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 7,479million,aslightincreaseof35 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 91millionfromfiscal2024tofiscal2025,primarilyduetothesaleoftheSupplyChainBusiness(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 6,587million,anincreaseof15 million from fiscal 2024, driven by ramp-up in volume on existing and new contracts[195]. - Selling, general and administrative expenses decreased to 339millioninfiscal2025,down34 million from fiscal 2024, mainly due to lower incentive-based compensation[197]. - Operating income for fiscal 2025 was 563million,adecreaseof24362 million, a decrease of 24% from fiscal 2024[193]. - Adjusted EBITDA for fiscal 2025 was 710million,withanadjustedEBITDAmarginof9.545 million in fiscal 2025, a significant decrease from an operating income of 147millioninfiscal2024[216].−TheadjustedoperatingincomefortheCorporatesegmentimprovedtoalossof20 million in fiscal 2025, compared to a loss of 51millioninfiscal2024[214].RisksandChallenges−ThecompanyfacesrisksfrompotentialreductionsinU.S.governmentdefensespending,whichcouldadverselyaffectfuturerevenuesandcashflows[75].−Thecompanyissubjecttorigorousgovernmentaudits,whichcouldleadtoadjustmentsincontractcostsandmandatorycustomerrefunds,potentiallyimpactingprofitabilityandcashflows[93].−Thecompanymayfacecivilorcriminalpenaltiesifinvestigationsrevealimproperactivities,whichcouldincludecontractterminationsandreputationalharm[96].−TheU.S.governmenthastherighttoterminateormodifycontractsatanytime,whichcouldadverselyaffectrevenuegrowthandprofitability[97].−Thecompanyfacesrisksrelatedtohealthepidemics,whichcoulddisruptoperationsandimpactfinancialperformance[110].−Thecompanymayengageinacquisitionsordivestituresthatcoulddisruptoperationsandposefinancialrisksifnotmanagedproperly[105].−Thecompanyfacespotentialliabilitiesandnegativepublicityifitsdetectionsystemsfail,particularlyregardingtsunamibuoysdeployedbytheU.S.NationalOceanicandAtmosphericAdministration[121].−Climatechangeposesriskstothecompany′soperations,asextremeweathereventscoulddisruptcontractualobligationsandaffectbusinessperformance[117].−Cybersecuritythreatsareasignificantconcern,withpotentialimpactsonbusinessoperationsandcustomertrustifsensitiveinformationiscompromised[132].−Thecompanyhasexperiencedcybersecurityincidents,butnonehavemateriallyimpactedoperationstodate;however,futureincidentscouldharmreputationandfinancialperformance[136].StrategicInitiatives−ThecompanycompletedabusinessreorganizationeffectiveFebruary3,2024,transitioningfromtwooperatingsectorstofivecustomer−facingbusinessgroups[172].−ThesaleoftheSupplyChainBusinessinMay2023allowedthecompanytofocusonlong−termstrategicgrowthareas[187].−Thecompanyanticipatesthatspendingpackagesrelatedtodigitalmodernizationandclimateresiliencymayprovideadditionalopportunities[183].−Thecompanyexpectscontinuedramp−upinvolumeonexistingandnewcontractstodrivefuturerevenuegrowthdespitechallengesfromcontractcompletions[209].−Thecompanyisactivelymonitoringchangesinenvironmentallawsandimplementingsustainabilityinitiativestomitigaterisksassociatedwithclimatechange[91].BacklogandFutureOutlook−AsofJanuary31,2025,thetotalbacklogwasestimatedat21.857 billion, a decrease from 22.763billiononFebruary2,2024[232].−Netbookingsforfiscal2025wereapproximately6.6 billion, compared to 6.7billioninfiscal2024[232].−Fundedbacklogforgovernmentcontractswas3.444 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].
SAIC(SAIC)2025-03-17 16:16