DXC Technology Co.
10/31/2025 | Press release | Distributed by Public on 10/31/2025 04:06
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The purpose of the Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is to present information that management believes is relevant to an assessment and understanding of our results of operations and cash flows for the second quarter and first six months of fiscal 2026 and our financial condition as of September 30, 2025. The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and accompanying notes.
The MD&A is organized in the following sections:
•Background
•Results of Operations
•Liquidity and Capital Resources
•Critical Accounting Estimates
The following discussion includes a comparison of our results of operations and liquidity and capital resources for the second quarters and first six months of fiscal 2026 and fiscal 2025. References are made throughout to the numbered Notes to the Condensed Consolidated Financial Statements ("Notes") in this Quarterly Report on Form 10-Q.
Background
DXC is a leading global provider of IT services. We are a trusted partner to many of the world's most innovative organizations, building solutions that move industries and companies forward. Our engineering, consulting, and technology experts help clients simplify, optimize, and modernize their systems and processes, manage their most critical workloads, integrate AI-powered intelligence into their operations, and put security and trust at the forefront. Through innovative solutions, we help clients achieve competitive advantages in the marketplace.
Effective April 1, 2025 (fiscal year 2026), we began reporting our financial results under a new segment structure designed to better reflect the Company's operational structure and the delivery of end-to-end IT services. The new structure includes three reportable segments: Consulting & Engineering Services ("CES"), Global Infrastructure Services ("GIS"), and Insurance Services ("Insurance").
Results of Operations for the Second Quarter and First Six Months of Fiscal 2026 and Fiscal 2025
Financial Highlights
Key metrics for the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025 as well as year to date cash flow comparisons are included below. We have presented organic revenue and diluted earnings per share on a non-GAAP basis. For more information see "Non-GAAP Financial Measures."
•Revenues of $3.2 billion, down 2.5% year-over-year (down 4.2% on an organic basis);
•EBIT was $138 million, up 24.3% year-over-year with a corresponding margin of 4.4%. Adjusted EBIT was $254 million, down 9.0% year-over-year with a corresponding margin of 8.0%;
•Diluted earnings per share of $0.20, compared to $0.23 in the same period a year ago; adjusted diluted earnings per share of $0.84, compared to $0.93 in the same period a year ago;
•Year-to-date fiscal 2026 cash generated from operations was $595 million, less capital expenditures of $258 million, resulted in free cash flow of $337 million, compared to free cash flow of $93 million in the in the prior-year;
•Book-to-bill ratio (contract awards divided by quarterly revenue) of 0.85x, compared to 0.81x in the prior-year period.
Segment Highlights - Second Quarter Fiscal 2026
Consulting & Engineering Services
• Revenue was $1,255 million, down 1.9% year-over-year (down 3.4% on an organic basis).
• Segment profit was $145 million, down 17.1% year-over-year, with a corresponding margin of 11.6%.
• Book-to-bill ratio of 0.92x, compared to 0.93x during the second quarter of fiscal 2025.
Global Infrastructure Services
• Revenue was $1,586 million, down 4.2% year-over-year (down 6.3% on an organic basis).
• Segment profit was $122 million, up 1.7% year-over-year, with a corresponding margin of 7.7%.
• Book-to-bill ratio of 0.82x, compared to 0.76x during the second quarter of fiscal 2025.
Insurance Services
• Revenue was $320 million, up 4.6% year-over-year (up 3.6% on an organic basis).
• Segment profit was $28 million, down 24.3% year-over-year, with a corresponding margin of 8.8%.
• Book-to-bill ratio of 0.68x, compared to 0.57x during the second quarter of fiscal 2025.
Segment Highlights - First Six Months Fiscal 2026
Consulting & Engineering Services
• Revenue was $2,501 million, down 2.3% year-over-year (down 3.9% on an organic basis).
• Segment profit was $250 million, down 16.1% year-over-year, with a corresponding margin of 10.0%.
Global Infrastructure Services
• Revenue was $3,186 million, down 3.9% year-over-year (down 6.0% on an organic basis).
• Segment profit was $219 million, down 0.9% year-over-year, with a corresponding margin of 6.9%.
Insurance Services
• Revenue was $633 million, up 5.0% year-over-year (up 3.6% on an organic basis).
• Segment profit was $61 million, down 24.7% year-over-year, with a corresponding margin of 9.6%.
Revenues
Our revenues by geography and operating segment are provided below:
| Three Months Ended |
Percentage Change
|
Percentage of Revenue
for the Three Months Ended
|
||||||||||||||||||||||||||||||||||||
| (in millions) | September 30, 2025 | September 30, 2024 |
U.S.
