SAIC Announces Second Quarter of Fiscal Year 2025 Results

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]