It has been about a month since the last earnings report for SAIC (SAIC) . Shares have added about 3.3% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is SAIC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.How Have Estimates Been Moving Since Then?It turns out, esti ...

RESTON, Va., April 09, 2025 (GLOBE NEWSWIRE) -- Science Applications International Corp. (NASDAQ: SAIC), a premier mission integrator driving our nation's digital transformation across the defense, space, civilian and intelligence markets, is pleased to announce the appointment of Kathleen McCarthy as the company’s new Executive Vice President and Chief Human Resources Officer, effective May 12, 2025. In this role, McCarthy will report directly to Chief Executive Officer Toni Townes-Whitley and will spearhe ...

RESTON, Va., March 26, 2025 (GLOBE NEWSWIRE) -- Science Applications International Corp. (NASDAQ: SAIC) has announced the launch of ReadyOne™ Foundational – the company’s commercial-grade solution for a rapidly deployable, cloud-based digital engineering ecosystem that meets the Department of Defense (DoD) Instruction 5000.97 mandate and unique mission requirements of government customers. It is now available on the AWS Marketplace to accelerate deployment and help government avoid developing capabilities t ...

Science Applications International Corporation (NASDAQ: SAIC ) is a major technology integrator for the U.S. government. In essence, it focuses on providing engineering, digital, and mission-related services to various government sectors, namely defense, intelligence, and civilian agencies. The company, with a long history tied toThe mission of Grassroots Trading rests on the following principles: providing objective, unbiased, and balanced research, backed by solid data and completely void of emotional inf ...

Science Applications International (SAIC) delivered better-than-expected fourth-quarter fiscal 2025 results. The company reported non-GAAP earnings of $2.57 per share for the fiscal fourth quarter, surpassing the Zacks Consensus Estimate of $2 by 28.5%. Furthermore, the bottom line increased 79.7% year over year, driven by higher revenues and effective cost management.Science Applications’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surp ...

Financial Data and Key Metrics Changes - The company reported fourth-quarter revenue of $1.84 billion, an increase of 6% year-over-year, driven mainly by new program wins and on-contract growth [18] - Full-year fiscal year 2025 revenue reached $7.48 billion, representing 3.1% organic growth, which is at the high end of the guidance provided at the start of the year [19] - Fourth-quarter adjusted EBITDA was $177 million, resulting in a margin of 9.6%, while full-year adjusted EBITDA was $710 million with a margin of 9.5% [19][20] - Adjusted diluted earnings per share for the fourth quarter was $2.57 and $9.13 for the full year, benefiting from strong operating performance and a lower effective tax rate [19] Business Line Data and Key Metrics Changes - Revenue from the commercial operating sector increased from less than $1 million in fiscal year 2022 to approximately $45 million in fiscal year 2025, with a goal of reaching approximately $100 million by fiscal year 2028 [12] - The company delivered net bookings of $1.3 billion in the fourth quarter and $6.6 billion for fiscal year 2025, resulting in a book-to-bill ratio of 0.9% [15] Market Data and Key Metrics Changes - The company submitted bids totaling $28 billion in fiscal year 2025, exceeding the initial plan of $22 billion, with a backlog of submitted bids increasing to just over $20 billion at year-end [16] - The company expects to drive its book-to-bill ratio to the target of 1.2% by the first half of FY 2026, contingent on ongoing uncertainties facing customers [17] Company Strategy and Development Direction - The company is focusing on transitioning from cost-plus contracts to fixed-price contracts, which is expected to improve margins while maintaining revenue levels [46][50] - The strategy emphasizes mission-critical programs and the infusion of cutting-edge technology, aligning with government efficiency initiatives [9][56] - The company is assessing its cost-plus portfolio to determine how much work could transition to fixed-type contracting over time [14] Management's Comments on Operating Environment and Future Outlook - Management noted that the financial impact from recent executive orders and program cancellations has been nominal, but they remain prepared for potential changes in the operating environment [8] - The company anticipates a headwind of approximately $200 million related to low-margin Air Force CloudOne compute and store revenue, which they chose to no-bid [24] - Management expressed confidence in achieving free cash flow targets of $11 per share in fiscal year 2026 and $12 in fiscal year 2027 [20][26] Other Important Information - The company plans to repurchase between $350 million to $400 million in FY 2026 and 2027 while maintaining capacity for capability-focused M&A or additional share repurchases [26] - Several members of the executive leadership team have indicated an intent to make discretionary purchases of company shares to align interests with shareholders [28] Q&A Session Summary Question: Impact of the $1.8 billion recompete on future book-to-bill - Management indicated that the win would bring them close to a trailing twelve-month book-to-bill ratio of 1.0% [32] Question: Details on the incremental $6 billion in submitted bids - The increase is attributed to a combination of standardized business development functions and a balanced pipeline of new business and recompete opportunities [35] Question: Nature of budget dollars in the bid pipeline - Management believes the current pipeline is competitive and can be funded, with a focus on mission-critical areas [41] Question: Transition from cost-plus to firm fixed price contracts - Management sees potential for higher margins with fixed-price contracts but does not expect a significant revenue decline [48] Question: Risks and opportunities related to DOD budget cuts - Management emphasized the importance of focusing on mission-critical programs to mitigate risks associated with budget reallocations [56] Question: Impact of federal workforce layoffs on business - Management has not seen significant impacts but is prepared to support customers as personnel changes occur [66] Question: Backlog and organic growth expectations - A high percentage of the expected organic growth is already in backlog, with a focus on contract growth rather than relying heavily on new business [75] Question: Confidence in guidance despite uncertainty - Management expressed confidence based on past performance and ongoing efforts to drive organic growth [90] Question: Strategy regarding civil versus defense work - The company has not shifted its strategy and continues to focus on mission-critical areas in both civil and defense sectors [104]

