Total debt was $3,059 million, down $493 million after a $400 million principal payment, which implies net debt of about $1,460 million on a calculated basis. Share repurchases totaled $132 million in the first six months.

What to watch as Insurance growth meets weaker infrastructure demand

Global Infrastructure Services accounted for 47.0% of revenue, down from 50.2% a year earlier, while Insurance rose to 13.0% from 10.1%. The largest segment is shrinking while a smaller one expands, partly through a one-time contract modification.

Key watch points include whether book-to-bill improves from 0.80x and whether Insurance keeps its pace without the contract benefit. The filing did not give a forward outlook.