DXC Technology Co (DXC) · Quarterly Report (10-Q) SEC Filing

PART I ITEM 1. FINANCIAL STATEMENTS Index to Condensed Consolidated Financial Statements Page Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2026 and June 30, 2025 (unaudited) 2 Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended June 30, 2026 and June 30, 2025 (unaudited) 3 Condensed Consolidated Balance Sheets as of June 30, 2026 and March 31, 2026 (unaudited) 4 Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2026, and June 30, 2025 (unaudited) 5 Condensed Consolidated Statements of Changes in Equity for the Three Months Ended June 30, 2026 and June 30, 2025 (unaudited) 6 Notes to Condensed Consolidated Financial Statements (unaudited) Note 1 Summary of Significant Accounting Policies 7 Note 2 Earnings Per Share 9 Note 3 Receivables 9 Note 4 Leases 10 Note 5 Derivative Instruments 12 Note 6 Intangible Assets 14 Note 7 Goodwill 15 Note 8 Debt 16 Note 9 Revenue 17 Note 10 Restructuring Costs 18 Note 11 Pension and Other Benefit Plans 19 Note 12 Income Taxes 19 Note 13 Stockholders Equity 21 Note 14 Stock Incentive Plans 22 Note 15 Cash Flows 23 Note 16 Segment Information 23 Note 17 Other Liabilities 25 Note 18 Commitments and Contingencies 26 June 30, 2026June 30, 2025$2,999 $3,159 2,388 2,388 328 394 267 304 26 37 55 54 (89)(46)(217)(39)2,758 3,092 241 67 115 49 126 18 4 2 $122 $16 $0.75 $0.09 $0.73 $0.09 June 30, 2026June 30, 2025$126 $18 45 (32)10 (7)(1) (1) 54 (39)180 (21)3 2 $177 $(23) (in millions, except per-share and share amounts)June 30, 2026March 31, 2026 ASSETS Current assets: Cash and cash equivalents$1,957 $1,737 Receivables and contract assets, net of allowance of $25 and $27 2,892 2,973 Prepaid expenses556 526 Other current assets108 126 Total current assets5,513 5,362 Intangible assets, net of accumulated amortization of $6,036 and $5,977 1,518 1,612 Operating right-of-use assets, net637 663 Goodwill527 527 Deferred income taxes, net753 802 Property and equipment, net of accumulated depreciation of $3,210 and $3,229 1,129 1,122 Other assets2,849 2,802 Total Assets$12,926 $12,890 LIABILITIES and EQUITY Current liabilities: Short-term debt and current maturities of long-term debt501 520 Accounts payable689 561 Accrued payroll and related costs587 564 Operating lease liabilities 234 232 Accrued expenses and other current liabilities1,129 1,261 Deferred revenue and advance contract payments715 748 Income taxes payable 61 53 Total current liabilities3,916 3,939 Long-term debt, net of current maturities3,003 3,032 Non-current deferred revenue 559 559 Non-current operating lease liabilities436 463 Non-current income tax liabilities and deferred tax liabilities500 502 Other long-term liabilities 1,184 1,186 Total Liabilities9,598 9,681 Commitments and contingencies DXC stockholders equity: Preferred stock, par value $0.01 per share; authorized 1,000,000 shares; none issued as of June 30, 2026 and March 31, 2026 Common stock, par value $0.01 per share; authorized 750,000,000 shares; issued 168,276,567 as of June 30, 2026 and 171,946,069 as of March 31, 2026 1 1 Additional paid-in capital6,749 7,016 Accumulated deficit(2,601)(2,937) Accumulated other comprehensive loss(835)(890) Treasury stock, at cost, 7,392,532 and 6,460,358 shares as of June 30, 2026 and March 31, 2026 (257)(249) Total DXC stockholders equity3,057 2,941 Non-controlling interest in subsidiaries271 268 Total Equity3,328 3,209 Total Liabilities and Equity$12,926 $12,890 (in millions) June 30, 2026June 30, 2025 Cash flows from operating activities: Net income$126 $18 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization271 309 Goodwill impairment losses 14 Operating right-of-use expense 72 76 Share-based compensation17 22 Deferred taxes49 (12) Gain on dispositions(2)(1) (7)(47) Impairment losses and contract write-offs 1 Other non-cash charges, net(2)(3) Changes in assets and liabilities: (Increase) decrease in assets(20)90 Decrease in operating lease liability(72)(76) Decrease in other liabilities(14)(205) Net cash provided by operating activities418 186 Cash flows from investing activities: Purchases of property and equipment(59)(43) Payments for transition and transformation contract costs(23)(30) Software purchased and developed(22)(16) Proceeds from sale of assets5 10 Other investing activities, net 2 Net cash used in investing activities(99)(77) Cash flows from financing activities: (38)(49) Taxes paid related to net share settlements of share-based compensation awards(10)(12) Repurchase of common stock(71)(48) Other financing activities, net(1)(1) Net cash used in financing activities(120)(110) Effect of exchange rate changes on cash and cash equivalents21 (3) Net increase (decrease) in cash and cash equivalents220 (4) Cash and cash equivalents at beginning of year1,737 1,796 Cash and cash equivalents at end of period$1,957 $1,792 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 DXC TECHNOLOGY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) Three Months Ended June 30, 2026 (in millions, except shares in thousands)Common StockAdditional Paid-in Capital Accumulated DeficitAccumulated Other Comprehensive Loss Treasury StockTotal DXC Equity Non- Controlling Interest Total Equity SharesAmount Balance at March 31, 2026171,946 $1 $7,016 $(2,937)$(890)$(249)$2,941 $268 $3,209 Net income122 122 4 126 Other comprehensive loss 55 55 (1)54 Share-based compensation expense17 17 17 Acquisition of treasury stock(8)(8)(8) Share repurchase program(6,704)(284)214 (70)(70) Stock option exercises and other common stock transactions3,035 168,277$1 $6,749 $(2,601)$(835)$(257)$3,057 $271 $3,328 Three Months Ended June 30, 2025 (in millions, except shares in thousands)Common StockAdditional Paid-in Capital Accumulated DeficitAccumulated Other Comprehensive LossTreasury Stock Total DXC Equity Non- Controlling Interest Total Equity SharesAmount Balance at March 31, 2025186,856 $2 $7,677 $(3,451)$(762)$(237)$3,229 $261 $3,490 Net income16 16 2 18 Other comprehensive income (39)(39)(39) Share-based compensation expense22 22 22 Acquisition of treasury stock(10)(10)(10) Share repurchase program(3,275)(138)88(50)(50) Stock option exercises and other common stock transactions2,397 Non-controlling interest distributions and other (1)(1) Balance at June 30, 2025185,978 $2 $7,561 $(3,347)$(801)$(247)$3,168 $262 $3,430 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1 Summary of Significant Accounting Policies Business DXC Technology Company ( DXC, the Company, we, us, or our ) is a leading enterprise technology and innovation partner delivering software, services, and solutions to global enterprises and public sector organizations helping them harness AI to drive outcomes at a time of exponential change with speed. With deep expertise in Managed Infrastructure Services, Application Modernization, and Industry-Specific Software Solutions, DXC modernizes, secures, and operates some of the world s most complex technology estates. Segment Structure The Company s three reportable segments align with how management assesses performance of the business and allocates resources: Consulting & Engineering Services ("CES"), Global Infrastructure Services ("GIS"), and Insurance Software & Services ("Insurance"). Across these segments, we embed AI, automation and data-driven capabilities into our solutions to improve efficiency, enhance operations and support better business outcomes for clients. See Note 16 - "Segment Information" for more information. Descriptions for each segment are provided below: Consulting & Engineering Services Helps businesses use AI and data analytics to improve operations, automate tasks, and speed up their digital transformation. We provide software engineering, consulting, and custom and enterprise applications solutions that help companies manage essential functions, modernize processes, and drive innovation. We have strong expertise in industries like finance, automotive, manufacturing, healthcare, life sciences, travel, and the public sector. Our solutions help businesses stay competitive by improving efficiency, launching new products faster, expanding into new markets, and achieving their strategic goals. Global Infrastructure Services Implements and operates the technology underpinning the critical systems of global businesses and governments. Clients trust us to secure, modernize, and operate their critical systems and improve workplace experience to support business growth. Services include the design, migration, and management of complex