Dollars
|
Constant Currency(1)
|
September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||||||||||||
| Geographic Market | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 821 | $ | 889 | (7.6) | % | (7.6) | % | 26.0 | % | 27.4 | % | ||||||||||||||||||||||||||
|
United Kingdom
|
464 | 451 | 2.9 | % | (0.7) | % | 14.7 | % | 13.9 | % | ||||||||||||||||||||||||||||
| Other Europe | 1,040 | 1,035 | 0.5 | % | (4.7) | % | 32.9 | % | 31.9 | % | ||||||||||||||||||||||||||||
| Australia | 275 | 309 | (11.0) | % | (8.7) | % | 8.7 | % | 9.5 | % | ||||||||||||||||||||||||||||
| Other International | 561 | 557 | 0.7 | % | 0.7 | % | 17.7 | % | 17.2 | % | ||||||||||||||||||||||||||||
| Total Revenues | $ | 3,161 | $ | 3,241 | (2.5) | % | (4.4) | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||
|
Operating Segments
|
||||||||||||||||||||||||||||||||||||||
| CES | $ | 1,255 | $ | 1,279 | (1.9) | % | (3.8) | % | 39.7 | % | 39.5 | % | ||||||||||||||||||||||||||
| GIS | 1,586 | 1,656 | (4.2) | % | (6.3) | % | 50.2 | % | 51.1 | % | ||||||||||||||||||||||||||||
| Insurance | 320 | 306 | 4.6 | % | 3.6 | % | 10.1 | % | 9.4 | % | ||||||||||||||||||||||||||||
| Total Revenues | $ | 3,161 | $ | 3,241 | (2.5) | % | (4.4) | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||
| Six Months Ended |
Percentage Change
|
Percentage of Revenue
for the Six Months Ended
|
||||||||||||||||||||||||||||||||||||
| (in millions) | September 30, 2025 | September 30, 2024 |
U.S.
Dollars
|
Constant Currency(1)
|
September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||||||||||||
| Geographic Market | ||||||||||||||||||||||||||||||||||||||
| United States | $ | 1,649 | $ | 1,786 | (7.7) | % | (7.7) | % | 26.1 | % | 27.6 | % | ||||||||||||||||||||||||||
|
United Kingdom
|
944 | 899 | 5.0 | % | 0.2 | % | 14.9 | % | 13.9 | % | ||||||||||||||||||||||||||||
| Other Europe | 2,078 | 2,065 | 0.6 | % | (4.3) | % | 32.9 | % | 31.9 | % | ||||||||||||||||||||||||||||
| Australia | 534 | 608 | (12.2) | % | (9.9) | % | 8.4 | % | 9.4 | % | ||||||||||||||||||||||||||||
| Other International | 1,115 | 1,119 | (0.4) | % | (0.4) | % | 17.6 | % | 17.3 | % | ||||||||||||||||||||||||||||
| Total Revenues | $ | 6,320 | $ | 6,477 | (2.4) | % | (4.4) | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||
|
Operating Segments
|
||||||||||||||||||||||||||||||||||||||
| CES | $ | 2,501 | $ | 2,560 | (2.3) | % | (4.3) | % | 39.6 | % | 39.5 | % | ||||||||||||||||||||||||||
| GIS | 3,186 | 3,314 | (3.9) | % | (6.0) | % | 50.4 | % | 51.2 | % | ||||||||||||||||||||||||||||
| Insurance | 633 | 603 | 5.0 | % | 3.6 | % | 10.0 | % | 9.3 | % | ||||||||||||||||||||||||||||
| Total Revenues | $ | 6,320 | $ | 6,477 | (2.4) | % | (4.4) | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||
_____________
(1)Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period's currency conversion rates. This information is consistent with how management views our revenues and evaluates our operating performance and trends. For more information, see "Non-GAAP Financial Measures."
For the second quarter of fiscal 2026, our total revenue was $3.2 billion, a decrease of $80 million or 2.5%, compared to the same period a year ago. The decrease against the comparative period includes a 4.2% decline in organic revenue partially offset by a 1.9% favorable foreign currency exchange rate impact. Organic revenue growth is a non-GAAP measure. For more information, see "Non-GAAP Financial Measures."
For the first six months of fiscal 2026, our total revenue was $6.3 billion, a decrease of $157 million or 2.4%, as compared to the same period a year ago. The decrease against the comparative period includes a 4.3% decline in organic revenue partially offset by a 2.0% favorable foreign currency exchange rate impact.
For the discussion of risks associated with our foreign operations, see Part 1, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
Costs and Expenses
Our total costs and expenses are provided below:
| Three Months Ended September 30, | Change | Six Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | Dollar | Percent | 2025 | 2024 | Dollar | Percent | ||||||||||||||||||||||||||||||||||||||||||
| Costs of services | $ | 2,383 | $ | 2,427 | $ | (44) | (1.8) | % | $ | 4,771 | $ | 4,953 | $ | (182) | (3.7) | % | ||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 366 | 353 | 13 | 3.7 | % | 760 | 654 | 106 | 16.2 | % | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 295 | 329 | (34) | (10.3) | % | 599 | 655 | (56) | (8.5) | % | ||||||||||||||||||||||||||||||||||||||||
| Restructuring costs | 35 | 42 | (7) | (16.7) | % | 72 | 81 | (9) | (11.1) | % | ||||||||||||||||||||||||||||||||||||||||
| Interest expense | 53 | 69 | (16) | (23.2) | % | 107 | 141 | (34) | (24.1) | % | ||||||||||||||||||||||||||||||||||||||||
| Interest income | (46) | (51) | 5 | (9.8) | % | (92) | (102) | 10 | (9.8) | % | ||||||||||||||||||||||||||||||||||||||||
| Other income, net | (56) | (21) | (35) | 166.7 | % | (95) | (66) | (29) | 43.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Total Costs and Expenses | $ | 3,030 | $ | 3,148 | $ | (118) | (3.7) | % | $ | 6,122 | $ | 6,316 | $ | (194) | (3.1) | % | ||||||||||||||||||||||||||||||||||
Costs of Services
Costs of services, excluding depreciation and amortization and restructuring costs ("COS"), consist of expenses directly associated with revenue-generating activities. These expenses primarily include payroll and related employee benefit costs, subcontractor costs and other contract-related expenses, as well as technology, facilities, and other supporting infrastructure costs.
