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Item 2. Management’s Discussion and Analysis

2026-01-30 compared with 2025-10-31 · 149 added, 123 removed, 328 unchanged (45% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 second quarter and first six months of fiscal 2026 and our financial condition as of September 30, 2025.

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 third quarter and first nine months of fiscal 2026 and our financial condition as of December 31, 2025.

The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and accompanying notes.

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• Critical Accounting Estimates

The following discussion includes a comparison of our results of operations and liquidity and capital resources for the second quarters and first six months of fiscal 2026 and fiscal 2025.

The following discussion includes a comparison of our results of operations and liquidity and capital resources for the third quarters and first nine months of fiscal 2026 and fiscal 2025.

References are made throughout to the numbered Notes to the Condensed Consolidated Financial Statements (“Notes”) in this Quarterly Report on Form 10-Q.

DXC 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.

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.

Effective April 1, 2025 (fiscal year 2026), we began reporting our 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.

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

Results of Operations for the Second Quarter and First Six Months of Fiscal 2026 and Fiscal 2025

Results of Operations for the Third Quarter and First Nine Months of Fiscal 2026 and Fiscal 2025

Financial Highlights

Key metrics for the second quarter of fiscal 2026 compared to the second quarter of fiscal 2025 as well as year to date cash flow comparisons are included below.

Key metrics for the third quarter of fiscal 2026 compared to the third quarter of fiscal 2025 as well as year to date cash flow comparisons are included below.

We have presented organic revenue and diluted earnings per share on a non-GAAP basis.

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• Book-to-bill ratio (contract awards divided by quarterly revenue) of 1.12x, compared to 1.33x in the prior-year period.

Segment Highlights - Second Quarter Fiscal 2026

Segment Highlights - Third Quarter Fiscal 2026

Consulting & Engineering Services

1 unchanged sentence

• Segment profit was $144 million, down 12.2% year-over-year, with a corresponding margin of 11.4%.

• Book-to-bill ratio of 0.92x, compared to 0.93x during the second quarter of fiscal 2025.

• Book-to-bill ratio of 1.20x, compared to 1.28x during the third quarter of fiscal 2025.

Global Infrastructure Services

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• Segment profit was $113 million, up 0.9% year-over-year, with a corresponding margin of 7.0%.

• Book-to-bill ratio of 0.82x, compared to 0.76x during the second quarter of fiscal 2025.

• Book-to-bill ratio of 1.09x, compared to 1.43x during the third quarter of fiscal 2025.

Insurance Services

1 unchanged sentence

• Segment profit was $35 million, down 30.0% year-over-year, with a corresponding margin of 10.9%.

• Book-to-bill ratio of 0.68x, compared to 0.57x during the second quarter of fiscal 2025.

Segment Highlights - First Six Months Fiscal 2026

• Book-to-bill ratio of 0.93x, compared to 1.04x during the third quarter of fiscal 2025.

Segment Highlights - First Nine Months Fiscal 2026

Consulting & Engineering Services

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for the Three Months Ended

(in millions) September 30, 2025 September 30, 2024 U.S.

(in millions) December 31, 2025 December 31, 2024 U.S.

Constant Currency (1)

September 30, 2025 September 30, 2024

December 31, 2025 December 31, 2024

Geographic Market

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Operating Segments

CES $ 1,255 $ 1,279 (1.9) % (3.8) % 39.7 % 39.5 %

GIS 1,586 1,656 (4.2) % (6.3) % 50.2 % 51.1 %

Insurance 320 306 4.6 % 3.6 % 10.1 % 9.4 %

$ 1,266 $ 1,267 (0.1) % (3.6) % 39.6 % 39.3 %

1,607 1,651 (2.7) % (6.2) % 50.3 % 51.2 %

321 307 4.6 % 3.3 % 10.1 % 9.5 %

Total Revenues $ 3,194 $ 3,225 (1.0) % (4.3) % 100.0 % 100.0 %

Six Months Ended Percentage Change

Nine Months Ended Percentage Change

Percentage of Revenue

for the Six Months Ended

(in millions) September 30, 2025 September 30, 2024 U.S.

for the Nine Months Ended

(in millions) December 31, 2025 December 31, 2024 U.S.

