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Item 1. Financial Statements

2025-08-01 compared with 2025-02-05 · 297 added, 327 removed, 607 unchanged (51% of the section changed)

1 unchanged sentence

Index to Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31 , 2024 and December 31 , 2023 (unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended December 31 , 2024 and December 31 , 2023 (unaudited)

Condensed Consolidated Balance Sheets as of December 31 , 2024 and March 31, 2024 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31 , 2024 and December 31 , 2023 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended December 31 , 2024 and December 31 , 2023 (unaudited)

Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2025 and June 30, 2024 (unaudited)

Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended June 30, 2025 and June 30, 2024 (unaudited)

Condensed Consolidated Balance Sheets as of June 30, 2025 and March 31, 2025 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2025, and June 30, 2024 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three Months Ended June 30, 2025 and June 30, 2024 (unaudited)

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1–Summary of Significant Accounting Policies

Note 2–Divestitures

Note 2–Earnings Per Share

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended Nine Months Ended

(in millions, except per-share amounts) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

(in millions, except per-share amounts) June 30, 2025 June 30, 2024

Revenues $ 3,159 $ 3,236

5 unchanged sentences

Interest income ( 46 ) ( 51 )

Gain on disposition of businesses

( 7 ) ( 103 ) ( 7 ) ( 96 )

Other income, net ( 39 ) ( 45 )

4 unchanged sentences

net income (loss) attributable to non-controlling interest, net of tax

6 ( 16 ) 8 ( 10 )

Net income attributable to DXC common stockholders $ 16 $ 26

4 unchanged sentences

DXC TECHNOLOGY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

Three Months Ended Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

$ 63 $ 140 $ 133 $ 281

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments, net of tax (1)

( 59 ) 37 23 31

Cash flow hedges adjustments, net of tax (2)

4 ( 4 ) ( 7 ) 3

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (unaudited)

Three Months Ended

(in millions)

June 30, 2025 June 30, 2024

Net income $ 18 $ 25

Other comprehensive (loss) income, net of taxes:

Foreign currency translation adjustments, net of tax (benefit) expense of $( 15 ) and $ 1

Cash flow hedges adjustments, net of tax (benefit) expense of $( 2 ) and $ 1

Pension and other post-retirement benefit plans, net of tax:

Prior service cost, net of tax (3)

— ( 7 ) — ( 7 )

Amortization of prior service cost, net of tax (4)

( 1 ) ( 1 ) ( 3 ) ( 3 )

Amortization of prior service cost, net of tax benefit of $ 0 and $ 0

Pension and other post-retirement benefit plans, net of tax — ( 1 )

Other comprehensive income (loss), net of taxes

( 56 ) 25 13 24

Comprehensive income

7 165 146 305

Other comprehensive (loss) income, net of taxes

Comprehensive (loss) income

comprehensive income (loss) attributable to non-controlling interest

5 ( 23 ) 7 ( 18 )

Comprehensive income attributable to DXC common stockholders

Comprehensive (loss) income attributable to DXC common stockholders

$ ( 23 ) $ 31

(1) Tax expense (benefit) related to foreign currency translation adjustments was $ 13 and $ 7 for the three and nine months ended December 31, 2024, respectively, and $( 3 ) and $( 1 ) for the three and nine months ended December 31, 2023, respectively.

(2) Tax expense (benefit) related to cash flow hedges adjustments was $ 1 and $( 2 ) for the three and nine months ended December 31, 2024, respectively, and $( 1 ) and $ 1 for the three and nine months ended December 31, 2023, respectively.

(3) Tax expense related to prior service costs was $ 0 for the three and nine months ended December 31, 2023, respectively.

(4) Tax benefit related to amortization of prior service costs was $ 0 and $ 1 for the three and nine months ended December 31, 2024, respectively, and $ 0 and $ 1 for the three and nine months ended December 31, 2023, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in millions, except per-share and share amounts) December 31, 2024 March 31, 2024

(in millions, except per-share and share amounts) June 30, 2025 March 31, 2025

Current assets:

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Other assets 3,059 2,967

Assets held for sale - non-current 2 11

Total Assets $ 13,438 $ 13,205

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Accrued payroll and related costs 639 571

Current operating lease liabilities 235 282

Operating lease liabilities

Accrued expenses and other current liabilities 1,265 1,358

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DXC stockholders’ equity:

Preferred stock, par value $ 0.01 per share, 1,000,000 shares authorized, none issued as of December 31, 2024 and March 31, 2024

Common stock, par value $ 0.01 per share, 750,000,000 shares authorized, 186,609,810 issued as of December 31, 2024 and 183,430,878 issued as of March 31, 2024

Preferred stock, par value $ 0.01 per share;

authorized 1,000,000 shares;

none issued as of June 30, 2025 and March 31, 2025

Common stock, par value $ 0.01 per share;

authorized 750,000,000 shares;

issued 185,978,363 as of June 30, 2025 and 186,856,421 as of March 31, 2025

Additional paid-in capital 7,561 7,677

1 unchanged sentence

Accumulated other comprehensive loss ( 801 ) ( 762 )

Treasury stock, at cost, 5,567,341 and 4,591,340 shares as of December 31, 2024 and March 31, 2024

Treasury stock, at cost, 6,364,907 and 5,653,666 shares as of June 30, 2025 and March 31, 2025

( 247 ) ( 237 )

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Nine Months Ended

(in millions) December 31, 2024 December 31, 2023

Three Months Ended

(in millions)

June 30, 2025 June 30, 2024

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization 309 333

Goodwill impairment losses 14 —

Operating right-of-use expense 76 80

1 unchanged sentence

Deferred taxes ( 12 ) ( 50 )

Loss (gain) on dispositions 30 ( 153 )

Gain on dispositions ( 1 ) ( 1 )

Provision for losses on accounts receivable — 7

Unrealized foreign currency exchange loss 33 48

Unrealized foreign currency exchange gain ( 47 ) —

Impairment losses and contract write-offs 1 4

Other non-cash charges, net ( 3 ) 5

Changes in assets and liabilities:

Changes in assets and liabilities, net of effects of acquisitions and dispositions:

Decrease in assets 90 161

6 unchanged sentences

Software purchased and developed ( 16 ) ( 107 )

Business dispositions 26 31

Proceeds from sale of assets 10 5

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Other financing activities, net ( 1 ) —

Net cash used in financing activities ( 257 ) ( 877 )

