SAIC (SAIC) came out with quarterly earnings of $2.05 per share, beating the Zacks Consensus Estimate of $1.86 per share. This compares to earnings of $2.05 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 10.22%. A quarter ago, it was expected that this information technology company would post earnings of $1.93 per share when it actually produced earnings of $1.92, delivering a surprise of -0.52%. Over the last four quarters, ...

Core Insights - Science Applications International Corporation (SAIC) reported revenues of $1.82 billion for the second quarter of Fiscal Year 2025, reflecting a 2% organic growth compared to the previous year [1][4] - The company achieved a net income of $81 million and an adjusted EBITDA of $170 million, which is 9.4% of revenues [1][3] - SAIC increased its adjusted diluted earnings per share (EPS) guidance for Fiscal Year 2025 to a range of $8.10 - $8.30, reaffirming all other financial guidance for the year [1][14] Financial Performance - Revenues increased by $34 million or 2% year-over-year, primarily due to ramp-up in volume on existing and new contracts, partially offset by contract completions [4][26] - Operating income decreased significantly to $134 million, down 63% from $362 million in the prior year, largely due to a prior year gain from the sale of the Supply Chain Business [3][5] - Net income fell by 67% from $247 million to $81 million, while diluted EPS dropped from $4.56 to $1.58 [3][7] Cash Flow and Capital Deployment - Cash flows from operating activities decreased by $12 million to $138 million, attributed to higher cash used from the Master Accounts Receivable Purchase Agreement [8] - Free cash flow increased significantly by 67% to $241 million compared to $144 million in the prior year [1][8] - The company deployed $226 million in capital, including $201 million for share repurchases and $19 million in cash dividends [9][10] Backlog and Contract Awards - Net bookings for the quarter were approximately $1.2 billion, resulting in a book-to-bill ratio of 0.6, while the trailing twelve months book-to-bill ratio stood at 1.1 [11] - The estimated backlog at the end of the quarter was approximately $22.9 billion, with $4.2 billion funded [11][29] - Notable contract awards included a $134 million task order from the U.S. Treasury and a $206 million recompete from the Department of Veterans Affairs [12][13] Guidance and Future Outlook - The company expressed confidence in achieving Fiscal Year 2027 targets of 5% organic revenue growth and mid-9% adjusted EBITDA margins [2] - Management reaffirmed its guidance for Fiscal Year 2025, projecting revenues between $7.35 billion and $7.50 billion and adjusted EBITDA between $680 million and $700 million [15][14]

Financial Performance - Revenues for Q2 FY2025 were $1.82 billion, reflecting a 2% organic growth compared to the same period last year[1]. - Net income decreased to $81 million, while adjusted EBITDA was $170 million, representing 9.4% of revenues[1][3]. - Diluted earnings per share (EPS) were $1.58, down 65% from $4.56 in the prior year quarter; adjusted diluted EPS remained at $2.05[3]. - Operating income as a percentage of revenues decreased to 7.4% from 20.3% in the prior year, primarily due to contract completions[3]. - The company reported a net income of $81 million for the three months ended August 2, 2024, down from $247 million in the same period last year[17]. - Net income for the three months ended August 2, 2024, was $81 million, down 67.2% from $247 million for the same period last year[25]. - Adjusted EBITDA for the three months ended August 2, 2024, was $170 million, representing 9.4% of revenues, compared to $174 million and 9.8% of revenues for the same period last year[25]. - Total revenues for the six months ended August 2, 2024, were $3,665 million, a decrease of 3.8% from $3,812 million for the same period last year[25]. - Net income for the six months ended August 2, 2024, was $205 million, compared to $227 million for the same period in 2023, reflecting a decrease of approximately 9.7%[33]. - Diluted EPS for the six months ended August 2, 2024, was $3.97, down from $4.19 in the prior year, representing a decline of about 5.3%[34]. Cash Flow and Liquidity - Free cash flow increased by 67% to $241 million compared to $144 million in the prior year[2][5]. - Net cash provided by operating activities for the quarter was $138 million, compared to $150 million in the prior year[17]. - Free cash flow for the three months ended August 2, 2024, was $241 million, an increase from $144 million in the same period last year, marking a growth of approximately 67.4%[35]. - Transaction-adjusted free cash flow for the three months ended August 2, 2024, was $241 million, compared to $143 million in the prior year, indicating a rise of about 68.5%[35]. - The company expects net cash provided by operating activities to be between $520 million and $540 million for the upcoming period[36]. - Projected free cash flow is estimated to be between $490 million and $510 million, reflecting strong operational performance[36]. Backlog and Bookings - Net bookings for the quarter were approximately $1.2 billion, resulting in a book-to-bill ratio of 0.6 and a trailing twelve months book-to-bill ratio of 1.1[7]. - The estimated backlog at the end of the quarter was approximately $22.9 billion, with $4.2 billion funded[7]. - The total backlog as of August 2, 2024, was $22,899 million, consisting of $4,237 million in funded backlog and $18,662 million in negotiated unfunded backlog[23]. Segment Performance - Operating income for the Defense and Intelligence segment was $107 million, with an operating income margin of 7.6%[18][20]. - The Civilian segment reported revenues of $403 million, also reflecting a 2% increase compared to the prior year[22]. Guidance and Future Outlook - The company increased its adjusted diluted EPS guidance for FY2025 to $8.10 - $8.30, reaffirming all other financial guidance[9]. - The company plans to continue focusing on cash flow trends and liquidity measures to enhance financial performance and shareholder value[35]. - The company is committed to optimizing its facilities and managing long-lived asset impairments as part of its restructuring strategy[34]. Other Financial Metrics - Cash flows from operating activities decreased by $12 million compared to the prior year, mainly due to higher cash used from the Master Accounts Receivable Purchase Agreement[5]. - Total current liabilities increased to $1,292 million from $1,158 million year-over-year[16]. - Principal payments on borrowings for the quarter amounted to $296 million, compared to $100 million in the prior year[17]. - The company experienced a decrease in cash and cash equivalents to $56 million at the end of the period, down from $361 million[17]. - Operating loss in the Corporate segment increased to $7 million, primarily due to the prior year gain from divestiture[22]. - The company incurred restructuring and impairment costs of $5 million for the three months ended August 2, 2024[31]. - The EBITDA margin for the six months ended August 2, 2024, was 9.2%, compared to 15.6% for the same period last year[25]. - The company reported interest expense of $35 million for the three months ended August 2, 2024, compared to $31 million for the same period last year[25]. - The company reported a loss on divestitures of $234 million for the three months ended August 4, 2023[25]. - Acquisition and integration costs for the six months ended August 2, 2024, amounted to $4 million, while restructuring and impairment costs were $6 million[33]. - The company reported a significant gain on divestitures, net of transaction costs, amounting to $240 million for the six months ended August 4, 2023[34].

