DXC Lowers Fiscal 2027 Revenue and Profit Outlook

The Tip Desk · November 1, 2026 · 3 min read

Second-quarter revenue was $3.03 billion as the company cut full-year organic revenue, adjusted EBIT margin and non-GAAP EPS ranges.

DXC Technology (DXC) reported second-quarter fiscal 2027 revenue of $3.03 billion, down 4.0% from a year earlier and down 4.0% on an organic basis, and lowered its full-year outlook for revenue, adjusted EBIT margin and non-GAAP earnings.

The organic decline narrowed from 6.7% in the first quarter of fiscal 2027. GAAP revenue had fallen 5.1% in that prior quarter.

Adjusted EBIT was $187 million, or a 6.2% margin, compared with $150 million and a 5.0% margin in the first quarter. EBIT was $66 million, a 2.2% margin. Non-GAAP diluted earnings were $0.67 a share, down 20.2% from a year earlier. GAAP diluted earnings were $0.15 a share.

Chief executive Raul Fernandez said the company delivered revenue, adjusted EBIT and non-GAAP diluted EPS above its expectations for the quarter and that the revenue ramp for agentic solutions was clearer in average deal size, close-cycle timing and pace of follow-on work. He said core revenue recovery would take time.

Bookings of $2.4 billion declined 10% year-over-year, with a book-to-bill ratio of 0.80x, after $3.0 billion of bookings, up 5% year-over-year, and a 0.99x book-to-bill in the first quarter. The trailing twelve-month book-to-bill ratio was 1.0x.

Consulting and Engineering Services revenue was $1,213 million, down 3.3% year-over-year and down 3.3% organically. Segment profit was $125 million, down 13.8% year-over-year, with a 10.3% margin. CES bookings declined 17.0% year-over-year, with a 0.79x book-to-bill.

Global Infrastructure Services revenue was $1,427 million, down 10.0% year-over-year and down 10.0% organically. Segment profit was $66 million, down 45.9% year-over-year, with a 4.6% margin. GIS bookings declined 12.7% year-over-year, with a 0.80x book-to-bill.

Insurance Software & Services revenue was $394 million, up 23.1% year-over-year and up 23.1% organically, after a 1.9% year-over-year increase in the first quarter. The company said organic growth included a favorable contract modification entered in the second quarter. Segment profit was $45 million, up 60.7% year-over-year, with an 11.4% margin. Insurance bookings increased 43.5% year-over-year, with a 0.79x book-to-bill.

Cash generated from operations was $217 million, down 46.9% year-over-year. Free cash flow was $91 million, compared with $240 million in the second quarter of fiscal 2026. For the first half of fiscal 2027, free cash flow was $405 million, compared with $337 million a year earlier. The company repurchased $60 million of shares, or about 5.7 million shares.

DXC acknowledged ongoing discussions regarding a possible sale of its insurance business.

The company now expects full-year fiscal 2027 revenue of $11.91 billion to $11.98 billion, a 5.5% to 5.0% organic decline, versus a prior range of $12.10 billion to $12.35 billion, a 5.0% to 3.0% organic decline. Adjusted EBIT margin guidance is 5.75% to 6.25%, down from 6.0% to 7.0%. Non-GAAP diluted EPS is guided at $2.25 to $2.50, down from $2.40 to $2.90. Free cash flow is guided at about $600 million, down from about $685 million; the prior free-cash-flow guide had included litigation-related cash proceeds.

For the third quarter of fiscal 2027, DXC expects revenue of about $2.98 billion, a roughly 6.0% organic decline, versus the 4.0% organic decline in the second quarter. Adjusted EBIT margin is expected at about 6.0% and non-GAAP diluted EPS at about $0.55, matching the ranges it had given for the second quarter.