Operational Margin Improvements and Future Targets
Full-year operating margin increased to 14.2%, up 270 basis points, driven by higher revenue and favorable product mix.
NSE operating margin was 4.7%, with a goal to reach mid- to high-teens and eventually 20% as the business recovers and grows.
Management discussed historical NSE margins approaching 20% pre-telecom meltdown, with a long-term target to improve margins through growth in data center and military markets.
Adjusted EBIT margin was 6.8%, down modestly by 10 basis points year-over-year.
Bookings increased 14% year-over-year, marking the third consecutive quarter of double-digit growth, with a trailing 12-month book-to-bill ratio of 1.06, up from 1.03 at fiscal 2025 year-end.
Capital expenditures declined to 2.8% of revenue from 6% last year, and net debt was reduced by approximately $630 million since fiscal 2025 start.
DXC Technology reported first quarter fiscal 2026 total revenue of $3.2 billion, declining 4.3% organically year-over-year, at the high end of their guidance range.
Free cash flow generation was strong at $97 million, more than doubling from $45 million in the prior year quarter.
Non-GAAP diluted EPS was $0.68, down from $0.75 in the prior year quarter, driven by lower adjusted EBIT and higher taxes, partially offset by lower net interest expense.
Segment results: CES revenue declined 4.4% organically with bookings growth of 32% and a book-to-bill ratio of 1.2; GIS revenue declined 5.7% organically with modest bookings growth and a book-to-bill of 0.7; Insurance segment grew 3.6% organically driven by software and volume increases.
Cash, cash equivalents, and marketable securities totaled $814 million, up $47 million from the prior quarter, with $10 million used for share repurchases.
Customer count grew by 320 to 6,467, with a gross retention rate of 97% and net retention rate of 114%, both exceeding internal targets.
In Q2 2025, Workiva generated $215 million in total revenue, up 21% year-over-year, beating the high end of revenue guidance by $5 million.
Large contract cohorts showed strong growth: contracts over $100,000 increased 27%, over $300,000 increased 37%, and over $500,000 increased 35% compared to Q2 2024.
Non-GAAP operating margin was 3.8%, exceeding guidance by 380 basis points due to stronger top-line results and operational leverage.
Professional services revenue was flat at $17 million, with declines in setup and consulting offset by higher XBRL services.
Remaining performance obligations expected to be recognized over the next 12 months increased 23% year-over-year to $668 million.
Subscription revenue grew 23% to $198 million, driven by both new customers and account expansions, with new customers added in the last 12 months accounting for 41% of the increase.
Advanced nodes revenue was $89 million (35% of total), specialty devices and advanced packaging $117 million (46%), and software and services $48 million (19%).
Cash and investments increased by $44 million to approximately $895 million at quarter-end.
Cash from operations was $58 million, with a cash conversion rate of 95% of non-GAAP net income.
Earnings per share were $1.25, impacted slightly by foreign exchange losses and a higher effective tax rate of 16%.
Gross margin was 54.5%, or approximately 55% excluding $1.1 million in tariff expenses.
Onto Innovation reported Q2 2025 revenue of $253.6 million, a 5% year-over-year increase.
Operating margin reached 25.9%, near the high end of guidance, driven by productivity gains in R&D and operations.
Dafinchi