DXC Technology Company FY 2026 Earnings Call

Welcome to the annual meeting for DXC Technology Company. Our host for today's call is David Herzog, chairman. I will now turn the call over to your host. Mr. Herzog, you may begin, sir.

Thank you, Paul. Good morning. This is David Herzog. As Paul said, I'm chairman of the board of DXC Technology. I appreciate everyone joining the DXC 2026 annual meeting of stockholders. Please note that today's discussion may include forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. For details of these risks, please see our 2026 annual report on Form 10-K and subsequent SEC filings. With that, let's begin. On behalf of the board of directors and our roughly 113,000 employees, I want to begin by saying thank you for your support. We do not take that support for granted, as the board is working closely with our senior leadership team to chart a path forward towards sustainable, profitable growth.

Raul Fernandez is also with us here today. Raul is our president and chief executive officer, he will comment in a moment on the highlights from our recent investor day, where Raul and the team set out financial goals and the strategies to realize those goals. Speaking on behalf of the entire board, we are unsatisfied with our stock price performance during fiscal 2026 and are committed to long-term shareholder value appreciation. Underneath these results, though, are encouraging building blocks for our future with new AI-infused solutions and development and in production across DXC's offerings. The trust our customers have and our proven ability to run their mission-critical systems forms the foundation for a brighter future for our global infrastructure business.

Our insurance, software, and services business continues to be a market leader, leveraging an enviable installed base of world-class customers while innovating with new AI-based applications to modernize heritage infrastructures without costly or risky replacement transformations. We have attracted new talent in our consulting and engineering business with the experience to harness the potential of our global technical teams, leveraging AI to meet the most complex challenges of our customers. It's now up to us to execute. With that, I'll turn it over to Raul for some opening remarks.

Thank you, David. Last month at our investor day in New York, we shared a clear and compelling picture of who DXC is becoming. That story, our strategy, and our AI-based fast-track innovation is the product of the work of thousands of colleagues across the company for multiple years. We outlined a disciplined financial framework through fiscal year 2029, including a return to organic growth, non-GAAP EBIT margin expansion, and continued strong free cash flow generation. While being transparent that the current fiscal year represents a transition, we demonstrated real-time AI strategy, scale, and products that we are currently delivering for our customers, we also announced an incredible partnership, a landmark global partnership with Anthropic to further advance our AI capabilities into mission-critical systems that we operate globally.

The early response from our customers and our partners has been very strong, reinforcing our confidence that DXC is extremely well-positioned for long-term growth and AI value creation. I want to acknowledge and thank our shareholders for your continued confidence in our long-term vision and your commitment to DXC's future. David, back to you. Thank you, Raul.

At this time, I will call the meeting to order and begin by introducing the other director nominees in attendance today. You've just heard from Raul. Also in attendance, David Barnes, Anthony Gonzalez, Pinkie Mayfield, Dawn Rogers, Carrie Teffner, Kiko Washington, and Robert Woods. I would also like to acknowledge and thank Karl Racine, who has served as a director since January of 2023 through today and is not standing for re-election. On behalf of the entire board, we are grateful for Karl's contribution during his tenure here. I would also like to introduce other participants in today's meeting. Matt Fawcett, DXC's General Counsel and Corporate Secretary, who will cover several items on today's agenda. James Rate from American Election Services, LLC, who has been appointed as Inspector of Elections for this meeting and has taken his oath of inspector.

Also Melinda Covert from Deloitte & Touche LLP, our independent auditors. We will report our first quarter fiscal 2027 earnings after the market close on July 30, we will not discuss company performance beyond fiscal 2026 at this meeting. Meeting rules, procedures, and today's agenda are posted in the meeting portal for all participants. We will follow that agenda as posted. Notice of this meeting was duly given. The notice and affidavit of mailing will be incorporated into the meeting minutes. As stated in the notice and proxy statement, stockholders of record as of May 28, 2026, are entitled to vote at today's meeting. Our first order of business is confirming a quorum for purposes of transacting business at this meeting. Matt, I'll turn to you for the actual results of today's voting. We have 162.080 million shares outstanding. Matt, what's the share count?

Our Inspector of Elections reports that 135,086,527 shares of common stock, or approximately 83.35% of all shares entitled to vote, are represented by proxy or online, and therefore, a quorum is present, and the meeting can proceed.