Net cash (used in) provided by financing activities ( 110 ) 41

Effect of exchange rate changes on cash and cash equivalents ( 3 ) 2

Net increase (decrease) in cash and cash equivalents 499 ( 167 )

Net (decrease) increase in cash and cash equivalents ( 4 ) 93

Cash and cash equivalents at beginning of year 1,796 1,224

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

Three Months Ended December 31, 2024

Three Months Ended June 30, 2025

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated

Paid-in Capital

Accumulated Deficit Accumulated

Comprehensive Loss

Treasury Stock (1)

DXC Equity Non-

Controlling Interest Total Equity

Controlling Interest

Shares Amount

Balance at September 30, 2024

Balance at March 31, 2025

186,856 $ 2 $ 7,677 $ ( 3,451 ) $ ( 762 ) $ ( 237 ) $ 3,229 $ 261 $ 3,490

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Acquisition of treasury stock ( 10 ) ( 10 ) ( 10 )

Stock option exercises and other common stock transactions 89 — —

Non-controlling interest distributions and other ( 1 ) ( 1 ) ( 1 ) ( 3 ) 2 ( 1 )

Balance at December 31, 2024 186,610 $ 2 $ 7,657 $ ( 3,715 ) $ ( 719 ) $ ( 235 ) $ 2,990 $ 262 $ 3,252

Three Months Ended December 31, 2023

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated

Comprehensive Loss Treasury Stock Total

DXC Equity Non-

Controlling Interest Total Equity

Shares Amount

Balance at September 30, 2023

200,790 $ 2 $ 8,280 $ ( 4,143 ) $ ( 774 ) $ ( 218 ) $ 3,147 $ 320 $ 3,467

156 156 ( 16 ) 140

Other comprehensive income

32 32 ( 7 ) 25

Share-based compensation expense 26 26 26

Share repurchase program (2)

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Non-controlling interest distributions and other — — ( 1 ) ( 1 )

Balance at December 31, 2023 189,469 $ 2 $ 7,827 $ ( 3,762 ) $ ( 742 ) $ ( 218 ) $ 3,107 $ 259 $ 3,366

Nine Months Ended December 31, 2024

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated

Comprehensive Loss

Treasury Stock (1)

DXC Equity Non-

Controlling Interest Total Equity

Shares Amount

Balance at March 31, 2024

183,431 $ 2 $ 7,599 $ ( 3,839 ) $ ( 732 ) $ ( 219 ) $ 2,811 $ 255 $ 3,066

Net income 125 125 8 133

Other comprehensive income

Balance at June 30, 2025

185,978 $ 2 $ 7,561 $ ( 3,347 ) $ ( 801 ) $ ( 247 ) $ 3,168 $ 262 $ 3,430

Share-based compensation expense 59 59 59

Acquisition of treasury stock ( 16 ) ( 16 ) ( 16 )

Stock option exercises and other common stock transactions 3,179 — —

Non-controlling interest distributions and other ( 1 ) ( 1 ) ( 1 ) ( 3 ) ( 3 )

Balance at December 31, 2024 186,610 $ 2 $ 7,657 $ ( 3,715 ) $ ( 719 ) $ ( 235 ) $ 2,990 $ 262 $ 3,252

Nine Months Ended December 31, 2023

Three Months Ended June 30, 2024

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated

Paid-in Capital

Accumulated Deficit Accumulated

Comprehensive Loss Treasury Stock Total

DXC Equity Non-

Controlling Interest Total Equity

Controlling Interest

Shares Amount

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Other comprehensive income

32 32 ( 8 ) 24

Share-based compensation expense 23 23 23

Acquisition of treasury stock ( 14 ) ( 14 ) ( 14 )

Share repurchase program (2)

( 32,275 ) ( 1,365 ) 612 ( 753 ) ( 753 )

Stock option exercises and other common stock transactions 2,836 — —

Non-controlling interest distributions and other ( 1 ) ( 1 ) ( 1 ) ( 2 )

Balance at December 31, 2023 189,469 $ 2 $ 7,827 $ ( 3,762 ) $ ( 742 ) $ ( 218 ) $ 3,107 $ 259 $ 3,366

(1) 5,567,341 treasury shares as of December 31, 2024.

Balance at June 30, 2024

186,267 $ 2 $ 7,622 $ ( 3,814 ) $ ( 727 ) $ ( 233 ) $ 2,850 $ 253 $ 3,103

(1) 6,364,907 treasury shares as of June 30, 2025.

(2) 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

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.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Note 1 – Summary of Significant Accounting Policies

DXC Technology Company (“DXC,” the “Company,” “we,” “us,” or “our”) helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds.

Many of the world’s largest companies and public sector organizations trust DXC to deploy services to drive new levels of performance, competitiveness and customer experience across their IT estates.

DXC Technology Company (“DXC,” the “Company,” “we,” “us,” or “our”) is a leading global provider of IT services.

We are a trusted partner to many of the world’s most innovative organizations, building solutions that move industries and companies forward.

Our engineering, consulting, and technology experts help clients simplify, optimize, and modernize their systems and processes, manage their most critical workloads, integrate AI-powered intelligence into their operations, and put security and trust at the forefront.

Through innovative solutions, we help clients achieve competitive advantages in the marketplace.

New Segment Structure

During the first quarter of fiscal 2026, the Company began reporting its financial results under a new segment structure designed to better reflect the Company’s operational structure and the delivery of end-to-end IT services.

The new structure includes three reportable segments that align with how management assesses performance of the business and allocates resources:

Consulting & Engineering Services ("CES"), Global Infrastructure Services ("GIS"), and Insurance Services ("Insurance").

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 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 enhances operational efficiency, improves customer experiences, and enables 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.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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,” (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.

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 (Loss) Income as the “statements of comprehensive (loss) income,” (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.

The accompanying financial statements include the accounts of DXC, its consolidated subsidiaries, and those business entities in which DXC maintains a controlling interest.

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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 attributable to non-controlling interests are presented separately in the statements of comprehensive income.

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 (loss) income.

All intercompany transactions and balances have been eliminated.

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Recent Accounting Pronouncements

During fiscal 2024 and fiscal 2025, the following Accounting Standards Updates (“ASUs”) were issued by the Financial Accounting Standards Board but have not yet been adopted by DXC:

During fiscal 2025, the following Accounting Standards Updates ("ASU") were issued by the Financial Accounting Standards Board but have not yet been adopted by DXC:

Date Issued and ASU DXC Effective Date

Description Impact

November 2023

ASU 2023-07, “Improvements to Reportable Segment Disclosures”

Fiscal 2025 This update requires disclosure of significant segment expenses used by the Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources, disclose the title and position of the CODM and modifies other segment disclosures and the frequency thereof.

