Science Applications International (SAIC) Q1 2027 earnings summary

Executive summary

• Revenues for Q1 FY27 reached $1.91 billion, up 2% year-over-year, with 0.5% organic growth after adjusting for the SilverEdge acquisition, driven by contract ramp-ups and portfolio realignment.

• Net income rose 69% year-over-year to $115 million, with adjusted diluted EPS at $3.23, reflecting improved profitability and a $12 million gain from an investment sale.

• Adjusted EBITDA was $222 million, representing 11.6% of revenues, up from 8.4% a year ago, with margin boosted by a $12 million gain from a venture investment IPO.

• Leadership transition in the civilian business group, with the CFO serving as interim head, and a reorganization into three business groups aggregated into two reportable segments.

• AI integration, modernization, and business process transformation are central to growth, with ongoing investments in next-gen command, control, and autonomous systems.

Financial highlights

• Q1 revenue reached $1.91 billion, up from $1.88 billion in Q1 FY26, with adjusted EBITDA at $222 million (11.6% margin) and adjusted diluted EPS at $3.23.

• Free cash flow was $118 million, up from $(44) million year-over-year, and cash flow from operations totaled $127 million.

• Quarterly book-to-bill was 1.1x, with net bookings of $2.1 billion and backlog at $22.9 billion.

• Operating income increased to $179 million, with operating margin improving to 9.4% from 6.4% year-over-year.

• Weighted-average diluted shares outstanding decreased to 44.0 million from 47.8 million.

Outlook and guidance

• FY27 revenue guidance maintained at $7.0–$7.2 billion, with organic growth expected between -4% and 4%.

• Adjusted EBITDA guidance raised to $720–$730 million (10.1%–10.3% margin), and adjusted diluted EPS guidance increased to $9.90–$10.10.

• Free cash flow outlook unchanged at over $600 million for FY27 and at least $13 per share for FY28.

• Approximately $6.6 billion in remaining performance obligations, with 76% expected to be recognized as revenue in the next 12 months.

• Management expects continued growth opportunities from government spending packages and digital modernization initiatives.