Science Applications International (SAIC) investor relations material

Executive summary

• Quarterly revenue declined 2.7–3% year-over-year to $1.77 billion, mainly due to contract completions, ramp-downs, and delays in new business awards, partially offset by new contracts.

• Net income rose 57% to $127 million, with adjusted diluted EPS of $3.63, driven by improved profitability and favorable legal and tax settlements.

• Bookings reached $2.6 billion for the quarter, with a book-to-bill ratio of 1.5 and backlog at $23.2 billion; year-to-date book-to-bill is 1.4.

• Strategic and cost efficiency initiatives, including AI, are being implemented to align with a challenging revenue environment and support long-term value.

• Guidance and outlook have been revised, lowering revenue and EBITDA expectations but raising free cash flow and adjusted EPS guidance.

Financial highlights

• Adjusted EBITDA for the quarter was $185 million (10.5% margin), up from $170 million (9.4%) year-over-year.

• Adjusted diluted EPS for the quarter was $3.63, up from $2.05 in the prior year.

• Free cash flow for the quarter was $150 million, with full-year guidance raised to over $550 million.

• Adjusted operating income for the quarter was $182 million (10.3% margin), up from $169 million (9.3%).

• Weighted-average diluted shares outstanding decreased to 46.8 million from 51.2 million.

Outlook and guidance

• FY26 revenue guidance lowered to $7.25–$7.33 billion, down from $7.60–$7.75 billion, with organic revenue expected to contract 2–3%.

• Adjusted EBITDA guidance reduced to $680–$690 million (9.3%–9.5% margin), down from $715–$735 million.

• Adjusted diluted EPS guidance increased to $9.40–$9.60, reflecting tax benefits; free cash flow guidance raised to over $550 million.

• FY27 revenue guidance set at 0–3% growth, with margin guidance at 9.5–9.7% and free cash flow per share projected at $13–$14.

• Guidance assumes a stable but challenging operating environment, with normalization anticipated in FY27.