Science Applications International (SAIC) Q4 2026 earnings summary

Executive summary

• CEO Jim Reagan was appointed to the permanent role, emphasizing continuity, operational excellence, and value creation.

• Operating discipline drove robust EBITDA and cash flow despite a challenging sales environment, with a focus on margin and cash momentum.

• Portfolio realignment emphasized Mission IT & Engineering and non-commoditized Enterprise IT for better execution upside.

• Enterprise business processes are being transformed to streamline operations and improve margins.

• Q4 FY26 revenues were $1.75B, down 5% year-over-year; FY26 revenues were $7.26B, down 3%.

Financial highlights

• Q4 revenue was $1.75 billion, down 6% organically year-over-year, mainly due to a $60 million reduction from Cloud One and a $45 million non-recurring software license sale in the prior year.

• FY26 revenue was $7.26B, down 3% year-over-year; adjusted EBITDA was $708M, nearly flat from $710M in FY25.

• Adjusted diluted EPS was $2.62 for Q4 and $10.75 for the year, benefiting from strong margins and a favorable tax rate.

• Free cash flow was $336 million in Q4 and $577 million for the year, exceeding guidance by 10%.

• Q4 cash flow from operations was $258M (up 124%); FY26 was $609M (up 23%).

Outlook and guidance

• FY27 revenue guidance is $7.0–$7.2 billion, representing a 2–4% organic contraction due to recompete losses.

• Adjusted EBITDA guidance is $705–715 million (9.9–10.1% margin), a 30-basis point improvement at the midpoint.

• Adjusted diluted EPS guidance is $9.50–$9.70, unchanged from prior guidance.

• Free cash flow guidance is at least $600 million for FY27, with $70 million in non-recurring cash tax benefits; FY28 expected at $530 million without this benefit.

• Guidance assumes a 23% effective tax rate, $135M net interest expense, and $130M intangible amortization.