data center, mainframe, cloud, and network environments, with an emphasis on scalability, security, compliance, and cost efficiency. By leveraging a human-led, AI-driven Intelligent Operations approach, we deliver secure, reliable IT operations that clients trust. We also provide cross-industry business process services, which streamline clients core enterprise functions such as finance, HR, procurement, and customer service. The implementation of secure, reliable technology improves employee experiences and productivity by streamlining daily operations such as device management, helpdesk support, and AI-powered automation enabling seamless collaboration, reducing IT support demands, and lowering costs through intuitive, self-service tools. Insurance Software & Services Provides software and services for Life and Wealth, Property & Casualty and Reinsurance providers, helping them optimize, run and digitally transform their operations. We help insurers modernize their technology landscape from heritage systems to advanced AI-powered solutions that enhance operational efficiency, improve customer experiences, and enable insurers to adopt a digital-first approach. Complementing our software solutions, we provide comprehensive business process services, leveraging deep industry expertise to support the full spectrum of insurance operations. Basis of Presentation In order to make this report easier to read, DXC refers throughout to (i) the interim unaudited Condensed Consolidated Financial Statements as the financial statements, (ii) the Condensed Consolidated Statements of Operations as the statements of operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) as the statements of comprehensive income (loss), (iv) the Condensed Consolidated Balance Sheets as the balance sheets, and (v) the Condensed Consolidated Statements of Cash Flows as the statements of cash flows. In addition, references are made throughout to the numbered Notes to the Condensed Consolidated Financial Statements ( Notes ) in this Quarterly Report on Form 10-Q. 7 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) The accompanying financial statements include the accounts of DXC, its consolidated subsidiaries, and those business entities in which DXC maintains a controlling interest. Investments in business entities in which the Company does not have control, but has the ability to exercise significant influence over operating and financial policies, are accounted for by the equity method. Other investments are accounted for by the cost method. Non-controlling interests are presented as a separate component within equity in the balance sheets. Net earnings attributable to the non-controlling interests are presented separately in the statements of operations and comprehensive income (loss) attributable to non-controlling interests are presented separately in the statements of comprehensive income (loss). All intercompany transactions and balances have been eliminated. The financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ( SEC ) for quarterly reports and accounting principles generally accepted in the United States ( GAAP ). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules. These financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company s Annual Report on Form 10-K for the fiscal year ended March 31, 2026 ( fiscal 2026 ). Use of Estimates The preparation of the financial statements, in accordance with GAAP, requires the Company s management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on assumptions regarding historical experience, currently available information, and anticipated developments that it believes are reasonable and appropriate. However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates. Estimates are used for, but are not limited to, contracts accounted for using the percentage-of-completion method, cash flows used in the evaluation of impairment of goodwill and other long-lived assets, reserves for uncertain tax positions, valuation allowances on deferred tax assets, loss accruals for litigation, and obligations related to our pension plans. In the opinion of the Company s management, the accompanying financial statements contain all adjustments necessary, including those of a normal recurring nature, to fairly present the financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year. Recent Accounting Pronouncements The following Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board have not yet been adopted by DXC: Date Issued and ASUDXC Effective Date DescriptionImpact November 2024 ASU 2024-03, Disaggregation of Income Statement Expenses Fiscal 2028 The update requires disclosure, in the notes to financial statements, of specified quantitative information about certain costs and expenses presented in the income statement and certain qualitative information about costs that are not disaggregated. Early adoption of this update is permitted. The Company is in the process of assessing the impacts and method of adoption. This ASU will impact the Company s financial statement disclosures, but not its consolidated financial statements. ASU 2025-06 Targeted Improvements to the Accounting for Internal-Use Software Fiscal 2029The update amends the guidance for capitalizing internal-use software so that it is neutral to different software development methods, primarily by removing the previous development stage model to more closely align the capitalization of internal use software to that of software to be sold or marketed externally. Early adoption of this update is permitted.The Company is in the process of assessing the impact of the ASU on our consolidated financial statements as well as its method of adoption. Other recently issued ASUs that have not yet been adopted are not expected to have a material effect on DXC's condensed consolidated financial statements. 8 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 2 Earnings per Share Basic earnings per share ( EPS ) is computed using the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the incremental shares issuable upon the assumed exercise of stock options and equity awards. The following table reflects the calculation of basic and diluted EPS: June 30, 2026June 30, 2025$122 $16 162.86 181.10 3.41 3.86 166.27 184.96 $0.75 $0.09 $0.73 $0.09 June 30, 2025 Stock Options407,095 Restricted Stock Units2,272,376 Performance Stock Units144,891 (in millions)June 30, 2026June 30, 2025 Beginning balance$27 $32 (2)(2) Ending balance$25 $30 Receivables Facility The Company has an accounts receivable sales facility (as amended, restated, supplemented or otherwise modified, the Receivables Facility ) with certain unaffiliated financial institutions (the Purchasers ) for the sale of commercial accounts receivable in the United States up to a maximum amount of $400 million. The Receivables Facility was amended on July 24, 2026, extending the termination date to July 23, 2027. 9 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) As of June 30, 2026, the total availability under the Receivables Facility was $359 million and the amount sold to the Purchasers was $367 million, which was derecognized from the Company s balance sheet. As of June 30, 2026, the Company recorded a $8 million liability within accounts payable because the amount of cash proceeds received by the Company under the Receivables Facility was more than the total availability. The fair value of the sold receivables approximated book value due to the short-term nature, and as a result, no gain or loss on sale of receivables was recorded. Note 4 Leases The Company has operating and finance leases for data centers, corporate offices, and certain equipment. Its leases have remaining lease terms of one to ten years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the leases within one to three years. Operating Leases The components of operating lease expense were as follows: Three Months Ended (in millions)June 30, 2026June 30, 2025 Operating lease cost$72 $76 Short-term lease cost 3 5 Variable lease cost 14 15 Sublease income(3)(3) Total operating costs$86 $93 (in millions)June 30, 2026June 30, 2025 Cash paid for amounts included in the measurement of operating lease liabilities operating cash flows$72 $76 ROU assets obtained in exchange for operating lease liabilities(1) $47 $142 (in millions)Balance Sheet Line ItemJune 30, 2026March 31, 2026 ROU operating lease assetsOperating right-of-use assets, net$637 $663 Operating lease liabilitiesCurrent operating lease