SAIC Announces First Quarter of Fiscal Year 2027 Results
Rhea-AI Summary
SAIC (NASDAQ: SAIC) reported Q1 FY2027 revenues of $1.91 billion, up ~2% with 0.5% organic growth adjusted for the SilverEdge acquisition. Net income was $115 million and adjusted EBITDA $222 million (11.6% margin). Diluted EPS was $2.61; adjusted diluted EPS $3.23.
Operating cash flow reached $127 million and free cash flow $118 million. Net bookings were $2.1 billion with a book-to-bill of 1.1 and backlog of $22.9 billion. SAIC raised FY2027 guidance for adjusted EBITDA, adjusted EBITDA margin and adjusted diluted EPS, while reiterating revenue and free cash flow guidance.
Positive
- Q1 FY2027 revenues of $1.906 billion, up 2% year-over-year
- Adjusted EBITDA of $222 million; margin expanded to 11.6% from 8.4%
- Diluted EPS rose to $2.61; adjusted diluted EPS to $3.23
- Free cash flow improved to $118 million from negative $44 million
- FY2027 guidance raised for adjusted EBITDA, margin and adjusted diluted EPS
- $2.1 billion in net bookings; backlog of approximately $22.9 billion
Negative
- Q1 organic revenue growth approximately 0.5% after SilverEdge adjustment
- FY2027 organic growth guidance remains negative at (4%) to (2%)
News Market Reaction – SAIC
In the Jun 1 session, SAIC gained 10.44%, reflecting a significant positive market reaction. Argus tracked a peak move of +8.9% during that session. Argus tracked a trough of -4.0% from its starting point during tracking. Our momentum scanner triggered 10 alerts that day, indicating notable trading interest and price volatility.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Mar 16 | Q4 & FY26 results | Neutral | -1.3% | Reported Q4 and full-year FY26 results and introduced initial FY27 guidance. |
| Feb 11 | Prelim FY26, FY27 guide | Negative | -16.0% | Issued preliminary FY26 results and lowered FY27 revenue outlook amid contract headwinds. |
| Dec 04 | Q3 FY26 results | Positive | +16.3% | Delivered solid Q3 earnings, strong bookings and raised parts of FY26 guidance. |
| Sep 04 | Q2 FY26 results | Negative | -6.9% | Reported revenue decline and reduced FY26 revenue guidance despite stronger profitability. |
| Jun 02 | Q1 FY26 results | Positive | -13.3% | Posted Q1 growth with strong bookings and reaffirmed FY26 guidance, but shares fell sharply. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Earnings releases have often produced downside moves, especially when guidance was reduced, but strong upside reactions occurred when results and outlook clearly exceeded prior expectations.
Over the last several earnings cycles, SAIC has reported relatively stable revenue around $7.2B annually, with a focus on expanding margins and adjusted EPS. Prior updates included lowered revenue expectations for fiscal 2027 but higher margin and EPS guidance, as well as details on the SilverEdge acquisition. Past earnings days saw share price declines when guidance was cut, and a sharp gain following strong Q3 FY26 results and raised outlook. Today’s Q1 FY27 report adds higher margins, stronger cash generation, and an increase to adjusted EBITDA and EPS guidance while revenue guidance is reiterated.
Key Terms
adjusted ebitda financial
free cash flow financial
non-gaap financial
book-to-bill ratio financial
backlog financial
ebitda financial
form 10-k regulatory
pdufa regulatory
AI-generated analysis. How Rhea-AI works. Not financial advice.
- Revenues of
$1.91 billion , approximately2% growth;0.5% organic growth(1) adjusted for SilverEdge acquisition - Net bookings of
$2.1 billion ; quarterly book-to-bill ratio of 1.1; trailing twelve months book-to-bill ratio of 1.0 - Net income of
$115 million ; Adjusted EBITDA(1) of$222 million or11.6% of revenues - Diluted earnings per share of
$2.61 ; Adjusted diluted earnings per share(1) of$3.23 - Cash flows provided by operating activities of
$127 million ; Free cash flow(1) of$118 million - Company increases fiscal year 2027 guidance for adjusted EBITDA(1), adjusted EBITDA margin %(1) and adjusted diluted EPS(1); reiterates revenue and free cash flow(1) guidance
RESTON, Va., June 01, 2026 (GLOBE NEWSWIRE) -- Science Applications International Corporation (NASDAQ: SAIC), a premier mission integrator driving our nation's digital transformation across the defense, space, intelligence, and civilian markets, today announced results for the first quarter ended May 1, 2026.