COS was $2.4 billion for the second quarter of fiscal 2026, a decrease of $44 million (-1.8%) compared to the prior-year period. COS was $4.8 billion for the first six months of fiscal 2026, a decrease of $182 million (-3.7%) compared to the prior-year period. The decline in both periods was primarily driven by the alignment of business development expenses to selling, general and administrative expenses in support of the offering model, a decrease in costs from lower revenue levels, and a reduction in professional services and contractor-related expenses from our cost optimization initiatives, partially offset by an unfavorable foreign currency exchange rate impact. In connection with the Company's new segment structure in fiscal 2026, certain costs for personnel in non-client facing positions are now included in selling, general and administrative expenses.
Gross margin (Revenues less COS as a percentage of revenue) was 24.6% and 24.5% for the second quarter and first six months of fiscal 2026, respectively, a decrease of 0.5% and an increase of 1.0% against the comparative periods.
Selling, General and Administrative
Selling, general and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), consist of the costs associated with personnel in non-client facing positions. These expenses primarily include payroll and related employee benefit costs, business development efforts, marketing and advertising activities, and other expenses such as information systems and office space.
SG&A was $366 million for the second quarter of fiscal 2026, an increase of $13 million (+3.7%) compared to the prior year period. SG&A was $760 million for the first six months of fiscal 2026, an increase of $106 million (+16.2%) compared to the prior-year period. The increase in both periods was primarily driven by higher expenses from the realignment of business development and other costs from COS as referenced above, certain investments in marketing and the Company's information systems, a gain from a legal settlement in the second quarter of fiscal 2025, and an unfavorable foreign currency exchange rate impact, partially offset by lower levels of transaction, separation and integration-related ("TSI") costs.
SG&A as a percentage of revenue was 11.6% and 12.0% for the second quarter and first six months of fiscal 2026, respectively, an increase of 0.7% and 1.9% against the comparative periods.
Depreciation and Amortization
Depreciation and amortization was $295 million for the second quarter of fiscal 2026, a decrease of $34 million (-10.3%) compared to the prior-year period. Depreciation expense decreased by $20 million due to lower average net property and equipment balances. Amortization expense decreased by $14 million due to lower transition and transformation contract cost balances and lower software amortization.
Depreciation and amortization was $599 million for the first six months of fiscal 2026, a decrease of $56 million (-8.5%) compared to the prior-year period. Depreciation expense decreased by $35 million due to lower average net property and equipment balances. Amortization expense decreased by $21 million due to lower transition and transformation contract cost balances and lower software amortization.
Restructuring Costs
During fiscal 2026, management approved global cost savings initiatives designed to better align our facility and data center requirements. During the second quarter and first six months of fiscal 2026, total restructuring costs recorded, net of reversals, were $35 million and $72 million, respectively, a decrease of $7 million (-16.7%) and $9 million (-11.1%), respectively, as compared to the prior-year periods.
See Note 10 - "Restructuring Costs" for additional information about our restructuring actions.
Interest Expense and Interest Income
Net interest expense (interest expense less interest income) was $7 million and $15 million for the second quarter and first six months of fiscal 2026, respectively, a decrease of $11 million (-61.1%) and $24 million (-61.5%), as compared to the prior-year periods. The improvement in both periods was primarily from higher net interest income from our cash deposits and multi-currency notional pools.
Other Income, Net
Other income, net includes non-service cost components of net periodic pension income, pension and other post-retirement benefit ("OPEB") actuarial and settlement (gains) losses, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, losses (gains) on real estate and facility sales, and other miscellaneous (gains) and losses.
The components of Other income, net for the second quarters and first six months of fiscal 2026 and 2025 were as follows:
| Three Months Ended September 30, | Six Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | Dollar Change | 2025 | 2024 | Dollar Change | ||||||||||||||||||||||||||||||||
| Non-service cost components of net periodic pension income | $ | (43) | $ | (40) | $ | (3) | $ | (86) | $ | (80) | $ | (6) | ||||||||||||||||||||||||||
| Foreign currency (gain) loss | (2) | - | (2) | (7) | 1 | (8) | ||||||||||||||||||||||||||||||||
| Loss (gain) on real estate and facility sales | (7) | 27 | (34) | (7) | 29 | (36) | ||||||||||||||||||||||||||||||||
|
Other (gain) loss
|
(4) | (8) | 4 | 5 | (16) | 21 | ||||||||||||||||||||||||||||||||
| Total | $ | (56) | $ | (21) | $ | (35) | $ | (95) | $ | (66) | $ | (29) | ||||||||||||||||||||||||||
Other income, net, increased $35 million, compared to the second quarter of fiscal 2025, primarily due to:
•higher pension income (+$3 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions;
•foreign currency impact (+$2 million) - change in foreign currency, primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program;
•real estate and facility sales (+$34 million) - losses on real estate and facility sales in the comparative period; offset by gains on real estate and facility sales in the second quarter of fiscal 2026.
•other miscellaneous items (-$4 million) - primarily from a gain on the sale of a strategic investment in the second quarter of fiscal 2025.
Other income, net, increased $29 million, compared to the first six months of fiscal 2025, primarily due to:
•higher pension income (+$6 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions;
•foreign currency impact (+$8 million) - change in foreign currency, primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program;
•real estate and facility sales (+$36 million) - losses on real estate and facility sales in the comparative period; offset by gains on real estate and facility sales during the first six months of fiscal 2026.
•other miscellaneous items (-$21 million) - primarily from the $14 million impairment of goodwill in the first quarter of fiscal 2026 related to the change in operating segments and from a gain on the sale of a strategic investment in the second quarter of fiscal 2025.
