SAIC Announces Second Quarter of Fiscal Year 2026 Results (Form 8-K)

SAIC Announces Second Quarter of Fiscal Year 2026 Results

•Revenues of $1.77 billion; approximately (3)% revenue contraction

•Net bookings of $2.6 billion; book-to-bill ratio of 1.5, trailing twelve months book-to-bill ratio of 1.0

•Year-to-date net bookings of $5.0 billion; year-to-date book-to-bill ratio of 1.4

•Net income of $127 million; Adjusted EBITDA(1) of $185 million or 10.5% of revenues

•Diluted earnings per share of $2.71; Adjusted diluted earnings per share(1) of $3.63

•Cash flows provided by operating activities of $122 million; Free cash flow(1) of $150 million

•Management lowers revenue and adjusted EBITDA(1) guidance and increases free cash flow(1) and adjusted diluted earnings per share(1) guidance

RESTON, VA, September 4, 2025-Science Applications International Corporation (NASDAQ: SAIC), a premier Fortune 500 technology integrator driving our nation's digital transformation across the defense, space, civilian, and intelligence markets, today announced results for the second quarter ended August 1, 2025.

"Our second quarter results reflect strong program performance, and our bookings reflect further momentum in our business development efforts; however, slower on-contract growth and continued delays in new business awards and new program ramps are contributing to a more challenging revenue environment than previously forecasted," said Toni Townes-Whitley, SAIC Chief Executive Officer. "We are responding purposefully by aligning our cost structure while sustaining key investments to drive long-term value creation. Our revised guidance assumes that the operating environment remains stable but does not improve this year. We believe that this more cautious outlook is prudent, and we are confident in our ability to execute against it."

Second Quarter of Fiscal Year 2026: Summary Operating Results

			Three Months Ended
			August 1, 2025						Percent change						August 2, 2024
			(dollars in millions, except per share amounts)
Revenues			$	1,769					(3)%						$	1,818
Operating income			139						4%						134
Operating income as a percentage of revenues			7.9		%				50bps						7.4		%
Adjusted operating income(1)			182						8%						169
Adjusted operating income as a percentage of revenues			10.3		%				100bps						9.3		%
Net income			127						57%						81
EBITDA(1)			177						5%						169
EBITDA as a percentage of revenues			10.0		%				70bps						9.3		%
Adjusted EBITDA(1)			185						9%						170
Adjusted EBITDA as a percentage of revenues			10.5		%				110bps						9.4		%
Diluted earnings per share			$	2.71					72%						$	1.58
Adjusted diluted earnings per share(1)			$	3.63					77%						$	2.05
Net cash provided by operating activities			$	122					(12)%						$	138
Free cash flow(1)			$	150					(38)%						$	241

(1)Non-GAAP measure, see Schedule 6 for information about this measure.

Second Quarter Summary Results

Revenues for the quarter decreased $49 million or 3% compared to the same period in the prior year primarily due to contract completions and ramp down in volume on existing contracts, partially offset by new contracts.

Operating income as a percentage of revenues for the quarter increased compared to the same period in the prior year primarily due to improved profitability across our contract portfolio and a recovery of costs from the settlement of a patent infringement matter, partially offset by costs related to the settlement of federal tax audits and the indirect rates impact of state taxes related to the One Big Beautiful Bill Act.

Adjusted EBITDA(1) as a percentage of revenues for the quarter increased to 10.5% from 9.4% for the same period in the prior year primarily due to improved profitability across our contract portfolio and a recovery of costs from the settlement of a patent infringement matter, partially offset by the indirect rates impact of state taxes related to the One Big Beautiful Bill Act.

Diluted earnings per share for the quarter was $2.71 compared to $1.58 in the prior year quarter. Adjusted diluted earnings per share(1) for the quarter was $3.63 compared to $2.05 in the prior year quarter. The weighted-average diluted shares outstanding during the quarter decreased to 46.8 million from 51.2 million during the prior year quarter.

(1)Non-GAAP measure, see Schedule 6 for information about this measure.

Cash Generation and Capital Deployment

Cash flows provided by operating activities for the second quarter decreased $16 million compared to the prior year quarter primarily due to timing of customer collections and vendor payments, partially offset by lower cash outflows from the usage of the Master Accounts Receivable Purchase Agreement ("MARPA Facility") in the current year and other changes in working capital.

During the quarter, SAIC deployed $130 million of capital, primarily consisting of $106 million of plan share repurchases and $17 million in cash dividends.

Quarterly Dividend Declared

Subsequent to quarter end, the Company's Board of Directors declared a cash dividend of $0.37 per share of the Company's common stock payable on October 24, 2025 to stockholders of record on October 10, 2025. SAIC intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.

Backlog and Contract Awards

Net bookings for the quarter and year were approximately $2.6 billion and $5.0 billion, respectively, which reflects a book-to-bill ratio of 1.5 and 1.4, respectively, and a trailing twelve months book-to-bill ratio of 1.0. SAIC's estimated backlog at the end of the quarter was approximately $23.2 billion. Of the total backlog amount, approximately $3.6 billion was funded.