"I am proud of our team’s performance this quarter, delivering record margin and modest organic growth," said Jim Reagan, SAIC Chief Executive Officer. "These results reflect our focus on execution and our commitment to our financial targets. We are raising our guidance to reflect this strong start, while continuing to invest for the future. We are also advancing our enterprise transformation and strategy efforts to drive long-term growth and margin expansion, and to support our customers’ most critical missions."
First Quarter of Fiscal Year 2027: Summary Operating Results
| Three Months Ended | ||||||||||
| May 1, 2026 | Percent change | May 2, 2025 | ||||||||
| (dollars in millions, except per share amounts) | ||||||||||
| Revenues | $ | 1,906 | 2 | % | $ | 1,877 | ||||
| Operating income | 179 | 48 | % | 121 | ||||||
| Operating income as a percentage of revenues | 9.4 | % | 300bps | 6.4 | % | |||||
| Adjusted operating income(1) | 221 | 40 | % | 158 | ||||||
| Adjusted operating income as a percentage of revenues | 11.6 | % | 320bps | 8.4 | % | |||||
| Net income | 115 | 69 | % | 68 | ||||||
| EBITDA(1) | 220 | 41 | % | 156 | ||||||
| EBITDA as a percentage of revenues | 11.5 | % | 320bps | 8.3 | % | |||||
| Adjusted EBITDA(1) | 222 | 41 | % | 157 | ||||||
| Adjusted EBITDA as a percentage of revenues | 11.6 | % | 320bps | 8.4 | % | |||||
| Diluted earnings per share | $ | 2.61 | 84 | % | $ | 1.42 | ||||
| Adjusted diluted earnings per share(1) | $ | 3.23 | 68 | % | $ | 1.92 | ||||
| Net cash provided by operating activities | $ | 127 | 27 | % | $ | 100 | ||||
| Free cash flow(1) | $ | 118 | 368 | % | $ | (44 | ) | |||
(1)Non-GAAP measure, see Schedule 6 for information about this measure.
First Quarter Summary Results
Revenues for the quarter increased
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
Adjusted EBITDA(1) as a percentage of revenues for the quarter increased to
Diluted earnings per share for the quarter was
(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
During the quarter, SAIC deployed
Quarterly Dividend Declared
Subsequent to quarter end, on May 28, 2026, the Company's Board of Directors declared a cash dividend of
Backlog and Contract Awards
Net bookings for the quarter were approximately
Notable New and Recompete Awards:
U.S. Space and Intelligence Community: During the quarter, SAIC was awarded several awards within the U.S. Space and Intelligence Community, including:
- A seven-year recompete contract of approximately
$330 million with a Space and Intelligence Community customer. Under this contract, SAIC will provide systems engineering and technical assistance to its customer. - A seven-year recompete of approximately
$540 million with a Space and Intelligence Community customer. Under this contract, SAIC will provide systems engineering and technical assistance in the form of subject matter expertise. - A seven-year recompete of approximately
$100 million with a Space and Intelligence Community customer. Under this contract, SAIC will provide organizational support, mission analysis and engineering, program support, and additional technical services.
U.S. Department of Homeland Security: During the quarter, SAIC was awarded a five-year (one-year base, plus four, one-year option periods) recompete contract of approximately
U.S. Air Force: During the quarter, SAIC was awarded a five-year (three-year base, plus two, one-year option periods) contract of approximately
U.S. Navy: During the quarter, SAIC was awarded a six-year (one-year base, plus five, one-year option periods) contract of approximately
Notable Awards Subsequent to Period End (not included in current quarter bookings):
Federal Aviation Administration ("FAA"): Subsequent to the end of the quarter, SAIC was awarded several task orders totaling
Fiscal Year 2027 Guidance
The table below summarizes fiscal year 2027 guidance and represents the Company's views as of June 1, 2026.
| CURRENT | PRIOR | |
| Fiscal Year | Fiscal Year | |
| 2027 Guidance | 2027 Guidance | |
| Revenue | ||
| Organic Growth(1) | ( | ( |
| Adjusted EBITDA(1) | ||
| Adjusted EBITDA Margin %(1) | ||
| Adjusted Diluted EPS(1) | ||
| Free Cash Flow(1) | > | > |
(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 1, 2026. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the SAIC website (https://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 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, intelligence, and civilian 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 23,000 strong; driven by mission, united by purpose, and inspired by opportunities. Headquartered in Reston, Virginia, SAIC has annual revenues of approximately
Media Contact
Darryn James
Director, Media and Brand Reputation
publicrelations@saic.com
Investor Relations Contact
Jon Raviv
Vice President, Investor Relations
investorrelations@saic.com
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.