Taxes
Our effective tax rate ("ETR") was 69.5% and 51.6% for the three months ended September 30, 2025, and September 30, 2024, respectively, and 70.7% and 56.5% for the six months ended September 30, 2025, and September 30, 2024, respectively. For the three months ended September 30, 2025, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, and the tax benefit of a worthless stock deduction under section 165(g) of the Internal Revenue Code related to the Company's investment in a wholly owned subsidiary. For the six months ended September 30, 2025, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, the tax benefit of a worthless stock deduction under section 165(g) of the Internal Revenue Code related to the Company's investment in a wholly owned subsidiary, and a decrease in a deferred tax asset for stock based compensation. For the three months ended September 30, 2024, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, the foreign tax credit, and an increase in interest receivables due from tax authorities. For the six months ended September 30, 2024, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, the foreign tax credit, an increase in interest receivables due from tax authorities, and a decrease in a deferred tax asset for stock based compensation.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA includes a broad range of tax reform provisions affecting businesses. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We anticipate remitting less federal and state income taxes during fiscal year 2026 as a result of OBBBA.
Earnings Per Share
Diluted EPS for the second quarter and first six months of fiscal 2026 was $0.20 and $0.29, respectively, a decrease of $0.03 and $0.08 compared with the prior-year periods primarily due to lower net income attributable to DXC common stockholders, partially offset by a lower weighted average share count from the Company's share repurchases.
Diluted EPS for the second quarter of fiscal 2026 includes $0.16 per share of restructuring costs, $0.01 per share of transaction, separation and integration-related costs, $0.41 per share of amortization of acquired intangible assets, $0.01 per share of merger related indemnification costs, $(0.04) per share of gains on real estate, facility sales, and dispositions, and $0.09 per share of tax adjustments.
Diluted EPS for the first six months of fiscal 2026 includes $0.31 per share of restructuring costs, $0.01 per share of transaction, separation and integration-related costs, $0.77 per share of amortization of acquired intangible assets, $0.02 per share of merger related indemnification costs, $(0.04) per share of gains on real estate, facility sales, and dispositions, $0.06 per share of impairment losses, and $0.10 per share of tax adjustments.
Non-GAAP Financial Measures
We present non-GAAP financial measures of performance which are derived from the statements of operations of DXC. These non-GAAP financial measures include earnings before interest and taxes ("EBIT"), adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, non-GAAP EPS, organic revenue growth, constant currency revenues, and free cash flow.
We believe EBIT, adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS provide investors with useful supplemental information about our operating performance after excluding certain categories of expenses as well as gains and losses on certain dispositions and certain tax adjustments.
We believe constant currency revenues provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars in the periods presented. See below for a description of the methodology we use to present constant currency revenues.
One category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS, incremental amortization of intangible assets acquired through business combinations, if included, may result in a significant difference in period over period amortization expense on a GAAP basis. We exclude amortization of certain acquired intangible assets as these non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Although DXC management excludes amortization of acquired intangible assets, primarily customer-related intangible assets, from its non-GAAP expenses, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and support revenue generation. Any future transactions may result in a change to the acquired intangible asset balances and associated amortization expense.
Another category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS is impairment losses, which, if included, may result in a significant difference in period-over-period expense on a GAAP basis. We exclude impairment losses as these non-cash amounts reflect generally an acceleration of what would be multiple periods of expense and are not expected to occur frequently. Further, assets such as goodwill may be significantly impacted by market conditions outside of management's control.
Selected references are made to revenue growth on an "organic basis" so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates and without the impacts of acquisitions and divestitures, thereby providing comparisons of operating performance from period to period of the business that we have owned during both periods presented. Organic revenue growth is calculated by dividing the year-over-year change in GAAP revenues attributed to organic growth by the GAAP revenues reported in the prior comparable period. Organic revenue is calculated as constant currency revenue excluding the impact of mergers, acquisitions or similar transactions until the one-year anniversary of the transaction and excluding revenues of divestitures during the reporting period. This approach is used for all results where the functional currency is not the U.S. dollar. We believe organic revenue growth provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars and the effects of acquisitions and divestitures in both periods presented.
Free cash flow represents cash flow from operations, less capital expenditures. Free cash flow is utilized by our management, investors, and analysts to evaluate cash available to pay debt, repurchase shares, and provide further investment in the business.
There are limitations to the use of the non-GAAP financial measures presented in this report. One of the limitations is that they do not reflect complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Additionally, other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes between companies. Selected references are made on a "constant currency basis" so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby providing comparisons of operating performance from period to period. Financial results on a "constant currency basis" are non-GAAP measures calculated by translating current period activity into U.S. Dollars using the comparable prior period's currency conversion rates. This approach is used for all results where the functional currency is not the U.S. Dollar. Please see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Revenues."
Certain non-GAAP financial measures and the respective most directly comparable financial measures calculated and presented in accordance with GAAP include:
| Three Months Ended September 30, | Change | Six Months Ended September 30, | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | Dollar | Percent | 2025 | 2024 | Dollar | Percent | ||||||||||||||||||||||||||||||||||||||||||
|
Income before income taxes
|
$ | 131 | $ | 93 | $ | 38 | 40.9 | % | $ | 198 | $ | 161 | $ | 37 | 23.0 | % | ||||||||||||||||||||||||||||||||||
| Non-GAAP income before income taxes | $ | 247 | $ | 261 | $ | (14) | (5.4) | % | $ | 455 | $ | 464 | $ | (9) | (1.9) | % | ||||||||||||||||||||||||||||||||||
|
Net income
|
$ | 40 | $ | 45 | $ | (5) | (11.1) | % | $ | 58 | $ | 70 | $ | (12) | (17.1) | % | ||||||||||||||||||||||||||||||||||
| Adjusted EBIT | $ | 254 | $ | 279 | $ | (25) | (9.0) | % | $ | 470 | $ | 503 | $ | (33) | (6.6) | % | ||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures
Our non-GAAP adjustments include:
•Restructuring costs - includes costs, net of reversals, related to workforce and real estate optimization and other similar charges.