Thank you, Matt. Appreciate that. I will now present five proposals to be considered and acted upon at this meeting. Voting will start after all the proposals have been presented. The first proposal is to elect nine director nominees to serve until the 2027 annual meeting or until their successor are elected and qualified. Per our bylaws advance notice provisions, all director nominations are now closed. The board of directors of the company recommends the election of the following persons as directors of the company: David Barnes, Raul Fernandez, Anthony Gonzalez, David Herzog, Pinkie Mayfield, Dawn Rogers, Carrie Teffner, Kiko Washington, and Robert Woods. The second proposal is the ratification of the appointment of Deloitte & Touche LLP as our independent auditors. The third proposal is an advisory vote on the company's named executive officers' compensation as detailed in the proxy statement.

The fourth proposal is an approval of the amendments to the amended and restated DXC Technology Company 2017 Omnibus Incentive Plan to increase the number of shares available for issuance by 20 million from 51.2 million to 71.2 million shares, and to extend the plan term to March 30, 2037. The fifth and final proposal is the approval of the amendments to the amended and restated DXC Technology Company 2017 Non-Employee Director Incentive Plan to increase the number of shares by 1 million from 1.245 million to 2.245 million, and to extend the term of the plan to March 30, 2037. I will now turn the call over to Matt Fawcett to review voting procedures and the preliminary voting results. Matt? Thank you, David. Voting will proceed as follows.

Stockholders who submitted proxies or voted by telephone or internet need not take further action unless changing their vote. Those who haven't voted or wish to change their vote may click the Vote Here button on the web portal and follow the instructions accordingly. It is now 8:10 A.M. Eastern Time. The polls are open and will remain open briefly to allow electronic voting. All electronic ballots have been received and the polls are now closed. The Inspector of Elections will count all ballots and proxies, and we will now report the preliminary voting results. The Inspector of Elections reports that all director nominees have received the requisite votes and have been elected to serve until next year's annual meeting or until their successors are elected and qualified.

The stockholders have ratified Deloitte & Touche LLP as the company's independent auditor for fiscal year 2027. The required number of affirmative votes has been received, approving on a non-binding and advisory basis the compensation of the company's named executive officers. The amendment to the amended and restated DXC Technology Company 2017 Omnibus Incentive Plan did not receive the required number of affirmative votes and therefore was not approved. The amendment to the amended and restated DXC Technology Company 2017 Non-Employee Director Incentive Plan received the required number of affirmative votes and was approved. Accordingly, the number of shares available for issuance under that plan has been increased by 1 million shares. The company will be reporting the final vote results in a report on Form 8-K to be filed within the next four business days.

Mr. Chairman, at this point in the meeting, we will respond to questions received from stockholders in accordance with the company's instructions. We've received a question from a stockholder about executive and board compensation in light of the company's stock performance and what our plan is to improve the results going forward. David? Thank you, Matt Anne, thank you for your question.

On compensation, as detailed in our proxy statement, the increase in reported CEO pay is driven by a multi-year front-loaded equity award that covered an extended period of time and was designed to ensure retention and stockholder-aligned incentives during a critical period in DXC's transformation. These awards tied to growth in revenue, growth in free cash flow, and relative shareholder return targets. If these targets are not met, the awards do not pay out at target. Director compensation is benchmarked to peer companies and reviewed periodically to ensure that we can attract and retain directors with the skills this transformation requires. On our plan, as Raul described in his opening remarks, we laid out a clear financial framework at our recent investor day, including organic revenue growth and continued strong free cash flow generation.

Management's compensation is tied directly to delivering on those commitments. Matt? Thank you, David. There are no further questions received, and you may now declare this annual meeting concluded.

Thank you, Matt. Before we adjourn, I want to address the voting results from today's meeting. Our advisory vote on executive compensation and our proposal on the omnibus share plan. On the say on pay, we as a board will continue to dialogue with investors, and we will thoughtfully, carefully review these programs going forward to align with shareholder interests. On the equity plan, we're disappointed with the proposal did not pass, because equity compensation is both critical and market standard tool to attract and retain senior talent across our organization, and it aligns management incentives with the creation of long-term shareholder value. We remain focused on driving long-term value for our shareholders. At this point, I will now declare that the meeting is adjourned, and I want to thank each of you for attending.

The meeting has now concluded. Thank you for joining, and have a pleasant day.