Latest news with #ToniTownes-Whitley
Yahoo
03-06-2025
- Business
- Yahoo
SAIC Q1 Earnings Call: Revenue Miss and Margin Pressures Shape 2025 Outlook
Government IT services provider Science Applications International Corporation (NASDAQ:SAIC) missed Wall Street's revenue expectations in Q1 CY2025 as sales only rose 1.6% year on year to $1.88 billion. Its non-GAAP EPS of $1.92 per share was 9.3% below analysts' consensus estimates. Is now the time to buy SAIC? Find out in our full research report (it's free). Revenue: $1.88 billion (1.6% year-on-year growth) Adjusted EPS: $1.92 vs analyst expectations of $2.12 (9.3% miss) Adjusted Operating Income: $158 million vs analyst estimates of $138.4 million (8.4% margin, 14.2% beat) Management reiterated its full-year Adjusted EPS guidance of $9.20 at the midpoint EBITDA guidance for the full year is $725 million at the midpoint, below analyst estimates of $729.2 million Operating Margin: 6.4%, in line with the same quarter last year Backlog: $22.34 billion at quarter end Market Capitalization: $5.45 billion Science Applications International Corporation's (SAIC) first quarter performance was shaped by persistent procurement delays and customer personnel turnover, which management said contributed to the slower pace of contract awards. CEO Toni Townes-Whitley highlighted that while some areas within the Department of Defense (DoD) received more robust budget requests, significant agency staff changes have affected procurement timelines. The company's decision to move away from lower-margin programs, like CloudOne, also weighed on recent results. Townes-Whitley noted, 'We have been amping up our submissions and being very selective in terms of being on strategy with the bids that we've been making,' indicating a continued focus on higher-value, mission-critical IT and integration work. Looking forward, SAIC's guidance is anchored on ramping up new business and achieving higher on-contract growth, despite ongoing headwinds in budget negotiations and potential delays in contract awards. CFO Prabu Natarajan explained that full-year margin improvement relies on a transition from development-heavy to sustainment phases in certain fixed price programs, as well as continued discipline in cost management. Management reiterated its commitment to achieving margin targets, with Townes-Whitley stating, 'We remain focused on executing and delivering on our full year margin guidance…our flexible cost structure permits us to calibrate our spend in line with the macro environment.' However, the company acknowledged that achieving booking targets may be impacted if procurement delays persist. Management attributed the quarter's performance to slower contract awards, portfolio shifts toward higher-value IT work, and cost overruns on select programs. Several civilian agency contracts and a new space integration win provided areas of relative strength. Procurement delays impact awards: SAIC faced continued delays in federal contract awards due to customer turnover and new agency processes, particularly in acquisition functions. This led to a slower realization of new business, with management emphasizing that award timing rather than program performance drove the softness. Portfolio shift to mission IT: The company continued its pivot away from lower-margin, legacy programs—such as the CloudOne contract, which SAIC intentionally did not rebid—toward higher-margin mission and enterprise IT. This transition is designed to align with evolving government priorities and to position SAIC for more sustainable, profitable growth. Fixed price space program overruns: A unique fixed price development program in the space segment incurred higher costs during its technical development phase. Management stated that the transition into the sustainment phase and recent option period extensions should relieve some cost pressures in future quarters. Civilian business momentum: SAIC's civilian segment showed growth and margin improvement, benefiting from its focus on key agencies like the Department of Homeland Security, State, Transportation, and Treasury, where funding and IT modernization remained supportive. Bookings and backlog visibility: While net bookings and backlog remained solid, management cautioned that achieving their targeted book-to-bill ratio may be delayed by up to two quarters if procurement headwinds persist. Recent post-quarter wins, including a major State Department extension and Air Force contract, bolstered confidence in near-term visibility. Management expects future performance to rest on the pace of new business ramp-up, margin recovery in challenged programs, and the company's ability to adjust to shifting federal priorities. On-contract growth and booking targets: The company is relying on continued growth within existing contracts ('on-contract growth') if new business awards are further delayed. Sustained mid-single-digit on-contract growth is seen as necessary to support its revenue guidance if external headwinds persist. Margin normalization in key programs: Margin improvement is expected as SAIC transitions fixed price programs in the space segment from development to sustainment phases, and as civilian business margins trend higher. Management pointed to enhanced cost controls and standardized delivery frameworks as tools to mitigate margin risk. Federal budget and procurement environment: The outlook depends on stable or moderately growing federal budgets, especially for defense and civilian agencies. Management acknowledged that further disruptions in government funding or policy priorities could impact the timing and mix of awarded contracts, introducing risk to the growth trajectory. In upcoming quarters, the StockStory team will watch (1) whether SAIC can accelerate new business awards and reach its targeted book-to-bill ratio, (2) the pace of margin recovery in fixed price and space programs as they enter sustainment phases, and (3) continued expansion and profitability in the civilian segment, especially as federal funding priorities evolve. Execution on disciplined contract transitions and cost control will also be closely monitored. SAIC currently trades at a forward P/E ratio of 12×. Should you double down or take your chips? Find out in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
02-06-2025
- Business
- Yahoo
Why SAIC Stock Plunged Today
