DXC Technology (DXC) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue was $3.00 billion, down 5.1% year-over-year and 6.7% on an organic basis, with bookings up 5% and a book-to-bill ratio of 0.99x.

• Adjusted EBIT margin was 5.0%, non-GAAP diluted EPS was $0.40, and diluted EPS was $0.73, driven by a $214 million litigation gain.

• Free cash flow was $314 million, including $214 million from a litigation judgment; net income attributable to common stockholders was $122 million.

• Leadership changes included the appointment of Paul Taylor as President and other key roles to drive AI and operational transformation.

• Strategic focus on agentic AI, partnerships with Anthropic and ElevenLabs, and accelerated sales cycles for AI-driven solutions.

Financial highlights

• EBIT was $207 million (margin 6.9%), adjusted EBIT was $150 million (margin 5.0%), and non-GAAP EPS was $0.40.

• Free cash flow was $314 million, up from $97 million, including litigation proceeds; cash from operations was $418 million.

• Net income attributable to common stockholders was $122 million, up from $16 million a year ago.

• Book-to-bill ratio was 0.99x, the highest Q1 level in three years.

• Ended the quarter with $1.9 billion in cash and net debt of $1.5 billion, down $270 million from Q4.

Outlook and guidance

• FY27 organic revenue expected to decline 5.0% to 3.0% year-over-year, with improvement in the rate of decline in the second half.

• Adjusted EBIT margin for FY27 guided at 6.0%–7.0%, with non-GAAP diluted EPS outlook of $2.40–$2.90.

• Free cash flow guidance raised to ~$685 million, reflecting litigation proceeds.

• Q2 FY27 guidance: organic revenue decline of 6.5% to 5.5%, adjusted EBIT margin ~6%, non-GAAP EPS ~$0.55.