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 segment disclosures, but not its consolidated financial statements.

December 2023

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The Company is in the process of assessing the impacts and method of adoption.

This ASU will impact the Company’s income tax disclosures, but not its consolidated financial statements.

This ASU will impact the Company’s financial statement disclosures, but not its consolidated financial statements.

November 2024

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 2 – Divestitures

During the first nine months of fiscal 2025 and fiscal 2024, the Company sold insignificant businesses and made adjustments to estimated amounts from prior years’ dispositions that resulted in a gain of $ 7 million and $ 96 million, respectively.

Note 2 – Earnings per Share

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The following table reflects the calculation of basic and diluted EPS:

Three Months Ended Nine Months Ended

(in millions, except per-share amounts) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Net income attributable to DXC common stockholders:

$ 57 $ 156 $ 125 $ 291

Three Months Ended

(in millions, except per-share amounts)

June 30, 2025 June 30, 2024

Net income attributable to DXC common shareholders:

Common share information:

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Diluted $ 0.09 $ 0.14

Certain share-based equity awards were excluded from the computation of dilutive EPS because inclusion of these awards would have an anti-dilutive effect.

Certain share-based equity awards were excluded from the dilutive EPS calculation because they would have an anti-dilutive effect.

The number of awards excluded were as follows:

Three Months Ended Nine Months Ended

December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

June 30, 2025 June 30, 2024

Stock Options 407,095 927,909

1 unchanged sentence

Performance Stock Units 144,891 160,461

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 3 – Receivables

1 unchanged sentence

The following table presents the change in balance for the allowance for doubtful accounts:

(in millions) December 31, 2024 March 31, 2024

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Beginning balance $ 32 $ 35

4 unchanged sentences

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’s termination date is July 25, 2025.

As of December 31, 2024, the total availability under the Receivables Facility was $ 400 million and the amount sold to the Purchasers was $ 400 million, which was derecognized from the Company’s balance sheet.

The Receivables Facility was amended on July 25, 2025, extending the termination date to July 24, 2026.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of June 30, 2025, the total availability under the Receivables Facility was $ 380 million and the amount sold to the Purchasers was $ 373 million, which was derecognized from the Company’s balance sheet.

As of June 30, 2025, the Company recorded a $ 7 million asset within accounts receivable because the amount of cash proceeds received by the Company under the Receivables Facility was less 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.

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The Company has operating and finance leases for data centers, corporate offices, and certain equipment.

Its leases have remaining lease terms of one to 10 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 .

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 Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Operating lease cost $ 76 $ 80

3 unchanged sentences

Total operating costs $ 93 $ 94

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Cash payments made for variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and as such, are excluded from the supplemental cash flow information stated below.

Nine Months Ended

(in millions) December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows $ 76 $ 80

ROU assets obtained in exchange for operating lease liabilities (1)

(1) Net of $ 528 million and $ 691 million in lease modifications and terminations during the first nine months of fiscal 2025 and 2024, respectively.

(1) Net of $ 214 million and $ 237 million in lease modifications and terminations for the three months ended June 30, 2025 and June 30, 2024, respectively.

See Note 15 – “Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents operating lease balances:

(in millions) Balance Sheet Line Item December 31, 2024 March 31, 2024

(in millions) Balance Sheet Line Item June 30, 2025 March 31, 2025

ROU operating lease assets Operating right-of-use assets, net $ 735 $ 635

2 unchanged sentences

Total operating lease liabilities $ 770 $ 671

The weighted-average operating lease term was 3.8 years and 3.9 years as of December 31, 2024 and March 31, 2024, respectively.

The weighted-average operating lease discount rate was 5.0 % and 4.6 % as of December 31, 2024 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of December 31, 2024:

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The weighted-average operating lease term was 3.7 years and 3.8 years as of June 30, 2025 and March 31, 2025, respectively.

The weighted-average operating lease discount rate was 4.8 % and 4.9 % as of June 30, 2025 and March 31, 2025, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of June 30, 2025:

(in millions)

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Total operating lease liabilities

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Finance Leases

The components of finance lease expense were as follows:

Three Months Ended Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Amortization of right-of-use assets $ 15 $ 25

Interest on lease liabilities 3 4

Total finance lease expense $ 21 $ 35 $ 77 $ 121

Total finance lease cost $ 18 $ 29

The following table provides supplemental cash flow information related to the Company’s finance leases:

Nine Months Ended

(in millions) December 31, 2024

December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Interest paid for finance lease liabilities – Operating cash flows $ 3 $ 4

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The following table presents finance lease balances:

(in millions) Balance Sheet Line Item December 31, 2024 March 31, 2024

(in millions) Balance Sheet Line Item June 30, 2025 March 31, 2025

ROU finance lease assets Property and Equipment, net $ 119 $ 145

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(1) See Note 8 – “Debt” for further information on finance lease liabilities.

The weighted-average finance lease term was 2.8 years and 2.9 years as of December 31, 2024 and March 31, 2024, respectively.

The weighted-average finance lease discount rate was 5.6 % and 4.3 % as of December 31, 2024 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of December 31, 2024:

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The weighted-average finance lease term was 2.6 years and 2.7 years as of June 30, 2025 and March 31, 2025, respectively.

The weighted-average finance lease discount rate was 5.6 % as of both June 30, 2025 and March 31, 2025, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of June 30, 2025:

(in millions)

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Total finance lease liabilities

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 5 – Derivative Instruments

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Cash flow hedges

The Company has designated certain foreign currency forward contracts as cash flow hedges to reduce foreign currency risk related to certain Euro and Indian Rupee-denominated obligations and forecasted transactions.

The notional amounts of foreign currency forward contracts designated as cash flow hedges as of December 31, 2024 and March 31, 2024 were $ 730 million and $ 885 million, respectively.

As of December 31, 2024, the related forecasted transactions extend through December 2026.

During the three and nine months ended December 31, 2024 and December 31, 2023, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur.

The Company has designated certain foreign currency forward contracts as cash flow hedges to reduce foreign currency risk related to certain Indian Rupee-denominated obligations and forecasted transactions.

The notional amounts of foreign currency forward contracts designated as cash flow hedges as of June 30, 2025 and March 31, 2025 were $ 546 million and $ 668 million, respectively.

As of June 30, 2025, the related forecasted transactions extend through December 2026.