liabilities$234 $232 Operating lease liabilities Non-current operating lease liabilities436 463 Total operating lease liabilities $670 $695 (in millions) Remainder of 2027 2028202920302031Thereafter Total Operating lease payments $198 $226 $162 $64 $40 $46 $736 Less: imputed interest (66) Total operating lease liabilities $670 (in millions)June 30, 2026June 30, 2025 Amortization of right-of-use assets$9 $15 Interest on lease liabilities2 3 Total finance lease cost$11 $18 (in millions)June 30, 2026June 30, 2025 Interest paid for finance lease liabilities Operating cash flows$2 $3 Cash paid for amounts included in the measurement of finance lease obligations financing cash flows29 38 Total cash paid in the measurement of finance lease obligations$31 $41 Capital expenditures through finance lease obligations(1) $4 $1 (1) See Note 15 Cash Flows for further information on non-cash activities affecting cash flows. The following table presents finance lease balances: As of (in millions)Balance Sheet Line ItemJune 30, 2026March 31, 2026 ROU finance lease assetsProperty and Equipment, net $67 $74 Finance lease Short-term debt and current maturities of long-term debt $82 $92 Finance leaseLong-term debt, net of current maturities 70 82 Total finance lease liabilities(1) $152 $174 (in millions) Remainder of 2027 2028202920302031Thereafter Total Finance lease payments $70 $60 $25 $5 $1 $3 $164 Less: imputed interest (12) Total finance lease liabilities $152 (in millions)June 30, 2026June 30, 2025 Foreign currency remeasurement(1) $5 $(59) Undesignated foreign currency forward contracts(2) (6)54 Total - Foreign currency (gain) loss $(1)$(5) (1) Movements from exchange rates on the Company s foreign currency-denominated assets and liabilities. (2) Movements from hedges used to manage the Company s foreign currency remeasurement exposure, and the associated costs of the hedging program. Other Risks for Derivative Instruments The Company is exposed to the risk of losses in the event of non-performance by the counterparties to its derivative contracts. The amount subject to credit risk related to derivative instruments is generally limited to the amount, if any, by which a counterparty s obligations exceed the obligations of the Company with that counterparty. To mitigate counterparty credit risk, the Company regularly reviews its credit exposure and the creditworthiness of the counterparties. With respect to its foreign currency derivatives, as of June 30, 2026, there were three counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $2 million. The Company also enters into enforceable master netting arrangements with some of its counterparties. However, for financial reporting purposes, it is the Company s policy not to offset derivative assets and liabilities despite the existence of enforceable master netting arrangements. The potential effect of such netting arrangements on the Company s balance sheets is not material for the periods presented. Non-Derivative Financial Instruments Designated for Hedge Accounting The Company applies hedge accounting for foreign currency-denominated debt used to manage foreign currency exposures on its net investments in certain non-U.S. operations. To qualify for hedge accounting, the hedging instrument must be highly effective at reducing the risk from the exposure being hedged. Net Investment Hedges DXC seeks to reduce the impact of fluctuations in foreign exchange rates on its net investments in certain non-U.S. operations with foreign currency-denominated debt. For foreign currency-denominated debt designated as a hedge, the effectiveness of the hedge is assessed based on changes in spot rates. For qualifying net investment hedges, all gains or losses on the hedging instruments are included in currency translation. Gains or losses on individual net investments in non-U.S. operations are reclassified to earnings from accumulated other comprehensive loss when such net investments are sold or substantially liquidated. As of June 30, 2026, DXC had $637 million of foreign currency-denominated debt designated as hedges of net investments in non-U.S. subsidiaries. For the three months ended June 30, 2026, the pre-tax impact of gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income (loss) was $5 million. 13 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 6 Intangible Assets Intangible assets consisted of the following: As of June 30, 2026As of March 31, 2026 (in millions)Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value Software$3,353 $2,481 $872 $3,383 $2,507 $876 Customer related intangible assets3,936 3,406 530 3,941 3,326 615 Other intangible assets265 149 116 265 144 121 Total intangible assets$7,554 $6,036 $1,518 $7,589 $5,977 $1,612 The components of amortization expense were as follows: June 30, 2026June 30, 2025$162 $180 38 45 $200 $225 (in millions) Remainder of 2027$444 2028338 2029235 2030193 2031179 Thereafter129 Total$1,518 14 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 7 Goodwill The following table summarizes the changes in the carrying amount of goodwill by segment for the three months ended June 30, 2026. (in millions)Consulting & Engineering Services Global Infrastructure Services Insurance Services Total $378 $ $149 $527 Balance as of June 30, 2026, net$378 $ $149 $527 Goodwill, gross3,597 5,080 1,420 10,097 Accumulated impairment losses(3,219)(5,080)(1,271)(9,570) Balance as of June 30, 2026, net$378 $ $149 $527 Interest RatesFiscal Year MaturitiesJune 30, 2026(1) March 31, 2026(1) 1.80%2027400 400 0.59% - 14.59% 2027 - 202882 92 Various2027 - 202819 28 $501 $520 0.45%2028856 862 2.375%2029648 648 4.25%2031726 731 0.95%2032683 687 0.59% - 14.59% 2027 - 203570 82 0.00% - 7.55% 2027 - 20336 7 Various2027 - 203514 15 3,003 3,032 $3,504 $3,552 (1)The carrying amounts of the senior notes as of June 30, 2026 and March 31, 2026, include the remaining principal outstanding of $3,313 million and $3,328 million, respectively, net of total unamortized debt (discounts) and premiums, and deferred debt issuance costs of $24 million and $27 million, respectively. Fair Value of Debt The estimated fair value of the Company s senior notes was $3.2 billion and $3.1 billion as of June 30, 2026 and March 31, 2026, respectively, compared with carrying value of $3.3 billion and $3.3 billion as of June 30, 2026 and March 31, 2026, respectively. Senior notes are classified as Level 2 within the fair value hierarchy. Revolving Credit Facility As of June 30, 2026, the Company's total liquidity was $5.0 billion, consisting of $2.0 billion of cash and cash equivalents and $3.0 billion of available borrowings under our revolving credit facility, with no outstanding borrowings under the facility during or as of the three months ended June 30, 2026. 16 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 9 Revenue Revenue Recognition The following table presents DXC s revenues disaggregated by geography, based on the location of incorporation of the DXC entity providing the related goods or services: June 30, 2026June 30, 2025$742 $828 401 480 1,039 1,038 288 259 529 554 $2,999 $3,159 (in millions)Balance Sheet Line ItemJune 30, 2026March 31, 2026 Trade receivables, net Receivables and contract assets, net of allowance for doubtful accounts$1,929 $1,940 Contract assets Receivables and contract assets, net of allowance for doubtful accounts$401 $379 Contract liabilitiesDeferred revenue and advance contract payments and Non-current deferred revenue$1,274 $1,307 Change in contract liabilities were as follows: Three Months Ended (in millions)June 30, 2026June 30, 2025 Balance, beginning of period$1,307 $1,397 Deferred revenue 411 382 Recognition of deferred revenue(441)(479) Currency translation adjustment(1)59 Other(2)(6) Balance, end of period$1,274 $1,353 17 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 10 Restructuring Costs The composition of restructuring liabilities by financial statement line items is as follows: As of (in millions)June 30, 2026March 31, 2026 Accrued expenses and other current liabilities$20 $20 Other long-term liabilities3 3 Total$23 $23 Summary of Restructuring Plans Fiscal 2027 Plan During fiscal 2027, management approved global cost savings initiatives designed to better align the Company s workforce, facility and data center requirements (the Fiscal 2027 Plan ). Restructuring Liability Reconciliations by Plan Costs Expensed, Net of ReversalsCosts Not Affecting Restructuring Liability(1) Cash Paid Fiscal 2027 Plan$ $16 $ $(7)9 Facilities Costs 1 (1) 17 (1)(7) $12 $ $ $(7)5 Facilities Costs 12 (7) $10 $2 $ $(3)9 Facilities Costs1 7 (8) 11 9 (11) Total$23 $26 $(1)$(25)23 (1) Restructuring costs associated with right-of-use assets. Included in restructuring costs for the first quarter of fiscal 2027 is $1 million related to amortization of the right-of-use asset and interest expense for leased facilities that have been vacated but are being actively marketed for sublease or we are in negotiations with the landlord to potentially terminate or modify those leases. 