DXC Technology (DXC) Q3 2026 earnings summary

Executive summary

• Q3 FY26 revenue was $3.2 billion, down 1.0% year-over-year (down 4.3% organically), with adjusted EBIT margin at 8.2% and non-GAAP EPS at $0.96, outperforming guidance.

• The company is executing a dual-track strategy: stabilizing legacy businesses and investing in AI-native, high-growth segments, with a refreshed brand and centralized sales enablement.

• Fast-Track and AI-driven initiatives are ahead of schedule, targeting high-margin, repeatable offerings and expanding growth opportunities.

• Strategic partnerships, especially in digital assets and payments, are expanding reach and enabling scalable solutions.

• Notable new client wins and internal AI deployment are enhancing productivity and product development.

Financial highlights

• Q3 revenue was $3.2 billion, down 4.3% organically year-over-year, with adjusted EBIT margin at 8.2% and non-GAAP EPS at $0.96.

• Free cash flow for Q3 was $266 million; year-to-date $603 million, on track for $650 million full-year.

• Book-to-bill ratio for Q3 was 1.12; trailing 12-month at 1.02, fourth consecutive quarter above one.

• Net debt reduced by ~$970 million since start of FY25; total debt now ~$3.6 billion.

• Share repurchases totaled $190 million year-to-date, with $65 million in Q3.

Outlook and guidance

• Q4 organic revenue expected to decline 4%-5%; adjusted EBIT margin for Q4 guided at 6.5%-7.5%; non-GAAP EPS $0.65-$0.75.

• Full-year FY26 guidance: organic revenue decline ~4.3%, adjusted EBIT margin ~7.5%, non-GAAP EPS ~$3.15, free cash flow ~$650 million.

• FY27 capital allocation: $400 million to retire bonds, $250 million share repurchase in H1.

• No quarterly dividends planned for fiscal 2026 to maintain flexibility.