During the three months ended June 30, 2025 and June 30, 2024, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur.

See Note 13 – “Stockholders’ Equity” for changes in accumulated other comprehensive loss, net of taxes, related to the Company’s derivatives designated for hedge accounting.

As of December 31, 2024, $ 2 million of loss related to the cash flow hedge reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

As of June 30, 2025, $ 15 million of loss related to cash flow hedges reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

Derivatives Not Designated for Hedge Accounting

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The Company manages the exposure to fluctuations in foreign currencies by using primarily short-term foreign currency forward contracts to hedge certain foreign currency denominated assets and liabilities, including intercompany accounts and forecasted transactions.

The net notional amounts of the foreign currency forward contracts outstanding as of December 31, 2024 and March 31, 2024 were $ 1.7 billion and $ 1.5 billion, respectively.

The net notional amounts of the foreign currency forward contracts outstanding as of June 30, 2025 and March 31, 2025 were $ 1.7 billion and $ 1.9 billion, respectively.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following table presents the foreign currency (gain) loss to Other income, net:

Three Months Ended

Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

The following table presents the pretax foreign currency (gain) loss to Other income, net:

For the Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Foreign currency remeasurement (1)

$ 48 $ ( 17 ) $ 29 $ 4

Undesignated foreign currency forward contracts (2)

( 49 ) 22 ( 29 ) ( 8 )

Total - Foreign currency (gain) loss

$ ( 1 ) $ 5 $ — $ ( 4 )

(1) Movements from exchange rates on the Company’s foreign currency-denominated assets and liabilities.

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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 December 31, 2024, there were seven counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $ 19 million.

With respect to its foreign currency derivatives, as of June 30, 2025, 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.

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Gains or losses on individual net investments in non-U.S.

operations are reclassified to earnings from accumulated other comprehensive income (loss) when such net investments are sold or substantially liquidated.

As of December 31, 2024 and March 31, 2024, DXC had $ 673 million and $ 702 million, respectively, of foreign currency-denominated debt designated as hedges of 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, 2025 and March 31, 2025, DXC had $ 763 million and $ 702 million, respectively, of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

subsidiaries.

For the three and nine months ended December 31, 2024, the pre-tax gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income was $ 52 million and $ 28 million, respectively.

For the three months ended June 30, 2025, the pre-tax impact of loss on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive (loss) income was $ 61 million.

DXC TECHNOLOGY COMPANY

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Intangible assets consisted of the following:

As of December 31, 2024 As of March 31, 2024

As of June 30, 2025

As of March 31, 2025

(in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value

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Customer related intangible assets 3,980 3,091 889 3,886 2,933 953

3,846 2,819 1,027 3,892 2,588 1,304

Other intangible assets 291 154 137 284 142 142

285 133 152 309 134 175

Total intangible assets $ 8,035 $ 6,524 $ 1,511 $ 7,883 $ 6,241 $ 1,642

The components of amortization expense were as follows:

Three Months Ended Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Intangible asset amortization

Transition and transformation contract cost amortization (1)

51 53 152 155

Total amortization expense $ 225 $ 232

(1) Transition and transformation contract costs are included within other assets on the balance sheets.

Estimated future amortization related to intangible assets as of December 31, 2024 is as follows:

(1) Transaction and transformation contract costs are included within other assets on the balance sheets.

Estimated future amortization related to intangible assets as of June 30, 2025 is as follows:

Fiscal Year (in millions)

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Note 7 – Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of December 31, 2024.

(in millions) GBS GIS Total

During the first quarter of fiscal 2026, the Company began reporting its financial results under a new segment structure that includes three operating and reportable segments:

1) CES, 2) GIS, and 3) Insurance.

These segments align with how management assesses performance of the business and allocates resources.

See Note 16 - "Segment Information" for more information.

The change to the Company’s operating segments resulted in a change to the Company’s reporting units, which are aligned to the Company’s operating and reportable segments.

As a result of the realignment, the Company reallocated goodwill to the new reporting units on a relative fair value basis.

In connection with the goodwill reallocation described above, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below their carrying amount and require goodwill to be tested for impairment.

As a result, the Company concluded that the goodwill balance reallocated to the GIS segment was fully impaired in the first quarter of fiscal 2026.

The following table summarizes the changes in the carrying amount of goodwill by segment for the three months ended June 30, 2025.

(in millions) Global Business Solutions

Consulting & Engineering Services

Global Infrastructure Services

Insurance Services

Balance as of March 31, 2025, net $ 526 $ — $ — $ — $ 526

Reallocation of goodwill

( 526 ) 367 14 145 —

Impairment losses (1)

— — ( 14 ) — ( 14 )

Foreign currency translation (2)

Balance as of December 31, 2024, net $ 518 $ — $ 518

Balance as of June 30, 2025, net $ — $ 381 $ — $ 151 $ 532

Goodwill, gross 3,600 5,080 1,422 10,102

Accumulated impairment losses ( 3,219 ) ( 5,080 ) ( 1,271 ) ( 9,570 )

Balance as of December 31, 2024, net $ 518 $ — $ 518

Balance as of June 30, 2025, net $ 381 $ — $ 151 $ 532

(1) Impairment losses are included within Other income, net on the statements of operations.

(2) The foreign currency translation amount reflects the impact of currency movements on non-U.S.

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The following is a summary of the Company’s debt:

(in millions) Interest Rates Fiscal Year Maturities December 31, 2024 (1)

(in millions) Interest Rates Fiscal Year Maturities June 30, 2025 (1)

March 31, 2025 (1)

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current maturities of long-term debt

Current maturities of long-term debt Various 2025 - 2026 62 93

€ 650 million Senior notes

1.75 % 2026 763 702

Current maturities of finance lease liabilities 0.51 % - 14.59 %

2026 - 2027 117 123

Current maturities of long-term debt Various 2026 - 2027 49 55

Short-term debt and current maturities of long-term debt $ 929 $ 880

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$ 700 million Senior notes

1.75 % 2026 673 700

€ 750 million Senior notes

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0.95 % 2032 700 644

€ 600 million Senior notes

0.95 % 2032 617 643

Finance lease liabilities 0.51 % - 14.59 %

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Other borrowings Various 2027 - 2035 16 16

Long-term debt 3,830 4,089

current maturities 193 271

Long-term debt, net of current maturities

(1) The carrying amounts of the senior notes as of December 31, 2024 and March 31, 2024, include the remaining principal outstanding of $ 3,422 million and $ 3,509 million, respectively, net of total unamortized debt discounts and premiums, and deferred debt issuance costs of $ 13 million and $ 17 million, respectively.