18 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 11 Pension and Other Benefit Plans Defined Benefit Plans The components of net periodic pension income were: June 30, 202512 $13 75 (117)(1)(33)$(30)Fiscal 2026 Fiscal PeriodAverage Price Per ShareAmount (in millions)Number of Shares RepurchasedAverage Price Per ShareAmount (in millions) 1st Quarter$10.42 $70 3,275,268 $15.27 $50 Total$10.42 $70 3,275,268 $15.27 $50 Foreign Currency Translation AdjustmentsCash Flow HedgesAccumulated Other Comprehensive Loss Balance at March 31, 2026$(1,060)$(19)189 $(890) Other comprehensive income before reclassifications46 (1)45 Amounts reclassified from accumulated other comprehensive loss 11 10 Balance at June 30, 2026$(1,014)$(9)188 $(835) Foreign Currency Translation AdjustmentsCash Flow HedgesAccumulated Other Comprehensive Loss Balance at March 31, 2025$(948)$(7)193 $(762) Other comprehensive loss before reclassifications(32)(10)(42) Amounts reclassified from accumulated other comprehensive loss 3 3 Balance at June 30, 2025$(980)$(14)193 $(801) 21 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 14 Stock Incentive Plans Restricted Stock Units and Performance-Based Restricted Stock Units Restricted stock units ("RSUs") represent the right to receive one share of DXC common stock upon a future settlement date, subject to vesting and other terms and conditions of the award, plus any dividend equivalents accrued during the award period. The RSUs vest one-third ratably over a three-year period. In general, if the employees status as a full-time employee is terminated prior to the vesting of the RSU grant in full, then the RSU grant is automatically canceled on the termination date and any unvested shares and dividend equivalents are forfeited. The Company also grants performance-based restricted stock units ( PSUs ), which generally vest at the end of a three-year period. The number of PSUs that ultimately vest is dependent upon the Company s achievement of certain specified financial performance criteria over a three-year period. If the specified performance criteria are met, awards are settled for shares of DXC common stock and dividend equivalents shortly subsequent to the end of the performance period, subject to continued employment through the last day of the third fiscal year. DXC also issued PSU awards that are considered to have a market condition. Settlement of shares for these PSU awards will be made shortly subsequent to the end of the third fiscal year, subject to certain market conditions and continued employment through the last day of the third fiscal year. The fair value of RSUs and PSUs is based on the Company s common stock closing price on the grant date. For PSUs with a market-based condition, DXC uses a Monte Carlo simulation model to value the grants. Employee Equity PlanDirector Equity Plan Number of SharesWeighted Average Grant Date Fair ValueNumber of SharesWeighted Average Grant Date Fair Value Outstanding as of March 31, 202613,441,505 $17.15 250,235 $20.41 Granted7,832,632 $9.91 $ (3,058,194)$19.20 $ Canceled/Forfeited(731,721)$26.86 $ Outstanding as of June 30, 202617,484,222 $13.14 250,235 $20.41 Share-Based Compensation June 30, 2026June 30, 2025$17 $22 $2 $3 (in millions)June 30, 2026June 30, 2025 Cash paid for: Interest$37 $40 Taxes on income, net of refunds (1) $66 $87 Non-cash activities: ROU assets obtained in exchange for lease, net (2) $47 $142 Capital expenditures in accounts payable and accrued expenses (3) $61 $4 Capital expenditures through finance lease obligations$4 $1 Shares repurchased but not settled in cash$1 $2 CES GIS Insurance Total Reportable Segments Three Months Ended June 30, 2026 Revenues$1,231 $1,449 $319 $2,999 Costs of services (995)(1,173)(232)(2,400) Selling, general and administrative (136)(118)(40)(294) Depreciation and amortization (1) (19)(143)(18)(180) Other segment items (2) 19 23 5 47 Segment profit $100 $38 $34 $172 Three Months Ended June 30, 2025 Revenues$1,246 $1,600 $313 $3,159 Costs of services (976)(1,212)(218)(2,406) Selling, general and administrative (163)(150)(44)(357) Depreciation and amortization (1) (24)(169)(23)(216) Other segment items (2) 22 28 5 55 Segment profit $105 $97 $33 $235 (1) Depreciation and amortization as presented excludes amortization of acquired intangible assets. (2) Other segment items as presented includes non-service cost components of net periodic pension income and other miscellaneous segment gains/(losses). 24 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Reconciliation of Reportable Segment Profit to Consolidated Total Three Months Ended (in millions)June 30, 2026June 30, 2025 Total profit for reportable segments$172 $235 Corporate expenses (22)(19) Subtotal$150 $216 Restructuring costs(26)(37) Transaction, separation and integration-related costs (1) Amortization of acquired intangible assets(87)(87) Merger related indemnification (2) Gain on litigation award168 Gains on dispositions2 Impairment losses (14) Interest income89 46 Interest expense(55)(54) Income before income taxes$241 $67 Management does not use total assets by segment to evaluate segment performance or allocate resources. As a result, assets are not tracked by segment, and therefore, total assets by segment are not disclosed. Note 17 Other Liabilities The following table provides the components of other liabilities: As of (in millions) June 30, 2026March 31, 2026 Accrued Expenses and Other Current Liabilities Indirect tax expenses268 316 Employee-related obligations (1) 115 216 Operating expenses and other current liabilities (2) 746 729 Total$1,129 $1,261 Other Long-term Liabilities Indemnification obligations$87 $83 Employee-related obligations (1) 502 507 Operating expenses and other long-term liabilities (2) 595 596 Total$1,184 $1,186 (1) Includes the Company s pension obligations and other certain employee-related obligations. (2) Includes multi-year third-party software license agreements and accrued services for professional service providers and other vendors primarily related to program-level activities. 25 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 18 Commitments and Contingencies Commitments Minimum purchase commitments as of June 30, 2026 were as follows: Fiscal yearMinimum Purchase Commitment (in millions) Remainder of 2027$411 2028639 2029536 2030368 2031335 Thereafter172 Total$2,461 Contingencies Securities Litigation: On August 20, 2019, a purported class action lawsuit was filed in the Superior Court of the State of California, County of Santa Clara, against the Company, directors of the Company, and a former officer of the Company, among other defendants. The action asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and is premised on allegedly false and/or misleading statements, and alleged non-disclosure of material facts, regarding the Company s prospects and expected performance. The putative class of plaintiffs includes former shareholders of Computer Sciences Corporation ( CSC ) who exchanged their CSC shares for the Company s common stock pursuant to the offering documents filed with the Securities and Exchange Commission in connection with the April 2017 transaction that formed DXC. The State of California action had been stayed pending the outcome of the substantially similar federal action filed in the United States District Court for the Northern District of California. The federal action was dismissed with prejudice in December 2021. Thereafter, the state court lifted the stay and entered an order permitting additional briefing by the parties. In March 2022, Plaintiffs filed an amended complaint, which the Company moved to dismiss. In August 2022, the Court granted the Company s motion to dismiss, but permitted Plaintiffs to amend and refile their complaint. In September 2022, Plaintiffs filed a second amended complaint, which the Company moved to dismiss. In January 2023, the Court issued an order denying the Company s motion to dismiss the second amended complaint. In March 2023, the Court entered a scheduling order setting a trial date for September 2025. The trial date has since been extended to May 2026. In May 2024, the Court entered an order granting Plaintiffs motion for class certification. In July 2024, notice was provided to potential class members. In June 2025, the Company reached an agreement in principle to resolve all claims in the action. In October 2025, the parties executed a Stipulation of Settlement and submitted it to the Court for approval. In December 2025, the Court entered an order granting preliminary approval of the settlement. Notice of the pending settlement was thereafter sent to class members. In June 2026, the Court entered an order granting final approval of the settlement. The Company s share of the settlement has been funded by its insurance carriers. This matter is now closed. Tax Examinations: The Company is under IRS examination in the U.S. on its federal income tax returns for certain fiscal years and is in disagreement with the IRS on certain tax positions, which are currently being contested in the U.S. Tax Court. For more detail, see Note 12 Income Taxes. 