SAIC missed earnings expectations despite in-line revenue. The company is fighting through DOGE-related headwinds, but is an attractive long-term option. 10 stocks we like better than Science Applications International › Government contractor Science Applications International (NASDAQ: SAIC) reported disappointing quarterly results, weighed down by the government's efficiency drive. Investors were disappointed, sending SAIC shares down 13% for the day. SAIC is one of the largest so-called "Beltway Bandits" -- defense contractors focused on providing IT and other services to military, intelligence, and civil government customers. The company earned $1.92 per share in its fiscal first quarter of 2026 on revenue of $1.88 billion, compared to analyst expectations for $2.12 per share in earnings on sales of $1.87 billion. Net income was down 12% year over year to $68 million, and SAIC's operating margin fell by 70 basis points to 6.4%. On a call with investors, CEO Toni Townes-Whitley said that the business has been caught up in the efforts of the newly formed Department of Government Efficiency (DOGE) to scrutinize spending. Townes-Whitley said: While the operating environment has stabilized in recent months and recent budget developments provide improved clarity around future spending, we continue to see higher rates of turnover among our customers, contributing to procurement delays and award timelines moving to the right. We expect conditions to remain very fluid over the next few months as budget negotiations play out and agencies continue to implement the strategic priorities of this administration. The good news is the company expects DOGE to impact full-year revenue by less than 1%. The company booked $2.4 billion in future business in the quarter, which is 1.3 times the revenue it brought in, an indication of better times ahead. And SAIC reiterated its full-year guidance, implying that the company sees opportunities to make back the profit miss in the quarters to come. The question is how soon those better times will arrive. Townes-Whitley and other executives have said the DOGE impact so far, is more to delay procurements than to tear up contracts. But with a Congressional budget battle brewing, there is unlikely to be clarity about future spending anytime soon. With Monday's fall, SAIC is trading at just 10 times future earnings. That's nearing a recent historical low. It's possible we haven't bottomed out yet, but for long-term-focused investors, SAIC has reached a level where it is worth adding to the watch list. Before you buy stock in Science Applications International, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Science Applications International wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why SAIC Stock Plunged Today was originally published by The Motley Fool
Yahoo
02-06-2025
- Business
- Yahoo
SAIC Stock Falls After Q1 Earnings Miss, Soft Guidance
Science Applications International Corporation (NASDAQ:SAIC) stock is trading lower on Monday after reporting the first-quarter 2026 earnings. The company reported quarterly sales growth of 2% year-on-year to $1.88 billion, beating the analyst consensus estimate of $1.87 billion. The adjusted EPS of $1.92 missed the analyst consensus estimate of $ income for the quarter declined by 8% to $121 million, and the operating margin declined by 70 basis points to 6.4%. Adjusted EBITDA decreased 5% to $157 million with an adjusted EBITDA margin of 8.4%, a 60 basis points decline. Net bookings for the quarter were approximately $2.4 billion, which reflects a book-to-bill ratio of 1.3. The quarter's operating cash flow totaled $100 million. Free cash flow was an outflow of $44 million. SAIC's estimated backlog for the quarter was approximately $22.3 billion, of which $3.3 billion was funded. As of May 2, 2025, the company held $47 million in cash and equivalents. CEO Toni Townes-Whitley acknowledged the steady progress it made against its enterprise growth strategy despite a still dynamic operating environment. Science Applications reiterated the 2026 revenue outlook of $7.60 billion-$7.75 billion, below the analyst consensus estimate of $7.93 billion. The company maintained an annual adjusted EPS outlook of $9.10-$9.30 below the analyst consensus estimate of $10.24. Price Action: SAIC shares are trading lower by 10.7% to $103.21 at last check Monday. Read Next:Photo by DCStockPhotography via Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article SAIC Stock Falls After Q1 Earnings Miss, Soft Guidance originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved.
Yahoo
02-06-2025
- Business
- Yahoo
SAIC Announces First Quarter of Fiscal Year 2026 Results
RESTON, Va., June 02, 2025 (GLOBE NEWSWIRE) -- 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 first quarter ended May 2, 2025. "Our performance in the first quarter reflects the steady progress we are making against our enterprise growth strategy despite a still dynamic operating environment," said Toni Townes-Whitley, SAIC Chief Executive Officer. "As a premier mission integrator, the rapid evolution of new technologies, a renewed focus on deploying software to drive efficiency, and an elevated global threat environment create significant opportunities for SAIC. I am confident that SAIC is prepared and well aligned with these macro trends to drive value for our customers, employees, and shareholders." First Quarter of Fiscal Year 2026: Summary Operating Results Three Months Ended May 2, 2025 Percent change May 3, 2024 (dollars in millions, except per share amounts) Revenues $ 1,877 2 % $ 1,847 Operating income 121 (8 )% 131 Operating income as a percentage of revenues -70bps 7.1 % Adjusted operating income(1) 158 (4 )% 165 Adjusted operating income as a percentage of revenues -50bps 8.9 % Net income 68 (12 )% 77 EBITDA(1) 156 (7 )% 167 EBITDA as a percentage of revenues -70bps 9.0 % Adjusted EBITDA(1) 157 (5 )% 166 Adjusted EBITDA as a percentage of revenues -60bps 9.0 % Diluted earnings per share $ 1.42 (4 )% $ 1.48 Adjusted diluted earnings per share(1) $ 1.92 — % $ 1.92 Net cash provided by operating activities $ 100 2 % $ 98 Free cash flow(1) $ (44 ) (438 )% $ 13 (1)Non-GAAP measure, see Schedule 6 for information about this measure. First Quarter Summary Results Revenues for the quarter increased $30 million or 2% compared to the same period in the prior year primarily due to ramp up in volume in existing and new contracts, partially offset by contract completions. Operating income as a percentage of revenues decreased from the comparable prior year period primarily due to