Constant Currency (1)

September 30, 2025 September 30, 2024

December 31, 2025 December 31, 2024

Geographic Market

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Operating Segments

CES $ 2,501 $ 2,560 (2.3) % (4.3) % 39.6 % 39.5 %

GIS 3,186 3,314 (3.9) % (6.0) % 50.4 % 51.2 %

Insurance 633 603 5.0 % 3.6 % 10.0 % 9.3 %

$ 3,767 $ 3,827 (1.6) % (4.1) % 39.6 % 39.4 %

4,793 4,965 (3.5) % (6.1) % 50.4 % 51.2 %

954 910 4.8 % 3.5 % 10.0 % 9.4 %

Total Revenues $ 9,514 $ 9,702 (1.9) % (4.4) % 100.0 % 100.0 %

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For more information, see "Non-GAAP Financial Measures."

For the second quarter of fiscal 2026, our total revenue was $3.2 billion, a decrease of $80 million or 2.5%, compared to the same period a year ago.

For the third quarter of fiscal 2026, our total revenue was $3.2 billion, a decrease of $31 million or 1.0%, compared to the same period a year ago.

The decrease against the comparative period includes a 4.3% decline in organic revenue partially offset by a 3.3% favorable foreign currency exchange rate impact.

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For more information, see "Non-GAAP Financial Measures."

For the first six months of fiscal 2026, our total revenue was $6.3 billion, a decrease of $157 million or 2.4%, as compared to the same period a year ago.

For the first nine months of fiscal 2026, our total revenue was $9.5 billion, a decrease of $188 million or 1.9%, as compared to the same period a year ago.

The decrease against the comparative period includes a 4.3% decline in organic revenue partially offset by a 2.5% favorable foreign currency exchange rate impact.

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Our total costs and expenses are provided below:

Three Months Ended September 30, Change Six Months Ended September 30, Change

Three Months Ended December 31,

Change Nine Months Ended December 31,

(in millions) 2025 2024 Dollar Percent 2025 2024 Dollar Percent

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Interest income (46) (51) 5 (9.8) % (138) (153) 15 (9.8) %

Gain on disposition of businesses — (7) 7 (100.0) % — (7) 7 (100.0) %

Other income, net (32) (28) (4) 14.3 % (127) (94) (33) 35.1 %

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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 second quarter of fiscal 2026, a decrease of $44 million (-1.8%) compared to the prior-year period.

COS was $4.8 billion for the first six months of fiscal 2026, a decrease of $182 million (-3.7%) compared to the prior-year period.

The decline in both periods was primarily driven by the alignment of business development expenses to selling, general and administrative expenses in support of the offering model, a decrease in costs from lower revenue levels, and a reduction in professional services and contractor-related expenses from our cost optimization initiatives, partially offset by an unfavorable foreign currency exchange rate impact.

COS was $2.4 billion for the third quarter of fiscal 2026, an increase of $19 million (+0.8%) compared to the prior-year period.

The increase was primarily driven by an unfavorable foreign currency exchange rate impact, partially offset by a decrease in costs and payroll-related expenses from lower revenue levels.

COS was $7.2 billion for the first nine months of fiscal 2026, a decrease of $163 million (-2.2%) compared to the prior-year period.

The decline was primarily driven by the alignment of business development expenses to selling, general and administrative expenses in support of the offering model, a decrease in costs from lower revenue levels, and a reduction in professional services and contractor-related expenses from our cost optimization initiatives, partially offset by an unfavorable foreign currency exchange rate impact.

In connection with the Company’s new segment structure in fiscal 2026, certain costs for personnel in non-client facing positions are now included in selling, general and administrative expenses.

Gross margin (Revenues less COS as a percentage of revenue) was 24.6% and 24.5% for the second quarter and first six months of fiscal 2026, respectively, a decrease of 0.5% and an increase of 1.0% against the comparative periods.

Gross margin (Revenues less COS as a percentage of revenue) was 23.8% and 24.3% for the third quarter and first nine months of fiscal 2026, respectively, a decrease of 1.3% and an an increase of 0.3% against the comparative periods.

Selling, General and Administrative

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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 $366 million for the second quarter of fiscal 2026, an increase of $13 million (+3.7%) compared to the prior year period.

