Science Applications International (SAIC) Q2 2027 earnings summary

Executive summary

• Quarterly revenue reached $1.88–$1.9 billion, up 6.3% year-over-year with 5.3% organic growth, driven by operational efficiency, new contract ramp-ups, and the SilverEdge acquisition.

• Major contract wins in intelligence, defense, and civilian markets, including $1.6 billion in intel space awards, $400 million with a U.S. Intelligence Agency, and significant recompete victories.

• Project ORBIT implementation underway, targeting $150 million in annual run-rate savings over three years, with a path to 11% margin by FY2030.

• Portfolio and strategy review ongoing to sharpen focus on high-growth, mission-critical areas, with M&A opportunities under evaluation and updates expected in December.

• Business reorganization consolidated five groups into three, maintaining two reportable segments: Defense and Intelligence, and Civilian.

Financial highlights

• Q2/F2Q27 revenue was $1.88–$1.9 billion, up 5–6.3% year-over-year; adjusted EBITDA was $193 million (10.3% margin); adjusted diluted EPS was $3.01, down year-over-year due to prior period settlement.

• Free cash flow for the quarter was $131 million; cash flows from operating activities were $146 million; net leverage reduced to 3.0x.

• Book-to-bill ratio for the quarter was 0.6x (0.8x trailing twelve months), with backlog at $22.1 billion and $3.8 billion funded.

• Adjusted operating income was $191 million (10.2% margin); operating income was $152 million (8.1% margin).

• Weighted-average diluted shares outstanding decreased to 42.8 million from 46.8 million.

Outlook and guidance

• FY27 revenue guidance raised to $7.2–$7.3 billion, with organic growth expected between -2% and 0%; adjusted EBITDA guidance increased to $750–$755 million (10.3%–10.5% margin).

• Adjusted diluted EPS guidance raised to $10.65–$10.75; free cash flow guidance reiterated at over $600 million or $14 per share.

• Margin target set at mid-10s for next year, with a path to 11% by FY2030 as Project ORBIT matures.

• Approximately $6.4 billion in remaining performance obligations, with 75% expected to be recognized as revenue in the next 12 months.

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