Science Applications International (SAIC) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 FY26 was $1.88 billion, up 2% year-over-year, driven by ramp on new and existing programs, partially offset by contract completions.

• Adjusted EBITDA was $157 million (8.4% margin), down from 9.0% in the prior year, impacted by seasonality, proposal costs, and a fixed-price space program overrun.

• Net income declined 12% year-over-year to $68 million, with diluted EPS at $1.42–$1.43; adjusted diluted EPS was $1.92, flat year-over-year.

• Net bookings reached $2.4 billion (book-to-bill 1.3), with total backlog at $22.3 billion and significant new awards post-quarter close.

• Free cash flow was -$44 million due to receivables timing and working capital, but full-year guidance remains unchanged.

Financial highlights

• Operating income was $121 million, down 8% year-over-year; operating margin declined to 6.4% from 7.1%.

• Adjusted diluted EPS was $1.92, unchanged from the prior year quarter, as lower share count offset higher tax rate and lower EBITDA.

• Cash flows from operating activities were $100 million, up $2 million year-over-year; free cash flow was negative $44 million.

• Weighted-average diluted shares outstanding decreased to 47.8 million from 52.1 million.

Outlook and guidance

• FY26 revenue guidance is $7.6–$7.75 billion, representing 2%–4% organic growth at midpoint.

• Adjusted EBITDA margin guidance reiterated at 9.4%–9.6% ($715–$735 million).

• Adjusted diluted EPS guidance of $9.10–$9.30; free cash flow guidance of $510–$530 million (~$11/share).

• Book-to-bill target of 1.2 trailing 12 months by Q2 or Q3, supporting 4–5% revenue growth for FY27.

• FY27 targets: revenue $7.95B–$8.10B, adjusted EBITDA ~$770M (9.5%–9.7% margin), free cash flow ~$550M (~$12/share).