•Transaction, separation and integration-related ("TSI") costs - includes third party costs related to integration, separation, planning, financing and advisory fees and other similar charges associated with mergers, acquisitions, strategic investments, joint ventures, and dispositions and other similar transactions incurred within one year of such transactions closing, except for costs associated with related disputes, which may arise more than one year after closing.
•Amortization of acquired intangible assets - includes amortization of intangible assets acquired through business combinations.
•Merger-related indemnification - represents the Company's estimate of potential net liability to HPE for tax related indemnifications.
•Gains and losses on dispositions - gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities.
•Gains and losses on real estate and facility sales - gains and losses related to dispositions of real property.
•Impairment losses - non-cash charges associated with the permanent reduction in the value of the Company's assets (e.g., impairment of goodwill and other long-term assets including fixed assets and impairments to deferred tax assets for discrete changes in valuation allowances). Future discrete reversals of valuation allowances are likewise excluded.
•Tax adjustments - discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation and the impact of mergers and divestitures. Income tax expense of all other (non-discrete) non-GAAP adjustments is based on the difference in the GAAP annual effective tax rate (AETR) and overall non-GAAP provision (consistent with the GAAP methodology).
A reconciliation of reported results to non-GAAP results is as follows:
|
Three Months Ended September 30, 2025
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except per-share amounts) |
As Reported |
Restructuring Costs |
Transaction, Separation and Integration-Related Costs |
Amortization of Acquired Intangible Assets |
Merger Related Indemnification |
(Gains) and Losses on Real Estate, Facility Sales and Dispositions | Tax Adjustment |
Non-GAAP Results |
||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 131 | $ | 35 | $ | 1 | $ | 88 | $ | - | $ | (8) | $ | - | $ | 247 | ||||||||||||||||||||||||||||||||||
| Income tax expense | 91 | 6 | - | 15 | (2) | (1) | (16) | 93 | ||||||||||||||||||||||||||||||||||||||||||
| Net income | 40 | 29 | 1 | 73 | 2 | (7) | 16 | 154 | ||||||||||||||||||||||||||||||||||||||||||
| Less: net income attributable to non-controlling interest, net of tax | 4 | - | - | - | - | - | - | 4 | ||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to DXC common stockholders | $ | 36 | $ | 29 | $ | 1 | $ | 73 | $ | 2 | $ | (7) | $ | 16 | $ | 150 | ||||||||||||||||||||||||||||||||||
| Effective Tax Rate | 69.5 | % | 37.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS from continuing operations | $ | 0.20 | $ | 0.16 | $ | 0.01 | $ | 0.41 | $ | 0.01 | $ | (0.04) | $ | 0.09 | $ | 0.85 | ||||||||||||||||||||||||||||||||||
| Diluted EPS from continuing operations | $ | 0.20 | $ | 0.16 | $ | 0.01 | $ | 0.41 | $ | 0.01 | $ | (0.04) | $ | 0.09 | $ | 0.84 | ||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding for: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS | 177.43 | 177.43 | 177.43 | 177.43 | 177.43 | 177.43 | 177.43 | 177.43 | ||||||||||||||||||||||||||||||||||||||||||
| Diluted EPS | 179.15 | 179.15 | 179.15 | 179.15 | 179.15 | 179.15 | 179.15 | 179.15 | ||||||||||||||||||||||||||||||||||||||||||
|
Six Months Ended September 30, 2025
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except per-share amounts) |
As Reported |
Restructuring Costs |
Transaction, Separation and Integration-Related Costs |
Amortization of Acquired Intangible Assets |
Merger Related Indemnification |
(Gains) and Losses on Real Estate, Facility Sales and Dispositions | Impairment Losses | Tax Adjustment |
Non-GAAP Results |
|||||||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 198 | $ | 72 | $ | 2 | $ | 175 | $ | 2 | $ | (8) | $ | 14 | $ | - | $ | 455 | ||||||||||||||||||||||||||||||||||||||
| Income tax expense | 140 | 15 | - | 35 | (2) | (1) | 4 | (18) | 173 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | 58 | 57 | 2 | 140 | 4 | (7) | 10 | 18 | 282 | |||||||||||||||||||||||||||||||||||||||||||||||
| Less: net income attributable to non-controlling interest, net of tax | 6 | - | - | - | - | - | - | - | 6 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to DXC common stockholders | $ | 52 | $ | 57 | $ | 2 | $ | 140 | $ | 4 | $ | (7) | $ | 10 | $ | 18 | $ | 276 | ||||||||||||||||||||||||||||||||||||||
| Effective Tax Rate | 70.7 | % | 38.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS from continuing operations | $ | 0.29 | $ | 0.32 | $ | 0.01 | $ | 0.78 | $ | 0.02 | $ | (0.04) | $ | 0.06 | $ | 0.10 | $ | 1.54 | ||||||||||||||||||||||||||||||||||||||