timing and volume mix in our contract portfolio. Adjusted EBITDA(1) as a percentage of revenues for the quarter decreased to 8.4% from 9.0% for the same period in the prior year primarily due to timing and volume mix in our contract portfolio. Diluted earnings per share for the quarter was $1.42 compared to $1.48 in the prior year quarter. Adjusted diluted earnings per share(1) for both the current and prior year quarter was $1.92. The weighted-average diluted shares outstanding during the quarter decreased to 47.8 million from 52.1 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 first quarter increased $2 million compared to the prior year quarter, primarily due to higher cash provided by the Master Accounts Receivable Purchase Agreement ("MARPA Facility") and lower incentive-based compensation payments in the current year, partially offset by timing of vendor payments and other changes in working capital. During the quarter, SAIC deployed $152 million of capital, primarily consisting of $125 million of plan share repurchases and $19 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 July 25, 2025 to stockholders of record on July 11, 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 were approximately $2.4 billion, which reflects a book-to-bill ratio of 1.3 and a trailing twelve months book-to-bill ratio of 0.8. SAIC's estimated backlog at the end of the quarter was approximately $22.3 billion. Of the total backlog amount, approximately $3.3 billion was funded. Notable New and Recompete Awards: During the quarter, SAIC was awarded the System Software Lifecycle Engineering contract, a five-year (one year base, plus four, one-year option periods) $1.8 billion contract to continue mission engineering, integration, software development, and other life cycle support to CCDC-AvMC. Under the five-year award, SAIC will continue to develop and integrate advanced technologies throughout the software life cycle, including software development and maintenance. During the quarter, SAIC was awarded a $327 million contract to continue delivering essential IT services for the Pension Benefit Guaranty Corporation. Under this eight-year (approximately 1-year base, plus seven, one-year option periods) contract renewal, SAIC will provide seamless operation across various IT functions including service desk, desktop support, user services, platform support, network and database support, and cloud migration. During the quarter, SAIC was awarded approximately $300 million of contract awards by space and intelligence organizations. These awards represent a combination of new business and recompetes, including a four-year, $140 million task order to provide enterprise cloud services. Notable Awards Subsequent to Period End (not included in current quarter bookings): Subsequent to the end of 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. Fiscal Year 2026 Guidance Management reaffirms fiscal year 2026 guidance which represents the Company's views as of June 2, 2025. Fiscal Year 2026 Guidance Revenue $7.60B - $7.75B Adjusted EBITDA(1) $715M - $735M Adjusted EBITDA Margin %(1) 9.4% - 9.6% Adjusted Diluted EPS(1) $9.10 - $9.30 Free Cash Flow(1) $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 June 2, 2025. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the SAIC website ( 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 For ongoing news, please visit our newsroom. Contacts Investor Relations: Joe DeNardi, Kara Ross, 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 statements in this release contain or are based on 'forward-looking' information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as 'expects,' 'intends,' 'plans,' 'anticipates,' 'believes,' 'estimates,' 'guidance,' and similar words or phrases. Forward-looking statements in this release may include, among others, estimates of future revenues, operating income, earnings, earnings per share, charges, total contract value, backlog, outstanding shares and cash flows, as well as statements about future dividends, share repurchases and other capital deployment plans. Such statements are not guarantees of future performance and involve risk, uncertainties and assumptions, and actual results may differ materially from the guidance and other forward-looking statements made in this release as a result of various factors. Risks, uncertainties and assumptions that could cause or contribute to these material differences include those discussed in the 'Risk Factors,' 'Management's Discussion and Analysis of Financial Condition and Results of Operations' and 'Legal Proceedings' sections of our Annual Report on Form 10-K, as updated in any subsequent Quarterly Reports on Form 10-Q and other filings with the SEC, which may be viewed or obtained through the Investor Relations section of our website at or on the SEC's website at Due to such risks, uncertainties and assumptions you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. SAIC expressly disclaims any duty to update any forward-looking statement provided in this release to reflect subsequent events, actual results or changes in SAIC's expectations. SAIC also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others. Schedule 1: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended May 2, 2025 May 3, 2024 (in millions, except per share amounts) Revenues $ 1,877 $ 1,847 Cost of revenues 1,668 1,634 Selling, general and administrative expenses 89 85 Other operating (income) expense (1 ) (3 ) Operating income 121 131 Interest expense, net 30 34 Other (income) expense, net 5 2 Income before income taxes 86 95 Provision for income taxes (18 ) (18 ) Net income $ 68 $ 77 Weighted-average number of shares outstanding: Basic 47.6 51.6 Diluted 47.8 52.1 Earnings per share: Basic $ 1.43 $ 1.49 Diluted $ 1.42 $ 1.48 Schedule 2: SCIENCE APPLICATIONS INTERNATIONAL CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited) May 2, 2025 January 31,2025 (in millions) ASSETS Current assets: Cash and cash equivalents $ 47 $ 56 Receivables, net 1,009 1,000 Prepaid expenses and other current assets 92 98 Total current assets 1,148 1,154 Goodwill 2,851 2,851 Intangible assets, net 750 779 Property, plant, and equipment, net 102 104 Operating lease right of use assets 161 164 Other assets 199 194 Total assets $ 5,211 $ 5,246 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 668 $ 631 Accrued payroll and employee benefits 288 339 Other accrued liabilities 113 113 Debt, current portion 405 313 Total