DXC Technology Charts Dual-Track Future: AI Push Gains Traction Amid Revenue Headwinds
TYSONS CORNER, Va. – DXC Technology (NYSE: DXC) is navigating a delicate balancing act. The global IT services firm reported its fiscal third-quarter 2026 results, showcasing a "dual-track" strategy designed to steady its traditional business while aggressively cultivating new, high-margin revenue streams it calls "AI-native." The quarter was marked by a refreshed market posture and significant internal AI deployment, even as overall revenue continued to contract.
"We've moved from design to deployment," declared President and CEO Raul Fernandez on the earnings call. He emphasized that recent efforts—including a brand refresh, new sales materials, and a centralized sales enablement function—were substantive changes, not merely cosmetic. Early indicators, he noted, are promising where the new tools are in use.
The company's financials painted a mixed picture. CFO Rob Del Bene reported total revenue of $3.2 billion, a 4.3% year-over-year organic decline, though performance was within guidance. A brighter spot was bookings, with a book-to-bill ratio of 1.12 for the quarter. Adjusted earnings per share of $0.96 surpassed expectations, and the company generated $266 million in free cash flow.
Central to DXC's growth narrative are its "Fast-Track" initiatives—productized, "AI-infused" offerings meant to move beyond traditional time-and-materials contracts. Fernandez cited the win of a "master vendor" engagement with the London Metropolitan Police as a key example, involving core system replacement and AI integration. He also detailed "CoreIgnite," a platform for real-time payments leveraging partnerships with firms like Ripple and Euronet.
Perhaps most telling is DXC's internal use of AI. Fernandez described the company as "Customer Zero," having deployed a multi-provider AI orchestration layer across its 115,000-strong workforce to route tasks optimally. This internal proving ground, management argues, validates the architecture before it's sold to clients.
Looking ahead, guidance for Q4 remains cautious, forecasting a 4-5% organic revenue decline. However, Fernandez projected that Fast-Track offerings could reach 10% of run-rate revenue by fiscal Q2 2029. The company also plans to detail these initiatives further at an Investor Day in June.
Market Voices: Analysts and Observers Weigh In
"The bookings improvement and cash flow are tangible positives," said Michael Thorne, a technology sector analyst at Veritas Insights. "It suggests the stabilization track is working. The real test will be the scalability and market acceptance of those Fast-Track products. The 2029 target is ambitious but gives them a clear metric to track."
"This is a classic case of rearranging deck chairs," countered Lisa Hammond, founder of the sharp-tongued investment blog The Naked Ledger. "A refreshed brand doesn't fix a declining core business. They're touting AI like every other legacy IT shop, but 'AI-native' is just a marketing buzzword until it materially reverses the top-line slide. The guidance for next quarter says it all—more decline."
"The internal AI adoption is a credible differentiator," noted David Chen, a partner at a venture firm specializing in enterprise software. "Using themselves as a testbed de-risks the solution for clients. The partnership ecosystem around CoreIgnite is also strategically sound, focusing on a high-growth niche like real-time payments."
"The balance sheet management is prudent," observed Sarah Wilkinson, a fixed-income analyst. "Refinancing debt ahead of maturity and committing to continued buybacks signals confidence in their liquidity. For investors, the sustained free cash flow generation provides a floor while the growth story develops."
DXC Technology, formed from the merger of CSC and HPE's Enterprise Services, provides IT services across cloud, security, analytics, and workplace solutions. The article is based on the company's fiscal Q3 2026 earnings call and public disclosures.