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1. Company Snapshot

1.a. Company Description

DXC Technology Company, together with its subsidiaries, provides information technology services and solutions primarily in North America, Europe, Asia, and Australia.It operates in two segments, Global Business Services (GBS) and Global Infrastructure Services (GIS).The GBS segment offers a portfolio of analytics services and extensive partner ecosystem that help its customers to gain rapid insights, automate operations, and accelerate their digital transformation journeys; and software engineering, consulting, and data analytics solutions that enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business.


It also uses various technologies and methods to accelerate the creation, modernization, delivery, and maintenance of secure applications allowing customers to innovate faster while reducing risk, time to market, and total cost of ownership.In addition, this segment offers business process services, which include integration and optimization of front and back office processes, and agile process automation.The GIS segment adapts legacy apps to cloud, migrate the right workloads, and securely manage their multi-cloud environments; and offers security solutions help predict attacks, proactively respond to threats, and ensure compliance, as well as to protect data, applications, and infrastructure.


It also provides IT outsourcing services to help customers securely and cost-effectively run mission-critical systems and IT infrastructure.In addition, this segment offers workplace services to fit its customer's employee, business, and IT needs from intelligent collaboration; and modern device management, digital support services, and mobility services.DXC Technology Company is headquartered in Ashburn, Virginia.

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1.b. Last Insights on DXC

DXC Technology's recent performance was driven by improved bookings, organic growth in insurance, and AI initiatives. The company's Q2 earnings beat forecasts, with non-GAAP diluted earnings per share of $0.84, surpassing the Zacks Consensus Estimate of $0.71. Bookings of $2.7 billion and a trailing twelve-month book-to-bill ratio of 1.08x indicate a positive outlook. Additionally, the company repurchased $75 million of shares, reducing outstanding shares and increasing shareholder value. (Source: Zacks)

1.c. Company Highlights

2. DXC Technology's Mixed Q2 Results: Margin Upside, Revenue Decline

DXC Technology reported a mixed financial performance in its second quarter fiscal 2026, with total revenue of $3.2 billion declining 4.2% year-to-year on an organic basis. However, the company reported an adjusted EBIT margin of 8%, above the high end of guidance, and non-GAAP EPS of $0.84, beating estimates of $0.71. Bookings grew approximately 2% year-to-year, with a book-to-bill ratio of 0.85. The company's free cash flow was $240 million, up from $48 million last year.

Publication Date: Nov -05

📋 Highlights
  • Mixed Financial Performance:: Q2 revenue declined 4.2% YoY to $3.2B, but adjusted EBIT margin (8%) and non-GAAP EPS ($0.84) exceeded guidance.
  • Segment Underperformance:: Core segments CES (-3.4%) and GIS (-6.3%) saw organic revenue declines, while Insurance grew 3.6% YoY.
  • Free Cash Flow Strength:: Generated $240M free cash flow in Q2 (vs. $48M prior year), with $650M expected annually due to working capital efficiency.
  • Fast Track AI Initiatives:: Launched AI-native products like CoreIgnite and OASIS, with a robust $12.67B–$12.81B FY2026 revenue guidance despite 3.5%–4.5% organic declines.

Segment Performance

The company's segment results showed a decline in CES and GIS, with CES declining 3.4% year-over-year on an organic basis, and GIS declining 6.3% year-over-year organically. However, the insurance segment grew 3.6% year-over-year organically. Raul Fernandez, the company's CEO, highlighted the importance of building a predictable and growing company with better execution and pipeline conversion in the quarters ahead, stating that "we have a solid base entering the fourth quarter and beyond into fiscal '27, with a robust pipeline and a strong backlog."

Valuation and Growth Prospects

With a P/E Ratio of 6.44 and an EV/EBITDA of 2.44, the market appears to be pricing in a challenging growth environment for DXC Technology. Analysts estimate next year's revenue growth at -1.2%, indicating a continued decline. However, the company's focus on AI-native solutions and its strong balance sheet may help to drive growth in the long term. The company's Free Cash Flow Yield of 47.72% is also attractive, indicating a significant return for investors.

AI Strategy and Fast-Track Initiatives

DXC Technology is investing in AI, with a focus on developing new products and services, such as DXC CoreIgnite and OASIS. The company believes that these initiatives will drive growth and improve its competitive position. With a robust pipeline and a strong backlog, the company is well-positioned to execute on its AI strategy. The company's cost discipline has driven margin upside, and it is confident that this can be sustained, with a plan to maintain spending discipline and drive productivity from a margin perspective.

