SAIC Reports Third Quarter Of Fiscal Year 2026 Earnings Results

Science Applications International Corporation (SAIC) today announced its financial results for the most recent quarter, showcasing a strong performance that exceeded expectations. The company reported earnings per share (EPS) of $2.58, surpassing analysts’ estimates of $2.08 by a notable margin. This impressive result reflects a year-over-year increase and highlights SAIC’s continued growth and resilience in a competitive market.

Key Highlights

• Revenues for Q3 FY2026: $1.87 billion, a decrease of 6% year-over-year.
• Net bookings for the quarter: $2.2 billion, with a book-to-bill ratio of 1.2.
• Year-to-date net bookings: $7.2 billion, with a year-to-date book-to-bill ratio of 1.3.
• Net income for the quarter: $78 million, down 26% from the previous year.
• Adjusted EBITDA: $185 million, representing 9.9% of revenues.
• Free cash flow for the quarter: $135 million, a significant increase from $9 million in the prior year.
• Fiscal year 2026 guidance increased for certain key metrics, including revenue and adjusted EBITDA.

Summary

SAIC, Inc. reported its third-quarter results for fiscal year 2026, revealing a revenue of $1.87 billion, which reflects a 6% decline compared to the same period last year. The decrease was attributed to a ramp-down in existing contracts and the impact of a government shutdown. Interim CEO Jim Reagan noted, “Our third quarter results reflect a 5.6% revenue contraction, slightly ahead of our guidance when adjusting for the approximate 1% headwind from the government shutdown, and strong margins due to continued sound program execution.” The company also reported net income of $78 million and an adjusted EBITDA of $185 million, which is 9.9% of revenues.

In terms of future outlook, SAIC has increased its fiscal year 2026 guidance for revenue to a range of $7.275 billion to $7.325 billion and adjusted EBITDA to approximately $695 million. The company continues to focus on long-term shareholder value creation, with a robust backlog of approximately $23.8 billion and significant contract awards, including a $1.4 billion task order from the U.S. Air Force. The management is committed to implementing changes to fuel growth and drive margins higher while maintaining a capital allocation framework centered around share repurchases.

Science Applications International Corporation (SAIC) has experienced a tumultuous year, with its stock price plummeting by nearly 28% over the past twelve months. This decline is particularly concerning given the company’s fundamentals, which reveal a price-to-earnings ratio of 10.59, suggesting that the stock may be undervalued relative to its earnings potential. However, the negative trends in key metrics such as a two-year compound annual growth rate (CAGR) for earnings per share at -4.92% and revenue at -1.50% raise red flags about the company’s growth trajectory. Additionally, the free cash flow CAGR of -2.53% indicates potential liquidity challenges ahead. Despite these hurdles, SAIC maintains a respectable return on invested capital of 13.81% and a net profit margin of 5.37%, which could provide some cushion against the ongoing price volatility. The stock’s recent uptick of 2.15% over the past week may signal a momentary rebound, but investors will be watching closely to see if this is a sustainable trend or merely a blip in a broader downward spiral. Overall, while SAIC’s fundamentals show some promise, the recent price changes reflect a market grappling with uncertainty about the company’s future performance.

Science Applications International Corporation provides technical, engineering, and enterprise information technology (IT) services primarily in the United States. The company’s offerings include engineering; technology integration; IT modernization; maintenance of ground and maritime systems; logistics; training and simulation; operation and program support services; and end-to-end services, such as design, development, integration, deployment, management and operations, sustainment, and security of its customers’ IT infrastructure, as well as cloud migration, managed services, infrastructure modernization, and enterprise IT-as-a-service solutions. It serves the U.S. military comprising Army, Air Force, Navy, Marines, and Coast Guard; Department of Defense agencies; National Aeronautics and Space Administration; the U.S. Department of State; Department of Justice; Department of Homeland Security; and various intelligence community agencies, as well as U.S. federal civilian agencies. The company was formerly known as SAIC Gemini, Inc. and changed its name to Science Applications International Corporation in September 2013. Science Applications International Corporation was founded in 1969 and is headquartered in Reston, Virginia.