current liabilities 1,474 1,396 Debt, net of current portion 1,876 1,907 Operating lease liabilities 160 173 Deferred income taxes 22 24 Other long-term liabilities 174 169 Equity: Total stockholders' equity 1,505 1,577 Total liabilities and stockholders' equity $ 5,211 $ 5,246 Schedule 3: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Three Months Ended May 2, 2025 May 3, 2024 (in millions) Cash flows from operating activities: Net income $ 68 $ 77 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 36 35 Stock-based compensation expense 15 13 Other — (1 ) Increase (decrease) resulting from changes in operating assets and liabilities: Receivables (9 ) (20 ) Prepaid expenses and other current assets 6 15 Accounts payable and accrued liabilities 33 60 Accrued payroll and employee benefits (51 ) (83 ) Operating lease assets and liabilities, net (2 ) (3 ) Other assets and other long-term liabilities, net 4 5 Net cash provided by operating activities 100 98 Cash flows from investing activities: Expenditures for property, plant, and equipment (8 ) (6 ) Purchases of marketable securities (4 ) (4 ) Sales of marketable securities 3 4 Contributions to investments (6 ) (1 ) Net cash used in investing activities (15 ) (7 ) Cash flows from financing activities: Principal payments on borrowings (689 ) (310 ) Proceeds from borrowings 750 293 Stock repurchased and retired or withheld for taxes on equity awards (142 ) (103 ) Dividend payments to stockholders (19 ) (20 ) Issuances of stock 6 4 Net cash used in financing activities (94 ) (136 ) Net decrease in cash, cash equivalents and restricted cash (9 ) (45 ) Cash, cash equivalents and restricted cash at beginning of period 64 103 Cash, cash equivalents and restricted cash at end of period $ 55 $ 58 Schedule 4: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION SEGMENT OPERATING RESULTS (Unaudited) Three Months Ended May 2, 2025 May 3, 2024 (dollars in millions) Revenues Defense and Intelligence $ 1,433 $ 1,436 Civilian 444 411 Total revenues $ 1,877 $ 1,847 Operating income (loss) Defense and Intelligence $ 98 $ 107 Civilian 40 34 Corporate (17 ) (10 ) Total operating income $ 121 $ 131 Operating margin Defense and Intelligence 6.8 % 7.5 % Civilian 9.0 % 8.3 % Total operating margin 6.4 % 7.1 % Adjusted operating income (loss)(1) Defense and Intelligence $ 115 $ 124 Civilian 52 46 Corporate (9 ) (5 ) Total adjusted operating income(1) $ 158 $ 165 Adjusted operating margin(1) Defense and Intelligence 8.0 % 8.6 % Civilian 11.7 % 11.2 % Total adjusted operating margin(1) 8.4 % 8.9 % First Quarter Defense and Intelligence Results Revenues for the quarter decreased $3 million or 0.2% compared to the same period in the prior year primarily due to contract completions, partially offset by ramp up in volume on existing and new contracts. Operating and adjusted operating income(1) as a percentage of revenues decreased from the comparable prior year period primarily due to timing and volume mix in our contract portfolio. First Quarter Civilian Results Revenues for the quarter increased $33 million or 8% compared to the same period in the prior year primarily due to ramp up in volume on existing and new contracts. Operating and adjusted operating income(1) as a percentage of revenues increased from the comparable prior year period due to ramp up in volume on existing and new contracts. First Quarter Corporate Results Operating and adjusted operating loss(1) for the quarter increased $7 million and $4 million, respectively, from the comparable prior year period primarily due to higher selling, general and administrative expenses. (1)Non-GAAP measure, see Schedule 6 for information about this measure. Schedule 5: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION BACKLOG (Unaudited) The estimated value of our total backlog as of the dates presented was: May 2, 2025 January 31, 2025 Defense and Intelligence Civilian Total SAIC Defense and Intelligence Civilian Total SAIC (in millions) Funded backlog $ 2,524 $ 741 $ 3,265 $ 2,599 $ 845 $ 3,444 Negotiated unfunded backlog 15,857 3,221 19,078 15,341 3,072 18,413 Total backlog $ 18,381 $ 3,962 $ 22,343 $ 17,940 $ 3,917 $ 21,857 Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts and task orders as work is performed and excludes contract awards which have been protested by competitors until the protest is resolved in our favor. SAIC segregates backlog into two categories, funded backlog and negotiated unfunded backlog. Funded backlog for contracts with government agencies primarily represents contracts for which funding is appropriated less revenues previously recognized on these contracts, and does not include the unfunded portion of contracts where funding is incrementally appropriated or authorized by the U.S. government and other customers even though the contract may call for performance over a number of years. Funded backlog for contracts with non-government agencies represents the estimated value of contracts which may cover multiple future years under which SAIC is obligated to perform, less revenues previously recognized on these contracts. Negotiated unfunded backlog represents the estimated future revenues to be earned from negotiated contracts for which funding has not been appropriated or authorized, and unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders expected to be awarded under indefinite delivery, indefinite quantity (IDIQ), U.S. General Services Administration (GSA) schedules or other master agreement contract vehicles, with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future anticipated task orders. Schedule 6: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) This schedule describes the non-GAAP financial measures included in this earnings release. While we believe that these non-GAAP financial measures may be useful in evaluating our financial information, they should be considered as supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Reconciliations, definitions, and how we believe these measures are useful to management and investors are provided below. Other companies may define similar measures differently. EBITDA and Adjusted EBITDA Three Months Ended May 2, 2025 May 3, 2024 (dollars in millions) Revenues $ 1,877 $ 1,847 Net income $ 68 $ 77 Interest expense, net and loss on sale of receivables 34 37 Provision for income taxes 18 18 Depreciation and amortization 36 35 EBITDA(1) 156 167 EBITDA as a percentage of revenues 9.0 % Acquisition and integration costs — (2 ) Restructuring and impairment costs 3 2 Recovery of acquisition and integration costs and restructuring and impairment costs (2 ) (1 ) Adjusted EBITDA(1) $ 157 $ 166 Adjusted EBITDA as a percentage of revenues 9.0 % EBITDA is a performance measure that is calculated by taking net income and excluding interest and loss on sale of receivables, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is a performance measure that excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. Adjusted EBITDA is calculated by taking EBITDA and excluding acquisition and integration costs, impairments, restructuring costs, and any other material non-recurring costs. