Science Applications International Corp Earnings
Science Applications International Corporation (SAIC), a leading technology integrator for the defense, space, civilian, and intelligence markets, reported its earnings for the second quarter of fiscal year 2026. Though the company experienced a contraction in revenues, it managed to deliver commendable financial outcomes, showcasing its operational resilience in a challenging business environment.
Science Applications International Corp Results
Below is a table summarizing key financial metrics reported by SAIC for the second quarter ending August 1, 2025:
| Metric | Amount | Year-on-Year Change |
|---|---|---|
| Total Revenue | $1.77 billion | -3% |
| Net Income | $127 million | N.A. |
| Diluted Earnings Per Share | $2.71 | +71.5% |
| Adjusted Diluted Earnings Per Share | $3.63 | +77.1% |
| Adjusted EBITDA Margin | 10.5% | N.A. |
| Cash Flows from Operating Activities | $122 million | N.A. |
| Free Cash Flow | $150 million | N.A. |
SAIC's total revenue for the quarter was $1.77 billion, representing a 3% decline compared to the same period in the previous year. However, diluted earnings per share surged to $2.71 from $1.58, marking a substantial 71.5% increase.
Revenue Breakdown
SAIC's revenue performance across different segments indicates both challenges and the ability to capitalize on opportunities within its contract portfolio. Below is a summary of the revenue breakdown:
| Segment | Year-on-Year Change |
|---|---|
| Defense and Intelligence | -3% |
| Civilian | -2% |
| Corporate | Improved |
In-depth analysis shows that the decline in revenue is primarily attributable to contract completions and a reduction in volume on existing contracts. However, the company managed to secure new contracts, which partially mitigated the overall revenue decline. Improved profitability across SAIC's contract portfolio also contributed positively to segment performance.
Key Developments
During the second quarter, SAIC achieved notable contract awards across several major sectors:
- U.S. Air Force : Awarded a $928 million, five-year contract for the Hyper-Innovative Operational Prototype Engineering (HOPE) 2.0. This contract integrates intelligence capabilities with urgent Department of Defense needs.
- Department of Treasury : Secured a $728 million, three-year task order to continue providing essential cloud services, contributing significantly to the Treasury’s multi-cloud transformation.
- U.S. Navy : Won multiple contracts, including a $202 million five-year contract for training solutions and a $360 million contract focusing on electronic warfare and active emitter systems.
- U.S. Department of State : Continued its Vanguard program with a $547 million contract extension for comprehensive IT services.
- Other significant awards : Contracts from Orange County, California, and various space and intelligence organizations totaling millions, further enriching the backlog.
Comments from Company Officers
SAIC's Chief Executive Officer, Toni Townes-Whitley, remarked on the quarter's performance, "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 are contributing to a more challenging revenue environment than previously forecasted." In light of these challenges, management has taken steps to align the cost structure with current realities while maintaining key investments for long-term value creation.
Dividends and Share Repurchases
SAIC maintained its commitment to shareholder returns through regular dividends and share repurchases. During the quarter, the company repurchased shares worth $106 million and paid $17 million in cash dividends. Post-quarter, SAIC’s Board declared a dividend of $0.37 per share, payable on October 24, 2025. The company intends to continue this quarterly dividend policy, contingent on various economic factors.
Science Applications International Corp Stock Forecast
Given SAIC's solid program performance amidst a challenging market environment, the outlook for the company remains cautiously optimistic. Its robust contract pipeline, evidenced by a book-to-bill ratio of 1.5 during the quarter, bodes well for future revenue streams. With an estimated backlog of $23.2 billion, SAIC is positioned to capture significant market opportunities.
While market fluctuations and economic conditions present risks, the company is demonstrating stability and effective management. Based on current financial performance and market trends, analyst projections for SAIC's stock price remain within the following range:
- High Projection : $150 per share, reflecting potential future contract awards and successful execution of its backlog.
- Low Projection : $115 per share, considering current revenue challenges and external market pressures.
Overall, Science Applications International Corporation is navigating a complex market with strategic resilience, maintaining profitability and key investments necessary for sustained growth.
