Financial Data and Key Metrics Changes - The company reported revenue of $1,877 million for Q1 FY 2026, representing growth of approximately 2% year-over-year due to the ramp-up of new and existing programs [11] - Adjusted EBITDA for the quarter was $157 million, resulting in an adjusted EBITDA margin of 8.4% [11] - Adjusted diluted earnings per share were flat year-over-year at $1.92, impacted by a higher tax rate and lower adjusted EBITDA [12] - Free cash flow was negative $44 million, affected by the timing of receivables on two programs [12] Business Line Data and Key Metrics Changes - The company secured net bookings of $2,400 million with a book-to-bill ratio of 1.3, including key recompete contracts [10] - The backlog of pending awards remained steady at approximately $20,000 million, providing visibility into future bookings [10] - The company expects to achieve a trailing twelve-month book-to-bill ratio of 1.2 in the coming quarters [11] Market Data and Key Metrics Changes - The Department of Defense (DoD) is expected to see stronger budget support, particularly for the Navy, Air Force, and Space Force, while the Army may face challenges [6] - The company noted over $1 billion in additional budget for the Department of Transportation and over $40 billion for the Department of Homeland Security [9] - The company’s revenue from its top five civilian agency customers represents over 70% of total revenue for the civilian segment [9] Company Strategy and Development Direction - The company is pivoting its portfolio towards mission and enterprise IT, aligning with the new administration's priorities [7] - The strategy includes leveraging proven expertise in mission integration and digital engineering to drive program success [8] - The company is focused on executing its growth strategy while navigating procurement delays and changes in the operating environment [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment stabilizing, despite ongoing procurement delays and turnover among customers [5] - The company anticipates continued growth driven by new business ramping up and modest headwinds from contract transitions [14] - Management reiterated guidance for revenue growth of approximately 2.5% at the midpoint for FY 2026 [14] Other Important Information - The company repurchased approximately $125 million of shares in Q1 and continues to target annual repurchases of $350 million to $400 million [17] - The company is also exploring additional capacity for mergers and acquisitions or incremental share repurchases [17] Q&A Session Summary Question: Update on operating environment and budget priorities - Management noted that the operating environment has stabilized, with significant turnover among acquisition personnel affecting procurement processes [20][22] Question: Competitiveness in procurement environment - Management acknowledged increased competitiveness but expressed confidence in their submission pipeline and win rates [24][25] Question: Known headwinds from recompetes - The only significant known recompete headwind is the NASA program loss, which will conclude in Q3 [28][31] Question: Nature of cost overruns in fixed-price programs - Management explained that cost overruns were due to challenges in the tech development phase, but they expect to recover as the program transitions to the sustainment phase [33][34] Question: Overview of end markets and opportunities - Management provided insights into the civilian and defense markets, highlighting growth opportunities in various sectors, including command and control capabilities [41][44] Question: Impact of continuing resolutions on awards - Management indicated that while there are delays in larger awards, the overall solicitation of proposals remains robust [49][50] Question: Margin trajectory and expectations - Management expects civil margins to improve and defense margins to stabilize, with a focus on executing transitions effectively [82][88]

Group 1 - SAIC reported quarterly earnings of $1.92 per share, missing the Zacks Consensus Estimate of $2.14 per share, representing an earnings surprise of -10.28% [1] - The company posted revenues of $1.88 billion for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 0.71%, compared to year-ago revenues of $1.85 billion [2] - Over the last four quarters, SAIC has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2 - The stock's immediate price movement will depend on management's commentary on the earnings call and the sustainability of earnings expectations [3][4] - SAIC shares have increased by approximately 3.4% since the beginning of the year, outperforming the S&P 500's gain of 0.5% [3] - The current consensus EPS estimate for the coming quarter is $2.21 on $1.86 billion in revenues, and for the current fiscal year, it is $9.19 on $7.67 billion in revenues [7] Group 3 - The Computers - IT Services industry, to which SAIC belongs, is currently in the top 38% of Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for SAIC is currently mixed, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market [6]

FINANCIAL RESULTS FY26 1Q SUPPLEMENTAL FINANCIAL PRESENTATION JUNE 2, 2025 SAIC PROPRIETARY INFORMATION I © SAIC. ALL RIGHTS RESERVED FORWARD LOOKING STATEMENTS Certain statements in this presentation are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "should," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions identify forward-looking statements in this p ...