| Diluted EPS from continuing operations | $ | 0.29 | $ | 0.31 | $ | 0.01 | $ | 0.77 | $ | 0.02 | $ | (0.04) | $ | 0.06 | $ | 0.10 | $ | 1.52 | ||||||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding for: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | 179.26 | |||||||||||||||||||||||||||||||||||||||||||||||
| Diluted EPS | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | 181.76 | |||||||||||||||||||||||||||||||||||||||||||||||
|
Three Months Ended September 30, 2024
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except per-share amounts) |
As Reported |
Restructuring Costs |
Transaction, Separation and Integration-Related Costs |
Amortization of Acquired Intangible Assets |
Merger Related Indemnification |
(Gains) and Losses on Real Estate, Facility Sales and Dispositions | Tax Adjustment |
Non-GAAP Results |
||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 93 | $ | 42 | $ | 15 | $ | 89 | $ | - | $ | 22 | $ | - | $ | 261 | ||||||||||||||||||||||||||||||||||
| Income tax expense | 48 | 9 | 3 | 20 | 5 | 7 | (5) | 87 | ||||||||||||||||||||||||||||||||||||||||||
| Net income | 45 | 33 | 12 | 69 | (5) | 15 | 5 | 174 | ||||||||||||||||||||||||||||||||||||||||||
| Less: net income attributable to non-controlling interest, net of tax | 3 | - | - | - | - | - | - | 3 | ||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to DXC common stockholders | $ | 42 | $ | 33 | $ | 12 | $ | 69 | $ | (5) | $ | 15 | $ | 5 | $ | 171 | ||||||||||||||||||||||||||||||||||
| Effective Tax Rate | 51.6 | % | 33.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS | $ | 0.23 | $ | 0.18 | $ | 0.07 | $ | 0.38 | $ | (0.03) | $ | 0.08 | $ | 0.03 | $ | 0.95 | ||||||||||||||||||||||||||||||||||
| Diluted EPS | $ | 0.23 | $ | 0.18 | $ | 0.07 | $ | 0.38 | $ | (0.03) | $ | 0.08 | $ | 0.03 | $ | 0.93 | ||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding for: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS | 180.93 | 180.93 | 180.93 | 180.93 | 180.93 | 180.93 | 180.93 | 180.93 | ||||||||||||||||||||||||||||||||||||||||||
| Diluted EPS | 183.88 | 183.88 | 183.88 | 183.88 | 183.88 | 183.88 | 183.88 | 183.88 | ||||||||||||||||||||||||||||||||||||||||||
|
Six Months Ended September 30, 2024
|
||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions, except per-share amounts) |
As Reported |
Restructuring Costs |
Transaction, Separation and Integration-Related Costs |
Amortization of Acquired Intangible Assets |
Merger Related Indemnification |
(Gains) and Losses on Real Estate, Facility Sales and Dispositions | Tax Adjustment |
Non-GAAP Results |
||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes | $ | 161 | $ | 81 | $ | 22 | $ | 176 | $ | - | $ | 24 | $ | - | $ | 464 | ||||||||||||||||||||||||||||||||||
| Income tax expense | 91 | 16 | 4 | 35 | 5 | 8 | (5) | 154 | ||||||||||||||||||||||||||||||||||||||||||
| Net income | 70 | 65 | 18 | 141 | (5) | 16 | 5 | 310 | ||||||||||||||||||||||||||||||||||||||||||
| Less: net income attributable to non-controlling interest, net of tax | 2 | - | - | - | - | - | - | 2 | ||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to DXC common stockholders | $ | 68 | $ | 65 | $ | 18 | $ | 141 | $ | (5) | $ | 16 | $ | 5 | $ | 308 | ||||||||||||||||||||||||||||||||||
| Effective Tax Rate | 56.5 | % | 33.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS | $ | 0.38 | $ | 0.36 | $ | 0.10 | $ | 0.78 | $ | (0.03) | $ | 0.09 | $ | 0.03 | $ | 1.71 | ||||||||||||||||||||||||||||||||||
| Diluted EPS | $ | 0.37 | $ | 0.35 | $ | 0.10 | $ | 0.77 | $ | (0.03) | $ | 0.09 | $ | 0.03 | $ | 1.67 | ||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding for: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic EPS | 180.30 | 180.30 | 180.30 | 180.30 | 180.30 | 180.30 | 180.30 | 180.30 | ||||||||||||||||||||||||||||||||||||||||||
| Diluted EPS | 184.01 | 184.01 | 184.01 | 184.01 | 184.01 | 184.01 | 184.01 | 184.01 | ||||||||||||||||||||||||||||||||||||||||||
Reconciliations of revenue growth to organic revenue growth are as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| (in millions) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||
| Total revenue growth | (2.5) | % | (5.7) | % | (2.4) | % | (5.9) | % | ||||||||||||||||||
| Foreign currency | (1.9) | % | - | % | (2.0) | % | 0.7 | % | ||||||||||||||||||
| Acquisitions and Divestitures | 0.2 | % | 0.1 | % | 0.1 | % | 0.2 | % | ||||||||||||||||||
| Organic revenue growth | (4.2) | % | (5.6) | % | (4.3) | % | (5.0) | % | ||||||||||||||||||
| CES revenue growth | (1.9) | % | (3.3) | % | (2.3) | % | (3.1) | % | ||||||||||||||||||
| Foreign currency | (1.9) | % | (0.1) | % | (2.0) | % | 0.7 | % | ||||||||||||||||||
| Acquisitions and Divestitures | 0.4 | % | - | % | 0.4 | % | 0.2 | % | ||||||||||||||||||
| CES organic revenue growth | (3.4) | % | (3.4) | % | (3.9) | % | (2.2) | % | ||||||||||||||||||
| GIS revenue growth | (4.2) | % | (9.2) | % | (3.9) | % | (9.7) | % | ||||||||||||||||||