Revenue Sources - In fiscal 2025, 98% of total revenues were attributable to prime contracts with the U.S. government or subcontracts with other contractors engaged in work for the U.S. government[32]. - Approximately 52% of total revenues in fiscal 2025 were from the Department of Defense, while 46% were from Intelligence and other federal government agencies[33]. - In fiscal 2023, 49% of total revenues were from both the Department of Defense and Intelligence and other federal government agencies[34]. - The company generated 98% of total revenues from U.S. government contracts over the last three fiscal years, highlighting dependency on government spending[74]. - In fiscal 2025, revenue breakdown included approximately 16% from fixed-price contracts, 22% from time and materials contracts, and 62% from cost-reimbursable contracts[82]. - Revenues for fiscal 2025 were $7,479 million, a slight increase of $35 million from fiscal 2024, primarily due to ramp-up in volume in existing and new contracts, partially offset by the sale of the Supply Chain Business[193]. - Revenues decreased by $91 million from fiscal 2024 to fiscal 2025, primarily due to the sale of the Supply Chain Business ($188 million) and contract completions, but adjusted revenues grew by 1.7% when excluding the divestiture[207]. - The revenue mix for fiscal 2025 included 79% from cost reimbursement contracts, 10% from time and materials, and 11% from firm-fixed price contracts[233]. Employee and Talent Management - As of January 31, 2025, the company employed approximately 24,000 individuals, including over 6,000 active military or veterans[57]. - The company achieved its highest overall score in five years in the fiscal 2025 culture survey, exceeding national benchmarks by 6%[59]. - In fiscal 2025, the company invested in talent development with over 140,000 training hours completed, averaging nearly 6 hours per employee[61]. - More than 21% of approximately 5,000 new employees were hired through employee referrals, indicating strong internal talent attraction[63]. - The voluntary attrition rate was approximately 13%, demonstrating industry-leading employee retention[63]. - More than 450 employees participated in leadership development programs, totaling nearly 8,500 hours of training[62]. - The company is committed to employee well-being, offering wellness programs and an Employee Assistance Program to support mental and financial health[65]. Financial Performance - Cost of revenues for fiscal 2025 was $6,587 million, an increase of $15 million from fiscal 2024, driven by ramp-up in volume on existing and new contracts[195]. - Selling, general and administrative expenses decreased to $339 million in fiscal 2025, down $34 million from fiscal 2024, mainly due to lower incentive-based compensation[197]. - Operating income for fiscal 2025 was $563 million, a decrease of 24% compared to fiscal 2024, with operating income as a percentage of revenues at 7.5%[193]. - Net income attributable to common stockholders for fiscal 2025 was $362 million, a decrease of 24% from fiscal 2024[193]. - Adjusted EBITDA for fiscal 2025 was $710 million, with an adjusted EBITDA margin of 9.5%, an increase from 9.0% in fiscal 2024[224]. - The effective income tax rate for fiscal 2025 is lower than fiscal 2024, primarily due to the gain from the divestiture of the Supply Chain Business[202]. - Operating loss for the Corporate segment was $45 million in fiscal 2025, a significant decrease from an operating income of $147 million in fiscal 2024[216]. - The adjusted operating income for the Corporate segment improved to a loss of $20 million in fiscal 2025, compared to a loss of $51 million in fiscal 2024[214]. Risks and Challenges - The company faces risks from potential reductions in U.S. government defense spending, which could adversely affect future revenues and cash flows[75]. - The company is subject to rigorous government audits, which could lead to adjustments in contract costs and mandatory customer refunds, potentially impacting profitability and cash flows[93]. - The company may face