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# DXC's Insurance Revenue Jumped 23.1%, But A Contract Change Helped — And Consulting Goodwill Has 13% Cushion
- URL: https://www.bullished.co/dxcs-insurance-revenue-jumped-23-1-but-a-contract-change-helped-and-consulting-goodwill-dae849bd/
- Published: 2026-10-30T11:06:09.000Z
- Updated: 2026-10-30T11:06:09.000Z
- Description: DXC's growth unit got a lift from a favorable contract modification, while its Consulting unit's goodwill test cleared by 13%.
- Author: Matteo Parrino
- Tags: Earnings, DXC, Industry: Technology

[DXC Technology](https://www.bullished.co/tag/dxc/)'s insurance software unit grew revenue [23.1% on an organic basis](https://www.sec.gov/Archives/edgar/data/0001688568/000168856826000090/dxc-20260930.htm?ref=bullished.co) last quarter, and the company's 10-Q says that figure includes a favorable contract modification signed during the quarter. The same filing shows the Consulting & Engineering Services unit passed its goodwill test with fair value only 13% above carrying value.

## A contract change flatters Insurance

DXC, which provides IT services and software to large global companies and public sector organizations, reported Insurance revenue of $394 million for the second quarter of fiscal 2027\. Segment profit rose 60.7% to $45 million, a margin of 11.4%.

The prior quarter looks very different. DXC's [first-quarter filing](https://www.sec.gov/Archives/edgar/data/0001688568/000168856826000069/dxc-20260630.htm?ref=bullished.co) showed Insurance growing 1.4% organic, so the 23.1% quarter is a sharp break from that trend. For the first six months, Insurance organic growth was 12.4%.

The same customer contract change left marks elsewhere: the company wrote off transition and transformation costs once, hitting cost of services, and sped up software amortization as a single event. Insurance book-to-bill, a measure of new awards against revenue, was 0.79x, up from 0.68x a year earlier.

## Thin cushion under Consulting goodwill

In its annual test as of July 1, 2026, DXC found the Consulting unit's fair value exceeded carrying value by 13%. The unit carries $378 million of goodwill, and the company says a significant unfavorable change in revenue growth rates in its forecasts could force an impairment charge later.

That unit's revenue fell 3.3% on an organic basis in the quarter, to $1,213 million, and segment profit fell 13.8% to $125 million. Insurance goodwill of $149 million also passed the test. DXC found no signs requiring an interim test as of September 30.

## The shrinking core

Total revenue was $3.0 billion, down 4.0% organically. Global Infrastructure Services, the largest segment, fell 10.0% to $1,427 million, with segment profit down 45.9%. [Diluted earnings per share](https://www.marketwatch.com/story/dxc-slides-after-fiscal-year-guidance-cut-2q-results-bdc9c9b7?ref=bullished.co) were $0.15, against $0.20 a year earlier.

Remaining performance obligations, the contracted revenue yet to be recognized, stood at about $15.8 billion at September 30\. DXC repurchased about 5.7 million shares for $60 million in the quarter.

On its [earnings release](https://www.sec.gov/Archives/edgar/data/0001688568/000168856826000089/dxcfy27q2pressrelease.htm?ref=bullished.co), the company guided third-quarter revenue down about 6.0% organically and acknowledged ongoing discussions regarding a possible sale of its insurance business. CEO Raul Fernandez said "our core revenue recovery will take time."

DXC's market value was $2.4 billion at the time of the original report, and the company's guidance calls for third-quarter revenue to fall about 6.0% without another contract tailwind.

### Sources

- [10-Q Filing — DXC Technology (DXC)](https://www.sec.gov/Archives/edgar/data/0001688568/000168856826000090/dxc-20260930.htm?ref=bullished.co) — SEC EDGAR
- [10-Q Filing — DXC Technology (DXC), Q1 FY2027 filed 2026-07-31 (comparison basis)](https://www.sec.gov/Archives/edgar/data/0001688568/000168856826000069/dxc-20260630.htm?ref=bullished.co) — SEC EDGAR
- [Earnings release (8-K Item 2.02, dxcfy27q2pressrelease.htm) — DXC Technology, filed 2026-10-29](https://www.sec.gov/Archives/edgar/data/0001688568/000168856826000089/dxcfy27q2pressrelease.htm?ref=bullished.co) — SEC EDGAR
- [DXC Technology Company. (DXC) Q2 Earnings and Revenues Beat Estimates](https://finance.yahoo.com/markets/stocks/articles/dxc-technology-company-dxc-q2-203503782.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance
- [DXC Slides After Fiscal-Year Guidance Cut, 2Q Results](https://www.marketwatch.com/story/dxc-slides-after-fiscal-year-guidance-cut-2q-results-bdc9c9b7?ref=bullished.co) — MarketWatch
- [Compared to Estimates, DXC Technology (DXC) Q2 Earnings: A Look at Key Metrics](https://finance.yahoo.com/markets/stocks/articles/compared-estimates-dxc-technology-dxc-213002394.html?.tsrc=rss&ref=bullished.co) — Yahoo Finance
- [DXC Technology Company Non-GAAP EPS of $0.67 beats by $0.12, revenue of $3.03B beats by $30M (DXC:NYSE)](https://seekingalpha.com/news/4660809-dxc-technology-company-non-gaap-eps-of-0%5F67-beats-by-0%5F12-revenue-of-3%5F03b-beats-by-30m?ref=bullished.co) — seekingalpha.com
- [DXC Technology Company (DXC) Stock Price, News, Quote & History - Yahoo Finance](https://ca.finance.yahoo.com/quote/DXC/?ref=bullished.co) — Yahoo Finance

### More on DXC Technology

- [DXC Cuts Revenue Outlook To A 5% To 5.5% Decline, And Its CEO Calls Some Lost Deals 'Self-Made'](https://www.bullished.co/dxc-cuts-revenue-outlook-to-a-5-to-5-5-decline-and-its-ceo-calls-some-lost-deals-self-made-f72d7f75/)
- [DXC Confirms 'Ongoing Discussions' On Sale Of Insurance Business, Cuts Full-Year Revenue Outlook](https://www.bullished.co/dxc-confirms-ongoing-discussions-on-sale-of-insurance-business-cuts-full-year-revenue-767b9526/)
- [DXC Confirms Talks To Sell Insurance Unit, Its Only Growing Segment, As Infrastructure Sales Fall 10%](https://www.bullished.co/dxc-confirms-talks-to-sell-insurance-unit-its-only-growing-segment-as-infrastructure-sales-b46c8936/)

[All DXC Technology (DXC) coverage →](https://www.bullished.co/tag/dxc/)