RESTON, Va., Aug. 30, 2024 (GLOBE NEWSWIRE) -- Science Applications International Corp. (NASDAQ: SAIC) announced today that the company's board of directors declared a cash dividend of $0.37 per share of the company's common stock payable on October 25, 2024 to stockholders of record on October 11, 2024. 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, financ ...

The market expects SAIC (SAIC) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended July 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on Septe ...

Science Applications (SAIC) recently secured three new contracts worth $58.2 million from the U.S. Navy. The first contract is on Jammer Technique Optimization (JATO), where SAIC will provide engineering support to the U.S. Navy's JATO Program, which is part of the PMA-234 Advanced Development Integrated Product Team. In the JATO contract, SAIC will improve the U.S. Navy's data collection and processing capabilities and also execute jammer optimization. Science Applications will enable the U.S. Navy to enha ...

Science Applications (SAIC) recently announced that it has received a $120 million contract from the Naval Supply Systems Command ("NAVSUP"). This contract follows other Naval projects, including a $375 million U.S. Navy contract for Modern Vehicle Fielding Integration and Support, a $80.5 million deal with MK 710 Torpedo System Test Set and an agreement with the U.S. Navy's Hypersonics Advanced Concepts and Strategic Missions Programs support. The latest NAVSUP contract is a five-year long, cost-plus fixed ...

Core Viewpoint - The article discusses the potential economic slowdown in the US while highlighting the resilience of equity markets and the implications for companies with significant revenue exposure to the US, particularly focusing on Science Applications International Corporation (SAIC) as a potential investment opportunity due to its fundamentals and valuation [2][10]. Company Overview - SAIC reported Q1 FY 2025 revenues of $1.85 billion, reflecting a 9% year-over-year decline, attributed to its maturity cycle [5]. - The company has a forward earnings yield of 7% and a trailing free cash flow yield of 9% [2]. - SAIC's total contract value (TCV) wins of less than $500 million have remained stable, indicating a strong pipeline for future growth [5]. Financial Performance - The company maintained a book-to-bill ratio of 1.4, with approximately two-thirds of submission volume categorized as new business wins [5]. - Management retained its FY 2025 revenue guidance of $7.35 billion to $7.5 billion, projecting pre-tax earnings of $700 million at the upper end of the range [5]. - Free cash flow for the company has been robust, with historical figures showing cash generation between $700 million to $1.1 billion after accounting for growth and maintenance investments [30]. Industry Outlook - The consulting services market is projected to grow at a compound annual growth rate (CAGR) of 4.8%, reaching $447 billion by 2029, driven by demand for data analytics and AI integration [4]. - The research, promotional, and consulting services market is expected to grow at a CAGR of 5.3%, outpacing long-term GDP growth by approximately 300 basis points [4]. Competitive Advantage - SAIC has demonstrated a higher return on capital compared to industry averages, achieving a return of 12.2% against the industry average of 6.5% [13][42]. - The company operates with lower gross margins but maintains higher operating margins due to efficient cost management and pricing strategies [42]. Valuation - SAIC trades at a discount to the sector at 14.8x trailing earnings and 16x trailing EBIT, which are 24% and 7% discounts to the sector, respectively [22]. - Projected valuation indicates a potential upside to $156 per share, representing a 35% increase from the current price [23].