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. We believe that these performance measures provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. (1)Non-GAAP measure, see above for definition. Schedule 6 (continued): SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) Adjusted Operating Income Three Months Ended May 2, 2025 (dollars in millions) As Reported Restructuring and impairment costs Recovery of acquisition and integration costs and restructuring and impairment costs Depreciation of property, plant, and equipment Amortization of intangible assets Non-GAAP results(1) Non-GAAP operating margin(1) Defense and Intelligence $ 98 $ 1 $ (1 ) $ — $ 17 $ 115 8.0 % Civilian 40 — — — 12 52 11.7 % Corporate (17 ) 2 (1 ) 7 — (9 ) Total $ 121 $ 3 $ (2 ) $ 7 $ 29 $ 158 8.4 % Three Months Ended May 3, 2024 (dollars in millions) As Reported Acquisition and integration costs Restructuring and impairment costs Recovery of acquisition and integration costs and restructuring and impairment costs Depreciation of property, plant, and equipment Amortization of intangible assets Non-GAAP results(1) Non-GAAP operating margin(1) Defense and Intelligence $ 107 $ — $ — $ — $ — $ 17 $ 124 8.6 % Civilian 34 — — — — 12 46 11.2 % Corporate (10 ) (2 ) 2 (1 ) 6 — (5 ) NM Total $ 131 $ (2 ) $ 2 $ (1 ) $ 6 $ 29 $ 165 8.9 % Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. Adjusted operating income is calculated by taking operating income and excluding depreciation and amortization, acquisition and integration costs, impairments, restructuring costs, and any other material non-recurring costs. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs and impairments of long-lived assets, along with associated depreciation. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment. Adjusted operating income also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. We believe that these performance measures provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. (1)Non-GAAP measure, see above for definition. Schedule 6 (continued): SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) Adjusted Diluted Earnings Per Share Three Months Ended May 2, 2025 (in millions, except per share amounts) As Reported Restructuring and impairment costs Recovery of acquisition and integration costs and restructuring and impairment costs Amortization of intangible assets Non-GAAP results(1) Income before income taxes $ 86 $ 3 $ (2 ) $ 29 $ 116 Provision for income taxes (18 ) — — (6 ) (24 ) Net income $ 68 $ 3 $ (2 ) $ 23 $ 92 Diluted EPS $ 1.42 $ 0.06 $ (0.04 ) $ 0.48 $ 1.92 Three Months Ended May 3, 2024 (in millions, except per share amounts) As Reported Acquisition and integration costs Restructuring and impairment costs Recovery of acquisition and integration costs and restructuring and impairment costs Amortization of intangible assets Non-GAAP results(1) Income before income taxes $ 95 $ (2 ) $ 2 $ (1 ) $ 29 $ 123 Provision for income taxes (18 ) — — — (5 ) (23 ) Net income $ 77 $ (2 ) $ 2 $ (1 ) $ 24 $ 100 Diluted EPS $ 1.48 $ (0.04 ) $ 0.04 $ (0.02 ) $ 0.46 $ 1.92 Adjusted diluted earnings per share is a performance measure that excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. Adjusted diluted earnings per share also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. We believe that this performance measure provides management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. (1)Non-GAAP measure, see above for definition. Schedule 6 (continued): SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) Free Cash Flow Three Months Ended May 2, 2025 May 3, 2024 (in millions) Net cash provided by operating activities $ 100 $ 98 Expenditures for property, plant, and equipment (8 ) (6 ) Cash used from (provided by) MARPA Facility (136 ) (79 ) Free cash flow(1) $ (44 ) $ 13 FY26 Guidance (in millions) Net cash provided by operating activities $545 to $565 Expenditures for property, plant, and equipment Approximately $35 Free cash flow(1) $510 to $530 Free cash flow is calculated by taking cash flows provided by operating activities less expenditures for property, plant, and equipment and less cash flows from our Master Accounts Receivable Purchasing Agreement (MARPA Facility) for the sale of certain designated eligible U.S. government receivables. Under the MARPA Facility, the Company can sell eligible receivables up to a maximum amount of $300 million. We believe that free cash flow provides management and investors with useful information in assessing trends in our cash flows and in comparing them to other peer companies, many of whom present similar non-GAAP liquidity measures. This measure should not be considered as a measure of residual cash flow available for discretionary purposes. (1)Non-GAAP measure, see above for in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
02-06-2025
- Business
- Yahoo
SAIC Announces First Quarter of Fiscal Year 2026 Results
