Science Applications International (SAIC) Earnings Date & Reports

Key Takeaways

• SAIC reported second-quarter fiscal 2027 revenue of $1.88 billion, up about 6% year over year, with organic growth of roughly 5%.
• Adjusted diluted earnings per share (EPS, or profit per share) came in at $3.01, down from $3.63 a year earlier, largely because the prior-year quarter included a favorable legal settlement.
• Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached $193 million, with a margin of 10.3%.
• Management raised full-year fiscal 2027 guidance across revenue, margins, and adjusted EPS.
• Free cash flow was $131 million, while net leverage declined to 3.0 times.

Earnings Context and Why It Matters

SAIC is a leading provider of technical, engineering, and information technology services to U.S. government customers across defense, intelligence, space, and civilian markets. This report matters because it offers a direct read on federal technology spending momentum and on SAIC's ability to convert its substantial contract backlog into revenue. After several quarters of top-line pressure, the company's return to organic growth signals improving demand and stronger execution. The results also test management's credibility around its multi-year efficiency program and margin targets, making the guidance raise a particularly important signal for investors weighing the stock's long-term growth trajectory.

Reported Results

For the second quarter of fiscal 2027, ended July 31, 2026, SAIC reported revenue of $1.88 billion, an increase of $111 million, or about 6%, from $1.77 billion in the prior-year period. Organic growth was approximately 5.3%, reflecting higher volume on existing and new contracts and a $20 million contribution from the SilverEdge acquisition.

Net income declined to $102 million from $127 million a year earlier, and diluted EPS fell to $2.38 from $2.71. Adjusted diluted EPS was $3.01, down from $3.63, primarily due to a favorable legal settlement recorded in the prior-year quarter, partially offset by a lower share count.

Adjusted EBITDA totaled $193 million, up from $185 million a year ago, though the adjusted EBITDA margin narrowed slightly to 10.3% from 10.5%. By segment, Defense and Intelligence revenue rose 5% to $1.45 billion, while Civilian revenue climbed 9% to $431 million.

Notably, SAIC raised its full-year fiscal 2027 outlook. Revenue guidance increased to $7.2 billion to $7.3 billion from $7.0 billion to $7.2 billion, adjusted EBITDA guidance rose to $750 million to $755 million, and adjusted diluted EPS guidance moved up to $10.65 to $10.75 from $9.90 to $10.10. Free cash flow guidance was held at more than $600 million.

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Market Reaction and Investor Sentiment

SAIC shares moved higher following the report, with the stock trading up more than 3% in the session after results, reflecting investor approval of the revenue beat and the full-year guidance raise. Sentiment was supported by the company's return to organic growth and the meaningful uplift to adjusted EPS guidance, which improved roughly 7% at the midpoint. However, the reaction was tempered by a subdued book-to-bill ratio of 0.6 for the quarter, which some investors viewed as a sign that near-term bookings remain uneven due to procurement timing rather than weakening demand.

Forward Outlook and Key Factors to Monitor

Looking ahead, SAIC's raised guidance still implies a challenging second half of the fiscal year. Management noted that the full-year outlook assumes organic revenue will be roughly flat to down 2%, reflecting the expected roll-off of the RITS contract and other program completions. As a result, investors should watch how SAIC manages this contract transition while sustaining its first-half momentum.

A key metric to monitor is the book-to-bill ratio, which measures new bookings relative to revenue. SAIC reported a trailing twelve-month ratio of 0.8, and management expects the full-year figure to approach roughly 1.0. A post-quarter recompete award of approximately $740 million with the Department of Homeland Security supports the view that the weak bookings largely reflect timing rather than a decline in customer demand.

Margin progression will be another important focus. SAIC expects second-half margins in the high-9% range as it reinvests in growth initiatives, even as its Project ORBIT efficiency program is projected to deliver roughly $150 million in annual savings after three years. Finally, watch free cash flow generation and continued deleveraging, with net leverage now at 3.0 times, as management balances reinvestment, share repurchases, and dividends.

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