26 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) TCS Litigation: In April 2019, the Company filed a lawsuit against Tata Consultancy Services Limited ( TCS ) and Tata America International Corporation alleging misappropriation of certain of the Company s trade secrets. In November 2023, a trial was held in the United States District Court for the Northern District of Texas, and a jury found TCS liable for misappropriating the Company s trade secrets and awarded the Company $70 million in compensatory damages and $140 million in punitive damages, for a total award of $210 million. In June 2024, the Court entered a final order in the case, affirming the jury s verdict in the Company s favor and revising the monetary award to $56 million in compensatory damages and $112 million in punitive damages. The Court also awarded the Company $26 million in prejudgment interest, post-judgment interest at an annual rate of 4.824%, and its attorney s fees and costs, in an amount to be determined in a later order. The total award to the Company was $194 million, plus its attorney s fees and costs. The Court also issued a permanent injunction enjoining TCS from, among other things, possessing, accessing, or using any of the Company s trade secrets that were at issue in the case, and appointing a monitor to confirm, among other things, that TCS does not do so. In August 2024, TCS filed a Notice of Appeal to the U.S. Court of Appeals for the Fifth Circuit. In April 2025, the Court of Appeals heard oral argument on the appeal. In November 2025, the Court of Appeals issued an order affirming the monetary award to the Company. The Court vacated the injunction and remanded to the District Court for the issuance of a revised injunction with a narrower scope. The District Court has issued an amended injunction, which preserved the ten-year monitorship imposed on TCS. The Company has moved to enforce the amended injunction, and will continue to do so where necessary. In December 2025, TCS filed petitions with the Court of Appeals seeking panel rehearing and rehearing en banc. The Court denied both petitions. In March 2026, TCS filed a petition for writ of certiorari with the U.S. Supreme Court. The Company filed its response to the petition in May 2026. In June 2026, the U.S. Supreme Court denied TCS s petition for writ of certiorari, thereby concluding the appeals process. Thereafter, the Company collected the full amount of the judgment, plus interest, in the amount of $214 million. The Company will continue to pursue collection of its previously awarded attorney s fees and costs, the amount of which will be adjudicated in the District Court. This matter is otherwise closed. In addition to the matters noted above, the Company is currently subject in the normal course of business to various claims and contingencies arising from, among other things, disputes with customers, vendors, employees, contract counterparties and other parties, as well as securities matters, environmental matters, matters concerning the licensing and use of intellectual property, and inquiries and investigations by regulatory authorities and government agencies. Some of these disputes involve or may involve litigation. The financial statements reflect the treatment of claims and contingencies based on management s view of the expected outcome. DXC consults with outside legal counsel on issues related to litigation and regulatory compliance and seeks input from other experts and advisors with respect to matters in the ordinary course of business. Although the outcome of these and other matters cannot be predicted with certainty, and the impact of the final resolution of these and other matters on the Company s results of operations in a particular subsequent reporting period could be material and adverse, management does not believe based on information currently available to the Company, that the resolution of any of the matters currently pending against the Company will have a material adverse effect on the financial position of the Company or the ability of the Company to meet its financial obligations as they become due. Unless otherwise noted, the Company is unable to determine at this time a reasonable estimate of a possible loss or range of losses associated with the foregoing disclosed contingent matters. 27 DXC TECHNOLOGY COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS All statements and assumptions contained in this Quarterly Report on Form 10-Q and in the documents incorporated by reference that do not directly and exclusively relate to historical facts constitute forward-looking statements that involve numerous assumptions, risks and uncertainties. Forward-looking statements often include words such as anticipates, believes, estimates, expects, forecast, goal, intends, objective, plans, projects, strategy, target, and will and words and terms of similar substance in discussions of future operating or financial performance. We may also make forward-looking statements in other reports filed with the Securities and Exchange Commission ( SEC ), in materials delivered to stockholders and in press releases. In addition, our representatives may from time to time make oral forward-looking statements. Forward-looking statements represent current expectations and beliefs, and no assurance can be given that the results, goals or plans described in such statements can or will be achieved, and readers are cautioned not to place undue reliance on such statements, which speak only as of the date they are made. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by law. Forward-looking statements include, among other things, statements with respect to our future financial condition, results of operations, cash flows, business strategies, operating efficiencies or synergies,restructuring plans, potential acquisitions and divestitures, competitive position, growth opportunities, artificial intelligence and technology initiatives, effective tax rates, liquidity and capital resources, capital return strategy, plans and objectives of management, the outcome of and costs associated with regulatory and litigation matters, and other matters. Important factors that could cause actual results to differ materially from those described in forward-looking statements, many of which are outside of our control, include, but are not limited to: our inability to effectively manage and improve our sales organization, including structural challenges related to sales execution, pipeline development, and talent management; our inability to develop and expand our service offerings to address emerging business demands and technological trends, and the competitive pressures faced by our business; our inability to attract and retain key personnel, including sales talent and employees with artificial intelligence and technical expertise, and to maintain relationships with key partners; risks associated with AI, including our adoption, deployment, and governance of AI technologies, reliance on third-party AI platforms, AI-related cybersecurity and data privacy risks, evolving AI regulations, and competitive displacement from AI; our inability to accurately estimate the cost of services and the timeline for completion of contracts, or if we or third parties fail to deliver on commitments or otherwise breach obligations to our customers; systems