DXC Technology Company

Hello, everyone. Thank you for joining us. And welcome to the DXC Technology Second Quarter Fiscal 2027 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. I will now hand the conference over to Tiffany Horvath, Senior Director, Investor Relations. Tiffany, please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to DXC Technologies' second quarter fiscal 2027 earnings conference call. We hope you had an opportunity to review our earnings release, which is available in the IR section of DXC's website. Speaking on today's call are Raul Fernandez, our CEO, and Rob Del Bene, our Chief Financial Officer. Here's today's agenda. First, Raul will update you on our strategic initiative. Rob will then review our quarterly financial performance as well as provide thoughts on our third quarter and full fiscal year 2027 guidance. Raul and Rob will then take your questions. Please note certain comments made during today's call are forward looking and subject to risks and uncertainties that could cause actual results to differ materially. Details of these risks and uncertainties are in our annual report on Form 10-K and other SEC filings. We undertake no obligation to update any forward-looking statements. Unless otherwise noted, year-to-year or quarter-over-quarter revenue growth rates discussed on today's call refer to organic revenue growth on a non-GAAP basis which excludes the impact of foreign exchange and inorganic activity. We will also be discussing certain other non-GAAP financial measures that we believe provide useful information to investors. Reconciliations to the most comparable GAAP measures are included in today's earnings release. And with that, let me turn the call over to Raul.

Thank you, Tiffany. I would like to take a moment to comment on the market speculation regarding a possible sale of our insurance business. While I don't want to get into specifics, I can confirm that we are currently in ongoing discussions. As we have said previously, management and the board are committed to exploring all avenues to create shareholder value. We believe we have multiple paths to do so, including improving the core, scaling our fast track agentic and AI based solutions, and evaluating strategic actions across our portfolio. We do not intend to answer additional questions at this time. On the quarter, our revenue, adjusted EBIT, and non-GAAP diluted EPS were above our guidance. For the balance of the year, we are adjusting our full year guide to reflect sales performance in our core business that fell short of our expectations. At the same time, we are pleased with the traction in our agentic solutions. One of DXC's greatest competitive advantages is the combination of our technical talent, deep industry expertise, and access to the world's leading AI platforms. Since June, more than 5,700 colleagues globally have earned AI certifications. We are building a global bench of engineers capable of moving from AI experimentation to production in complex enterprise environments. That is a capability few organizations can replicate at our scale. The next step is commercialization, deploying these engineers against customer opportunities and converting that capability into revenue. We are also developing greater visibility into average AI deal size, closed cycle timing, and pace of follow-on work, giving us increased confidence in the revenue opportunity ahead. Creating a growth company out of DXE is an ongoing exercise that will be bolstered by our work in strengthening the core track and growing our agentic fast track and AI-based solutions. We feel that the addition of Paul Taylor and his operational accountability and execution focus as our president gives us a path to achieving that goal. A few of Paul's key focus areas are removing friction in how we operate globally and improving our sales execution. He will join Rob and I on our next call to expand on his initiatives. We have continued to invest in agentic and AI-based solutions to drive innovation and position DXE for future growth. The value of AI will go to the companies that control the workflows, data, rights and distribution. We believe DXE is well positioned to capture the expanding total addressable market from AI because of our deep global technical bench, existing customer base, and new agentic solutions. We see evidence that what we are building is resonating with clients. In GrowthX, we secured our first large win with a leading global banking institution to modernize its mission-critical core banking system and accelerate its transition to the cloud. Delivered through our modernization as a service offering, we are combining our AI-powered modernization platform, industrialized delivery factory, and Anthropix Advanced Cloud Model to discover, document, and validate thousands of business rules embedded in decades of legacy systems. By integrating frontier AI capabilities with our deep banking expertise and proven modernization methodologies, we are transforming how complex high-risk modernization programs are delivered at scale. The promise of modernization has been around for decades, but the ability to do it at scale quickly is here. We are very well positioned to win in this business category. This win demonstrates Thank you for joining