Science Applications International Corporation, a premier Fortune 500 technology integrator driving our nation's digital transformation across the defense, space, civilian, and intelligence markets, announced results for the first quarter ended May 2, 2025.
"Our performance in the first quarter reflects the steady progress we are making against our enterprise growth strategy despite a still dynamic operating environment," said Toni Townes-Whitley, SAIC Chief Executive Officer. "As a premier mission integrator, the rapid evolution of new technologies, a renewed focus on deploying software to drive efficiency, and an elevated global threat environment create significant opportunities for SAIC. I am confident that SAIC is prepared and well aligned with these macro trends to drive value for our customers, employees, and shareholders."
First Quarter of Fiscal Year 2026: Summary Operating Results
|
Three Months Ended |
||||||||||
|
May 2, |
Percent |
May 3, |
||||||||
|
(dollars in millions, except per share amounts) |
||||||||||
|
Revenues |
$ |
1,877 |
2 |
% |
$ |
1,847 |
||||
|
Operating income |
121 |
(8 |
)% |
131 |
||||||
|
Operating income as a percentage of revenues |
6.4 |
% |
-70bps |
7.1 |
% |
|||||
|
Adjusted operating income(1) |
158 |
(4 |
)% |
165 |
||||||
|
Adjusted operating income as a percentage of revenues |
8.4 |
% |
-50bps |
8.9 |
% |
|||||
|
Net income |
68 |
(12 |
)% |
77 |
||||||
|
EBITDA(1) |
156 |
(7 |
)% |
167 |
||||||
|
EBITDA as a percentage of revenues |
8.3 |
% |
-70bps |
9.0 |
% |
|||||
|
Adjusted EBITDA(1) |
157 |
(5 |
)% |
166 |
||||||
|
Adjusted EBITDA as a percentage of revenues |
8.4 |
% |
-60bps |
9.0 |
% |
|||||
|
Diluted earnings per share |
$ |
1.42 |
(4 |
)% |
$ |
1.48 |
||||
|
Adjusted diluted earnings per share(1) |
$ |
1.92 |
— |
% |
$ |
1.92 |
||||
|
Net cash provided by operating activities |
$ |
100 |
2 |
% |
$ |
98 |
||||
|
Free cash flow(1) |
$ |
(44 |
) |
(438 |
)% |
$ |
13 |
|||
|
(1)Non-GAAP measure, see Schedule 6 for information about this measure. |
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First Quarter Summary Results
Revenues for the quarter increased $30 million or 2% compared to the same period in the prior year primarily due to ramp up in volume in existing and new contracts, partially offset by contract completions.
Operating income as a percentage of revenues decreased from the comparable prior year period primarily due to timing and volume mix in our contract portfolio.
Adjusted EBITDA(1) as a percentage of revenues for the quarter decreased to 8.4% from 9.0% for the same period in the prior year primarily due to timing and volume mix in our contract portfolio.
Diluted earnings per share for the quarter was $1.42 compared to $1.48 in the prior year quarter. Adjusted diluted earnings per share(1) for both the current and prior year quarter was $1.92. The weighted-average diluted shares outstanding during the quarter decreased to 47.8 million from 52.1 million during the prior year quarter.
(1)Non-GAAP measure, see Schedule 6 for information about this measure.
Cash Generation and Capital Deployment
Cash flows provided by operating activities for the first quarter increased $2 million compared to the prior year quarter, primarily due to higher cash provided by the Master Accounts Receivable Purchase Agreement ("MARPA Facility") and lower incentive-based compensation payments in the current year, partially offset by timing of vendor payments and other changes in working capital.
During the quarter, SAIC deployed $152 million of capital, primarily consisting of $125 million of plan share repurchases and $19 million in cash dividends.
Quarterly Dividend Declared
Subsequent to quarter end, the Company's Board of Directors declared a cash dividend of $0.37 per share of the Company's common stock payable on July 25, 2025 to stockholders of record on July 11, 2025. SAIC intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.
Backlog and Contract Awards
Net bookings for the quarter were approximately $2.4 billion, which reflects a book-to-bill ratio of 1.3 and a trailing twelve months book-to-bill ratio of 0.8. SAIC’s estimated backlog at the end of the quarter was approximately $22.3 billion. Of the total backlog amount, approximately $3.3 billion was funded.
Notable New and Recompete Awards:
U.S. Army Combat Capabilities Development Command (CCDC) Aviation and Missile Center (AvMC): During the quarter, SAIC was awarded the System Software Lifecycle Engineering contract, a five-year (one year base, plus four, one-year option periods) $1.8 billion contract to continue mission engineering, integration, software development, and other life cycle support to CCDC-AvMC. Under the five-year award, SAIC will continue to develop and integrate advanced technologies throughout the software life cycle, including software development and maintenance.
Pension Benefit Guaranty Corporation: During the quarter, SAIC was awarded a $327 million contract to continue delivering essential IT services for the Pension Benefit Guaranty Corporation. Under this eight-year (approximately 1-year base, plus seven, one-year option periods) contract renewal, SAIC will provide seamless operation across various IT functions including service desk, desktop support, user services, platform support, network and database support, and cloud migration.
U.S. Space and Intelligence Community: During the quarter, SAIC was awarded approximately $300 million of contract awards by space and intelligence organizations. These awards represent a combination of new business and recompetes, including a four-year, $140 million task order to provide enterprise cloud services.
Notable Awards Subsequent to Period End (not included in current quarter bookings):
U.S. Department of State: Subsequent to the end of the quarter, SAIC was awarded a two-year (1 year base plus four, three-month option periods) $547 million contract extension on the Vanguard program to continue providing comprehensive IT services and support for the Department of State.
Fiscal Year 2026 Guidance
Management reaffirms fiscal year 2026 guidance which represents the Company's views as of June 2, 2025.
|
Fiscal Year |
|||
|
2026 Guidance |
|||
|
Revenue |
$7.60B - $7.75B |
||
|
Adjusted EBITDA(1) |
$715M - $735M |
||
|
Adjusted EBITDA Margin %(1) |
9.4% - 9.6% |
||
|
Adjusted Diluted EPS(1) |
$9.10 - $9.30 |
||
|
Free Cash Flow(1) |
$510M - $530M |
||
|
(1)Non-GAAP measure, see Schedule 6 for information about this measure. |
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Webcast Information
SAIC management will discuss operations and financial results in an earnings conference call beginning at 10:00 a.m. Eastern time on June 2, 2025. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the SAIC website (investors.saic.com). We will be providing webcast access only – “dial-in” access is no longer available. Additionally, a supplemental presentation will be available to the public through links to the Investor Relations section of the SAIC website. After the call concludes, an on-demand audio replay of the webcast can be accessed on the Investor Relations website.
