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 second quarter ended August 1, 2025.
"Our second quarter results reflect strong program performance, and our bookings reflect further momentum in our business development efforts; however, slower on-contract growth and continued delays in new business awards and new program ramps are contributing to a more challenging revenue environment than previously forecasted,” said Toni Townes-Whitley, SAIC Chief Executive Officer. “We are responding purposefully by aligning our cost structure while sustaining key investments to drive long-term value creation. Our revised guidance assumes that the operating environment remains stable but does not improve this year. We believe that this more cautious outlook is prudent, and we are confident in our ability to execute against it."
Second Quarter Summary Results
Revenues for the quarter decreased $49 million or 3% compared to the same period in the prior year primarily due to contract completions and ramp down in volume on existing contracts, partially offset by new contracts.
Operating income as a percentage of revenues for the quarter increased compared to the same period in the prior year primarily due to improved profitability across our contract portfolio and a recovery of costs from the settlement of a patent infringement matter, partially offset by costs related to the settlement of federal tax audits and the indirect rates impact of state taxes related to the One Big Beautiful Bill Act.
Adjusted EBITDA(1) as a percentage of revenues for the quarter increased to 10.5% from 9.4% for the same period in the prior year primarily due to improved profitability across our contract portfolio and a recovery of costs from the settlement of a patent infringement matter, partially offset by the indirect rates impact of state taxes related to the One Big Beautiful Bill Act.
Diluted earnings per share for the quarter was $2.71 compared to $1.58 in the prior year quarter. Adjusted diluted earnings per share(1) for the quarter was $3.63 compared to $2.05 in the prior year quarter. The weighted-average diluted shares outstanding during the quarter decreased to 46.8 million from 51.2 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 second quarter decreased $16 million compared to the prior year quarter primarily due to timing of customer collections and vendor payments, partially offset by lower cash outflows from the usage of the Master Accounts Receivable Purchase Agreement ("MARPA Facility") in the current year and other changes in working capital.
During the quarter, SAIC deployed $130 million of capital, primarily consisting of $106 million of plan share repurchases and $17 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 October 24, 2025 to stockholders of record on October 10, 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 and year were approximately $2.6 billion and $5.0 billion, respectively, which reflects a book-to-bill ratio of 1.5 and 1.4, respectively, and a trailing twelve months book-to-bill ratio of 1.0. SAIC’s estimated backlog at the end of the quarter was approximately $23.2 billion. Of the total backlog amount, approximately $3.6 billion was funded.
Notable New and Recompete Awards:
U.S. Air Force: During the quarter, SAIC was awarded the Hyper-Innovative Operational Prototype Engineering ("HOPE") 2.0 contract in support of the U.S. Air Force Tactical Exploitation of National Capabilities ("AF TENCAP"). This $928 million contract spans a five-year performance period (one year base plus, four, one-year option periods). The HOPE 2.0 contract integrates Intelligence Community capabilities with urgent DoD operational needs. SAIC will provide comprehensive Research, Development, Test, and Evaluation ("RDT&E") mission engineering services to help AF TENCAP create near program of record ready prototypes that lead to improved warfighting superiority and decision dominance in all domains. Incorporating warfighter feedback, SAIC will support rapid prototype development and mission integration for AF TENCAP and its 65 agencies and commands across the DoD and Intelligence Community. This includes partnering with more than a dozen traditional and non-traditional defense companies to deliver the nation's most advanced technology to DoD Combatant Commands.
Department of Treasury: During the quarter, SAIC was awarded a three-year (one-year base plus, two, one-year option periods) $728 million task order to continue delivering essential cloud services for the Treasury Department. Under this task order, SAIC will continue providing cloud application assessment, implementation, operations, maintenance and training in support of the Treasury Department's transformation to a secure multi-cloud environment.
U.S. Navy: During the quarter, SAIC was awarded a five year (one-year base, plus four, one-year options), $202 million contract, to provide an extensive range of training solutions for the U.S. Navy, including modernized virtual and synthetic training environments, as part of the Fleet Deployment Training Program. This initiative is crucial to supporting U.S. Fleet Forces ("USFF") and associated Fleet commands and activities, significantly enhancing the Navy's readiness to operate and fight effectively across the globe. Under this contract, SAIC will provide the Navy with extensive training and readiness support capabilities across 19 different headquarters and training commands. This encompasses academic instruction, live exercises, synthetic training events and policy support to ensure comprehensive pre-deployment training and certification, as well as post-deployment sustainment for fleet units and staffs.
U.S. Department of State: During 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.
U.S. Navy: During the quarter, SAIC was awarded a 5-year, approximately $360 million contract with a Navy customer. This contract centers around delivering innovative solutions to enhance our nation’s defenses including development and modernization of a variety of electronic warfare and active emitter systems.
Orange County, California: During the quarter, SAIC was awarded a $164 million contract to continue delivering comprehensive IT managed services and solutions for Orange County, California. Under this five-year contract with two additional one-year options, SAIC will continue to manage data center infrastructure, desktop management, service desk operations, applications, networks, voice infrastructure and security operations across various county agencies and departments.
U.S. Navy: During the quarter, SAIC was awarded a Seaport Task Order to support Naval Surface Warfare Center Crane Mobility Platform Integration, with a total contract value of $89 million.
U.S. Space and Intelligence Community: During the quarter, SAIC was awarded approximately $150 million of contract awards by space and intelligence organizations. These awards represent a combination of new business and recompetes.
Fiscal Year 2026 Guidance
The table below summarizes fiscal year 2026 guidance and represents the Company's views as of September 4, 2025.
|
CURRENT |
PRIOR |
|
|
Fiscal Year |
Fiscal Year |
|
|
2026 Guidance |
2026 Guidance |
|
|
Revenue |
$7.250B - $7.325B |
$7.60B - $7.75B |
|
Adjusted EBITDA(1) |
$680M - $690M |
$715M - $735M |
|
Adjusted EBITDA Margin %(1) |
9.3% - 9.5% |
9.4% - 9.6% |
|
Adjusted Diluted EPS(1) |
$9.40 - $9.60 |
$9.10 - $9.30 |
|
Free Cash Flow(1) |
>$550M |
$510M - $530M |
(1)Non-GAAP measure, see Schedule 6 for information about this measure.
Webcast Information
SAIC management will discuss operations and financial results in an earnings conference call beginning at 10:00 a.m. Eastern time on September 4, 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.
