Financial Data and Key Metrics Changes - Third quarter revenue was $1.87 billion, a decline of 5.6% year-over-year, impacted by a government shutdown which accounted for approximately one percentage point of the decline [6][7] - Adjusted EBITDA was $185 million, resulting in a margin of 9.9%, driven by strong program execution [7][8] - Adjusted diluted EPS was $2.58, reflecting strong margin performance and a favorable tax rate [7] - Free cash flow for the third quarter was $135 million, despite being affected by the government shutdown [8][19] Business Line Data and Key Metrics Changes - Net bookings for the third quarter were $2.2 billion, resulting in a book-to-bill ratio of 1.2x [15] - The civil business segment experienced a year-over-year decline of 7%, but margins improved significantly over the first nine months of the year [32][33] Market Data and Key Metrics Changes - The government shutdown slowed proposal submissions, but normalization is expected in the near term [15][22] - The company anticipates submitting bids totaling over $30 billion in FY 2027 [15][16] Company Strategy and Development Direction - The acquisition of SilverEdge is expected to enhance the company's capabilities and contribute positively to margins and EPS [5][31] - The company is focusing on improving execution, resource allocation, and prioritizing bid quality to drive growth [9][10] - There is a commitment to reinvest over $100 million in annual spending into higher ROI areas to improve profitability [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to improve execution and deliver sustained profitable growth despite market uncertainties [20] - The company is prepared to adapt to changes in procurement processes within the Department of War, aiming for greater speed and efficiency [37][39] - The outlook for FY 2026 and FY 2027 includes increased revenue guidance due to the acquisition of SilverEdge and reaffirmed organic growth expectations [17][19] Other Important Information - The company plans to repurchase approximately $500 million in shares for both FY 2026 and FY 2027, totaling $1 billion, which represents about 25% of its market value [19] - Management is actively seeking a permanent CEO to lead the company forward [13] Q&A Session Summary Question: What is the current procurement environment post-shutdown? - Management noted a slowdown in submit activity and RFPs due to the shutdown, but expects normalization in Q4 [22] Question: Any residual impact from DOGE and pricing environment? - Management indicated no material changes from previous disclosures regarding DOGE, and margins remained healthy with minimal pricing pressure [24][25] Question: Opportunities and integration of SilverEdge? - Management expressed enthusiasm about SilverEdge's integration, expecting it to enhance bid differentiation and contribute positively to margins and EPS [30][31] Question: Civil growth decline and future trajectory? - Management stated that the civil business has been roughly flat over nine months, with no specific program-related drivers for the recent decline [32][33] Question: Thoughts on Department of War's reforms? - Management is ready to assist with procurement changes and is focusing on execution to align with the Department's objectives [37][39] Question: How to allocate savings from cost efficiencies? - Management indicated that a substantial portion of the $100 million savings will be reinvested into business development and proposal improvement [44][45] Question: Expectations on federal civil spending? - Management anticipates continued pressure on civilian agency budgets, but remains optimistic about their positioning within key agencies [51][52] Question: Portfolio shaping and defense budget growth? - Management is open to portfolio shaping but is currently focused on organic growth, with expectations of upward pressure on the DoD budget [62][65]

