SAIC (SAIC) Q2 2027 Financial Results Summary
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Science Applications International Corporation (SAIC) Q2 2027: Revenue Growth, Earnings Decline — Cautiously Optimistic
In the second quarter of fiscal year 2027, Science Applications International Corporation (SAIC) reported revenues of $1.88 billion, reflecting an increase of $111 million or approximately 6.3% compared to the same period last year. However, net income decreased to $102 million, down 20% from $127 million in the prior year. This mixed performance indicates a quarter that, while showing revenue growth, disappointed on the earnings front.
Analyst View
For shareholders, this quarter presents a mixed bag. The revenue growth of 6.3% is a positive sign, indicating that SAIC is successfully ramping up operations and benefiting from new contracts, including contributions from the acquisition of SilverEdge Government Solutions. However, the decline in net income and diluted earnings per share (EPS), which fell to $2.38 from $2.71 (a 12% decrease), raises concerns about profitability and cost management. The adjusted diluted EPS also saw a decline, dropping to $3.01 from $3.63 (a 17% decrease).
Key Metrics
- Revenues: $1.88 billion, up $111 million or +6.3% YoY
- Net Income: $102 million, down $25 million or -20% YoY
- Diluted EPS: $2.38, down $0.33 or -12% YoY
- Adjusted Diluted EPS: $3.01, down $0.62 or -17% YoY
- Adjusted EBITDA: $193 million, or 10.3% of revenues, down from 10.5% YoY
- Free Cash Flow: $131 million, down $19 million or -13% YoY
- Net Bookings: $1.2 billion, with a book-to-bill ratio of 0.6
Dividend and Share Buyback
During the quarter, SAIC deployed $106 million in capital, which included $90 million for share repurchases and $16 million in cash dividends. The company declared a cash dividend of $0.37 per share, payable on October 23, 2026, to stockholders of record on October 9, 2026. This commitment to returning capital to shareholders is a positive signal, although the decrease in free cash flow may warrant caution.
Guidance Update
SAIC has raised its fiscal year 2027 guidance, now expecting revenues between $7.2 billion and $7.3 billion, up from the previous range of $7.0 billion to $7.2 billion. Adjusted EBITDA guidance has also been increased to $750 million to $755 million, compared to the prior range of $720 million to $730 million. The adjusted diluted EPS guidance has been raised to $10.65 to $10.75, up from $9.90 to $10.10. This upward revision reflects confidence in the company's operational performance despite the current quarter's earnings decline.
Forward Catalysts
Investors should closely monitor SAIC's ability to convert its substantial backlog, which stands at approximately $22.1 billion, into revenue. The company’s recent contract wins, including a $400 million recompete contract with a U.S. Intelligence Agency and a $330 million contract with the U.S. Army, are promising indicators of future growth. Additionally, the upcoming earnings conference call on August 31, 2026, will provide further insights into management's strategies and operational outlook, which could influence investor sentiment moving forward.
In summary, while SAIC's revenue growth is commendable, the decline in earnings and free cash flow raises questions about its profitability. The raised guidance offers a silver lining, but investors should remain vigilant about the company's execution in the coming quarters.
Note: All amounts in the following tables are in millions.
| July 31, 2026 | August 1, 2025 | Six Months Ended | July 31, 2026 | August 1, 2025 | |
|---|---|---|---|---|---|
| Revenues | $1,880 | $1,769 | $3,786 | $3,656 | |
| Cost of revenues | $1,668 | $1,580 | $3,336 | $3,271 | |
| Selling, general and administrative expenses | 87 | 75 | 170 | 164 | |
| Other operating income | — | 1 | -13 | — | |
| Operating income | 152 | 139 | 331 | 260 | |
| Interest expense | 33 | 31 | 66 | 61 | |
| Other income (net) | — | — | 1 | 5 | |
| Income before income taxes | 119 | 108 | 264 | 194 | |
| Income tax expense | -17 | 19 | -47 | 1 | |
| Net income | 102 | 127 | 217 | 195 | |
| Weighted-average shares outstanding | 42.4 | 46.7 | 43.0 | 47.0 | |
| Diluted earnings per share | 2.41 | 2.72 | 5.03 | 4.17 | |
| Diluted earnings per share | 2.38 | 2.71 | 5.03 | 4.17 |
| ASSETS | July 31, 2026 | January 30, 2026 |
|---|---|---|
| Current assets: | ||
| Cash and cash equivalents | 126 | 182 |
| Receivables, net | 996 | 853 |
| Prepaid expenses | 129 | 122 |
| Other current assets | 28 | 22 |
| Total current assets | 1,279 | 1,179 |
| Goodwill | 2,943 | 2,944 |
| Intangible assets, net | 697 | 761 |
| Property, plant, and equipment, net | 122 | 110 |
| Operating lease right of use assets | 210 | 193 |
| Other assets | 172 | 167 |
| Total assets | 5,423 | 5,354 |
| LIABILITIES AND EQUITY | ||
| Current liabilities: | ||
| Accounts payable | 597 | 500 |
| Accrued payroll and employee benefits | 334 | 316 |
| Other accrued liabilities | 98 | 147 |
| Debt, current portion | 33 | 19 |
| Total current liabilities | 1,062 | 982 |
| Debt, net of current portion | 2,452 | 2,468 |
| Operating lease liabilities | 220 | 198 |
| Deferred income taxes | 147 | 104 |
| Other long-term liabilities | 106 | 102 |
| Total stockholders' equity | 1,436 | 1,500 |
| Total liabilities and stockholders' equity | 5,423 | 5,354 |
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