SG&A was $760 million for the first six months of fiscal 2026, an increase of $106 million (+16.2%) compared to the prior-year period.

The increase in both periods was primarily driven by higher expenses from the realignment of business development and other costs from COS as referenced above, certain investments in marketing and the Company’s information systems, a gain from a legal settlement in the second quarter of fiscal 2025, and an unfavorable foreign currency exchange rate impact, partially offset by lower levels of transaction, separation and integration-related (“TSI”) costs.

SG&A as a percentage of revenue was 11.6% and 12.0% for the second quarter and first six months of fiscal 2026, respectively, an increase of 0.7% and 1.9% against the comparative periods.

SG&A was $309 million for the third quarter of fiscal 2026, a decrease of $26 million (-7.8%) compared to the prior-year period.

The decrease was primarily driven by the reversal of a merger-related indemnification payable and lower levels of transaction, separation and integration-related (“TSI”) costs in the current quarter, partially offset by higher stock based compensation related to exits in the third quarter of fiscal 2025 and an unfavorable foreign currency exchange rate impact.

SG&A was $1,069 million for the first nine months of fiscal 2026, an increase of $80 million (+8.1%) compared to the prior-year period.

The increase was primarily driven by the realignment of business development and certain other costs from COS, increased investments in marketing and the Company’s information systems, a gain from a legal settlement in the second quarter of fiscal 2025, and an unfavorable foreign currency exchange rate impact, partially offset by by the reversal of a merger-related indemnification payable in the third quarter of fiscal 2026 and lower levels of TSI costs.

SG&A as a percentage of revenue was 9.7% and 11.2% for the third quarter and first nine months of fiscal 2026, respectively, a decrease of 0.7% and an increase of 1.0% against the comparative periods.

Depreciation and Amortization

Depreciation and amortization was $295 million for the second quarter of fiscal 2026, a decrease of $34 million (-10.3%) compared to the prior-year period.

Depreciation and amortization was $283 million for the third quarter of fiscal 2026, a decrease of $37 million (-11.6%) compared to the prior-year period.

Depreciation expense decreased by $17 million due to lower average net property and equipment balances.

Amortization expense decreased by $20 million due to lower transition and transformation contract cost balances and lower software amortization.

Depreciation and amortization was $599 million for the first six months of fiscal 2026, a decrease of $56 million (-8.5%) compared to the prior-year period.

Depreciation and amortization was $882 million for the first nine months of fiscal 2026, a decrease of $93 million (-9.5%) compared to the prior-year period.

Depreciation expense decreased by $52 million due to lower average net property and equipment balances.

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During fiscal 2026, management approved global cost savings initiatives designed to better align our facility and data center requirements.

During the second quarter and first six months of fiscal 2026, total restructuring costs recorded, net of reversals, were $35 million and $72 million, respectively, a decrease of $7 million (-16.7%) and $9 million (-11.1%), respectively, as compared to the prior-year periods.

During the third quarter and first nine months of fiscal 2026, total restructuring costs recorded, net of reversals, were $20 million and $92 million, respectively, a decrease of $23 million (-53.5%) and $32 million (-25.8%), respectively, as compared to the prior-year periods.

See Note 11 – “Restructuring Costs” for additional information about our restructuring actions.

Interest Expense and Interest Income

Net interest expense (interest expense less interest income) was $7 million and $15 million for the second quarter and first six months of fiscal 2026, respectively, a decrease of $11 million (-61.1%) and $24 million (-61.5%), as compared to the prior-year periods.

The improvement in both periods was primarily from higher net interest income from our cash deposits and multi-currency notional pools.

Net interest expense (interest expense less interest income) was $8 million and $23 million for the third quarter and first nine months of fiscal 2026, respectively, a decrease of $7 million (-46.7%) and $31 million (-57.4%), as compared to the prior-year periods.

The improvement in both periods was primarily from higher net interest income from our cash deposits and multi-currency notional pools and lower finance lease and asset financing costs, partially offset by debt extinguishment costs in the quarter.

Gain on Disposition of Businesses

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

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 (gains) losses, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, losses (gains) on real estate and facility sales, and other miscellaneous (gains) and losses.