Forward-Looking Statements
Certain 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 www.saic.com or on the SEC’s website at www.sec.gov. 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 1, 2026 | May 2, 2025 | ||||||
| (in millions, except per share amounts) | |||||||
| Revenues | $ | 1,906 | $ | 1,877 | |||
| Cost of revenues | 1,657 | 1,668 | |||||
| Selling, general and administrative expenses | 83 | 89 | |||||
| Other operating (income) expense | (13 | ) | (1 | ) | |||
| Operating income | 179 | 121 | |||||
| Interest expense, net | 33 | 30 | |||||
| Other (income) expense, net | 1 | 5 | |||||
| Income before income taxes | 145 | 86 | |||||
| Income tax (expense) benefit | (30 | ) | (18 | ) | |||
| Net income | $ | 115 | $ | 68 | |||
| Weighted-average number of shares outstanding: | |||||||
| Basic | 43.7 | 47.6 | |||||
| Diluted | 44.0 | 47.8 | |||||
| Earnings per share: | |||||||
| Basic | $ | 2.63 | $ | 1.43 | |||
| Diluted | $ | 2.61 | $ | 1.42 | |||
Schedule 2:
| SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||
| May 1, 2026 | January 30, 2026 | ||||
| (in millions) | |||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 109 | $ | 182 | |
| Receivables, net | 962 | 853 | |||
| Prepaid expenses | 102 | 122 | |||
| Other current assets | 26 | 22 | |||
| Total current assets | 1,199 | 1,179 | |||
| Goodwill | 2,944 | 2,944 | |||
| Intangible assets, net | 729 | 761 | |||
| Property, plant, and equipment, net | 111 | 110 | |||
| Operating lease right of use assets | 184 | 193 | |||
| Other assets | 171 | 167 | |||
| Total assets | $ | 5,338 | $ | 5,354 | |
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 634 | $ | 500 | |
| Accrued payroll and employee benefits | 278 | 316 | |||
| Other accrued liabilities | 99 | 147 | |||
| Debt, current portion | 26 | 19 | |||
| Total current liabilities | 1,037 | 982 | |||
| Debt, net of current portion | 2,460 | 2,468 | |||
| Operating lease liabilities | 189 | 198 | |||
| Deferred income taxes | 125 | 104 | |||
| Other long-term liabilities | 104 | 102 | |||
| Equity: | |||||
| Total stockholders' equity | 1,423 | 1,500 | |||
| Total liabilities and stockholders' equity | $ | 5,338 | $ | 5,354 | |
Schedule 3:
| SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
| Three Months Ended | |||||||
| May 1, 2026 | May 2, 2025 | ||||||
| (in millions) | |||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 115 | $ | 68 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 40 | 36 | |||||
| Stock-based compensation expense | 13 | 15 | |||||
| Deferred income taxes | 21 | (1 | ) | ||||
| Gain on sales of investments | (12 | ) | — | ||||
| Other | (2 | ) | 1 | ||||
| Increase (decrease) resulting from changes in operating assets and liabilities: | |||||||
| Receivables | (109 | ) | (9 | ) | |||
| Prepaid expenses and other current assets | 15 | 6 | |||||
| Accounts payable and other accrued liabilities | 85 | 33 | |||||
| Accrued payroll and employee benefits | (38 | ) | (51 | ) | |||
| Operating lease assets and liabilities, net | (1 | ) | (2 | ) | |||
| Other assets and other long-term liabilities, net | — | 4 | |||||
| Net cash provided by operating activities | 127 | 100 | |||||
| Cash flows from investing activities: | |||||||
| Proceeds from sales of investments | 15 | — | |||||
| Sales of marketable securities | 5 | 3 | |||||
| Purchases of marketable securities | (4 | ) | (4 | ) | |||
| Expenditures for property, plant, and equipment | (9 | ) | (8 | ) | |||
| Contributions to investments | (6 | ) | (6 | ) | |||
| Net cash provided by (used in) investing activities | 1 | (15 | ) | ||||
| Cash flows from financing activities: | |||||||
| Stock repurchased and retired or withheld for taxes on equity awards | (188 | ) | (142 | ) | |||
| Dividend payments to stockholders | (17 | ) | (19 | ) | |||
| Principal payments on borrowings | (1 | ) | (689 | ) | |||
| Proceeds from borrowings | — | 750 | |||||
| Issuances of stock | 5 | 6 | |||||
| Net cash used in financing activities | (201 | ) | (94 | ) | |||
| Net decrease in cash, cash equivalents and restricted cash | (73 | ) | (9 | ) | |||
| Cash, cash equivalents and restricted cash at beginning of period | 190 | 64 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 117 | $ | 55 | |||