| Foreign currency | (2.1) | % | 0.1 | % | (2.1) | % | 0.7 | % | ||||||||||||||||||
| Acquisitions and Divestitures | - | % | 0.1 | % | - | % | 0.2 | % | ||||||||||||||||||
| GIS organic revenue growth | (6.3) | % | (9.0) | % | (6.0) | % | (8.8) | % | ||||||||||||||||||
| Insurance revenue growth | 4.6 | % | 5.5 | % | 5.0 | % | 5.4 | % | ||||||||||||||||||
| Foreign currency | (1.0) | % | (0.2) | % | (1.4) | % | 0.4 | % | ||||||||||||||||||
| Acquisitions and Divestitures | - | % | - | % | - | % | - | % | ||||||||||||||||||
| Insurance organic revenue growth | 3.6 | % | 5.3 | % | 3.6 | % | 5.8 | % | ||||||||||||||||||
Reconciliations of segment profit and adjusted EBIT to net income are as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| (in millions) | September 30, 2025 | September 30, 2024 | September 30, 2025 | September 30, 2024 | ||||||||||||||||||||||
| Total profit for reportable segments | $ | 295 | $ | 332 | $ | 530 | $ | 600 | ||||||||||||||||||
|
Corporate expenses
|
(41) | (53) | (60) | (97) | ||||||||||||||||||||||
|
Adjusted EBIT
|
254 | 279 | 470 | 503 | ||||||||||||||||||||||
| Restructuring costs | (35) | (42) | (72) | (81) | ||||||||||||||||||||||
| Transaction, separation and integration-related costs | (1) | (15) | (2) | (22) | ||||||||||||||||||||||
| Amortization of acquired intangible assets | (88) | (89) | (175) | (176) | ||||||||||||||||||||||
| Merger related indemnification | - | - | (2) | - | ||||||||||||||||||||||
| Gains on dispositions | 1 | 5 | 1 | 5 | ||||||||||||||||||||||
|
Gains (losses) on real estate and facility sales
|
7 | (27) | 7 | (29) | ||||||||||||||||||||||
| Impairment losses | - | - | (14) | - | ||||||||||||||||||||||
|
EBIT
|
138 | 111 | 213 | 200 | ||||||||||||||||||||||
| Interest income | 46 | 51 | 92 | 102 | ||||||||||||||||||||||
|
Interest expense
|
(53) | (69) | (107) | (141) | ||||||||||||||||||||||
|
Income before income tax
|
131 | 93 | 198 | 161 | ||||||||||||||||||||||
| Income tax expense | (91) | (48) | (140) | (91) | ||||||||||||||||||||||
| Net income | $ | 40 | $ | 45 | $ | 58 | $ | 70 | ||||||||||||||||||
Liquidity and Capital Resources
Cash and Cash Equivalents and Cash Flows
As of September 30, 2025, our cash and cash equivalents ("cash") were $1.9 billion, of which $1.1 billion was held outside of the U.S. We maintain various multi-currency, multi-entity, cross-border, physical and notional cash and pool arrangements with various counterparties to manage liquidity efficiently that enable participating subsidiaries to draw on the Company's pooled resources to meet liquidity needs.
A significant portion of the cash held by our foreign subsidiaries is not expected to be impacted by U.S. federal income tax upon repatriation. However, a portion of this cash may still be subject to foreign and U.S. state income tax consequences upon future remittance. Therefore, if additional funds held outside the U.S. are needed for our operations in the U.S., we plan to repatriate these funds not designated as indefinitely reinvested.
We have $0.2 billion in cash held by foreign subsidiaries used for local operations that is subject to country-specific limitations which may restrict or result in increased costs in the repatriation of these funds. In addition, other practical considerations may limit our use of consolidated cash. This includes cash of $0.2 billion held by majority-owned consolidated subsidiaries where third-parties or public shareholders hold minority interests.
The following table summarizes our cash flow activity:
| Six Months Ended | ||||||||||||||||||||
| (in millions) | September 30, 2025 | September 30, 2024 | Change | |||||||||||||||||
| Net cash provided by (used in): | ||||||||||||||||||||
| Operating activities | $ | 595 | $ | 433 | $ | 162 | ||||||||||||||
| Investing activities | (222) | (258) | 36 | |||||||||||||||||
| Financing activities | (246) | (189) | (57) | |||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (35) | 38 | (73) | |||||||||||||||||
| Cash classified within current assets held for sale | - | (3) | 3 | |||||||||||||||||
| Net increase in cash and cash equivalents | $ | 92 | $ | 21 | $ | 71 | ||||||||||||||
| Cash and cash equivalents at beginning of year | 1,796 | 1,224 | ||||||||||||||||||
| Cash and cash equivalents at the end of period | $ | 1,888 | $ | 1,245 | ||||||||||||||||
Operating cash flow
Net cash provided by operating activities was $595 million and $433 million, respectively, during the first six months of fiscal 2026 and fiscal 2025, reflecting a year-over year increase of $162 million. The increase in operating cash flows compared with the prior-year period was primarily from:
•a $197 million favorable change in working capital, largely driven by improvements in our cash conversion cycle; partially offset by
•a $35 million decrease in net income, net of adjustments.