failures, catastrophic events, and resulting interruptions in the availability of our products or services; the risk of liability, reputational damages or adverse impact to our business due to security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data; compliance, or failure to comply, with obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data; our inability to comply with existing and new laws and regulations, including economic sanctions, export controls, AI regulations, and social and environmental responsibility regulations, policies, and provisions, as well as customer and investor demands; failure to maintain our credit rating, manage our indebtedness, and raise additional capital for future needs, which could adversely affect our liquidity, capital position, borrowing costs, and access to capital markets; the risks associated with our international operations, including fluctuations in exchange rates, geopolitical conflicts such as the ongoing conflict between Russia and Ukraine and hostilities in the Middle East, and disruptions to our operations; 28 the risks associated with prolonged periods of inflation or macroeconomic conditions, including reduced customer spending, the uncertainty related to our cost-takeout efforts, and our ability to close new deals in the event of an economic slowdown; our inability to compete effectively, maintain and grow our customer relationships over time, collect receivables from customers experiencing financial difficulties, or comply with customer contracts or government contracting regulations or requirements; our inability to succeed in our strategic transactions, including acquisitions, divestitures, and strategic partnerships; disruption of our supply chain or increases in procurement costs, including as a result of ongoing trade tensions, tariff charges, supplier non-performance, or armed hostilities; the risks associated with climate change and natural disasters; increased scrutiny of, and evolving expectations for, sustainability and environmental, social and governance ("ESG") initiatives; our inadvertent infringement of third-party intellectual property rights or infringement of our intellectual property rights by third parties; our inability to procure third-party licenses required for the operation of our products and service offerings; our inability to achieve the expected benefits of our restructuring plans, including risks associated with workforce reductions and increased reliance on automation and AI; our inability to maintain effective disclosure controls and internal control over financial reporting; potential losses due to asset impairment charges, including but not limited to intangibles and deferred tax assets; our inability to pay dividends or repurchase shares of our common stock; pending investigations, claims and disputes and any adverse impact on our profitability and liquidity; changes in tax rates, tax laws, and the timing and outcome of tax examinations; volatility of the price of our securities, which is subject to market and other conditions; risks following the merger of Computer Sciences Corporation ( CSC ) and Enterprise Services business of Hewlett Packard Enterprise Company's ( HPE ) businesses, including anticipated tax treatment, unforeseen liabilities and future capital expenditures; risks following the spin-off of our former U.S. Public Sector business (the USPS ) and its related mergers with Vencore Holding Corp. and KeyPoint Government Solutions in June 2018 to form Perspecta Inc. (including its successors and permitted assigns, Perspecta ) (collectively, the "USPS Separation and Mergers"); and the other factors described in Part I, Item 1A Risk Factors of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026 and subsequent SEC filings, including Part II, Item 1A Risk Factors of this Quarterly Report on Form 10-Q. 29 ITEM 2. 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 first quarter of fiscal 2027 and our financial condition as of June 30, 2026. 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 first quarters of fiscal 2027 and fiscal 2026. 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 enterprise technology and innovation partner delivering software, services, and solutions to global enterprises and public sector organizations helping them harness AI to drive outcomes at a time of exponential change with speed. With deep expertise in Managed Infrastructure Services, Application Modernization, and Industry-Specific Software Solutions, DXC modernizes, secures, and operates some of the world s most complex technology estates. We generate revenue by offering a broad range of information technology services and solutions to customers primarily in North America, Europe, Asia, and Australia. Our financial results are reported through three reportable segments that reflect the Company s operational structure and how we deliver end-to-end IT solutions: Consulting & Engineering Services ("CES"), Global Infrastructure Services ("GIS"), and Insurance Software & Services ("Insurance"). Key Metrics Key revenue, profitability and cash flow metrics for the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 are included below. Organic revenue, adjusted earnings before income taxes, and adjusted diluted earnings per share are non-GAAP financial measures. For more information see Non-GAAP Financial Measures. Revenues of $2,999 million, down 5.1% year-over-year (down 6.7% on an organic basis); EBIT was $207 million, with a corresponding margin of 6.9%. Adjusted EBIT was $150 million, down 30.6% year-over-year with a corresponding margin of 5.0%; Diluted earnings per share of $0.73, compared to $0.09 in the same period a year ago; adjusted diluted earnings per share of $0.40, compared to $0.68 in the same period a year ago; Cash generated from operations was $418 million, less capital expenditures of $104 million, resulted in free cash flow of $314 million, compared to free cash flow of $97 million in the prior-year period. Free cash flow in fiscal 2027 includes cash proceeds of $214 million related to the litigation judgment obtained against TCS, as discussed further in Note 18 - Commitments and Contingencies ; Book-to-bill ratio (contract awards divided by quarterly revenue) of 0.99x, compared to 0.90x during fiscal 2026. 30 Segment Highlights Consulting & Engineering Services Revenue was $1,231 million, down 1.2% year-over-year (down 3.0% on an organic basis). Segment profit was $100 million, down 4.8% year-over-year, with a corresponding margin of 8.1%. Book-to-bill ratio of 0.98x, compared to 1.19x during the first quarter of fiscal 2026. Global Infrastructure Services Revenue was $1,449 million, down 9.4% year-over-year (down 11.1% on an organic basis). Segment profit was $38 million, down 60.8% year-over-year, with a corresponding margin of 2.6%. Book-to-bill ratio of 1.11x, compared to 0.74x during the first quarter of fiscal 2026. Insurance Software & Services Revenue was $319 million, up 1.9% year-over-year (up 1.4% on an organic basis). Segment profit was $34 million, up 3.0% year-over-year, with a corresponding margin of 10.7%. Book-to-bill ratio of 0.54x, compared to 0.54x during the first quarter of fiscal 2026. 31 Results of Operations for the Three Months Ended June 30, 2026 and June 30, 2025 Revenues Our revenues by geography and operating segment are provided below: Three Months EndedPercentage Change Percentage of Revenue for the Three Months Ended (in millions)June 30, 2026June 30, 2025U.S. Dollars Constant Currency(1) June 30, 2026June 30, 2025 Geographic Market United States$742 $828 (10.4)%(10.4)%24.7 %26.2 % United Kingdom 401 480 (16.5)%(16.7)%13.4 %15.2 % Other Europe1,039 1,038 0.1 %(2.1)%34.6 %32.9 % Australia288 259 11.2 %0.4 %9.6 %8.2 % Other International529 554 (4.5)%(4.2)%17.6 %17.5 % Total Revenues$2,999 $3,159 (5.1)%(6.7)%100.0 %100.0 % Reportable Segments CES $1,231 $1,246 (1.2)%(3.0)%41.0 %39.4 % GIS 1,449 1,600 (9.4)%(11.1)%48.3 %50.6 % Insurance 319 313 1.9 %1.4 %10.6 %9.9 % Total Revenues$2,999 $3,159 (5.1)%(6.7)%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 first quarter of fiscal 2027, our total revenue was $3.0 billion, a decrease of $160 million or 5.1%, compared to the same period a year ago. The decrease against the comparative period includes a 6.7% decline in organic revenue partially offset by a 1.6% favorable foreign currency exchange rate impact. Organic revenue growth is a non-GAAP measure. For more information, see "Non-GAAP Financial Measures". 