SAIC Reports Mixed Results for First Quarter of Fiscal Year 2026

Science Applications International Corporation (NASDAQ: SAIC) released its first-quarter results for fiscal year 2026, showing slight revenue growth but falling short of earnings expectations. The company remains optimistic about its future, reaffirming its guidance for the fiscal year.

SAIC Reports Revenue of $1.88 Billion for First-Quarter FY’26

Science Applications International Corporation (SAIC) reported a revenue of $1.88 billion for the first quarter of fiscal year 2026, reflecting a 2% increase compared to the same period last year. This figure surpasses the expected revenue of $1.86 billion, indicating a solid performance in terms of sales. The increase in revenue was attributed to the ramp-up in volume on existing and new contracts, despite some contract completions. However, the company’s operating income decreased by 8% to $121 million, primarily due to timing and volume mix in its contract portfolio.

Despite the revenue growth, SAIC’s earnings per share (EPS) fell short of expectations. The diluted EPS for the quarter was $1.42, a 4% decrease from the previous year’s $1.48 and below the anticipated $2.14. The adjusted diluted EPS remained steady at $1.92, aligning with the previous year’s results. This discrepancy between actual and expected earnings highlights challenges in the company’s cost management and operational efficiency.

In terms of cash flow, SAIC reported a net cash provided by operating activities of $100 million, a slight increase from last year’s $98 million. However, the free cash flow was negative at $(44) million, a significant drop from the $13 million in the previous year. This decline was influenced by higher cash used from the Master Accounts Receivable Purchase Agreement (MARPA Facility) and timing of vendor payments.

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SAIC Optimistic on Remainder of FY’26

Looking ahead, SAIC remains optimistic about its financial performance for the remainder of fiscal year 2026. The company reaffirmed its guidance, projecting revenue between $7.60 billion and $7.75 billion. This outlook reflects confidence in its ability to secure and execute contracts across its core markets, including defense, space, and intelligence.

SAIC also anticipates adjusted EBITDA to range from $715 million to $735 million, with an adjusted EBITDA margin between 9.4% and 9.6%. The adjusted diluted EPS is expected to be between $9.10 and $9.30. These projections suggest that the company expects to improve its operational efficiency and profitability in the coming quarters.

Moreover, SAIC’s backlog at the end of the first quarter stood at approximately $22.3 billion, with $3.3 billion funded. This robust backlog provides a solid foundation for future revenue streams and underscores the company’s strong position in its industry. The management’s reaffirmation of guidance indicates confidence in the company’s strategic direction and ability to navigate the challenges of a dynamic market environment.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.