Science Applications International Corp (SAIC), a leading provider of scientific, engineering, and technology solutions, delivered a robust performance in the second quarter of fiscal 2025, exceeding analysts’ expectations on both revenue and earnings. The company reported a 2% year-over-year increase in revenue, reaching $1.82 billion, surpassing the consensus estimate of $1.79 billion. This growth was driven by a significant ramp-up in volume across existing and new contracts.
SAIC also exceeded earnings estimates, posting an adjusted EPS of $2.05, compared to the analyst consensus of $1.86. The company maintained a strong adjusted operating margin of 9.0%, although it experienced a slight year-over-year decrease of ten basis points. The adjusted EBITDA margin, however, declined by 40 basis points to 9.4%.
Despite the margin adjustments, SAIC generated a substantial $241 million in free cash flow for the quarter, a significant increase from the $144 million generated a year prior. As of August 2, 2024, the company held a healthy $48 million in cash and equivalents.
The company secured significant new contracts during the quarter, reflecting a book-to-bill ratio of 0.6. Net bookings for the quarter reached $1.2 billion, indicating a strong pipeline of future projects. At the end of the quarter, SAIC’s estimated backlog stood at approximately $22.9 billion, demonstrating its robust future revenue potential.
The company’s board of directors also declared a cash dividend of $0.37 per share, payable on October 25 to stockholders of record on October 11.
SAIC CEO Toni Townes-Whitley expressed confidence in the company’s growth trajectory, stating, “Our expanded pipeline of qualified opportunities is now converting to a higher number and quality of submissions and increasing book-to-bill, trends which are expected to accelerate and drive growth into Fiscal Year 2026. This momentum fuels the confidence we have in our ability to meet our Fiscal Year 2027 targets of 5% organic revenue growth, mid 9% adjusted EBITDA margins, and approximately $12 of free cash flow per share.”
Looking ahead, SAIC reiterated its fiscal 2025 revenue guidance, expecting a range of $7.35 billion to $7.50 billion, in line with the consensus estimate of $7.44 billion. The company also revised its adjusted EPS guidance upward, now projecting a range of $8.10 to $8.30, compared to the previous guidance of $8.00 to $8.20 and the consensus estimate of $8.07.
Despite the positive earnings report, SAIC shares closed down 0.33% at $128.79 on Thursday.