Notable New and Recompete Awards:

U.S. Air Force: During the quarter, SAIC was awarded the Hyper-Innovative Operational Prototype Engineering ("HOPE") 2.0 contract in support of the U.S. Air Force Tactical Exploitation of National Capabilities ("AF TENCAP"). This $928 million contract spans a five-year performance period (one year base plus, four, one-year option periods). The HOPE 2.0 contract integrates Intelligence Community capabilities with urgent DoD operational needs. SAIC will provide comprehensive Research, Development, Test, and Evaluation ("RDT&E") mission engineering services to help AF TENCAP create near program of record ready prototypes that lead to improved warfighting superiority and decision dominance in all domains. Incorporating warfighter feedback, SAIC will support rapid prototype development and mission integration for AF TENCAP and its 65 agencies and commands across the DoD and Intelligence Community. This includes partnering with more than a dozen traditional and non-traditional defense companies to deliver the nation's most advanced technology to DoD Combatant Commands.

Department of Treasury: During the quarter, SAIC was awarded a three-year (one-year base plus, two, one-year option periods) $728 million task order to continue delivering essential cloud services for the Treasury Department. Under this task order, SAIC will continue providing cloud application assessment, implementation, operations,

maintenance and training in support of the Treasury Department's transformation to a secure multi-cloud environment.

U.S. Navy: During the quarter, SAIC was awarded a five year (one-year base, plus four, one-year options), $202 million contract, to provide an extensive range of training solutions for the U.S. Navy, including modernized virtual and synthetic training environments, as part of the Fleet Deployment Training Program. This initiative is crucial to supporting U.S. Fleet Forces ("USFF") and associated Fleet commands and activities, significantly enhancing the Navy's readiness to operate and fight effectively across the globe. Under this contract, SAIC will provide the Navy with extensive training and readiness support capabilities across 19 different headquarters and training commands. This encompasses academic instruction, live exercises, synthetic training events and policy support to ensure comprehensive pre-deployment training and certification, as well as post-deployment sustainment for fleet units and staffs.

U.S. Department of State: During the quarter, SAIC was awarded a two-year, (1 year base plus four, three-month option periods) $547 million contract extension on the Vanguard program to continue providing comprehensive IT services and support for the Department of State.

U.S. Navy: During the quarter, SAIC was awarded a 5-year, approximately $360 million contract with a Navy customer. This contract centers around delivering innovative solutions to enhance our nation's defenses including development and modernization of a variety of electronic warfare and active emitter systems.

Orange County, California: During the quarter, SAIC was awarded a $164 million contract to continue delivering comprehensive IT managed services and solutions for Orange County, California. Under this five-year contract with two additional one-year options, SAIC will continue to manage data center infrastructure, desktop management, service desk operations, applications, networks, voice infrastructure and security operations across various county agencies and departments.

U.S. Navy: During the quarter, SAIC was awarded a Seaport Task Order to support Naval Surface Warfare Center Crane Mobility Platform Integration, with a total contract value of $89 million.

U.S. Space and Intelligence Community: During the quarter, SAIC was awarded approximately $150 million of contract awards by space and intelligence organizations. These awards represent a combination of new business and recompetes.

Fiscal Year 2026 Guidance

The table below summarizes fiscal year 2026 guidance and represents the Company's views as of September 4, 2025.

			CURRENT			PRIOR
			Fiscal Year			Fiscal Year
			2026 Guidance			2026 Guidance
Revenue			$7.250B - $7.325B			$7.60B - $7.75B
Adjusted EBITDA(1)			$680M - $690M			$715M - $735M
Adjusted EBITDA Margin %(1)			9.3% - 9.5%			9.4% - 9.6%
Adjusted Diluted EPS(1)			$9.40 - $9.60			$9.10 - $9.30
Free Cash Flow(1)			>$550M			$510M - $530M

(1)Non-GAAP measure, see Schedule 6 for information about this measure.

Webcast Information

SAIC management will discuss operations and financial results in an earnings conference call beginning at 10:00 a.m. Eastern time on September 4, 2025. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the SAIC website (http://investors.saic.com). We will be providing webcast access only - "dial-in" access is no longer available. Additionally, a supplemental presentation will be available to the public through links to the Investor Relations section of the SAIC website. After the call concludes, an on-demand audio replay of the webcast can be accessed on the Investor Relations website.

About SAIC

SAIC® is a premier Fortune 500 mission integrator focused on advancing the power of technology and innovation to serve and protect our world. Our robust portfolio of offerings across the defense, space, civilian and intelligence markets includes secure high-end solutions in mission IT, enterprise IT, engineering services and professional services. We integrate emerging technology, rapidly and securely, into mission critical operations that modernize and enable critical national imperatives.

We are approximately 24,000 strong; driven by mission, united by purpose, and inspired by opportunities. Headquartered in Reston, Virginia, SAIC has annual revenues of approximately $7.5 billion. For more information, visit saic.com. For ongoing news, please visit our newsroom.

Contacts

Investor Relations: Joe DeNardi, [email protected]

Media: Kara Ross, [email protected]

GAAP to Non-GAAP Guidance Reconciliation

The Company does not provide a reconciliation of forward-looking adjusted diluted EPS to GAAP diluted EPS, adjusted EBITDA margin to GAAP net income or free cash flow to GAAP net cash flows from operating activities due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate net income and cash flows from operating activities may vary significantly based on actual events, the Company is not able to forecast GAAP diluted EPS, GAAP net income or GAAP net cash flows from operating activities with reasonable certainty. The variability of the above charges may have an unpredictable and potentially significant impact on our future GAAP financial results.