Oct 29, 2026 earnings call — AI push and updated revenue guidance
DXC cut full-year organic revenue to decline 5% to 5.5%, after Q2 revenue was $3 billion and adjusted EBIT margin was 6.2%.
Revenue $3.0B (est $3.0B) · EPS $0.67 (est $0.56)
Key quotes
"The next step is commercialization, deploying these engineers against customer opportunities and converting that capability into revenue."
"A few of Paul's key focus areas are removing friction in how we operate globally and improving our sales execution."
"In our insurance business, we continue to build momentum in our SaaS-based Assure platform, with customer adoption exceeding 275 enterprise insurance accounts."
Analyst Q&A 6
Deals delayed vs lost
Q (Tien-Tsin Huang · JPMorgan): He asked whether lower pipeline conversion meant deals were being delayed or actually lost, and how the next couple of quarters might look.
A: Management said the big deferred deals were mostly in UKI public sector and remain in the pipeline, so those are delays not losses. They said smaller project deals in the Americas saw some slips and some dropouts, and competition there has stiffened. They noted AI-related small deals can move faster and unlock follow-on work, but they are not counting on faster conversion in their guide.
"So that was a delay dynamic as opposed to deals dropping out." — Robert Del Bene (CFO)
Why deals delayed and pricing pressure
Q (Keith Bachman · BMO): He asked why projects are being pushed—competition or other factors—and whether more competition is forcing down prices and hurting bookings.
A: They said pricing is relatively stable, slightly down, and win rates fell a bit, particularly in the Americas. Management attributed delays to extra evaluations and customers resetting priorities, and said customers are asking whether to use traditional upgrades or new agentic approaches, which lengthens decision cycles and can shorten contract terms.
"So Keith, what we're seeing in the data, and again, this is pronounced in the Americas, meaning the U.S., is that our -- the pricing data we have is relatively stable, slightly down." — Robert Del Bene (CFO)
Backlog erosion risk
Q (Bryan Bergin · TD Cowen): He asked if signed backlog is at risk of erosion because clients might shift priorities to other pipeline items.
A: They said they do not see elevated backlog erosion; backlog erosion statistics this year are consistent with historical levels and have been moderating. They also noted demand in cyber and the new Frontier Code Assurance product is strong and requires fast action, so some areas will move quickly even as others delay.
"Our backlog erosion statistics for this year are very consistent with historical levels, and they're -- and they've been actually moderating at a very good level." — Robert Del Bene (CFO)
Losing deals and sales fixes
Q (Yu Lee · Guggenheim): He asked if the weakness is DXC-specific share loss, who is winning those deals, and what sales changes will recover share. He also asked Rob what cost actions will protect margins next year.
A: Raul said they are simplifying customer interaction with a single point of accountability and clearer go-to-market, and that some lost conversions were self-made and will improve with execution. Rob said they increased their cost takeout objective given lower revenue and are evaluating deeper steps for fiscal 2028 but it's too early for specifics; Raul added the run rate gap is about $150 million and he believes they can close it.
"We're simplifying our interaction with the customer so that we've got a single point of accountability between the company, DXC and the customer with the offerings backing up that single point of accountability." — Raul Fernandez (CEO)
GrowthX modernization update
Q (James Friedman · Susquehanna): He asked for an update on GrowthX and whether recent deals like Guidewire's purchase of hyperexponential overlap with DXC.
A: Raul said GrowthX includes the modernization-as-a-service offering, they've won deals, completed initial phases, and see follow-on work behind those wins. On the Guidewire acquisition he said the attributes that drive high valuations—sticky customers, recurring revenue, regulatory moats—exist in DXC's insurance business as well.
"We've now completed the initial phases, and we see behind the initial phases of follow-on work as a result of those." — Raul Fernandez (CEO)
Data security and engineer certifications
Q (James Faucette · Morgan Stanley): He asked how DXC addresses data security and sovereignty concerns and what capabilities match that customer demand. He also asked what internal changes are needed to improve execution.
A: Raul said the key is a deep global engineering bench plus industry skills; they have thousands of engineers certified with Anthropic and are top 10 in FDE certification. For execution, he said they must clarify and prioritize proven products, distribute those proof points to sales, and engage clients quickly; he noted Frontier Code Assurance can scan 10 million lines of code quickly to find and help patch vulnerabilities.
"We've got thousands of engineers certified, and we're in the top 10 of all companies in the world with regards to FDE certified for Anthropic." — Raul Fernandez (CEO)