The components of Other income, net for the second quarters and first six months of fiscal 2026 and 2025 were as follows:

Three Months Ended September 30, Six Months Ended September 30,

(in millions) 2025 2024 Dollar Change 2025 2024 Dollar Change

The components of Other income, net for the third quarters and first nine months of fiscal 2026 and 2025 were as follows:

Three Months Ended Nine Months Ended

(in millions) December 31, 2025 December 31, 2024 Dollar Change December 31, 2025 December 31, 2024 Dollar Change

Non-service cost components of net periodic pension income $ (42) $ (40) $ (2) $ (128) $ (120) $ (8)

Pension and OPEB actuarial and settlement losses

11 — 11 11 — 11

Foreign currency (gain) loss — (1) 1 (7) — (7)

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Total $ (32) $ (28) $ (4) $ (127) $ (94) $ (33)

Other income, net, increased $35 million, compared to the second quarter of fiscal 2025, primarily due to:

• higher pension income (+$3 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions;

• foreign currency impact (+$2 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;

• real estate and facility sales (+$34 million) - losses on real estate and facility sales in the comparative period;

offset by gains on real estate and facility sales in the second quarter of fiscal 2026.

• other miscellaneous items (-$4 million) - primarily from a gain on the sale of a strategic investment in the second quarter of fiscal 2025.

Other income, net, increased $29 million, compared to the first six months of fiscal 2025, primarily due to:

• higher pension income (+$6 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions;

• foreign currency impact (+$8 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;

• real estate and facility sales (+$36 million) - losses on real estate and facility sales in the comparative period;

offset by gains on real estate and facility sales during the first six months of fiscal 2026.

• other miscellaneous items (-$21 million) - primarily from the $14 million impairment of goodwill in the first quarter of fiscal 2026 related to the change in operating segments and from a gain on the sale of a strategic investment in the second quarter of fiscal 2025.

Our effective tax rate (“ETR”) was 69.5% and 51.6% for the three months ended September 30, 2025, and September 30, 2024, respectively, and 70.7% and 56.5% for the six months ended September 30, 2025, and September 30, 2024, respectively.

For the three months ended September 30, 2025, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, and the tax benefit of a worthless stock deduction under section 165(g) of the Internal Revenue Code related to the Company's investment in a wholly owned subsidiary.

For the six months ended September 30, 2025, the primary drivers of the ETR were the global mix of income, U.S.

Other income, net, increased $4 million and $33 million, respectively, compared to the third quarter and first nine months of fiscal 2025, primarily due to:

• higher pension income (+$2 million and +$8 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions;

• pension and OPEB actuarial and settlement losses (-$11 million and -$11 million) - in the third quarter of fiscal 2026, the Company recognized net losses of $11 million, primarily reflecting a $15 million mark-to-market adjustment to its project benefit obligations in India following enactment of labor law reforms in November 2025;

• foreign currency impact (-$1 million and +$7 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;

• real estate and facility sales (+$3 million and +$39 million) - losses on real estate and facility sales in the comparative periods, partially offset by gains on real estate and facility sales in the second quarter of fiscal 2026;

• other miscellaneous items increased by $11 million and decreased by $10 million for the third quarter and first nine months, respectively.

In the third quarter comparison (+$11 million), the prior year period included an impairment loss.

For the nine months ended comparison (-$10 million), the Company recognized a $14 million impairment of goodwill in the first quarter of fiscal 2026 related to the change in operating segments, partially offset by an impairment loss recognized in the third quarter of fiscal 2025 and a gain on the sale of a strategic investment in the second quarter of fiscal 2025.

Our effective tax rate (“ETR”) was 35.7% and 51.9% for the three months ended December 31, 2025, and December 31, 2024, respectively, and 54.5% and 54.5% for the nine months ended December 31, 2025, and December 31, 2024, respectively.

For the three months ended December 31, 2025, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, and tax benefits resulting from the expiration of the statute of limitations relating to uncertain tax positions.

For the nine months ended December 31, 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 the Company’s investment in a wholly owned subsidiary, and a decrease in a deferred tax asset for stock based compensation.