civil or criminal penalties if investigations reveal improper activities, which could include contract terminations and reputational harm[96]. - The U.S. government has the right to terminate or modify contracts at any time, which could adversely affect revenue growth and profitability[97]. - The company faces risks related to health epidemics, which could disrupt operations and impact financial performance[110]. - The company may engage in acquisitions or divestitures that could disrupt operations and pose financial risks if not managed properly[105]. - The company faces potential liabilities and negative publicity if its detection systems fail, particularly regarding tsunami buoys deployed by the U.S. National Oceanic and Atmospheric Administration[121]. - Climate change poses risks to the company's operations, as extreme weather events could disrupt contractual obligations and affect business performance[117]. - Cybersecurity threats are a significant concern, with potential impacts on business operations and customer trust if sensitive information is compromised[132]. - The company has experienced cybersecurity incidents, but none have materially impacted operations to date; however, future incidents could harm reputation and financial performance[136]. Strategic Initiatives - The company completed a business reorganization effective February 3, 2024, transitioning from two operating sectors to five customer-facing business groups[172]. - The sale of the Supply Chain Business in May 2023 allowed the company to focus on long-term strategic growth areas[187]. - The company anticipates that spending packages related to digital modernization and climate resiliency may provide additional opportunities[183]. - The company expects continued ramp-up in volume on existing and new contracts to drive future revenue growth despite challenges from contract completions[209]. - The company is actively monitoring changes in environmental laws and implementing sustainability initiatives to mitigate risks associated with climate change[91]. Backlog and Future Outlook - As of January 31, 2025, the total backlog was estimated at $21.857 billion, a decrease from $22.763 billion on February 2, 2024[232]. - Net bookings for fiscal 2025 were approximately $6.6 billion, compared to $6.7 billion in fiscal 2024[232]. - Funded backlog for government contracts was $3.444 billion as of January 31, 2025, down from $3.539 billion in the previous year[232]. - The company anticipates that ongoing reforms in the U.S. government acquisition process could lead to delays in contract awards and increased competition[89].

FINANCIAL RESULTS FY25 4Q SUPPLEMENTAL FINANCIAL PRESENTATION March 17, 2025 Forward Looking Statements In addition, these slides should be read in conjunction with our earnings press release dated March 17, 2025 along with listening to or reading a transcript of the management comments delivered in an earnings conference call held on March 17, 2025. All information in these slides are as of March 17, 2025. SAIC expressly disclaims any duty to update any forward-looking statement provided in this release to ...

Defense IT specialist Science Applications International (SAIC 11.83%) delivered better-than-expected earnings, easing concerns about pullbacks as part of the government's efficiency push. Investors applauded the results, sending SAIC shares up 13% as of 10 a.m. ET.Strong margin performanceSAIC is one of several defense contractors focused on providing technical services to various military and civil government agencies. The company earned $2.57 per share in its fiscal fourth quarter ending Jan. 31 on reven ...

SAIC (SAIC) came out with quarterly earnings of $2.57 per share, beating the Zacks Consensus Estimate of $2 per share. This compares to earnings of $1.43 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 28.50%. A quarter ago, it was expected that this information technology company would post earnings of $2.17 per share when it actually produced earnings of $2.61, delivering a surprise of 20.28%.Over the last four quarters, the ...