$ 4,029 $ 3,876

(1) The carrying amounts of the senior notes as of June 30, 2025 and March 31, 2025, include the remaining principal outstanding of $ 3,698 million and $ 3,510 million, respectively, net of total unamortized debt (discounts) and premiums, and deferred debt issuance costs of $ 12 million and $ 11 million, respectively.

Fair Value of Debt

The estimated fair value of the Company’s long-term debt, excluding finance lease liabilities, was $ 3.3 billion as of both December 31, 2024 and March 31, 2024, compared with carrying value of $ 3.5 billion and $ 3.7 billion as of December 31, 2024 and March 31, 2024, respectively.

The estimated fair value of the Company’s long-term debt excluding finance lease liabilities was $ 3.5 billion and 3.3 billion as of June 30, 2025 and March 31, 2025, respectively, compared with carrying value of $ 3.8 billion and $ 3.6 billion as of June 30, 2025 and March 31, 2025, respectively.

Long-term debt excluding finance lease liabilities are classified as Level 1 or Level 2 within the fair value hierarchy.

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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:

Three Months Ended Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

United States $ 828 $ 897

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Remaining Performance Obligations

As of December 31, 2024, approximately $ 16.6 billion of revenue is expected to be recognized from remaining performance obligations.

As of June 30, 2025, approximately $ 16.7 billion of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 32 % of these remaining performance obligations in fiscal 2026, with the remainder of the balance recognized thereafter.

Contract Balances

The following table provides information about the balances of the Company’s trade receivables and contract assets and contract liabilities:

(in millions) Balance Sheet Line Item

December 31, 2024 March 31, 2024

The following table provides information about the balances of the Company’s trade receivables, contract assets and contract liabilities:

(in millions) Balance Sheet Line Item June 30, 2025 March 31, 2025

Trade receivables, net Receivables and contract assets, net of allowance for doubtful accounts $ 2,045 $ 2,041

$ 1,874 $ 2,195

Contract assets Receivables and contract assets, net of allowance for doubtful accounts $ 367 $ 338

Contract liabilities Deferred revenue and advance contract payments and Non-current deferred revenue $ 1,353 $ 1,397

$ 1,341 $ 1,537

Change in contract liabilities were as follows:

Nine Months Ended

(in millions) December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Balance, beginning of period $ 1,397 $ 1,537

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Note 10 – Restructuring Costs

The composition of restructuring liabilities by financial statement line item is as follows:

(in millions) December 31, 2024 March 31, 2024

The composition of restructuring liabilities by financial statement line items is as follows:

(in millions) June 30, 2025 March 31, 2025

Accrued expenses and other current liabilities $ 35 $ 33

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Costs Expensed, Net of Reversals Costs Not Affecting Restructuring Liability (1)

Cash Paid Other (2)

Restructuring Liability as of December 31, 2024

Cash Paid Restructuring Liability as of June 30, 2025

Fiscal 2026 Plan

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Total $ 39 $ 37 $ ( 2 ) $ ( 34 ) $ 40

(1) Pension benefit augmentations recorded as pension liabilities, asset impairments and restructuring costs associated with right-of-use assets.

(2) Foreign currency translation adjustments.

Restructuring costs for the nine months ended December 31, 2024 includes $ 11 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.

(1) Restructuring costs associated with right-of-use assets.

Restructuring costs for the first quarter of fiscal 2026 includes $ 2 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.

DXC TECHNOLOGY COMPANY

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The components of net periodic pension income were:

Three Months Ended Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Service cost $ 13 $ 13

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Expected return on assets ( 117 ) ( 113 )

Amortization of prior service costs ( 2 ) ( 1 ) ( 4 ) ( 4 )

Amortization of prior service credit ( 1 ) ( 1 )

Net periodic pension income $ ( 30 ) $ ( 27 )

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Note 12 – Income Taxes

The Company’s effective tax rate (“ETR”) was 51.9 % and 34.0 % for the three months ended December 31, 2024, and December 31, 2023, respectively, and 54.5 % and 32.8 % for the nine months ended December 31, 2024, and December 31, 2023, respectively.

For the three months ended December 31, 2024, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, and the foreign tax credit.

For the nine months ended December 31, 2024, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, the foreign tax credit, and an increase in interest receivables due from tax authorities.

For the three months ended December 31, 2023, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, and the foreign tax credit.

For the nine months ended December 31, 2023, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, a decrease in valuation allowances on deferred tax assets, and the foreign tax credit.

The majority of our global unremitted foreign earnings have been taxed or would be exempt from U.S.

tax upon repatriation.

Such earnings and the majority of current foreign earnings are not indefinitely reinvested.

The following earnings are considered indefinitely reinvested:

approximately $ 463 million that could be subject to U.S.

federal tax when repatriated to the U.S.

under section 1.245A-5(b) of the final Treasury regulations;

and approximately $ 423 million of earnings in foreign subsidiaries.

A portion of these indefinitely reinvested earnings may be subject to foreign and U.S.

state tax consequences when remitted.

The Company will continue to evaluate its position in the future based on its future strategy and cash needs.

The Company’s effective tax rate (“ETR”) was 73.1 % and 63.2 % for the three months ended June 30, 2025, and June 30, 2024, respectively.

For the three months ended June 30, 2025, 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.

For the three months ended June 30, 2024, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, a reduction in a deferred tax asset for stock based compensation, and a decrease in a deferred tax liability for estimated taxes associated with the repatriation of foreign earnings.

As of June 30, 2025, the Company had undistributed earnings from foreign subsidiaries that were not indefinitely reinvested and had a deferred tax liability of $ 28 million for the estimated taxes associated with the repatriation of these earnings.

The Company also had undistributed earnings and other outside basis differences in foreign subsidiaries that were indefinitely reinvested for which no taxes have been provided and the quantification of the deferred tax liability, if any, was not practicable.

If future events, including material changes in estimates of cash, working capital and long-term investment requirements, necessitate that these earnings be distributed, an additional provision for taxes may apply, which could materially affect our future effective tax rate.

In connection with the merger of Computer Sciences Corporation (“CSC”) and the Enterprise Services business of Hewlett Packard Enterprise Company (the “HPES Merger”), the Company entered into a tax matters agreement with Hewlett Packard Enterprise Company (“HPE”).