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

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 six months ended September 30, 2024, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, the foreign tax credit, an increase in interest receivables due from tax authorities, and a decrease in a deferred tax asset for stock based compensation.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

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Earnings Per Share

Diluted EPS for the second quarter and first six months of fiscal 2026 was $0.20 and $0.29, respectively, a decrease of $0.03 and $0.08 compared with the prior-year periods primarily due to lower net income attributable to DXC common stockholders, partially offset by a lower weighted average share count from the Company’s share repurchases.

Diluted EPS for the second quarter of fiscal 2026 includes $0.16 per share of restructuring costs, $0.01 per share of transaction, separation and integration-related costs, $0.41 per share of amortization of acquired intangible assets, $0.01 per share of merger related indemnification costs, $(0.04) per share of gains on real estate, facility sales, and dispositions, and $0.09 per share of tax adjustments.

Diluted EPS for the first six months of fiscal 2026 includes $0.31 per share of restructuring costs, $0.01 per share of transaction, separation and integration-related costs, $0.77 per share of amortization of acquired intangible assets, $0.02 per share of merger related indemnification costs, $(0.04) per share of gains on real estate, facility sales, and dispositions, $0.06 per share of impairment losses, and $0.10 per share of tax adjustments.

Diluted EPS for the third quarter and first nine months of fiscal 2026 was $0.61 and $0.88, respectively, an increase of $0.30 and $0.20 compared with the prior-year periods primarily due to higher net income attributable to DXC common stockholders and a lower weighted average share count from the Company’s share repurchases.

Diluted EPS for the third quarter of fiscal 2026 includes $0.09 per share of restructuring costs, $0.40 per share of amortization of acquired intangible assets, $(0.19) per share of merger related indemnification costs, $0.01 per share of debt extinguishment costs, $0.05 per share of pension and OPEB actuarial and settlement losses, and $(0.01) per share of tax adjustments.

Diluted EPS for the first nine months of fiscal 2026 includes $0.41 per share of restructuring costs, $0.01 per share of transaction, separation and integration-related costs, $1.17 per share of amortization of acquired intangible assets, $(0.17) per share of merger related indemnification costs, $(0.04) per share of gains on real estate, facility sales, and dispositions, $0.01 per share of debt extinguishment costs, $0.06 per share of impairment losses, $0.05 per share of pension and OPEB actuarial and settlement losses, and $0.09 per share of tax adjustments.

Non-GAAP Financial Measures

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Certain non-GAAP financial measures and the respective most directly comparable financial measures calculated and presented in accordance with GAAP include:

Three Months Ended September 30, Change Six Months Ended September 30, Change

Three Months Ended December 31,

Change Nine Months Ended December 31,

(in millions) 2025 2024 Dollar Percent 2025 2024 Dollar Percent

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• 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 to HPE for tax related indemnifications.

• Pension and OPEB actuarial and settlement gains and losses – pension and OPEB actuarial mark to market adjustments and settlement gains and losses.

• Merger-related indemnification – represents the Company’s estimate of potential net liability for tax related indemnifications.

• Gains and losses on dispositions – gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities.

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Future discrete reversals of valuation allowances are likewise excluded.

• Debt extinguishment costs – costs associated with early retirement, redemption, repayment or repurchase of debt and debt-like items including any breakage, make-whole premium, prepayment penalty or similar costs as well as solicitation and other legal and advisory expenses.

• Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation and the impact of mergers and divestitures.

1 unchanged sentence

A reconciliation of reported results to non-GAAP results is as follows:

Three Months Ended September 30, 2025

Three Months Ended December 31, 2025

(in millions, except per-share amounts) As

Reported Restructuring

Costs Transaction,

Separation and

Integration-Related Costs Amortization

Costs Amortization

Assets Merger Related

Indemnification (Gains) and Losses on Real Estate, Facility Sales and Dispositions Tax Adjustment Non-GAAP

Indemnification Debt Extinguishment Costs Pension and OPEB actuarial and settlement gains and losses Tax Adjustment Non-GAAP

Income before income taxes $ 171 $ 20 $ 87 $ (34) $ 1 $ 11 $ — $ 256

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Effective Tax Rate 35.7 % 33.2 %

Basic EPS from continuing operations $ 0.20 $ 0.16 $ 0.01 $ 0.41 $ 0.01 $ (0.04) $ 0.09 $ 0.85

