SAIC Announces Fourth Quarter and Full Fiscal Year 2025 Results

Core Insights - Science Applications International Corporation (SAIC) reported strong financial results for the fourth quarter and full fiscal year ended January 31, 2025, with revenue, adjusted EBITDA, adjusted earnings per share, and free cash flow exceeding guidance [2][3][8] - The company secured a significant $1.8 billion contract award for the System Software Lifecycle Engineering program, marking its largest recompete win in recent years, alongside a backlog of submitted bids valued at approximately $20 billion [2][3] Financial Performance - Fourth Quarter Results: Revenues increased by $101 million to $1.84 billion, a 6% rise compared to the prior year quarter, driven by increased volume on new and existing contracts [5][8] - Operating Income: Operating income rose to $138 million, a 75% increase from the previous year, with an operating margin of 7.5% [3][6] - Net Income: Net income for the quarter was $98 million, a 151% increase year-over-year, with diluted earnings per share at $2.00 [3][8] - Adjusted EBITDA: Adjusted EBITDA was $177 million, representing a 39% increase, with an adjusted EBITDA margin of 9.6% [3][7] Fiscal Year Overview - Annual Revenue: For the fiscal year 2025, revenues reached $7.48 billion, a slight increase of $35 million compared to the previous year, with organic growth of approximately 3.1% after adjusting for divestitures [10][8] - Operating Income: Operating income decreased by 24% to $563 million, primarily due to a prior year gain from the sale of the Supply Chain Business [11][12] - Net Income: Net income for the fiscal year was $362 million, down 24% from the previous year, with diluted earnings per share at $7.17 [3][13] Cash Flow and Capital Deployment - Cash Flow: Operating cash flow for the fourth quarter was $115 million, an increase of 83% year-over-year, while free cash flow was $236 million, a 143% increase [14][8] - Capital Deployment: In the fourth quarter, SAIC deployed $163 million in capital, including $130 million for share repurchases and $18 million in dividends [16][8] Backlog and Contract Awards - Backlog: As of January 31, 2025, SAIC's estimated backlog was approximately $21.9 billion, with $3.4 billion funded [18][46] - Contract Awards: Notable awards included a $187 million task order for the Defense Readiness Reporting System and approximately $480 million in contract awards from space and intelligence organizations [18][20] Guidance for Fiscal Year 2026 - Revenue Guidance: The company provided guidance for fiscal year 2026, projecting revenues between $7.60 billion and $7.75 billion, with adjusted EBITDA expected between $715 million and $735 million [21][22]