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Pursuant to the tax matters agreement, the Company recorded a $ 13 million tax indemnification receivable related to uncertain tax positions, a $ 38 million tax indemnification receivable related to other tax payables, and a $ 95 million tax indemnification payable related to other tax receivables.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

In connection with the spin-off of the Company’s former U.S.

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Pursuant to the tax matters agreement, the Company recorded a $ 13 million tax indemnification receivable from Perspecta related to other tax receivables and a $ 1 million tax indemnification payable to Perspecta related to income tax and other tax payables.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

In connection with the sale of its healthcare provider software business (“HPS”), the Company entered into a tax matters agreement with Dedalus.

Pursuant to the tax matters agreement, the Company generally will be responsible for tax liabilities arising prior to the sale of the HPS business.

The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal 2009 through the tax year ended October 31, 2018.

With respect to CSC’s fiscal 2009 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals.

The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal years 2009 through the tax year ended October 31, 2018.

With respect to CSC’s fiscal years 2009 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals.

The IRS examined several issues for these tax years that resulted in various audit adjustments.

The Company and the IRS Office of Appeals have settled various audit adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs, foreign exchange losses, and a third-party financing transaction in previous years.

We have received notices of deficiency and a final partnership administrative adjustment with respect to fiscal years 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S.

Tax Court cases generally involve three primary issues.

The first issue pertains to a capital loss the Company claimed in fiscal year 2013 in the amount of $ 651 million, which the IRS subsequently disallowed, and for which it proposed a substantial understatement penalty.

The total cash tax payment the IRS is seeking is approximately $ 477 million, inclusive of penalties and interest, which continues to accrue.

The matter is currently scheduled for trial in August 2025.

The second issue pertains to the Company’s deduction for restructuring expenses in fiscal year 2013 in the amount of $ 146 million, which the IRS has disputed.

The total cash tax payment the IRS is seeking is approximately $ 103 million, inclusive of penalties and interest, which continues to accrue.

In January 2025, the Court denied the IRS’s motion for summary judgment.

A trial date is pending.

The third issue primarily pertains to foreign currency losses from 2009 that the Company claimed in fiscal years 2010 and 2011 in the amount of $ 165 million, resulting from the depreciation of the U.S.

dollar against the Euro over an eight-year period (from 2001 to 2009) upon termination of a partnership interest involving two entities with different functional currencies.

The total cash tax payment the IRS is seeking is approximately $ 126 million, inclusive of penalties and interest, which continues to accrue.

The IRS has filed a motion for summary judgment.

A decision on the motion is pending.

As we believe we will ultimately prevail on the technical merits of the disagreed items and are challenging them in the U.S.

Tax Court, these matters are not fully reserved and would result in incremental federal and state tax expense of approximately $ 536 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $ 613 million if we do not prevail.

We have received notices of deficiency with respect to fiscal 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S.

During fiscal 2024, some of these cases were dismissed, but the dismissals were procedural in nature only and do not impact the Company’s potential liability for the aforementioned fiscal years.

We expect court proceedings to progress during calendar year 2025 that may result in resolution of some or all of the litigation matters by the end of fiscal year 2026.

Tax Court, the above matters are not fully reserved and would result in incremental federal and state tax expense of approximately $ 552 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $ 632 million if we do not prevail.

These amounts are net of an expected $ 74 million interest deduction tax benefit.

During fiscal 2024, the Company determined there were inadvertent omissions on previously filed tax returns related to gain recognition agreements and certain related tax forms and disclosures.

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Tax Court, and consequently these years will remain open until such proceedings have concluded.

The statute of limitations on assessments related to a refund claim for fiscal year 2012 is open through February 28, 2025.

The Company has agreed to extend the statute of limitations for fiscal and tax return years 2014 through 2021 to December 31, 2026.

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Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future.

For the three months ended December 31, 2024, the Company’s liability for uncertain tax positions decreased by $ 19 million (excluding interest and penalties and related tax attributes) primarily due to a change in the uncertain tax position related to capitalized research and experimental expenditures.

The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carryforwards, would be approximately $ 62 million.

For the three months ended June 30, 2025, the Company’s liability for uncertain tax positions increased by $ 2 million (excluding interest and penalties and related tax attributes).

DXC TECHNOLOGY COMPANY

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Share Repurchase Program

During the first nine months of fiscal 2025, there were no share repurchases under our Share Repurchase Program.

During the third quarter of fiscal 2025, the Company made a $ 12 million payment for the excise tax associated with prior year share repurchases in compliance with the Inflation Reduction Act.

The details of shares repurchased during the nine months ended December 31, 2023 are shown below:

During the first quarter of fiscal 2026, there were 3,275,268 shares repurchased under our Share Repurchase Program.

There were no share repurchases during the first quarter of fiscal 2025.

Fiscal Period Number of Shares Repurchased Average Price Per Share Amount

(in millions)

1st Quarter 10,975,643 $ 25.53 $ 280

2nd Quarter 9,958,585 $ 21.50 214

11,340,699 $ 22.18 252

Open market purchases 3,275,268 $ 15.27 $ 50

Total 3,275,268 $ 15.27 $ 50

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$ ( 948 ) $ ( 7 ) $ 193 $ ( 762 )

Other comprehensive income before reclassifications

Other comprehensive loss before reclassifications

( 32 ) ( 10 ) — ( 42 )

Amounts reclassified from accumulated other comprehensive loss — 3 — 3

Balance at December 31, 2024 $ ( 916 ) $ ( 7 ) $ 204 $ ( 719 )

Balance at June 30, 2025

$ ( 980 ) $ ( 14 ) $ 193 $ ( 801 )

(in millions) Foreign Currency Translation Adjustments Cash Flow Hedges Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive Loss

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$ ( 939 ) $ — $ 207 $ ( 732 )

Other comprehensive loss before reclassifications 39 ( 3 ) — 36

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive loss — — ( 1 ) ( 1 )

Balance at December 31, 2023 $ ( 946 ) $ ( 4 ) $ 208 $ ( 742 )

Balance at June 30, 2024

$ ( 936 ) $ 3 $ 206 $ ( 727 )

DXC TECHNOLOGY COMPANY

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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 market- and performance-based criteria over the three-year vesting 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 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.