Core Insights - Science Applications International Corporation (SAIC) reported a revenue increase of 2% in the first quarter of fiscal year 2026, totaling $1.877 billion compared to $1.847 billion in the same period last year [3][4][7] - The company experienced a decline in operating income, net income, and EBITDA, attributed to contract completions and timing and volume mix in its contract portfolio [4][5][34] - SAIC's backlog at the end of the quarter was approximately $22.3 billion, with net bookings of $2.4 billion, reflecting a book-to-bill ratio of 1.3 [10][11] Financial Performance - Revenues for the quarter increased by $30 million or 2% year-over-year, primarily due to ramp-up in volume in existing and new contracts [4] - Operating income decreased by 8% to $121 million, with an operating margin of 6.4%, down from 7.1% in the prior year [3][4][33] - Net income was $68 million, a decrease of 12% from $77 million in the previous year [3][6] - Adjusted EBITDA was $157 million, representing 8.4% of revenues, down from 9.0% in the prior year [3][5] Cash Flow and Capital Deployment - Cash flows from operating activities increased to $100 million, up from $98 million in the prior year [7][52] - Free cash flow was negative at $(44) million, a significant decline from $13 million in the same quarter last year [3][52] - The company deployed $152 million in capital, including $125 million for share repurchases and $19 million in cash dividends [8] Contract Awards and Backlog - SAIC secured notable contracts, including a $1.8 billion contract with the U.S. Army and a $327 million contract with the Pension Benefit Guaranty Corporation [11][12] - The estimated backlog included approximately $3.3 billion in funded contracts, with a total backlog of $22.3 billion [10][38] Fiscal Year 2026 Guidance - Management reaffirmed fiscal year 2026 guidance, projecting revenues between $7.60 billion and $7.75 billion, with adjusted EBITDA between $715 million and $735 million [14][15]

Financial Performance - Revenues for the first quarter of fiscal year 2026 were $1.88 billion, representing a 2% increase compared to $1.85 billion in the same period last year[5]. - Net income decreased to $68 million, down 12% from $77 million in the prior year quarter[6]. - Adjusted EBITDA was $157 million, accounting for 8.4% of revenues, a decrease from 9.0% in the prior year[8]. - Adjusted diluted earnings per share for the quarter was $1.92, unchanged from the prior year[8]. - Net income for the three months ended May 2, 2025, was $68 million, a decrease of 11.7% from $77 million in the same period of 2024[28]. - Operating income decreased to $121 million, down 7.6% from $131 million in the prior year, with an overall operating margin of 6.4% compared to 7.1%[30]. - Income before income taxes for the three months ended May 2, 2025, was $86 million, down from $95 million in the same period in 2024, a decrease of 9.5%[43]. - The company incurred restructuring and impairment costs of $3 million for the three months ended May 2, 2025, compared to $2 million in the same period in 2024[43]. Cash Flow and Dividends - Free cash flow for the quarter was $(44) million, a significant decrease from $13 million in the prior year[6]. - The company expects net cash provided by operating activities for FY26 to be between $545 million and $565 million, with free cash flow projected to be between $510 million and $530 million[46]. - The company declared a cash dividend of $0.37 per share, payable on July 25, 2025[11]. Bookings and Backlog - Net bookings for the quarter were approximately $2.4 billion, resulting in a book-to-bill ratio of 1.3[12]. - The estimated backlog at the end of the quarter was approximately $22.3 billion, with $3.3 billion funded[12]. - Funded backlog as of May 2, 2025, was $3,265 million, a decrease from $3,444 million as of January 31, 2025[34]. - Total backlog increased to $22,343 million, up from $21,857 million in the previous quarter, indicating growth in future revenue potential[34]. Segment Performance - The Defense and Intelligence segment reported revenues of $1,433 million, a slight decrease of 0.2% from $1,436 million year-over-year[30]. - Civilian segment revenues increased by $33 million, or 8%, primarily due to ramp-up in volume on existing and new contracts[31]. Corporate Activities - SAIC was awarded a $1.8 billion contract for the U.S. Army Combat Capabilities Development Command during the quarter[13]. - Principal payments on borrowings increased significantly to $689 million from $310 million, reflecting a strategic shift in financing activities[28]. - Corporate operating loss increased to $17 million, up from $10 million in the prior year, attributed to higher selling, general, and administrative expenses[32]. Expenditures and Provisions - Expenditures for property, plant, and equipment for the three months ended May 2, 2025, were $8 million, up from $6 million in the same period in 2024[46]. - The company reported a provision for income taxes of $18 million for both the three months ended May 2, 2025, and May 3, 2024[43]. - The recovery of acquisition and integration costs and restructuring and impairment costs contributed to the adjusted diluted earnings per share calculation[43]. Guidance - Management reaffirmed fiscal year 2026 guidance, projecting revenues between $7.60 billion and $7.75 billion[18].

