DXC Technology Raises FY26 EPS Guidance to $2.85-$3.35 Amid AI Initiatives and Bookings Momentum

DXC Technology has raised its FY26 EPS guidance to $2.85-$3.35, citing momentum in AI initiatives and bookings. The company delivered Q1 2026 results at the high end of its guided ranges for organic revenue growth and adjusted EBIT margin.

DXC Technology (DXC) has raised its full-year fiscal 2026 earnings per share (EPS) guidance to $2.85-$3.35, citing momentum in artificial intelligence (AI) initiatives and strong bookings performance. The company reported Q1 2026 results that exceeded expectations, delivering organic revenue growth and adjusted EBIT margin at the high end of its guided ranges.

The company's total revenue declined by 4.3% year-over-year on an organic basis, reaching $3.2 billion. However, this was within the company's guidance range. The adjusted EBIT margin stood at 6.8%, and non-GAAP diluted EPS was $0.68. Free cash flow improved to $97 million, compared to $45 million in the previous quarter. Notably, bookings increased by 14% year-over-year, marking the third consecutive quarter of double-digit growth.

The company's AI strategy is a key driver of growth. DXC is investing in talent and training over 50,000 GenAI-enabled engineers and achieving AI readiness across 92% of its technical teams. This focus on AI has been recognized by Gartner, which named DXC an Emerging Leader in Consulting and Implementation Services for Generative AI. The company also announced a strategic partnership with Boomi, an AI-driven integration automation company, to enhance end-to-end system connectivity and accelerate transformation for clients.

Management highlighted strong bookings performance in Europe and Asia Pacific, with book-to-bill ratios above 1.0. The company also noted public sector strength and solid deal flow in manufacturing and retail in Europe. A significant management change was announced, with Ramnath Venkataraman appointed as President of Consulting & Engineering Services, bringing nearly 30 years of experience from Accenture.

For the full year, DXC expects total organic revenue to decline 3% to 5%, with total reported revenue expected to be between $12.6 billion and $12.9 billion, an increase of approximately $430 million at the midpoint of the guide. The company expects adjusted EBIT margin to remain at 7% to 8%, with non-GAAP diluted EPS expected to be between $2.85 and $3.35. Free cash flow guidance for the year is approximately $600 million.

Management emphasized the company's proactive approach to contract renewals, a focus on both organic and inorganic AI investments, and efforts to build scalable, replicable AI-centric solutions. The company's AI strategy and strong bookings momentum are expected to drive future growth and stability.

References:
[1] https://seekingalpha.com/news/4476179-dxc-technology-raises-fy26-eps-guidance-to-2_85-3_35-as-ai-initiatives-and-bookings-momentum
[2] https://www.gurufocus.com/news/3023859/dxc-technology-reports-first-quarter-fiscal-year-2026-results-dxc-stock-news