Science Applications International Corporation's (SAIC) shares plunged 11.8% on Monday after the company reported lower-than-expected bottom-line results for the first quarter of fiscal 2025. The company reported first-quarter adjusted earnings of $1.92 per share, which missed the Zacks Consensus Estimate by a penny. The bottom line decreased 20% year over year due to a decline in revenues, increased internal investment and program performance milestones being weighted to the second half of the year. This w ...

Financial Performance - Revenues for the three months ended May 3, 2024, were $1,847 million, a decrease of 8.9% compared to $2,028 million for the same period in 2023[9]. - Net income for the same period was $77 million, down 21.4% from $98 million in the prior year[9]. - Basic earnings per share decreased to $1.49 from $1.80, reflecting a decline of 17.2% year-over-year[9]. - The company reported a comprehensive income of $80 million for the three months ended May 3, 2024, compared to $92 million in the prior year[11]. - Operating income for the same period decreased by $26 million (17%) to $131 million, with an operating margin of 7.1% compared to 7.7% in the prior year[118]. - EBITDA for the three months ended May 3, 2024, was $167 million, down from $194 million, with EBITDA as a percentage of revenues decreasing to 9.0% from 9.6%[134][135]. - Adjusted EBITDA also decreased to $166 million, with adjusted EBITDA as a percentage of revenues at 9.0%, down from 9.3% in the prior year[134][135]. Revenue Sources - The Department of Defense contributed $976 million to total revenues for the three months ended May 3, 2024, down from $1,071 million in the prior year[54]. - The Defense and Intelligence segment generated revenues of $1,436 million, while the Civilian segment contributed $411 million for the same period[91]. - Revenues for the three months ended May 3, 2024, decreased by $181 million (9%) to $1,847 million compared to $2,028 million in the same period last year, primarily due to the sale of the Supply Chain Business[118]. - Revenues for the three months ended May 3, 2024, decreased by $20 million to $411 million, a 5% decline compared to $431 million in the same period last year[127]. Cash Flow and Assets - Cash and cash equivalents decreased to $49 million from $94 million at the end of the previous quarter[15]. - Net cash provided by operating activities increased to $98 million from $82 million in the same period last year[21]. - Cash flows provided by operating activities increased by $16 million (20%) to $98 million, driven by higher cash from the Master Accounts Receivable Purchase Agreement[123]. - Cash used in investing activities was $7 million, a significant decrease from cash provided of $336 million in the prior year, primarily due to the sale of the Supply Chain Business[149]. - Cash used in financing activities increased to $136 million, attributed to higher principal payments and share repurchases[150]. Business Operations and Strategy - The company completed a business reorganization effective February 3, 2024, transitioning to five customer-facing business groups[24]. - The Innovation Factory supports the company’s segments by developing enterprise-class solutions, focusing on AI, application development, and cloud services[27]. - The company anticipates that spending packages related to digital modernization and climate resiliency may provide additional growth opportunities[110]. - The company executed a definitive agreement to sell its logistics and supply chain management business for $350 million, with a refundable cash deposit of $355 million received[63][65]. Shareholder Actions - The company paid cash dividends of $0.37 per share, totaling $20 million during the quarter[21]. - A quarterly dividend of $0.37 per share was declared during the three months ended May 3, 2024[49]. - The Company has repurchased approximately 20.9 million shares under its repurchase plan as of May 3, 2024[48]. - The company repurchased a total of 612,428 shares of common stock during the three months ended May 3, 2024, at an average price of $131.77 per share[161]. - The company may repurchase shares on the open market based on various factors including market conditions and internal cash generation[160]. Tax and Compliance - The company's effective income tax rate decreased to 19.0% for the three months ended May 3, 2024, from 20.0% in the same period in 2023, primarily due to higher tax benefits[73]. - The effective income tax rate for the three months ended May 3, 2024, was 19.0%, down from 20.0% in the same period last year, primarily due to higher tax benefits from foreign-derived intangible income[120]. - The Company plans to adopt new accounting standards related to income tax disclosures and segment reporting in fiscal years 2026 and 2025, respectively[43][44]. Future Outlook - As of May 3, 2024, the company had approximately $5.4 billion in remaining performance obligations, with an expectation to recognize revenue on approximately 81% over the next 12 months[60]. - The U.S. government budget for fiscal year 2025 includes a 1% growth for both defense and non-defense budgets, which may impact future revenue opportunities[108]. - The company expects to fund ongoing working capital and commitments with cash on hand and future operating cash flows, supported by a $1.0 billion Revolving Credit Facility[144]. Risk and Compliance - The company is routinely subject to investigations and reviews related to compliance with various laws and regulations, as detailed in the fiscal 2024 Annual Report[158]. - No material changes were reported in risk factors compared to the most recent Annual Report on Form 10-K[159]. - Management evaluated the effectiveness of disclosure controls and procedures, concluding they were operating effectively as of May 3, 2024[154]. - There were no changes in internal control over financial reporting that materially affected the company during the quarterly period[155].