Diluted EPS from continuing operations $ 0.20 $ 0.16 $ 0.01 $ 0.41 $ 0.01 $ (0.04) $ 0.09 $ 0.84

Basic EPS $ 0.62 $ 0.09 $ 0.40 $ (0.20) $ 0.01 $ 0.05 $ (0.01) $ 0.97

Diluted EPS $ 0.61 $ 0.09 $ 0.40 $ (0.19) $ 0.01 $ 0.05 $ (0.01) $ 0.96

Weighted average common shares outstanding for:

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Diluted EPS 175.75 175.75 175.75 175.75 175.75 175.75 175.75 175.75

Six Months Ended September 30, 2025

Nine Months Ended December 31, 2025

(in millions, except per-share amounts) As

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Assets Merger Related

Indemnification (Gains) and Losses on Real Estate, Facility Sales and Dispositions Impairment Losses Tax Adjustment Non-GAAP

Indemnification (Gains) and Losses on Real Estate, Facility Sales and Dispositions Debt Extinguishment Costs Impairment Losses Pension and OPEB actuarial and settlement gains and losses Tax Adjustment Non-GAAP

Income before income taxes $ 369 $ 92 $ 2 $ 262 $ (32) $ (8) $ 1 $ 14 $ 11 $ — $ 711

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Effective Tax Rate 54.5 % 36.3 %

Basic EPS from continuing operations $ 0.29 $ 0.32 $ 0.01 $ 0.78 $ 0.02 $ (0.04) $ 0.06 $ 0.10 $ 1.54

Diluted EPS from continuing operations $ 0.29 $ 0.31 $ 0.01 $ 0.77 $ 0.02 $ (0.04) $ 0.06 $ 0.10 $ 1.52

Basic EPS $ 0.90 $ 0.41 $ 0.01 $ 1.19 $ (0.17) $ (0.04) $ 0.01 $ 0.06 $ 0.05 $ 0.10 $ 2.51

Diluted EPS $ 0.88 $ 0.41 $ 0.01 $ 1.17 $ (0.17) $ (0.04) $ 0.01 $ 0.06 $ 0.05 $ 0.09 $ 2.46

Weighted average common shares outstanding for:

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Diluted EPS 180.16 180.16 180.16 180.16 180.16 180.16 180.16 180.16 180.16 180.16 180.16

Three Months Ended September 30, 2024

Three Months Ended December 31, 2024

(in millions, except per-share amounts) As

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Integration-Related Costs Amortization

Assets Merger Related

Indemnification (Gains) and Losses on Real Estate, Facility Sales and Dispositions Tax Adjustment Non-GAAP

Assets (Gains) and Losses on Real Estate, Facility Sales and Dispositions Impairment Losses Tax Adjustment Non-GAAP

Income before income taxes $ 131 $ 43 $ 3 $ 87 $ (5) 12 $ — $ 271

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net income attributable to non-controlling interest, net of tax

6 — — — — — — 6

Net income attributable to DXC common stockholders $ 57 $ 34 $ 2 $ 69 $ — $ 10 $ (2) $ 170

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Diluted EPS 184.77 184.77 184.77 184.77 184.77 184.77 184.77 184.77

Six Months Ended September 30, 2024

Nine Months Ended December 31, 2024

(in millions, except per-share amounts) As

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Assets Merger Related

Indemnification (Gains) and Losses on Real Estate, Facility Sales and Dispositions Tax Adjustment Non-GAAP

Indemnification (Gains) and Losses on Real Estate, Facility Sales and Dispositions Impairment Losses Tax Adjustment Non-GAAP

Income before income taxes $ 292 $ 124 $ 25 $ 263 $ — $ 19 $ 12 $ — $ 735

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net income attributable to non-controlling interest, net of tax

8 — — — — — — — 8

Net income attributable to DXC common stockholders $ 125 $ 99 $ 20 $ 210 $ (5) $ 16 $ 10 $ 3 $ 478

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Reconciliations of revenue growth to organic revenue growth are as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in millions) December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024