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Canceled/Forfeited ( 795,153 ) $ 40.48 — $ —

Outstanding as of December 31, 2024 9,524,004 $ 22.32 201,017 $ 26.63

Outstanding as of June 30, 2025

15,649,497 $ 17.43 201,017 $ 26.63

Share-Based Compensation

Three Months Ended Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Total share-based compensation cost $ 22 $ 23

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Cash payments for interest on indebtedness and income taxes and other select non-cash activities are as follows:

Nine Months Ended

(in millions) December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Cash paid for:

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ROU assets obtained in exchange for lease, net (2)

Assets acquired under long-term financing $ — $ 18

Capital expenditures in accounts payable and accrued expenses $ 4 $ 3

Capital expenditures through finance lease obligations $ 1 $ 7

Assets acquired under long-term financing $ — $ 34

Shares repurchased but not settled in cash (3)

(1) Income tax refunds were $ 36 million and $ 26 million for the nine months ended December 31, 2024 and December 31, 2023, respectively.

(2) Net of $ 528 million and $ 691 million in lease modifications and terminations during the nine months ended December 31, 2024 and December 31, 2023, respectively.

(1) Income tax refunds were $ 4 million and $ 16 million for the three months ended June 30, 2025 and June 30, 2024, respectively.

(2) Net of $ 214 million and $ 237 million in lease modifications and terminations for the three months ended June 30, 2025 and June 30, 2024, respectively.

(3) On August 16, 2022, the U.S.

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In our cash flow statement, we reflect the excise tax as a financing activity relating to the repurchase of common stock.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 16 – Segment Information

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As a result, and in accordance with accounting standards, operating segments are organized by the type of services provided.

DXC's chief operating decision maker ("CODM"), the chief executive officer, obtains, reviews, and manages the Company’s financial performance based on these segments.

The CODM uses these results, in part, to evaluate the performance of, and allocate resources to, each of the segments.

Global Business Services (“GBS”) provides innovative technology solutions that help our customers address key business challenges and accelerate transformations tailored to each customer’s industry and specific objectives.

Global Infrastructure Services (“GIS”) provides a portfolio of technology offerings that deliver predictable outcomes and measurable results while reducing business risk and operational costs for customers.

Our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") serve as our Chief Operating Decision Makers ("CODM") and are responsible for obtaining, reviewing, and managing the Company’s financial performance based on these segments.

The new structure includes three reportable segments that align with how management assesses performance of the business and allocates resources:

CES, GIS, and Insurance, as previously described above in Note 1 - “Summary of Significant Accounting Policies.” In connection with our segment reporting change, we have recast previously reported amounts across all reportable segments to conform to current segment presentation.

The Company's CODM uses segment profit to measure operational strength and performance, assist in evaluation of underlying trends, and allocate resources through periodic budget and forecasting processes.

Segment profit is defined as segment revenues less costs of services, selling, general and administrative, depreciation and amortization, and other segment items.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company allocates certain costs such as real estate costs, information technology costs and costs for certain other shared corporate functions to its segments using a proportional share of either revenue or headcount for each segment.

The Company does not allocate to its segments certain operating expenses managed at the corporate level.

These unallocated expenses generally include certain corporate function costs, pension and other post-retirement benefit (“OPEB”) actuarial and settlement gains and losses, restructuring costs, transaction, separation, and integration-related costs, amortization of acquired intangible assets, impairment losses, gains/(losses) on dispositions of businesses, gains/(losses) on real estate and facility sales, and other costs that do not reflect ongoing segment operating performance.

As part of the transition to the new segment structure, the Company updated the assumptions that define which expenses remain in corporate post allocation.

The tables below reflect those revised assumptions.

Segment Measures

The following table summarizes operating results regularly provided to the CODM by reportable segment and a reconciliation to the financial statements:

(in millions) GBS GIS Total Reportable Segments All Other Totals

Three Months Ended December 31, 2024

(in millions) CES

Total Reportable Segments

Three Months Ended June 30, 2025

Revenues $ 1,246 $ 1,600 $ 313 $ 3,159

Segment profit $ 224 $ 101 $ 325 $ ( 39 ) $ 286

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 )

Three Months Ended December 31, 2023

Revenues $ 1,696 $ 1,703 $ 3,399 $ — $ 3,399

Other segment items (2)

Segment profit

Depreciation and amortization (1)

$ 105 $ 97 $ 33 $ 235

(in millions) GBS GIS Total Reportable Segments All Other Totals

Nine Months Ended December 31, 2024

Three Months Ended June 30, 2024

Revenues $ 1,281 $ 1,658 $ 297 $ 3,236

Segment profit $ 619 $ 344 $ 963 $ ( 174 ) $ 789

Costs of services

( 1,016 ) ( 1,269 ) ( 209 ) ( 2,494 )

Selling, general and administrative

( 137 ) ( 122 ) ( 28 ) ( 287 )

Depreciation and amortization (1)

( 25 ) ( 191 ) ( 21 ) ( 237 )

Nine Months Ended December 31, 2023

Revenues $ 5,108 $ 5,173 $ 10,281 $ — $ 10,281

Other segment items (2)

Segment profit

Depreciation and amortization (1)

$ 123 $ 101 $ 44 $ 268

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $ 87 million and $ 88 million for the three months ended December 31, 2024 and 2023, respectively, and $ 263 million and $ 266 million for the nine months ended December 31, 2024 and 2023, respectively.

(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).

DXC TECHNOLOGY COMPANY

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Reconciliation of Reportable Segment Profit to Consolidated Total

The Company's management uses segment profit as the measure for assessing performance of its segments.

Segment profit is defined as segment revenues less cost of services, segment selling, general and administrative, depreciation and amortization, and other income (excluding the movement in foreign currency exchange rates on DXC's foreign currency denominated assets and liabilities and the related economic hedges).

The Company does not allocate to its segments certain operating expenses managed at the corporate level.

These unallocated costs generally include certain corporate function costs, stock-based compensation expense, pension and other post-retirement benefit (“OPEB”) actuarial and settlement gains and losses, restructuring costs, transaction, separation, and integration-related costs and amortization of acquired intangible assets.

Three Months Ended Nine Months Ended

(in millions) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Three Months Ended

(in millions) June 30, 2025 June 30, 2024

Total profit for reportable segments $ 235 $ 268

All other loss ( 39 ) ( 65 ) ( 174 ) ( 190 )

Corporate expenses

( 19 ) ( 44 )

Subtotal $ 216 $ 224

Interest income 51 56 153 158

Interest expense ( 66 ) ( 78 ) ( 207 ) ( 222 )

Restructuring costs ( 37 ) ( 39 )

Transaction, separation and integration-related costs

( 3 ) ( 2 ) ( 25 ) ( 6 )

Amortization of acquired intangible assets ( 87 ) ( 87 )

Merger related indemnification

Gains on dispositions

(Losses) gains on real estate and facility sales

( 3 ) 2 ( 32 ) 8

Losses on real estate and facility sales

Impairment losses ( 14 ) —

Interest income 46 51

Interest expense ( 54 ) ( 72 )

Income before income taxes $ 67 $ 68

$ 131 $ 212 $ 292 $ 418

Management does not use total assets by segment to evaluate segment performance or allocate resources.