The following table contains certain key working capital metrics:
| Three Months Ended | ||||||||||||||
| September 30, 2025 | September 30, 2024 | |||||||||||||
| Days of sales outstanding in accounts receivable | 66 | 71 | ||||||||||||
| Days of purchases outstanding in accounts payable | (57) | (56) | ||||||||||||
| Cash conversion cycle | 9 | 15 | ||||||||||||
Investing cash flow
Net cash used in investing activities was $222 million and $258 million, respectively, during the first six months of fiscal 2026 and fiscal 2025, reflecting a year-over-year decline of $36 million. The decline in investing cash flows compared with the prior-year period was primarily from:
•a reduction of $82 million in capital expenditures; partially offset by
•a $47 million decline in proceeds from sales of assets.
Financing cash flow
Net cash used in financing activities was $246 million and $189 million, respectively, during the first six months of fiscal 2026 and fiscal 2025, reflecting a year-over-year increase of $57 million. The increase in financing cash flows compared with the prior-year period was primarily from:
•a $117 million increase in cash used for share repurchases and related tax payments on net share settlements; partially offset by
•a $58 million reduction in payments on capital leases and asset financing arrangements, as the Company continues reducing the volume of these financing activities.
Debt Financing
The following table summarizes our total debt:
| As of | ||||||||||||||||||||
| (in millions) | September 30, 2025 | March 31, 2025 |
Change
|
|||||||||||||||||
| Short-term debt and current maturities of long-term debt | $ | 1,612 | $ | 880 | $ | 732 | ||||||||||||||
| Long-term debt, net of current maturities | 2,370 | 2,996 | (626) | |||||||||||||||||
| Total debt | $ | 3,982 | $ | 3,876 | $ | 106 | ||||||||||||||
The $106 million increase in total debt during the first six months of fiscal 2026 was primarily attributable to an unfavorable foreign currency exchange rate of U.S. dollar against the Euro, partially offset by decreases in finance leases and borrowings for asset financing attributable to payments exceeding minimal additions.
We were in compliance with all financial covenants associated with our borrowings as of September 30, 2025.
Our credit ratings are as follows:
| Rating Agency | Long Term Ratings | Short Term Ratings | Outlook | |||||||||||||||||
| Fitch |
BBB-
|
F3
|
Stable
|
|||||||||||||||||
| Moody's | Baa2 | P-2 |
Negative
|
|||||||||||||||||
| S&P | BBB- | - | Stable | |||||||||||||||||
For information on the risks of ratings downgrades, see Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
Liquidity
We expect our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our normal operating requirements for the next 12 months and beyond. We expect to continue using cash generated by operations as a primary source of liquidity; however, should we require funds greater than that generated from our operations to fund discretionary investment activities, such as business acquisitions, we have the ability to raise capital through debt financing, including the issuance of capital market debt instruments such as commercial paper, and bonds. In addition, we currently utilize, and will further utilize accounts receivables, sales facilities, and our cross-currency cash pool for liquidity needs. However, there is no guarantee that we will be able to obtain debt financing, if required, on terms and conditions acceptable to us, if at all, in the future.
Our exposure to operational liquidity risk is primarily from long-term contracts that require significant investment of cash during the initial phases of the contracts. The recovery of these investments is over the life of the contracts and is dependent upon our performance as well as customer acceptance.
Our total liquidity of $5.1 billion as of September 30, 2025, includes $1.9 billion of cash and cash equivalents and $3.2 billion of available borrowings under our revolving credit facility. On October 23, 2025, the Company amended its revolving credit facility, extending the maturity date to November 1, 2030 and reducing the total available borrowings to $3.0 billion as a result of rationalizing its bank group. The Company believes this revised facility continues to provide ample financial flexibility to support our operating and strategic objectives.
Share Repurchases
See Note 13 - "Stockholders' Equity."
Dividends
To maintain our financial flexibility, we continue to suspend payment of quarterly dividends for fiscal 2026.
Off-Balance Sheet Arrangements
In the normal course of business, we are a party to arrangements that include guarantees, the receivables securitization facility and certain other financial instruments with off-balance sheet risk, such as letters of credit and surety bonds. We also use performance letters of credit to support various risk management insurance policies. No liabilities related to these arrangements are reflected in our condensed consolidated balance sheets. There have been no material changes to our off-balance-sheet arrangements reported under Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, other than as disclosed in Note 3 - "Receivables" and Note 17 - "Commitments and Contingencies."
Cash Commitments
There have been no material changes, outside the ordinary course of business, to our cash commitments since March 31, 2025. For further information see "Cash Commitments" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.
For our minimum purchase cash commitments in connection with our long-term purchase agreements with certain software, hardware, telecommunication, and other service providers, see Note 17 - "Commitments and Contingencies."
Critical Accounting Estimates
The preparation of consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities. These estimates may change in the future if underlying assumptions or factors change. Accordingly, actual results could differ materially from our estimates under different assumptions, judgments or conditions. We consider the following policies to be critical because of their complexity and the high degree of judgment involved in implementing them: revenue recognition, income taxes, defined benefit plans, valuation of assets and loss accruals for contingencies and litigation. We have discussed the selection of our critical accounting policies and the effect of estimates with the Audit Committee of our Board of Directors. During the three months ended September 30, 2025, there were no changes to our critical accounting policies and estimates from those described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 except as mentioned in Note 1 - "Summary of Significant Accounting Policies."
DXC Technology Co. published this content on October 31, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 31, 2025 at 10:06 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]