DXC Technology Q1 revenue falls, adjusted EPS misses estimates

DXC Technology

30/07/2026 21:30

Overview
IT services provider's Q1 FY27 revenue fell 5% yr/yr, slightly beating analyst expectations
Adjusted EPS for Q1 FY27 missed analyst expectations and fell 41% yr/yr
Company repurchased $70 mln of shares in the quarter

Outlook
DXC maintains FY27 revenue guidance of $12.10 bln to $12.35 bln, down 5% to 3% organically
Company expects FY27 adjusted EBIT margin of 6% to 7% and non-GAAP EPS of $2.40 to $2.90
DXC raises FY27 free cash flow guidance to ~$685 mln from ~$600 mln on litigation proceeds

Result Drivers
SEGMENT WEAKNESS - Revenue and profit fell in Consulting and Engineering Services and Global Infrastructure Services, with GIS segment profit down 61% yr/yr
LITIGATION PROCEEDS - Free cash flow rose due to $214 mln in cash proceeds from a litigation judgment
INSURANCE SEGMENT GROWTH - Insurance Software & Services revenue and profit rose modestly yr/yr

Company press release: ID:nPn31stJKa

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Slight Beat*
$3 bln
$2.99 bln (7 Analysts)
Q1 Adjusted EPS
Miss
$0.40
$0.41 (8 Analysts)
Q1 Net Income
 
$126 mln
 
Q1 Adjusted EBIT Margin
 
5.00%
 
Q1 EBIT
 
$207 mln
 
*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 8 "hold" and 2 "sell" or "strong sell"
The average consensus recommendation for the it services & consulting peer group is "buy."
Wall Street's median 12-month price target for DXC Technology Co is $10.00, about 15% below its July 29 closing price of $11.77
The stock recently traded at 4 times the next 12-month earnings vs. a P/E of 4 three months ago

Reuters Recommended Reads
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July 29 - CBIZ Q2 revenue misses estimates; to be acquired by Grant Thornton

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)