Total revenue growth

(1.0) % (5.1) % (1.9) % (5.6) %

Foreign currency

Acquisitions and Divestitures 0.2 % 0.1 % 0.1 % 0.2 %

(3.3) % 0.7 % (2.5) % 0.7 %

Acquisition and divestitures

— % 0.2 % 0.1 % 0.2 %

Organic revenue growth

(4.3) % (4.2) % (4.3) % (4.7) %

CES revenue growth

(0.1) % (3.5) % (1.6) % (3.2) %

Foreign currency

Acquisitions and Divestitures 0.4 % — % 0.4 % 0.2 %

(3.5) % 0.9 % (2.5) % 0.8 %

Acquisition and divestitures

— % 0.4 % 0.3 % 0.2 %

CES organic revenue growth

(3.6) % (2.2) % (3.8) % (2.2) %

GIS revenue growth

(2.7) % (8.2) % (3.5) % (9.2) %

Foreign currency

Acquisitions and Divestitures — % 0.1 % — % 0.2 %

(3.5) % 0.8 % (2.6) % 0.7 %

Acquisition and divestitures

— % 0.2 % — % 0.2 %

GIS organic revenue growth

(6.2) % (7.2) % (6.1) % (8.3) %

Insurance revenue growth

4.6 % 6.6 % 4.8 % 5.8 %

Foreign currency

Acquisitions and Divestitures — % — % — % — %

(1.4) % (0.2) % (1.4) % 0.2 %

Acquisition and divestitures

— % — % — % — %

Insurance organic revenue growth

3.2 % 6.4 % 3.4 % 6.0 %

Reconciliations of segment profit and adjusted EBIT to net income are as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in millions) December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024

Total profit for reportable segments

$ 292 $ 326 $ 822 $ 926

Corporate expenses

7 unchanged sentences

Gains on dispositions

Gains (losses) on real estate and facility sales

7 (27) 7 (29)

(Losses) gains on real estate and facility sales

Impairment losses

— (12) (14) (12)

Pension and OPEB actuarial and settlement losses

(11) — (11) —

179 146 392 346

Interest Income

46 51 138 153

Interest expense

3 unchanged sentences

Income tax expense

Net income $ 40 $ 45 $ 58 $ 70

(61) (68) (201) (159)

$ 110 $ 63 $ 168 $ 133

Liquidity and Capital Resources

Cash and Cash Equivalents and Cash Flows

As of September 30, 2025, our cash and cash equivalents (“cash”) were $1.9 billion, of which $1.1 billion was held outside of the U.S.

As of December 31, 2025, our cash and cash equivalents (“cash”) were $1.7 billion, of which $1.1 billion was held outside of the U.S.

We maintain various multi-currency, multi-entity, cross-border, physical and notional cash and 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.

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The following table summarizes our cash flow activity:

Six Months Ended

(in millions) September 30, 2025 September 30, 2024 Change

Nine Months Ended

(in millions) December 31, 2025 December 31, 2024 Change

Net cash provided by (used in):

3 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents (35) 16 (51)

Cash classified within current assets held for sale — (3) 3

Net increase in cash and cash equivalents $ 92 $ 21 $ 71

Net (decrease) increase in cash and cash equivalents $ (65) $ 499 $ (564)

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

1 unchanged sentence

Operating cash flow

Net cash provided by operating activities was $595 million and $433 million, respectively, during the first six months of fiscal 2026 and fiscal 2025, reflecting a year-over year increase of $162 million.

The increase in operating cash flows compared with the prior-year period was primarily from:

• a $197 million favorable change in working capital, largely driven by improvements in our cash conversion cycle;

Net cash provided by operating activities was $1,009 million and $1,083 million, respectively, during the first nine months of fiscal 2026 and fiscal 2025, reflecting a year-over year decrease of $74 million.

Operating cash flow against the comparative period included:

• a $134 million unfavorable change in working capital;

partially offset by

• a $35 million decrease in net income, net of adjustments.

• an increase in net income, net of adjustments of $60 million.

The following table contains certain key working capital metrics:

Three Months Ended

September 30, 2025 September 30, 2024

December 31, 2025 December 31, 2024

Days of sales outstanding in accounts receivable 65 62

2 unchanged sentences

Investing cash flow

Net cash used in investing activities was $222 million and $258 million, respectively, during the first six months of fiscal 2026 and fiscal 2025, reflecting a year-over-year decline of $36 million.