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Note 17 – Commitments and Contingencies

Minimum purchase commitments as of December 31, 2024 were as follows:

Minimum purchase commitments as of June 30, 2025 were as follows:

Fiscal year Minimum Purchase Commitment

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Remainder of 2026

Thereafter 26

Total $ 1,054

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In July 2024, notice was provided to potential class members.

The case is otherwise in discovery.

In June 2025, the Company reached an agreement in principle to resolve all claims in the action.

The Company’s share of the settlement will be funded by its insurance carriers.

The Company expects the settlement to be finalized in the coming weeks and submitted to the Court for approval.

On August 2, 2024, a purported class action lawsuit was filed in the United States District Court for the Eastern District of Virginia against the Company and certain of its current and former officers.

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The putative class of plaintiffs includes investors who acquired DXC stock during the period of May 26, 2021 to May 16, 2024.

On August 29, 2024, a shareholder derivative suit was filed in the United States District Court for the Eastern District of Virginia against the Company’s Board of Directors and certain of its current and former officers.

The complaint alleges a breach of fiduciary duties arising from the claims asserted in the August 2024 securities class action lawsuit.

The derivative suit has been temporarily stayed, pending further developments in the August 2024 securities class action lawsuit.

On September 27, 2024, a shareholder derivative suit was filed in the District Court of the State of Nevada, Clark County against the Company’s Board of Directors and certain of its current and former officers.

The complaint alleges a breach of fiduciary duties arising from the claims asserted in the August 2024 securities class action lawsuit.

The derivative suit has been temporarily stayed, pending further developments in the August 2024 securities class action lawsuit.

In March 2025, the Court entered an order granting the Company’s motion to dismiss the lawsuit and closing the case.

In April 2025, the deadline to file an appeal passed and no appeal was filed.

The matter is now closed.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

In November and December 2024, two additional shareholder derivative suits were filed in the United States District Court for the Eastern District of Virginia against the Company’s Board of Directors and certain of its current and former officers and directors.

The complaints allege a breach of fiduciary duties arising from the claims asserted in the August 2024 securities class action lawsuit.

In January 2025, a second shareholder derivative suit was filed in the District Court of the State of Nevada, Clark County against the Company’s Board of Directors and certain of its current and former officers.

The complaint alleges a breach of fiduciary duties arising from the claims asserted in the August 2024 securities class action lawsuit.

This case has been consolidated with the previously filed derivative suit from September 2024, and has been temporarily stayed pending further developments in the August 2024 securities class action lawsuit.

The Company believes that the lawsuits described above are without merit and intends to vigorously defend all claims asserted.

After the filing of the August 2024 securities class action, five shareholder derivative suits were filed against the Company’s Board of Directors and certain of its current and former officers, alleging a breach of fiduciary duties arising from the claims asserted in the August 2024 securities class action.

Three derivative suits were filed in the United States District Court for the Eastern District of Virginia, and two derivative suits were filed in the District Court of the State of Nevada, Clark County.

All of the derivative suits had been temporarily stayed, pending an outcome in the August 2024 securities class action.

Following the dismissal of the securities class action, the Company secured the voluntary dismissal of all shareholder derivative suits.

The matter is now closed.

Tax Examinations:

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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.

For more detail, see Note 13 – “Income Taxes” for further information.

For more detail, see Note 12 – “Income Taxes.”

TCS Litigation:

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Court of Appeals for the Fifth Circuit.

In April 2025, the Court of Appeals heard oral argument on the appeal.

A decision from the Court of Appeals is pending.

The Company has not recognized any portion of the award in its financial statements and will continue to monitor the progress of the case.

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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.

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.” 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.

These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved.

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, divestitures, competitive position, growth opportunities, share repurchases, dividend payments, plans and objectives of management and other matters.

Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control.

Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to:

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, potential acquisitions and divestitures, competitive position, growth opportunities, 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 succeed in our strategic objectives;

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• our product and service quality issues;

• our inability to develop and expand our service offerings to address emerging business demands and technological trends, including our inability to sell differentiated services amongst our offerings;

• our inability to compete in certain markets and expand our capacity in certain offshore locations and risks associated with such offshore locations, such as the on-going conflict between Russia and Ukraine;

• our inability to compete in certain markets and expand our capacity in certain offshore locations;

• failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs;

• difficulty in understanding the changes to our business model by financial or industry analysts or our failure to meet our publicly announced financial guidance;

• public health crises such as the COVID-19 pandemic;

• difficulty in understanding the changes to our business model by equity research or industry analysts or our failure to meet our publicly announced financial guidance;

• public health crises;

• our indebtedness and potential material adverse effect on our financial condition and results of operations;

• the competitive pressures faced by our business;

• our inability to accurately estimate the cost of services, and the completion timeline of contracts;

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• our inability to attract and retain key personnel and maintain relationships with key partners;

• the risks associated with prolonged periods of inflation or current macroeconomic conditions, including the current decline in economic growth rates in the United States and in other countries, the possibility of reduced spending by customers in the areas we serve, the uncertainty related to our cost-takeout efforts, continuing unfavorable foreign exchange rate movements, and our ability to close new deals in the event of an economic slowdown;

• the risks associated with prolonged periods of inflation or current macroeconomic conditions, including the possibility of reduced spending by customers in the areas we serve, the uncertainty related to our cost-takeout efforts, and our ability to close new deals in the event of an economic slowdown;

• the risks associated with our international operations, such as risks related to currency exchange rates;

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• our inability to procure third-party licenses required for the operation of our products and service offerings;

• risks associated with disruption of our supply chain;

• risks associated with disruption of our supply chain or increases in procurement costs, including as a result of ongoing trade tensions and tariff charges;

• our inability to maintain effective disclosure controls and internal control over financial reporting;

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• 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, 2025 and subsequent SEC filings, including Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q.

No assurance can be given that any goal or plan set forth in any forward-looking statement 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.

Any forward-looking statement made by us in this Quarterly Report on Form 10-Q speaks only as of the date on which this Quarterly Report on Form 10-Q was first filed.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements