SAIC Announces Third Quarter of Fiscal Year 2026 Results

Core Insights - Science Applications International Corporation (SAIC) reported a revenue contraction of 5.6% for the third quarter ended October 31, 2025, attributed to a government shutdown and contract completions, despite strong margins from effective program execution [2][4][11]. Financial Performance - Revenues for the quarter were $1.866 billion, down 6% from $1.976 billion in the prior year [3][4]. - Operating income decreased by 20% to $128 million, with an operating margin of 6.9%, down 120 basis points from 8.1% [3][5]. - Net income fell 26% to $78 million, while diluted earnings per share decreased by 21% to $1.69 [3][7]. - Adjusted EBITDA was $185 million, representing 9.9% of revenues, a slight decrease from 10.0% in the prior year [3][6]. Cash Flow and Capital Deployment - Net cash provided by operating activities was $129 million, down 10% from $143 million in the prior year [3][8]. - Free cash flow surged to $135 million, a significant increase from $9 million in the previous year [3][6]. - The company deployed $120 million in capital, primarily for share repurchases and dividends [9]. Backlog and Contract Awards - Net bookings for the quarter were approximately $2.2 billion, with a book-to-bill ratio of 1.2, and year-to-date net bookings reached $7.2 billion [11]. - The estimated backlog at the end of the quarter was approximately $23.8 billion, with $3.8 billion funded [11][42]. - Notable contract awards included a $1.4 billion task order for the U.S. Air Force and a $413 million task order for the U.S. Army [12][13]. Acquisition Activity - SAIC acquired SilverEdge Government Solutions for a preliminary purchase price of $203 million, aimed at enhancing its mission-focused technology solutions [18]. Fiscal Year 2026 Guidance - The company raised its fiscal year 2026 guidance for revenue to $7.275 billion - $7.325 billion and adjusted EBITDA to approximately $695 million [20].