Core Insights - Science Applications International Corporation (SAIC) is expected to announce earnings on June 2, 2025, with historical data indicating a favorable one-day return trend post-earnings release [1][2] - Analysts project SAIC will report earnings of $2.12 per share on revenue of $1.87 billion, compared to $1.92 per share and $1.85 billion in the same quarter last year [2] - SAIC has a market capitalization of $5.6 billion and generated $7.5 billion in revenue over the past twelve months, with operating profits of $561 million and net income of $362 million [2] Historical Performance - Over the last five years, SAIC's stock has experienced a positive one-day return 63% of the time following earnings announcements, with a median positive return of 3.7% and a maximum return of 13.4% [1][5] - The percentage of positive one-day returns increases to 64% when considering the last three years [5] - The median of the 12 positive returns is 3.7%, while the median of the 7 negative returns is -4.9% [5] Trading Strategies - Traders can utilize historical trends to inform pre-earnings positioning and post-earnings adjustments based on immediate and medium-term return correlations [4] - A strategy involves analyzing the correlation between one-day and five-day returns to determine trading positions [3][4]

Company Overview - SAIC is expected to report quarterly earnings of $2.14 per share, reflecting a year-over-year increase of +11.5% [3] - Revenues are anticipated to reach $1.86 billion, which is a 0.9% increase from the previous year [3] - The earnings report is scheduled for June 2, 2025, and the stock may react positively if results exceed expectations [2] Earnings Estimates and Trends - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4] - The Most Accurate Estimate for SAIC is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.46%, suggesting a bearish outlook from analysts [10] - SAIC currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat [11] Historical Performance - In the last reported quarter, SAIC had an earnings surprise of +28.50%, posting earnings of $2.57 per share against an expectation of $2.00 [12] - Over the past four quarters, SAIC has beaten consensus EPS estimates three times [13] Comparative Industry Analysis - Nutanix, another player in the IT Services industry, is expected to report earnings of $0.38 per share, indicating a year-over-year change of +35.7% [17] - Nutanix's revenues are projected to be $626.12 million, up 19.4% from the previous year [17] - Nutanix has a positive Earnings ESP of 5.26% and has consistently beaten consensus EPS estimates in the last four quarters [18]

Core Points - Science Applications International Corp. (SAIC) is set to release its first quarter fiscal year 2026 results on June 2, 2025, before market opening [1] - A conference call to discuss the operational and financial results will take place at 10:00 a.m. Eastern time on the same day [1] - The conference call will be available via webcast only, with no dial-in access provided [2] Company Overview - SAIC is a Fortune 500 mission integrator focused on technology and innovation across defense, space, civilian, and intelligence markets [3] - The company offers a robust portfolio including mission IT, enterprise IT, engineering services, and professional services [3] - SAIC employs approximately 24,000 people and has annual revenues of around $7.5 billion [4]

Core Insights - SAIC is positioned to potentially continue its earnings-beat streak in upcoming reports, having a history of surpassing earnings estimates, particularly in the last two quarters with an average surprise of 24.39% [1][4] Earnings Performance - In the last reported quarter, SAIC achieved earnings of $2.57 per share, exceeding the Zacks Consensus Estimate of $2 per share, resulting in a surprise of 28.50% [2] - For the previous quarter, SAIC's earnings were $2.61 per share against an expected $2.17 per share, delivering a surprise of 20.28% [2] Earnings Estimates and Predictions - Estimates for SAIC have been trending higher, influenced by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +0.23%, indicating bullish sentiment among analysts [4][7] - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) suggests a strong possibility of another earnings beat [7] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [5] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [6]

Core Insights - Science Applications International Corp. (SAIC) has been awarded a $55 million contract for the Proliferated Warfighter Space Architecture (PWSA) Tranche 3 Program Integration (T3PI) from the Space Development Agency (SDA), starting on May 1, 2025 [1][2] - The PWSA aims to enhance Department of Defense capabilities by providing multi-band global communications, persistent encrypted connectivity, and improved missile defense systems [2][3] - SAIC's role includes managing enterprise requirements, schedules, and technical reviews to ensure the integration of various space layers and ground segments [2][3] Company Overview - SAIC is recognized as a leading Mission Integrator, focusing on advanced technology solutions for national defense and space capabilities [3][4] - The company has a robust portfolio that includes secure solutions across defense, space, civilian, and intelligence markets, with annual revenues of approximately $7.5 billion [5][6] - SAIC employs around 24,000 individuals and is headquartered in Reston, Virginia [6]