The decline in investing cash flows compared with the prior-year period was primarily from:

• a reduction of $82 million in capital expenditures;

Net cash used in investing activities was $365 million and $343 million, respectively, during the first nine months of fiscal 2026 and fiscal 2025, reflecting a year-over-year increase of $22 million.

The change against the comparative period was primarily due to:

• a decrease in proceeds from sales of assets of $100 million and from business dispositions of $26 million;

partially offset by

• a $47 million decline in proceeds from sales of assets.

• a $101 million decrease in capital expenditures.

Financing cash flow

Net cash used in financing activities was $246 million and $189 million, respectively, during the first six months of fiscal 2026 and fiscal 2025, reflecting a year-over-year increase of $57 million.

The increase in financing cash flows compared with the prior-year period was primarily from:

• a $117 million increase in cash used for share repurchases and related tax payments on net share settlements;

Net cash used in financing activities was $674 million and $257 million, respectively, during the first nine months of fiscal 2026 and fiscal 2025, reflecting a year-over-year increase of $417 million.

The change against the comparative period was primarily due to:

• principal payments on long-term debt, net of proceeds from bond issuance in fiscal 2026 of $315 million;

• a $169 million increase in cash used for share repurchases and related taxes paid on net share settlements;

• a decrease in other financing cash inflows of $23 million;

partially offset by

• a $58 million reduction in payments on capital leases and asset financing arrangements, as the Company continues reducing the volume of these financing activities.

• an $88 million decrease in payments on capital leases and borrowings for asset financing, as the Company continues reducing the volume of these financing arrangements.

Debt Financing

The following table summarizes our total debt:

(in millions) September 30, 2025 March 31, 2025 Change

(in millions) December 31, 2025 March 31, 2025

Short-term debt and current maturities of long-term debt $ 532 $ 880

1 unchanged sentence

Total debt $ 3,624 $ 3,876

The $106 million increase in total debt during the first six months of fiscal 2026 was primarily attributable to an unfavorable foreign currency exchange rate of U.S.

dollar against the Euro, partially offset by decreases in finance leases and borrowings for asset financing attributable to payments exceeding minimal additions.

We were in compliance with all financial covenants associated with our borrowings as of September 30, 2025.

The $252 million decrease in total debt during the first nine months of fiscal 2026 was primarily attributable to principal payments on long-term debt, net of proceeds from our bond issuance in fiscal 2026 (see Note 9 - "Debt”), decreases in finance leases and borrowings for asset financing attributable to payments exceeding minimal additions, partially offset by the impact of the foreign currency exchange rate of U.S.

dollar against the Euro.

We were in compliance with all financial covenants associated with our borrowings as of December 31, 2025.

Our credit ratings are as follows:

10 unchanged sentences

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 $5.1 billion as of September 30, 2025, includes $1.9 billion of cash and cash equivalents and $3.2 billion of available borrowings under our revolving credit facility.

Our total liquidity of $4.7 billion as of December 31, 2025, includes $1.7 billion of cash and cash equivalents and $3.0 billion of available borrowings under our revolving credit facility.

On October 23, 2025, the Company amended its revolving credit facility, extending the maturity date to November 1, 2030 and reducing the total available borrowings to $3.0 billion as a result of rationalizing its bank group.

9 unchanged sentences

Cash Commitments

There have been no material changes, outside the ordinary course of business, to our cash commitments since March 31, 2025.

The transactions below represent material changes to our cash commitments since March 31, 2025.

• Issuance of €650 million in aggregate principal amount of 4.25% senior notes due fiscal 2031;

• Repayment in full of the €650 million senior notes due fiscal 2026;

• Redemption of $300 million of the aggregate principal amount of its $700 million senior notes due fiscal 2027.

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, 2025.

8 unchanged sentences

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 September 30, 2025, 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, 2025 except as mentioned in Note 1 – “Summary of Significant Accounting Policies.”

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, 2025.

Our exposure to market risk has not changed materially since March 31, 2025.

During the three months ended December 31, 2025, 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, 2025 except as mentioned in Note 1 – “Summary of Significant Accounting Policies.”

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 2. Management’s Discussion and Analysis