RESTON, Va., June 02, 2025 (GLOBE NEWSWIRE) -- 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 first quarter ended May 2, 2025. "Our performance in the first quarter reflects the steady progress we are making against our enterprise growth strategy despite a still dynamic operating environment," said Toni Townes-Whitley, SAIC Chief Executive Officer. "As a premier mission integrator, the rapid evolution of new technologies, a renewed focus on deploying software to drive efficiency, and an elevated global threat environment create significant opportunities for SAIC. I am confident that SAIC is prepared and well aligned with these macro trends to drive value for our customers, employees, and shareholders." First Quarter of Fiscal Year 2026: Summary Operating Results Three Months Ended May 2, 2025 Percent change May 3, 2024 (dollars in millions, except per share amounts) Revenues $ 1,877 2 % $ 1,847 Operating income 121 (8 )% 131 Operating income as a percentage of revenues -70bps 7.1 % Adjusted operating income(1) 158 (4 )% 165 Adjusted operating income as a percentage of revenues -50bps 8.9 % Net income 68 (12 )% 77 EBITDA(1) 156 (7 )% 167 EBITDA as a percentage of revenues -70bps 9.0 % Adjusted EBITDA(1) 157 (5 )% 166 Adjusted EBITDA as a percentage of revenues -60bps 9.0 % Diluted earnings per share $ 1.42 (4 )% $ 1.48 Adjusted diluted earnings per share(1) $ 1.92 — % $ 1.92 Net cash provided by operating activities $ 100 2 % $ 98 Free cash flow(1) $ (44 ) (438 )% $ 13 (1)Non-GAAP measure, see Schedule 6 for information about this measure. First Quarter Summary Results Revenues for the quarter increased $30 million or 2% compared to the same period in the prior year primarily due to ramp up in volume in existing and new contracts, partially offset by contract completions. Operating income as a percentage of revenues decreased from the comparable prior year period primarily due to timing and volume mix in our contract portfolio. Adjusted EBITDA(1) as a percentage of revenues for the quarter decreased to 8.4% from 9.0% for the same period in the prior year primarily due to timing and volume mix in our contract portfolio. Diluted earnings per share for the quarter was $1.42 compared to $1.48 in the prior year quarter. Adjusted diluted earnings per share(1) for both the current and prior year quarter was $1.92. The weighted-average diluted shares outstanding during the quarter decreased to 47.8 million from 52.1 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 first quarter increased $2 million compared to the prior year quarter, primarily due to higher cash provided by the Master Accounts Receivable Purchase Agreement ("MARPA Facility") and lower incentive-based compensation payments in the current year, partially offset by timing of vendor payments and other changes in working capital. During the quarter, SAIC deployed $152 million of capital, primarily consisting of $125 million of plan share repurchases and $19 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 July 25, 2025 to stockholders of record on July 11, 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 were approximately $2.4 billion, which reflects a book-to-bill ratio of 1.3 and a trailing twelve months book-to-bill ratio of 0.8. SAIC's estimated backlog at the end of the quarter was approximately $22.3 billion. Of the total backlog amount, approximately $3.3 billion was funded. Notable New and Recompete Awards: During the quarter, SAIC was awarded the System Software Lifecycle Engineering contract, a five-year (one year base, plus four, one-year option periods) $1.8 billion contract to continue mission engineering, integration, software development, and other life cycle support to CCDC-AvMC. Under the five-year award, SAIC will continue to develop and integrate advanced technologies throughout the software life cycle, including software development and maintenance. During the quarter, SAIC was awarded a $327 million contract to continue delivering essential IT services for the Pension Benefit Guaranty Corporation. Under this eight-year (approximately 1-year base, plus seven, one-year option periods) contract renewal, SAIC will provide seamless operation across various IT functions including service desk, desktop support, user services, platform support, network and database support, and cloud migration. During the quarter, SAIC was awarded approximately $300 million of contract awards by space and intelligence organizations. These awards represent a combination of new business and recompetes, including a four-year, $140 million task order to provide enterprise cloud services. Notable Awards Subsequent to Period End (not included in current quarter bookings): Subsequent to the end of 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. Fiscal Year 2026 Guidance Management reaffirms fiscal year 2026 guidance which represents the Company's views as of June 2, 2025. Fiscal Year 2026 Guidance Revenue $7.60B - $7.75B Adjusted EBITDA(1) $715M - $735M Adjusted EBITDA Margin %(1) 9.4% - 9.6% Adjusted Diluted EPS(1) $9.10 - $9.30 Free Cash Flow(1) $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 June 2, 2025. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the SAIC website ( 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 For ongoing news, please visit our newsroom. Contacts Investor Relations: Joe DeNardi, Kara Ross, 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 statements in this release contain or are based on 'forward-looking' information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as 'expects,' 'intends,' 'plans,' 'anticipates,' 'believes,' 'estimates,' 'guidance,' and similar words or phrases. Forward-looking statements in this release may include, among others, estimates of future revenues, operating income, earnings, earnings per share, charges, total contract value, backlog, outstanding shares and cash flows, as well as statements about future dividends, share repurchases and other capital deployment plans. Such statements are not guarantees of future performance and involve risk, uncertainties and assumptions, and actual results may differ materially from the guidance and other forward-looking statements made in this release as a result of various factors. Risks, uncertainties and assumptions that could cause or contribute to these material differences include those discussed in the 'Risk Factors,' 'Management's Discussion and Analysis of Financial Condition and Results of Operations' and 'Legal Proceedings' sections of our Annual Report on Form 10-K, as updated in any subsequent Quarterly Reports on Form 10-Q and other filings with the SEC, which may be viewed or obtained through the Investor Relations section of our website at or on the SEC's website at Due to such risks, uncertainties and assumptions you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. SAIC expressly disclaims any duty to update any forward-looking statement provided in this release to reflect subsequent events, actual results or changes in SAIC's expectations. SAIC also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others. Schedule 1: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended May 2, 2025 May 3, 2024 (in millions, except per share amounts) Revenues $ 1,877 $ 1,847 Cost of revenues 1,668 1,634 Selling, general and administrative expenses 89 85 Other operating (income) expense (1 ) (3 ) Operating