Schedule 4:
| SCIENCE APPLICATIONS INTERNATIONAL CORPORATION SEGMENT OPERATING RESULTS (Unaudited) | |||||||
| Three Months Ended | |||||||
| May 1, 2026 | May 2, 2025 | ||||||
| (dollars in millions) | |||||||
| Revenues | |||||||
| Defense and Intelligence | $ | 1,466 | $ | 1,433 | |||
| Civilian | 440 | 444 | |||||
| Total revenues | $ | 1,906 | $ | 1,877 | |||
| Adjusted operating income (loss) | |||||||
| Defense and Intelligence | $ | 146 | $ | 115 | |||
| Civilian | 68 | 52 | |||||
| Corporate | 7 | (9 | ) | ||||
| Total adjusted operating income | $ | 221 | $ | 158 | |||
| Adjusted operating margin | |||||||
| Defense and Intelligence | 10.0 | % | 8.0 | % | |||
| Civilian | 15.5 | % | 11.7 | % | |||
| Total adjusted operating margin | 11.6 | % | 8.4 | % | |||
First Quarter Defense and Intelligence Results
Revenues for the quarter increased
Adjusted operating income as a percentage of revenues increased compared to the same period in the prior year primarily due to improved profitability and timing and volume mix in our contract portfolio, partially offset by contract completions.
First Quarter Civilian Results
Revenues for the quarter decreased
Adjusted operating income as a percentage of revenues increased from the comparable prior year period primarily due to improved profitability across our contract portfolio.
First Quarter Corporate Results
Adjusted operating income was
Schedule 5:
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
BACKLOG
(Unaudited)
The estimated value of our total backlog as of the dates presented was:
| May 1, 2026 | January 30, 2026 | ||||||||||||
| Defense and Intelligence | Civilian | Total SAIC | Defense and Intelligence | Civilian | Total SAIC | ||||||||
| (in millions) | |||||||||||||
| Funded backlog | $ | 2,675 | $ | 1,061 | $ | 3,736 | $ | 2,511 | $ | 1,061 | $ | 3,572 | |
| Negotiated unfunded backlog | 15,946 | 3,178 | 19,124 | 15,869 | 3,181 | 19,050 | |||||||
| Total backlog | $ | 18,621 | $ | 4,239 | $ | 22,860 | $ | 18,380 | $ | 4,242 | $ | 22,622 | |
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 consolidated 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. Organic growth is a performance measure that excludes the impact of acquisitions and divestitures. Organic growth is calculated by taking consolidated revenues and excluding revenues from acquisitions and divestitures during the periods presented, when applicable. See schedules below for the definitions of other non-GAAP measures.
Adjusted Operating Income
| Three Months Ended | |||||||
| May 1, 2026 | May 2, 2025 | ||||||
| (dollars in millions) | |||||||
| Revenues | $ | 1,906 | $ | 1,877 | |||
| Operating income | $ | 179 | $ | 121 | |||
| Operating income as a percentage of revenues | 9.4 | % | 6.4 | % | |||
| Depreciation of property, plant and equipment | 8 | 7 | |||||
| Amortization of intangible assets | 32 | 29 | |||||
| Acquisition, integration, restructuring and impairment costs | 2 | 3 | |||||
| Recovery of acquisition, integration, restructuring and impairment costs | (1 | ) | (2 | ) | |||
| Costs related to the settlement of federal tax audits | 1 | — | |||||
| Adjusted operating income(1) | $ | 221 | $ | 158 | |||
| Adjusted operating income as a percentage of revenues | 11.6 | % | 8.4 | % | |||
Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions and activities 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, integration, restructuring, and impairment costs, and any other material non-recurring costs. Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment. Adjusted operating income 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. Acquisition, integration, restructuring and impairment costs represent costs incurred related to acquisitions, the reorganization, facilities optimization efforts, and impairments of long-lived assets, along with associated depreciation. Recovery of acquisition, integration, restructuring and impairment costs represents costs recovered through our indirect rates in accordance with Cost Accounting Standards. Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019. 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 our long-term financial performance.
(1)Non-GAAP measure, see above for definition.
