Science Applications International Corporation (SAIC) released its first-quarter financial results for fiscal year 2026, revealing a modest revenue increase but shortfalls in earnings expectations. The company remains optimistic about its future prospects, reaffirming its guidance for the fiscal year.
SAIC’s Q1 FY’26 Revenue: A Summary
SAIC generated $1.88 billion in revenue for the first quarter of fiscal 2026, marking a 2% rise compared to the same period last year. This performance exceeded expectations of $1.86 billion, indicating solid sales growth fueled by increased contract volume.
However, SAIC’s operating income decreased by 8% to $121 million, primarily due to timing and mix challenges in its contract portfolio. Additionally, the company’s earnings per share (EPS) fell short of projections, dropping 4% from last year to $1.42. Despite this, adjusted diluted EPS remained stable at $1.92.
While revenue and sales are positive, operational efficiency still poses a challenge as evident in the company’s negative free cash flow of -$44 million, attributed to increased cash used for the Master Accounts Receivable Purchase Agreement (MARPA Facility) and timing of vendor payments.
Looking Ahead: A Positive Outlook
SAIC is optimistic about its continued performance throughout the fiscal year 2026. The company reaffirms its revenue guidance between $7.60 billion and $7.75 billion, driven by a strong pipeline of contracts across defense, space, and intelligence sectors.
The company also anticipates an adjusted EBITDA range of $715 million to $735 million, with an adjusted EBITDA margin expected to be 9.4% to 9.6%. The predicted EPS range is between $9.10 and $9.30, reflecting the company’s focus on operational efficiency.
SAIC also boasts a robust backlog of approximately $22.3 billion at the end of Q1, with $3.3 billion funded. This strong foundation ensures future revenue streams and underscores SAIC’s position within the industry. The company’s confidence in its strategic direction is reflected in its reaffirmation of its outlook.
Disclaimer: The author does not hold or have a position in any securities discussed in this article. All stock prices were quoted at the time of writing.