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, 2026. Costs and Expenses Our total costs and expenses are provided below: Dollar Amount Three Months Ended June 30,Change (in millions) 20262025DollarPercent Costs of services (excludes depreciation and amortization and restructuring costs)$2,388 $2,388 $ % Selling, general and administrative (excludes depreciation and amortization and restructuring costs)328 394 (66)(16.8)% Depreciation and amortization267 304 (37)(12.2)% Restructuring costs26 37 (11)(29.7)% Interest expense55 54 1 1.9 % Interest income(89)(46)(43)93.5 % Other income, net(217)(39)(178)456.4 % Total costs and expenses$2,758 $3,092 $(334)(10.8)% 32 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 first quarter of fiscal 2027, unchanged from the prior-year period. While the Company s cost optimization initiatives reduced payroll and related employee benefit costs, professional services, and contractor-related expenses, cost reductions did not keep pace with the decline in revenue. As a result, gross margin was 20.4% for the first quarter of fiscal 2027, a decline of 400 basis points against the prior-year period. 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 $328 million for the first quarter of fiscal 2027, a decrease of $66 million (-16.8%) compared to the prior-year period. The decline was primarily driven by lower payroll and related employee benefit costs, as well as reduced professional services and contractor related expenses. SG&A as a percentage of revenue was 10.9% for the first quarter of fiscal 2027, an improvement of 160 basis points against the prior-year period. Depreciation and Amortization Depreciation and amortization was $267 million for the first quarter of fiscal 2027, a decrease of $37 million (-12.2%) compared to the prior-year period. Depreciation expense decreased by $12 million due to lower average net property and equipment balances. Amortization expense decreased by $25 million due to lower software amortization and transition and transformation contract cost balances. Restructuring Costs During fiscal 2027, management approved global cost savings initiatives designed to better align our workforce, facility and data center requirements. Total restructuring costs recorded, net of reversals, was $26 million for the first quarter of fiscal 2027, an $11 million decrease (-29.7%) compared to the prior-year period. See Note 10 Restructuring Costs for additional information about our restructuring actions. Interest Income and Interest Expense Net interest income (interest expense less interest income) was $34 million for the first quarter of fiscal 2027, an increase of $42 million as compared to the prior-year period. Included in this amount is $46 million of interest income from the TCS litigation judgment, as discussed in Note 18 - Commitments and Contingencies. 33 Other Income, Net Other income, net includes non-service cost components of net periodic pension income, pension and other post-retirement benefit ( OPEB ) actuarial and settlement losses and (gains), movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, losses on real estate and facility sales, and other miscellaneous losses and (gains). The components of Other income, net were as follows: Three Months Ended (in millions)June 30, 2026June 30, 2025Dollar Change Non-service cost components of net periodic pension income$(45)$(43)$(2) Foreign currency gain(1)(5)4 Gain on litigation(168) (168) Other miscellaneous (gain) loss(3)9 (12) Total$(217)$(39)$(178) Other income, net, increased $178 million compared to the prior-year period primarily due to: pension income ($2 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions; foreign currency impact ($4 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; gain on litigation ($168 million) - compensatory and punitive damages from the litigation judgment obtained against TCS; and other miscellaneous items ($12 million) - the Company recognized a $14 million impairment of goodwill in the first quarter of fiscal 2026 related to the change in operating segments. Taxes Our effective tax rate ( ETR ) was 47.7% and 73.1% for the first quarter of fiscal 2027 and the first quarter of fiscal 2026, respectively. For the first quarter of fiscal 2027, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, and a reduction in a deferred tax asset for stock based compensation. For the first quarter of fiscal 2026, 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 DXC s investment in a wholly owned subsidiary, and a reduction in a deferred tax asset for stock based compensation. Earnings Per Share Diluted EPS for the first quarter of fiscal 2027 was $0.73, compared to $0.09 in the first quarter of fiscal 2026. The increase in earnings per share was primarily due to the Company's increase in net income attributable to DXC common stockholders and a lower weighted average share count from the Company s share repurchases. Diluted EPS for the first quarter of fiscal 2027 includes $0.08 per share of restructuring costs, $0.28 per share of amortization of acquired intangible assets, $(0.69) per share of gain on litigation award, and $(0.01) per share of gains on dispositions. 34 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. 35 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: Dollar Amount Three Months Ended June 30,Change (in millions)20262025DollarPercent Income before income taxes$241 $67 $174 NM(1) Non-GAAP income before income taxes$138 $208 $(70)(33.7)% Net income$126 $18 $108 NM(1) Adjusted EBIT$150 $216 $(66)(30.6)% (1) Calculation is not meaningful ("NM") due to the gain from the TCS litigation judgment, as discussed in Note 18 - Commitments and Contingencies. 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 for tax related indemnifications. Gain on litigation award reflects a gain related to the TCS litigation judgment. Gains and losses on real estate and facility sales gains and losses related to dispositions of real property. Gains and losses on dispositions gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities. 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 merger 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). 36 A reconciliation of reported results to non-GAAP results is as follows: Three Months Ended June 30, 2026 (in millions, except per-share amounts)As ReportedRestructuring CostsAmortization of Acquired Intangible AssetsGain on Litigation AwardGains on DispositionsNon-GAAP Results Income before income taxes$241 $26 $87 $(214)$(2)$138 Income tax expense115 12 40 (99)(1)67 Net income126 14 47 (115)(1)71 Less: net income attributable to non-controlling interest, net of tax4 4 Net income attributable to DXC common stockholders$122 $14 $47 $(115)$(1)$67 Effective Tax Rate47.7 %48.6 % Basic EPS$0.75 $0.09 $0.29 $(0.71)$(0.01)$0.41 Diluted EPS$0.73 $0.08 $0.28 $(0.69)$(0.01)$0.40 Weighted average common shares outstanding for: Basic EPS162.86 162.86 162.86 162.86 162.86 162.86 Diluted EPS166.27 166.27 166.27 166.27 166.27 166.27 Three Months Ended June 30, 2025 (in millions, except per-share amounts)As ReportedRestructuring CostsTransaction, Separation and Integration-Related CostsAmortization of Acquired Intangible AssetsMerger Related IndemnificationImpairment LossesTax AdjustmentsNon-GAAP Results Income before income taxes$67 $37 $1 $87 $2 $14 $ $208 Income tax expense49 9 20 4 (2)80 Net income18 28 1 67 2 10 2 128 Less: net loss attributable to non-controlling interest, net of tax2 2 Net income attributable to DXC common stockholders$16 $28 $1 $67 $2 $10 $2 $126 Effective Tax Rate73.1 %38.5 % Basic EPS $0.09 $0.15 $0.01 $0.37 $0.01 $0.06 $0.01 $0.70 Diluted EPS$0.09 $0.15 $0.01 $0.36 $0.01 $0.05 $0.01 $0.68 Weighted average common shares outstanding for: Basic EPS181.10 181.10 181.10 181.10 181.10 181.10 181.10 181.10 Diluted EPS184.96 184.96 184.96 184.96 184.96 184.96 184.96 184.96 37 Reconciliations of revenue growth to organic revenue growth are as follows: Three Months Ended June 30, 2026June 30, 2025 Total revenue growth(5.1)%(2.4)% Foreign currency(1.6)%(2.0)% Acquisition and divestitures %0.1 % Organic revenue growth(6.7)%(4.3)% CES revenue growth (1.2)%(2.7)% Foreign currency(1.8)%(2.0)% Acquisition and divestitures %0.3 % CES organic revenue growth (3.0)%(4.4)% GIS revenue growth(9.4)%(3.5)% Foreign currency(1.7)%(2.2)% Acquisition and divestitures % % GIS organic revenue growth(11.1)%(5.7)% Insurance revenue growth 1.9 %5.4 % Foreign currency(0.5)%(1.8)% Acquisition and divestitures % % Insurance