3. NewsRoom

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DXC und Aptys Solutions gehen Partnerschaft zur Modernisierung der Zahlungsanbindung von US-Finanzinstituten ein

Dec -04

Source: prnewswire.com

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DXC and Aptys Solutions Partner to Modernize Payments Connectivity for U.S. Financial Institutions

Dec -04

Source: prnewswire.com

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DXC Powers ivari's Cloud Transformation of Core Life Insurance Platform

Dec -03

Source: prnewswire.com

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DXC Technology Prices Senior Notes Offering

Dec -02

Source: prnewswire.com

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DXC Accelerates Digital Transformation for Brethren Mutual with Seamless Migration to Assure P&C Policy Platform

Nov -20

Source: prnewswire.com

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DXC Technology Company (DXC) Presents at J.P. Morgan 2025 Ultimate Services Investor Conference Transcript

Nov -18

Source: seekingalpha.com

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The Bottom Fishing Club - DXC Technology: Exceptional FCF Yield And AI Catalysts

Nov -17

Source: seekingalpha.com

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DXC's Jennifer Ragone Recognized with the 2025 N2Growth Leaders40 Top CHRO Award

Nov -13

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.31%)

6. Segments

Global Infrastructure Services

Expected Growth: 8.5%

DXC Technology's Global Infrastructure Services segment growth of 8.5% is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity services. Additionally, the company's strategic partnerships, investments in emerging technologies, and expansion into high-growth markets contribute to its growth momentum.

Global Business Services

Expected Growth: 8.12%

DXC Technology's Global Business Services segment growth of 8.12% is driven by increasing demand for digital transformation, cloud migration, and cybersecurity services. Additionally, the company's strategic partnerships, investments in emerging technologies like AI and analytics, and expansion into new markets have contributed to its growth.

7. Detailed Products

IT Outsourcing

DXC Technology provides IT outsourcing services to help clients manage their IT infrastructure, applications, and business processes.

Cloud Services

DXC Technology offers cloud services, including infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS).

Cybersecurity

DXC Technology provides cybersecurity services to help clients protect their IT systems and data from cyber threats.

Analytics and Artificial Intelligence

DXC Technology offers analytics and artificial intelligence (AI) services to help clients gain insights and make data-driven decisions.

Application Services

DXC Technology provides application services, including development, testing, and maintenance, to help clients modernize their applications.

Business Process Services

DXC Technology offers business process services, including business process outsourcing (BPO) and business process as a service (BPaaS).

Consulting Services

DXC Technology provides consulting services to help clients develop and implement digital transformation strategies.

Industry Solutions

DXC Technology offers industry-specific solutions for industries such as healthcare, financial services, and manufacturing.

8. DXC Technology Company's Porter Forces

Forces Ranking

Threat Of Substitutes

DXC Technology Company faces moderate threat from substitutes due to the presence of alternative IT services providers.

Bargaining Power Of Customers

DXC Technology Company's customers have low bargaining power due to the company's strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

DXC Technology Company's suppliers have moderate bargaining power due to the presence of multiple suppliers in the market.

Threat Of New Entrants

DXC Technology Company faces low threat from new entrants due to the high barriers to entry in the IT services industry.

Intensity Of Rivalry

DXC Technology Company operates in a highly competitive IT services market, leading to high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.50%
Debt Cost 7.76%
Equity Weight 40.50%
Equity Cost 13.25%
WACC 9.98%
Leverage 146.89%

11. Quality Control: DXC Technology Company passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Paymentus

A-Score: 4.3/10

Value: 1.1

Growth: 6.6

Quality: 6.8

Yield: 0.0

Momentum: 8.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Kyndryl

A-Score: 4.3/10

Value: 5.2

Growth: 4.7

Quality: 4.1

Yield: 0.0

Momentum: 7.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
EPAM Systems

A-Score: 4.3/10

Value: 3.9

Growth: 6.9

Quality: 7.0

Yield: 0.0

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
DXC Technology

A-Score: 4.1/10

Value: 9.3

Growth: 4.4

Quality: 4.8

Yield: 0.0

Momentum: 1.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
N-able

A-Score: 3.7/10

Value: 3.0

Growth: 8.4

Quality: 5.0

Yield: 0.0

Momentum: 0.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Perficient

A-Score: 3.2/10

Value: 0.6

Growth: 7.2

Quality: 4.6

Yield: 0.0

Momentum: 5.0

Volatility: 1.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.23$

Current Price

14.23$

Potential

-0.00%

Expected Cash-Flows