Schedule 6 (continued):
| SCIENCE APPLICATIONS INTERNATIONAL CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited) | |||||||
| EBITDA and Adjusted EBITDA | |||||||
| Three Months Ended | |||||||
| May 1, 2026 | May 2, 2025 | ||||||
| (dollars in millions) | |||||||
| Revenues | $ | 1,906 | $ | 1,877 | |||
| Net income | $ | 115 | $ | 68 | |||
| Interest expense, net and loss on sale of receivables | 35 | 34 | |||||
| Income tax expense (benefit) | 30 | 18 | |||||
| Depreciation and amortization | 40 | 36 | |||||
| EBITDA(1) | 220 | 156 | |||||
| EBITDA as a percentage of revenues | 11.5 | % | 8.3 | % | |||
| Acquisition, integration, restructuring and impairment costs | 2 | 3 | |||||
| Recovery of acquisition, integration, restructuring and impairment costs | (1 | ) | (2 | ) | |||
| Costs related to the settlement of federal tax audits | 1 | — | |||||
| Adjusted EBITDA(1) | $ | 222 | $ | 157 | |||
| Adjusted EBITDA as a percentage of revenues | 11.6 | % | 8.4 | % | |||
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 and activities that we do not consider to be indicative of our ongoing operating performance. Adjusted EBITDA is calculated by taking EBITDA and excluding acquisition, integration, restructuring and impairment costs, and any other material non-recurring costs. Acquisition, integration, restructuring and impairment costs represent costs incurred related to acquisitions, the reorganization, facilities optimization efforts, and impairments of long-lived assets, along with associated depreciation. Recovery of acquisition, integration, restructuring and impairment costs represents costs recovered through our indirect rates in accordance with Cost Accounting Standards. Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019. 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 1, 2026 | ||||||||||||||||||||
| (in millions, except per share amounts) | ||||||||||||||||||||
| As Reported | Amortization of intangible assets | Acquisition, integration, restructuring and impairment costs | Recovery of acquisition, integration, restructuring and impairment costs | Costs related to the settlement of federal tax audits | Non-GAAP results(1) | |||||||||||||||
| Income before income taxes | $ | 145 | $ | 32 | $ | 2 | $ | (1 | ) | $ | 1 | $ | 179 | |||||||
| Income tax (expense) benefit | (30 | ) | (7 | ) | — | — | — | (37 | ) | |||||||||||
| Net income | $ | 115 | $ | 25 | $ | 2 | $ | (1 | ) | $ | 1 | $ | 142 | |||||||
| Diluted EPS | $ | 2.61 | $ | 0.57 | $ | 0.05 | $ | (0.02 | ) | $ | 0.02 | $ | 3.23 | |||||||
| Three Months Ended May 2, 2025 | ||||||||||||||||||
| (in millions, except per share amounts) | ||||||||||||||||||
| As Reported | Amortization of intangible assets | Acquisition, integration, restructuring and impairment costs | Recovery of acquisition, integration, restructuring and impairment costs | Non-GAAP results(1) | ||||||||||||||
| Income before income taxes | $ | 86 | $ | 29 | $ | 3 | $ | (2 | ) | $ | 116 | |||||||
| Income tax (expense) benefit | (18 | ) | (6 | ) | — | — | (24 | ) | ||||||||||
| Net income | $ | 68 | $ | 23 | $ | 3 | $ | (2 | ) | $ | 92 | |||||||
| Diluted EPS | $ | 1.42 | $ | 0.48 | $ | 0.06 | $ | (0.04 | ) | $ | 1.92 | |||||||
Adjusted diluted earnings per share is a performance measure that excludes the impact of non-recurring transactions and activities that we do not consider to be indicative of our ongoing operating performance. Adjusted diluted earnings per share 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. Acquisition, integration, restructuring and impairment costs represent costs incurred related to acquisitions, the reorganization, facilities optimization efforts, and impairments of long-lived assets, along with associated depreciation. Recovery of acquisition, integration, restructuring and impairment costs represents costs recovered through our indirect rates in accordance with Cost Accounting Standards. Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019. 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 1, 2026 | May 2, 2025 | ||||||
| (in millions) | |||||||
| Net cash provided by operating activities | $ | 127 | $ | 100 | |||
| Expenditures for property, plant, and equipment | (9 | ) | (8 | ) | |||
| Cash used from (provided by) MARPA Facility | — | (136 | ) | ||||
| Free cash flow(1) | $ | 118 | $ | (44 | ) | ||
| FY27 Guidance | |
| (in millions) | |
| Net cash provided by operating activities | > |
| Expenditures for property, plant, and equipment | Approximately |
| Free cash flow(1) | > |
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
(1)Non-GAAP measure, see above for definition.