Financial Data and Key Metrics Changes - Third quarter revenue was $1.87 billion, a decline of 5.6% year over year, impacted by a government shutdown which accounted for approximately one percentage point of the decline [5][12] - Adjusted EBITDA was $185 million, resulting in a margin of 9.9%, driven by strong program execution [5][12] - Adjusted diluted EPS was $2.58, reflecting strong margin performance and a favorable tax rate [5][12] - Free cash flow for the third quarter was $135 million, despite being affected by the government shutdown [6][12] Business Line Data and Key Metrics Changes - Net bookings for the third quarter were $2.2 billion, resulting in a book-to-bill ratio of 1.2x [12] - The civil business segment experienced a year-over-year decline of 7%, but the nine-month performance showed it was roughly flat with improved margins [26][27] - The company expects to submit bids totaling over $30 billion in FY27, despite a slowdown in proposal submissions due to the government shutdown [12][13] Market Data and Key Metrics Changes - The government shutdown has slowed the pace of proposal submissions, but normalization is expected in the near term [20][12] - The company anticipates continued pressure on civilian agency budgets, impacting growth in the civil sector [45][60] Company Strategy and Development Direction - The acquisition of SilverEdge is expected to enhance the company's capabilities and contribute positively to margins and EPS [4][25] - The company is focusing on improving execution, increasing business development throughput, and prioritizing quality in proposals [7][9] - Efforts are being made to identify over $100 million in annual spending to reinvest in higher ROI areas to improve margins [8][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to improve execution and deliver sustained profitable growth despite market uncertainties [17][60] - The company is committed to adapting to changes in procurement processes within the Department of War, aiming for greater speed and efficiency [31][32] - Future guidance reflects a cautious optimism, with expectations for revenue growth and margin improvement in FY27 [14][15] Other Important Information - The company plans to repurchase approximately $500 million in shares for both FY26 and FY27, representing about 25% of its market value [16] - The leadership transition is ongoing, with a search for a permanent CEO being conducted [11] Q&A Session Summary Question: What is the current procurement environment post-shutdown? - Management noted a slowdown in RFP activity due to the shutdown but expects normalization in Q4, which is typically a softer quarter for book-to-bill [20] Question: Any residual impact from DOGE and pricing environment? - Management indicated no material changes from previous disclosures regarding DOGE, with healthy margins and limited pricing pressure observed [22] Question: How will SilverEdge integrate into the portfolio? - Management expressed enthusiasm about SilverEdge's potential to enhance bid differentiation and overall portfolio value [24] Question: What is the outlook for civil spending? - Management anticipates continued pressure on civilian agency budgets, but believes they are positioned well within key agencies [45][60] Question: How does the company plan to utilize the $100 million in savings? - A substantial portion of the savings will be reinvested into business development and proposal improvement efforts to drive growth [39][40] Question: What is the company's stance on portfolio shaping? - Management remains open to portfolio shaping opportunities but emphasizes the need for organic growth before pursuing larger acquisitions [56][57]

Financial Performance - SAIC's FY26 3Q revenue was $1.866 billion, a decrease compared to $1.976 billion in FY25 [13, 14] - Adjusted EBITDA for FY26 3Q was $185 million, representing 9.9% of revenue, compared to $197 million, or 10.0% of revenue, in FY25 [14] - Adjusted diluted EPS for FY26 3Q was $2.58, slightly lower than $2.61 in FY25 [15] - Free cash flow for FY26 3Q was $135 million, compared to $143 million in FY25 [18] Guidance and Targets - FY26 revenue guidance is $7.275 billion - $7.325 billion, with an organic growth rate of -2% to -3% [19] - Adjusted EBITDA guidance for FY26 is approximately $695 million, with a margin of approximately 9.5% [19] - Adjusted diluted EPS guidance for FY26 is $9.80 - $10.00 [19] - Free cash flow guidance for FY26 is greater than $550 million [19] Business Development - The TCV (Total Contract Value) of submitted bids for FY27 is projected to be greater than $30 billion [8] - The company has identified over $100 million of annual savings to reallocate to drive growth and improve margins [5] Capital Deployment - The majority of capital deployment is expected to be allocated to the share repurchase program [5] - Approximately $500 million is allocated to share repurchases for FY26 [22]

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].

