SAIC Reports Mixed Second Quarter Fiscal Year 2026 Results

Science Applications International Corporation (NASDAQ: SAIC) has released its financial results for the second quarter of fiscal year 2026, showing mixed performance metrics against expectations. The company has also updated its guidance for the full fiscal year, reflecting both challenges and opportunities in its operational landscape.

Science Applications International Corporation Reports Mixed Q2 Results

In the second quarter of fiscal year 2026, Science Applications International Corporation (SAIC) reported revenues of $1.77 billion, marking a 3% decline from the same period the previous year. This decrease was primarily attributed to the completion and ramp-down of existing contracts, which were only partially offset by new contracts. The company’s net income for the quarter was $127 million, a significant increase from $81 million in the prior year. Diluted earnings per share (EPS) rose to $2.71, surpassing the expected EPS of $2.25. Adjusted diluted EPS stood at $3.63, up from $2.05 in the previous year.

Compared to the expectations, SAIC’s revenue fell short of the anticipated $1.86 billion. However, the company’s EPS exceeded forecasts, demonstrating strong profitability despite the revenue shortfall. The increase in EPS was driven by improved profitability across the contract portfolio and a recovery of costs from the settlement of a patent infringement matter. Additionally, the company’s adjusted EBITDA was $185 million, representing 10.5% of revenues, up from 9.4% in the prior year. This improvement was due in part to the same factors that boosted EPS.

SAIC’s net bookings for the quarter were approximately $2.6 billion, with a book-to-bill ratio of 1.5. The trailing twelve months book-to-bill ratio stood at 1.0, indicating a stable pipeline of future work. Year-to-date net bookings reached $5.0 billion, with a year-to-date book-to-bill ratio of 1.4. Despite the revenue decline, these metrics reflect a healthy demand for SAIC’s services, particularly in defense and intelligence sectors.

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SAIC Revises Guidance for the Fiscal Year 2026

Looking ahead, SAIC has revised its guidance for the fiscal year 2026. The company now expects revenue to be between $7.25 billion and $7.325 billion, down from the previous guidance of $7.6 billion to $7.75 billion. This adjustment reflects a more cautious outlook due to slower on-contract growth and continued delays in new business awards and program ramps. Despite these challenges, SAIC has increased its guidance for adjusted diluted EPS to a range of $9.40 to $9.60, up from $9.10 to $9.30. This increase is supported by the company’s strong program performance and strategic cost alignment efforts.

SAIC has also adjusted its guidance for adjusted EBITDA, now projected to be between $680 million and $690 million, compared to the prior range of $715 million to $735 million. The company has raised its free cash flow guidance to exceed $550 million, up from the previous range of $510 million to $530 million. This increase reflects SAIC’s focus on improving cash generation and capital deployment, including share repurchases and dividend payments.

CEO Toni Townes-Whitley highlighted the company’s strategic response to the challenging environment, emphasizing the alignment of cost structures while sustaining key investments for long-term value creation. SAIC’s revised guidance assumes a stable operating environment for the remainder of the fiscal year. The company’s confidence in executing against this outlook is bolstered by its robust backlog of $23.2 billion, which includes significant contract awards across various sectors, such as defense, intelligence, and civilian markets.

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.