DXC Technology (DXC) Q2 2027 Earnings Report

The call had a mixed tone. DXC reported quarterly results above guidance and highlighted substantial progress in AI certifications, agentic deployments, cybersecurity offerings, SaaS adoption and new customer wins. However, these developments were accompanied by declining revenue, profitability and bookings, weaker pipeline conversion, increased competition and reduced full-year revenue, margin, EPS and free cash flow guidance. Management expressed confidence in the long-term AI opportunity but emphasized that improving core-business execution remains necessary.

For full fiscal year 2027, DXC expects organic revenue to decline 5% to 5.5% year-to-year, CES revenue to decline at a mid-single-digit range, GIS revenue to show a high single-digit revenue decline, and Insurance revenue growth to increase from low single-digit to mid-single-digit revenue growth; adjusted EBIT margin is expected to be between 5.75% and 6.25%, non-GAAP diluted EPS between $2.25 to $2.50, and free cash flow approximately $600 million. For the third quarter of fiscal 2027, total organic revenue is expected to decline approximately 6% year-to-year, CES to decline mid-single digits, GIS to decline at a high single-digit rate, insurance to grow at a similar rate as the first quarter, adjusted EBIT margin to be approximately 6%, and non-GAAP diluted EPS to be approximately $0.55.