DXC Technology (DXC) Q1 2026 earnings summary

Executive summary

• Q1 revenue was $3.16 billion, down 2.4% year-over-year (4.3% organic decline), with adjusted EBIT margin at 6.8% and non-GAAP EPS of $0.68, both at the high end of guidance.

• Bookings increased 14% year-over-year, marking the third consecutive quarter of double-digit growth and a book-to-bill ratio of 0.90x.

• Segment performance was mixed: CES and GIS declined organically, while Insurance grew 3.6% organically.

• Over 50,000 engineers trained in generative AI, with 92% of technical teams AI-ready; recognized by Gartner as an emerging leader in GenAI consulting.

• $50 million in share repurchases completed in Q1.

Financial highlights

• Q1 total revenue was $3.16 billion, with CES at $1,246M, GIS at $1,600M, and Insurance at $313M.

• Adjusted EBIT was $216 million (6.8% margin), down 3.6% year-over-year; non-GAAP diluted EPS was $0.68, down from $0.75.

• Free cash flow improved to $97 million from $45 million year-over-year.

• Gross margin improved to 24.4% from 21.9% year-over-year; SG&A as a percent of revenue increased to 12.5%.

• Net income attributable to common stockholders was $16 million, down from $26 million year-over-year.

Outlook and guidance

• FY26 organic revenue expected to decline 3%-5%, with reported revenue guided to $12.61-$12.87 billion.

• Adjusted EBIT margin guidance: 7%-8%; non-GAAP EPS raised to $2.85-$3.35.

• FY26 free cash flow expected at approximately $600 million.

• Q2 organic revenue expected to decline 3.5%-4.5%, with adjusted EBIT margin of 6.5%-7.5% and non-GAAP EPS of $0.65-$0.75.

• Management expects existing cash and cash flow to be sufficient for operations for the next 12 months and beyond.