income 121 131 Interest expense, net 30 34 Other (income) expense, net 5 2 Income before income taxes 86 95 Provision for income taxes (18 ) (18 ) Net income $ 68 $ 77 Weighted-average number of shares outstanding: Basic 47.6 51.6 Diluted 47.8 52.1 Earnings per share: Basic $ 1.43 $ 1.49 Diluted $ 1.42 $ 1.48 Schedule 2: SCIENCE APPLICATIONS INTERNATIONAL CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited) May 2, 2025 January 31,2025 (in millions) ASSETS Current assets: Cash and cash equivalents $ 47 $ 56 Receivables, net 1,009 1,000 Prepaid expenses and other current assets 92 98 Total current assets 1,148 1,154 Goodwill 2,851 2,851 Intangible assets, net 750 779 Property, plant, and equipment, net 102 104 Operating lease right of use assets 161 164 Other assets 199 194 Total assets $ 5,211 $ 5,246 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 668 $ 631 Accrued payroll and employee benefits 288 339 Other accrued liabilities 113 113 Debt, current portion 405 313 Total current liabilities 1,474 1,396 Debt, net of current portion 1,876 1,907 Operating lease liabilities 160 173 Deferred income taxes 22 24 Other long-term liabilities 174 169 Equity: Total stockholders' equity 1,505 1,577 Total liabilities and stockholders' equity $ 5,211 $ 5,246 Schedule 3: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Three Months Ended May 2, 2025 May 3, 2024 (in millions) Cash flows from operating activities: Net income $ 68 $ 77 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 36 35 Stock-based compensation expense 15 13 Other — (1 ) Increase (decrease) resulting from changes in operating assets and liabilities: Receivables (9 ) (20 ) Prepaid expenses and other current assets 6 15 Accounts payable and accrued liabilities 33 60 Accrued payroll and employee benefits (51 ) (83 ) Operating lease assets and liabilities, net (2 ) (3 ) Other assets and other long-term liabilities, net 4 5 Net cash provided by operating activities 100 98 Cash flows from investing activities: Expenditures for property, plant, and equipment (8 ) (6 ) Purchases of marketable securities (4 ) (4 ) Sales of marketable securities 3 4 Contributions to investments (6 ) (1 ) Net cash used in investing activities (15 ) (7 ) Cash flows from financing activities: Principal payments on borrowings (689 ) (310 ) Proceeds from borrowings 750 293 Stock repurchased and retired or withheld for taxes on equity awards (142 ) (103 ) Dividend payments to stockholders (19 ) (20 ) Issuances of stock 6 4 Net cash used in financing activities (94 ) (136 ) Net decrease in cash, cash equivalents and restricted cash (9 ) (45 ) Cash, cash equivalents and restricted cash at beginning of period 64 103 Cash, cash equivalents and restricted cash at end of period $ 55 $ 58 Schedule 4: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION SEGMENT OPERATING RESULTS (Unaudited) Three Months Ended May 2, 2025 May 3, 2024 (dollars in millions) Revenues Defense and Intelligence $ 1,433 $ 1,436 Civilian 444 411 Total revenues $ 1,877 $ 1,847 Operating income (loss) Defense and Intelligence $ 98 $ 107 Civilian 40 34 Corporate (17 ) (10 ) Total operating income $ 121 $ 131 Operating margin Defense and Intelligence 6.8 % 7.5 % Civilian 9.0 % 8.3 % Total operating margin 6.4 % 7.1 % Adjusted operating income (loss)(1) Defense and Intelligence $ 115 $ 124 Civilian 52 46 Corporate (9 ) (5 ) Total adjusted operating income(1) $ 158 $ 165 Adjusted operating margin(1) Defense and Intelligence 8.0 % 8.6 % Civilian 11.7 % 11.2 % Total adjusted operating margin(1) 8.4 % 8.9 % First Quarter Defense and Intelligence Results Revenues for the quarter decreased $3 million or 0.2% compared to the same period in the prior year primarily due to contract completions, partially offset by ramp up in volume on existing and new contracts. Operating and adjusted operating income(1) as a percentage of revenues decreased from the comparable prior year period primarily due to timing and volume mix in our contract portfolio. First Quarter Civilian Results Revenues for the quarter increased $33 million or 8% compared to the same period in the prior year primarily due to ramp up in volume on existing and new contracts. Operating and adjusted operating income(1) as a percentage of revenues increased from the comparable prior year period due to ramp up in volume on existing and new contracts. First Quarter Corporate Results Operating and adjusted operating loss(1) for the quarter increased $7 million and $4 million, respectively, from the comparable prior year period primarily due to higher selling, general and administrative expenses. (1)Non-GAAP measure, see Schedule 6 for information about this measure. Schedule 5: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION BACKLOG (Unaudited) The estimated value of our total backlog as of the dates presented was: May 2, 2025 January 31, 2025 Defense and Intelligence Civilian Total SAIC Defense and Intelligence Civilian Total SAIC (in millions) Funded backlog $ 2,524 $ 741 $ 3,265 $ 2,599 $ 845 $ 3,444 Negotiated unfunded backlog 15,857 3,221 19,078 15,341 3,072 18,413 Total backlog $ 18,381 $ 3,962 $ 22,343 $ 17,940 $ 3,917 $ 21,857 Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts and task orders as work is performed and excludes contract awards which have been protested by competitors until the protest is resolved in our favor. SAIC segregates backlog into two categories, funded backlog and negotiated unfunded backlog. Funded backlog for contracts with government agencies primarily represents contracts for which funding is appropriated less revenues previously recognized on these contracts, and does not include the unfunded portion of contracts where funding is incrementally appropriated or authorized by the U.S. government and other customers even though the contract may call for performance over a number of years. Funded backlog for contracts with non-government agencies represents the estimated value of contracts which may cover multiple future years under which SAIC is obligated to perform, less revenues previously recognized on these contracts. Negotiated unfunded backlog represents the estimated future revenues to be earned from negotiated contracts for which funding has not been appropriated or authorized, and unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders expected to be awarded under indefinite delivery, indefinite quantity (IDIQ), U.S. General Services Administration (GSA) schedules or other master agreement