us today. controlled changes within customer environments. We are also increasing the number of agentic workflows in production. For example, we recently launched DXC Workplace Services, an AI native workplace offering enabled by Oasis that reimagines the digital workplace around employee outcomes. With Workplace Services, agents and DXC experts helped resolve employees' IT issues before they disrupt work. As a result of this capability expansion and increased workflows in production, utilization surged 6x from last quarter. Demand for OASIS continues to be strong, with increased adoption from existing clients and interest from new customers, with patch management emerging as a leading use case. We are currently running two pilots with new customers with incremental opportunities in the pipeline. In our insurance business, we continue to build momentum in our SaaS-based Assure platform with customer adoption exceeding 275 enterprise insurance accounts. This expanding platform install base allows more customers to use our AI-enabled smart apps. We sold our first smart apps in the quarter and our pipeline has grown more than 20% from last quarter. Additionally, we are leveraging smart apps internally in our BPS business to drive efficiencies and provide proof points for our customers. As we shared last quarter, DXE is accelerating the development of our AI engineering talent through strategic partnerships and hands-on training programs. In August, I attended Anthropix partner base camp in San Francisco alongside DXE engineers and forward deployed engineers from across the industry. Working and learning alongside dozens of DXE teammates and FDEs in training from other companies gave me a close and upfront appreciation of the operating complexities of being an AI builder. It also gave me insight into what human capital skills are needed to be an A player in an AI world. It demands a combination of engineering excellence, deep industry knowledge, and the ability to translate AI capabilities into measurable business outcomes. More than 500 of our engineers participated in a multi-platform FDE boot camp in India, working with Anthropic, Eleven Labs, and AWS. Our approach is multi-platform, building expertise across Amazon, Microsoft Copilot, 7AI, Anthropic and Eleven Labs to deliver solutions aligned with our clients' needs. Additional base camps are planned for Sydney and Tokyo. Most importantly, DXC engineers are standing out in the marketplace for our operational and industry-specific context that is critical to creating value for our clients. We are already turning these capabilities into differentiated solutions for our customers. We have recently been approved to productize Claude Mythos into DXC Frontier Code Assurance, a managed service that combines frontier AI reasoning with DXC's cybersecurity expertise and governed delivery to identify, validate, prioritize, and help remediate vulnerabilities in critical software. A scan that produces every alert at once creates a backlog, not security. DXC goes beyond identifying vulnerabilities by validating each finding, ranking it by risk to the client and fixing what matters first. That is a tangible example of DXC's differentiated commercial offerings for our customers in the cyberspace. Last quarter, I talked about customers wanting the potential and promise of AI, but also needing to trust the architecture underneath it. Since last quarter, trust and safety considerations have become even more important for customers. Given our work operating the most critical systems, applications, and infrastructure, oftentimes in heavily regulated industries, trust and safety remains a key priority as we embed AI in more of our solutions. Our architectures are being developed around safe, responsible, and resilient AI operations. DXC's focus is on agent assurance, agent engineering, and Harness Engineering, which provide the controls, safeguards and operating mechanisms needed to manage AI systems. DXC has also partnered with Langchain to support agent and harness development for OASIS. From the beginning, OASIS used Langchain to develop agents and we have continued improving the harness as agents move to the production environment. We are licensing Langchain to support the development, evaluation, and observability of OASIS agents. We have more work to do, particularly in improving sales execution and stabilizing revenue in our core business. That remains a priority, and we're not satisfied with our current performance. But when I look at where DXC was at the beginning of this year and where we are today, the progress is meaningful. We have moved from strategy to products, from products to deployments, and increasingly from deployments to commercial adoption. We have a stronger leadership team, a growing portfolio of agentic offerings, thousands of AI certified engineers, and customer relationships that give us a unique opportunity to scale. Our strategy hasn't changed. What has changed is the evidence that it can work. The priority now is execution, improving the core, scaling what works, and creating sustainable long-term value for our shareholders. Through 11 labs, my script will be available in six languages following this call. Let me turn it over to Rob to review the second quarter results.