Financial Performance - Revenues for the third quarter of fiscal year 2026 were $1.87 billion, a decrease of 6% compared to $1.98 billion in the same period last year[4]. - Net income for the quarter was $78 million, down 26% from $106 million year-over-year[4]. - Adjusted EBITDA was $185 million, representing 9.9% of revenues, a slight decrease from 10.0% in the prior year[4][8]. - Revenues for the three months ended October 31, 2025, were $1,866 million, a decrease of 5.6% compared to $1,976 million for the same period in the prior year[25]. - Net income for the three months ended October 31, 2025, was $78 million, down from $106 million in the same period last year, representing a decline of 26.4%[25]. - Adjusted operating income for the Defense and Intelligence segment decreased to $118 million, down 20.3% from $148 million in the prior year[31]. - The Civilian segment's revenues decreased by 7.4% to $427 million for the three months ended October 31, 2025, compared to $461 million in the prior year[34]. - For the nine months ended October 31, 2025, revenues totaled $5,512 million, a decrease from $5,641 million in the same period of 2024[40]. - Operating income for the nine months ended October 31, 2025, was $388 million, down from $425 million in the same period of 2024[40]. Earnings Per Share - Diluted earnings per share for the quarter were $1.69, down from $2.13 in the prior year[4][8]. - The company reported a diluted earnings per share of $1.69 for the three months ended October 31, 2025, down from $2.13 in the same period last year, a decline of 20.7%[25]. - Adjusted diluted EPS for the nine months ended October 31, 2025, was $8.12, compared to $6.56 for the same period in 2024[49]. Guidance and Projections - Fiscal year 2026 revenue guidance was increased to $7.275 billion - $7.325 billion, up from the previous range of $7.250 billion - $7.325 billion[20]. - The company expects net cash provided by operating activities to exceed $585 million for FY26[52]. - Expenditures for property, plant, and equipment are projected to be approximately $35 million for FY26[52]. - The company anticipates free cash flow to exceed $550 million for FY26[52]. Cash Flow and Capital Expenditures - Cash flows from operating activities for the nine months ended October 31, 2025, totaled $351 million, compared to $379 million for the same period last year, reflecting a decrease of 7.4%[29]. - Free cash flow for the three months ended October 31, 2025, was $135 million, a significant increase from $9 million in the same period of 2024[52]. - For the nine months ended October 31, 2025, free cash flow totaled $241 million, compared to $263 million for the same period in 2024[52]. - Net cash provided by operating activities for the three months ended October 31, 2025, was $129 million, down from $143 million in the same period of 2024[52]. - Expenditures for property, plant, and equipment for the nine months ended October 31, 2025, were $24 million, compared to $21 million in the same period of 2024[52]. Acquisitions and Investments - The company deployed $120 million in capital during the quarter, including $94 million for share repurchases[10]. - SAIC acquired SilverEdge Government Solutions for a preliminary purchase price of $203 million, enhancing its mission-focused technology solutions[18]. - The company incurred $203 million in cash paid for acquisitions during the nine months ended October 31, 2025[29]. Backlog and Bookings - The company reported net bookings of $2.2 billion for the quarter, resulting in a book-to-bill ratio of 1.2[5][12]. - The estimated backlog at the end of the quarter was approximately $23.8 billion, with $3.8 billion funded[12]. - Total backlog as of October 31, 2025, was $23,788 million, an increase from $21,857 million as of January 31, 2025[37]. - Funded backlog for Defense and Intelligence contracts was $2,696 million, up from $2,599 million in January 2025, indicating a growth of 3.7%[37]. Dividends - The company declared a cash dividend of $0.37 per share, payable on January 28, 2026[11]. Other Financial Metrics - Adjusted operating income for the nine months ended October 31, 2025, was $523 million, slightly down from $529 million in the same period of 2024[40]. - Adjusted operating income for the three months ended October 31, 2025, was $183 million, representing 9.8% of revenues, compared to $195 million and 9.9% in the prior year[40]. - Adjusted EBITDA for the three months ended October 31, 2025, was $185 million, or 9.9% of revenues, compared to $197 million and 10.0% in the prior year[43]. - The company believes free cash flow is a useful measure for assessing cash flow trends and comparing with peer companies[52].