contract vehicles, with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future anticipated task orders. Schedule 6: SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) This schedule describes the non-GAAP financial measures included in this earnings release. While we believe that these non-GAAP financial measures may be useful in evaluating our financial information, they should be considered as supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Reconciliations, definitions, and how we believe these measures are useful to management and investors are provided below. Other companies may define similar measures differently. EBITDA and Adjusted EBITDA Three Months Ended May 2, 2025 May 3, 2024 (dollars in millions) Revenues $ 1,877 $ 1,847 Net income $ 68 $ 77 Interest expense, net and loss on sale of receivables 34 37 Provision for income taxes 18 18 Depreciation and amortization 36 35 EBITDA(1) 156 167 EBITDA as a percentage of revenues 9.0 % Acquisition and integration costs — (2 ) Restructuring and impairment costs 3 2 Recovery of acquisition and integration costs and restructuring and impairment costs (2 ) (1 ) Adjusted EBITDA(1) $ 157 $ 166 Adjusted EBITDA as a percentage of revenues 9.0 % EBITDA is a performance measure that is calculated by taking net income and excluding interest and loss on sale of receivables, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is a performance measure that excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. Adjusted EBITDA is calculated by taking EBITDA and excluding acquisition and integration costs, impairments, restructuring costs, and any other material non-recurring costs. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. We believe that these performance measures provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. (1)Non-GAAP measure, see above for definition. Schedule 6 (continued): SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) Adjusted Operating Income Three Months Ended May 2, 2025 (dollars in millions) As Reported Restructuring and impairment costs Recovery of acquisition and integration costs and restructuring and impairment costs Depreciation of property, plant, and equipment Amortization of intangible assets Non-GAAP results(1) Non-GAAP operating margin(1) Defense and Intelligence $ 98 $ 1 $ (1 ) $ — $ 17 $ 115 8.0 % Civilian 40 — — — 12 52 11.7 % Corporate (17 ) 2 (1 ) 7 — (9 ) Total $ 121 $ 3 $ (2 ) $ 7 $ 29 $ 158 8.4 % Three Months Ended May 3, 2024 (dollars in millions) As Reported Acquisition and integration costs Restructuring and impairment costs Recovery of acquisition and integration costs and restructuring and impairment costs Depreciation of property, plant, and equipment Amortization of intangible assets Non-GAAP results(1) Non-GAAP operating margin(1) Defense and Intelligence $ 107 $ — $ — $ — $ — $ 17 $ 124 8.6 % Civilian 34 — — — — 12 46 11.2 % Corporate (10 ) (2 ) 2 (1 ) 6 — (5 ) NM Total $ 131 $ (2 ) $ 2 $ (1 ) $ 6 $ 29 $ 165 8.9 % Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. Adjusted operating income is calculated by taking operating income and excluding depreciation and amortization, acquisition and integration costs, impairments, restructuring costs, and any other material non-recurring costs. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs and impairments of long-lived assets, along with associated depreciation. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment. Adjusted operating income also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. We believe that these performance measures provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. (1)Non-GAAP measure, see above for definition. Schedule 6 (continued): SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) Adjusted Diluted Earnings Per Share Three Months Ended May 2, 2025 (in millions, except per share amounts) As Reported Restructuring and impairment costs Recovery of acquisition and integration costs and restructuring and impairment costs Amortization of intangible assets Non-GAAP results(1) Income before income taxes $ 86 $ 3 $ (2 ) $ 29 $ 116 Provision for income taxes (18 ) — — (6 ) (24 ) Net income $ 68 $ 3 $ (2 ) $ 23 $ 92 Diluted EPS $ 1.42 $ 0.06 $ (0.04 ) $ 0.48 $ 1.92 Three Months Ended May 3, 2024 (in millions, except per share amounts) As Reported Acquisition and integration costs Restructuring and impairment costs Recovery of acquisition and integration costs and restructuring and impairment costs Amortization of intangible assets Non-GAAP results(1) Income before income taxes $ 95 $ (2 ) $ 2 $ (1 ) $ 29 $ 123 Provision for income taxes (18 ) — — — (5 ) (23 ) Net income $ 77 $ (2 ) $ 2 $ (1 ) $ 24 $ 100 Diluted EPS $ 1.48 $ (0.04 ) $ 0.04 $ (0.02 ) $ 0.46 $ 1.92 Adjusted diluted earnings per share is a performance measure that excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. Adjusted diluted earnings per share also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. We believe that this performance measure provides management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company. (1)Non-GAAP measure, see above for definition. Schedule 6 (continued): SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) Free Cash Flow Three Months Ended May 2, 2025 May 3, 2024 (in millions) Net cash provided by operating activities $ 100 $ 98 Expenditures for property, plant, and equipment (8 ) (6 ) Cash used from (provided by) MARPA Facility (136 ) (79 ) Free cash flow(1) $ (44 ) $ 13 FY26 Guidance (in millions) Net cash provided by operating activities $545 to $565 Expenditures for property, plant, and equipment Approximately $35 Free cash flow(1) $510 to $530 Free cash flow is calculated by taking cash flows provided by operating activities less expenditures for property, plant, and equipment and less cash flows from our Master Accounts Receivable Purchasing Agreement (MARPA Facility) for the sale of certain designated eligible U.S. government receivables. Under the MARPA Facility, the Company can sell eligible receivables up to a maximum amount of $300 million. We believe that free cash flow provides management and investors with useful information in assessing trends in our cash flows and in comparing them to other peer companies, many of whom present similar non-GAAP liquidity measures. This measure should not be considered as a measure of residual cash flow available for discretionary purposes. (1)Non-GAAP measure, see above for in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