organic revenue growth 1.4 %3.6 % Reconciliations of segment profit and adjusted EBIT to net income are as follows: Three Months Ended (in millions)June 30, 2026June 30, 2025 Total profit for reportable segments$172 $235 Corporate expenses(22)(19) Adjusted EBIT150 216 Restructuring costs(26)(37) Transaction, separation and integration-related costs (1) Amortization of acquired intangibles(87)(87) Merger related indemnification (2) Gain on litigation award 168 Gains on dispositions2 Impairment losses (14) EBIT207 75 Interest income89 46 Interest expense(55)(54) Income before income tax241 67 Income tax expense115 49 Net income$126 $18 38 Liquidity and Capital Resources Cash and Cash Equivalents and Cash Flows As of June 30, 2026, our cash and cash equivalents ( cash ) were $2.0 billion, of which $0.7 billion was held outside of the U.S. We maintain various multi-currency, multi-entity, cross-border, physical and notional cash 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 $0.1 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: Three Months Ended (in millions)June 30, 2026June 30, 2025Change Net cash provided by (used in): Operating activities$418 $186 $232 Investing activities(99)(77)(22) Financing activities(120)(110)(10) Effect of exchange rate changes on cash and cash equivalents21 (3)24 $220 $(4)$224 Cash and cash equivalents at beginning of year1,737 1,796 Cash and cash equivalents at the end of period$1,957 $1,792 Operating cash flow Net cash provided by operating activities was $418 million and $186 million, respectively, during the first quarters of fiscal 2027 and fiscal 2026, reflecting a year-over-year increase of $232 million. The increase was primarily due to: a $147 million favorable change in net income, net of adjustments, primarily driven by the $214 million TCS litigation judgment; and an $85 million favorable change in working capital due to lower working capital outflows during the first quarter of fiscal 2027 primarily as a result of lower annual executive compensation payments. The following table contains certain key working capital metrics: June 30, 2026June 30, 202571 69 (57)(52)14 17 June 30, 2026March 31, 2026Change$501 $520 $(19)3,003 3,032 (29)$3,504 $3,552 $(48)Long Term RatingsShort Term RatingsOutlook FitchBBB-F3Stable Moody sBaa3P-3Stable S&PBBB--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, 2026. 40 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 $5.0 billion as of June 30, 2026, includes $2.0 billion of cash and cash equivalents and $3.0 billion of available borrowings under our revolving credit facility. Share Repurchases See Note 13 Stockholders Equity. Dividends To maintain our financial flexibility, we continue to suspend payment of quarterly dividends for fiscal 2027. 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, 2026, other than as disclosed in Note 3 Receivables and Note 18 Commitments and Contingencies. Cash Commitments There have been no material changes, outside the ordinary course of business, to our cash commitments since March 31, 2026. 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, 2026. 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 18 Commitments and Contingencies. 41 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 June 30, 2026, 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, 2026 except as mentioned in Note 1 Summary of Significant Accounting Policies. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For quantitative and qualitative disclosures about market risk affecting DXC, see Quantitative and Qualitative Disclosures About Market Risk in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. Our exposure to market risk has not changed materially since March 31, 2026. ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act )). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2026. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. PART II ITEM 1. LEGAL PROCEEDINGS See Note 18 Commitments and Contingencies to the financial statements in this Quarterly Report on Form 10-Q under the caption Contingencies for information regarding legal proceedings in which we are involved. ITEM 1A. RISK FACTORS Our operations and financial results are subject to various risks and uncertainties, which may materially and adversely affect our business, financial condition, and results of operations, and the actual outcome of matters as to which forward-looking statements are made in this Quarterly Report on Form 10-Q. In such case, the trading price for DXC common stock could decline, and you could lose all or part of your investment. Past performance may not be a reliable indicator of future financial performance and historical trends should not be used to anticipate results or trends in future periods. Future performance and historical trends may be adversely affected by the aforementioned risks, and other variables and risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect our business, financial condition, and results of operations or the price of our common stock in the future. There have been no material changes in the three months ended June 30, 2026 to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. 42 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Unregistered Sales of Equity Securities None during the period covered by this report. Use of Proceeds Not applicable. Issuer Purchases of Equity Securities The following table provides information on a monthly basis for the quarter ended June 30, 2026, with respect to the Company s purchase of equity securities: PeriodTotal Number of Shares PurchasedAverage Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Plans or ProgramsApproximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs April 1, 2026 to April 30, 20262,019,638$12.38 2,019,638$316,871,951 May 1, 2026 to May 31, 20263,565,377$9.73 3,565,377$282,175,245 June 1, 2026 to June 30, 20261,119,636$9.11 1,119,636$271,980,496 On May 18, 2023, DXC announced that its Board approved an incremental $1.0 billion share repurchase authorization. As of June 30, 2026, approximately $272 million worth of shares remained available for repurchase under the plans or programs. Share repurchases may be made from time to time through various means, including in open market purchases, 10b5-1 plans, privately-negotiated transactions, accelerated stock repurchases, block trades and other transactions, in compliance with Rule 10b-18 under the Exchange Act, as well as, to the extent applicable, other federal and state securities laws and other legal requirements. The timing, volume, and nature of share repurchases pursuant to the share repurchase plan are at the discretion of management and may be suspended or discontinued at any time. On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (the "IRA") into law. The IRA imposes a 1% excise tax on share repurchases completed after December 31, 2022. We reflect the excise tax within equity as part of the repurchase of the common stock. See Note 13 - "Stockholders Equity" to the financial statements in this Quarterly Report on Form 10-Q for more information. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 43 ITEM 5. OTHER INFORMATION During the three months ended June 30, 2026, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408 of Regulation S-K. 44 ITEM 6. EXHIBITS Exhibit Number Description of Exhibit 10.1* Twentieth Amendment to the Receivables Purchase Agreement dated as of July 24, 2026, among DXC Receivables LLC (f/k/a CSC Receivables LLC), as Seller, DXC Technology Company, as Servicer, PNC Bank, National Association, as Administrative Agent, and the persons from time to time party thereto as Purchasers and Group Agents 31.1*Section 302 Certification of the Chief Executive Officer 31.2*Section 302 Certification of the Chief Financial Officer 32.1**Section 906 Certification of Chief Executive Officer 32.2**Section 906 Certification of Chief Financial Officer 101.INSInteractive Data Files 101.SCHXBRL Taxonomy Extension Schema 101.CALXBRL Taxonomy Extension Calculation 101.LABXBRL Taxonomy Extension Labels 101.PREXBRL Taxonomy Extension Presentation 104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith ** Furnished herewith Certain schedules to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request 45 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DXC TECHNOLOGY COMPANY Dated:July 30, 2026By:/s/ Christopher A. Voci Name:Christopher A. Voci Title:Senior Vice President, Corporate Controller and Principal Accounting Officer 46