Earnings Performance - HP reported quarterly earnings of $0.93 per share, exceeding the Zacks Consensus Estimate of $0.91 per share, with an earnings surprise of +2.20% [1] - The company's revenues for the quarter ended October 2025 were $14.64 billion, missing the Zacks Consensus Estimate by 2.23%, compared to $14.06 billion in the same quarter last year [2] Stock Performance - HP shares have declined approximately 25.3% since the beginning of the year, while the S&P 500 has gained 14% [3] - The current Zacks Rank for HP is 4 (Sell), indicating expected underperformance in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.76 on revenues of $14.43 billion, and for the current fiscal year, it is $3.15 on revenues of $56.17 billion [7] - The Computer - Micro Computers industry is currently ranked in the bottom 31% of over 250 Zacks industries, which may negatively impact HP's stock performance [8]

Core Points - Science Applications International Corp. (SAIC) has been awarded a $242 million contract by the Naval Undersea Warfare Center Division, Newport to support the Propulsion Test Facility (PTF) for the U.S. Navy [1][2] - The contract is a 5-year follow-on agreement that emphasizes the U.S. Navy's trust in SAIC's capabilities in engineering, technical, and logistics support [2][3] - The contract will enable SAIC to provide testing, engineering, and technical services for various torpedo systems and unmanned underwater vehicles, ensuring the PTF meets emerging Navy research and development needs [3] Company Overview - SAIC is a Fortune 500 mission integrator focused on technology and innovation across defense, space, civilian, and intelligence markets [4] - The company has approximately 24,000 employees and annual revenues of about $7.5 billion [5]

Core Insights - Science Applications International Corp (SAIC) was honored for its commitment to supporting American veterans and their families through a partnership with Building Homes for Heroes, which has resulted in the construction, gifting, and modification of 445 homes over 12 years [1][2]. Company Commitment - SAIC's Interim CEO, Jim Reagan, emphasized the company's deep connection to the armed forces, with over 25% of its employees being veterans, and expressed the privilege of supporting initiatives that transform veterans' lives through housing [2][3]. Partnership Impact - The partnership between SAIC and Building Homes for Heroes is highlighted as a model for how mission-driven organizations and corporations can create significant positive impacts for veterans [2]. - Building Homes for Heroes aims to deliver 50 homes in 2025 and reach its 500th home milestone by the end of 2026, with a goal of assisting over 5,000 veterans this year [2]. Organizational Achievements - Building Homes for Heroes has achieved a 96% program rating in 2024, marking the 13th consecutive year of a rating of at least 93%, and has received a perfect 4-star rating from Charity Navigator for seven years, including a 100% in transparency and accountability [4].

Core Insights - Zacks Premium provides various tools to enhance stock market investment confidence and knowledge [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market [3][4] Zacks Style Scores Overview - The Zacks Style Scores rate stocks based on value, growth, and momentum characteristics, with ratings from A to F [4] - Value Score focuses on identifying undervalued stocks using financial ratios [4] - Growth Score assesses a company's financial health and future growth potential [5] - Momentum Score evaluates stocks based on price trends and earnings estimate changes [6] - VGM Score combines all three styles to identify stocks with the best overall characteristics [7] Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investment decisions [8] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.93% since 1988, significantly outperforming the S&P 500 [9] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [10] Stock Highlight: SAIC - SAIC is a leading IT and professional services provider to the U.S. government, currently rated 3 (Hold) with a VGM Score of A [12] - The company has a Growth Style Score of B, with a projected year-over-year earnings growth of 4.8% for the current fiscal year [12] - Recent upward revision of earnings estimates indicates a consensus estimate increase of $0.08 to $9.57 per share, with an average earnings surprise of +25% [13]

Core Insights - SAIC is prioritizing its first major international expansion in India, viewing it as a strategic opportunity to support the country's aviation transformation [1][7] - The company aims to leverage its capabilities to drive faster development, greater efficiency, and enhance passenger safety and experience in India [2][6] Company Overview - SAIC is a leading technology and defense partner for the US government, with one-third of its business supporting the US civilian government and being a top contractor for the US Federal Aviation Administration [2][7] - The company is recognized as the largest air traffic controller training provider globally [7] Market Opportunities - SAIC sees significant opportunities in priority markets, including the GCC, UAE, and India, particularly in the context of India's rapid growth, which includes building a new airport every fifty days [5][6] - The company is showcasing next-generation air traffic control training, advanced simulation, and modernization solutions at the Dubai Air Show, emphasizing their role in enhancing safety, capacity, and operational excellence [5][6]