SAIC (NASDAQ:SAIC) Posts Mixed Q2 Results with Earnings Beat and Revenue Miss

SCIENCE APPLICATIONS INTERNATIONAL CORP (NASDAQ:SAIC) reported mixed second-quarter fiscal 2026 results, delivering a significant earnings beat while falling short on revenue expectations. The government technology integrator posted $1.77 billion in revenue, representing a 3% year-over-year decline and missing analyst estimates of $1.90 billion. Despite the top-line disappointment, the company's operational efficiency drove non-GAAP earnings per share of $3.63, substantially exceeding the $2.28 consensus estimate.

Quarterly Performance Highlights

The company's second-quarter results revealed several notable financial developments:

• Revenue: $1.77 billion (3% decrease year-over-year)
• Non-GAAP EPS: $3.63 (77% increase year-over-year)
• Net Bookings: $2.6 billion (book-to-bill ratio of 1.5)
• Adjusted EBITDA: $185 million (10.5% margin)
• Free Cash Flow: $150 million

CEO Toni Townes-Whitley attributed the revenue challenges to "slower on-contract growth and continued delays in new business awards and new program ramps," while emphasizing strong program performance and business development momentum.

Market Reaction and Guidance Revision

The market responded negatively to the earnings release, with pre-market trading indicating a decline of approximately 10.6%. This reaction appears driven by the revenue miss and management's revised guidance rather than the earnings beat.

The company lowered its full-year revenue outlook to a range of $7.25-$7.33 billion, down from previous guidance of $7.60-$7.75 billion. Similarly, adjusted EBITDA guidance was reduced to $680-$690 million from $715-$735 million. These revised figures fall below analyst expectations of $7.78 billion in revenue for the full year.

Notably, management increased guidance for both free cash flow (to over $550 million from $510-$530 million) and adjusted diluted EPS (to $9.40-$9.60 from $9.10-$9.30), indicating confidence in profitability and cash generation despite the more challenging revenue environment.

Contract Awards and Backlog Position

SAIC demonstrated continued business development strength with several significant contract wins:

• $928 million U.S. Air Force contract for prototype engineering services
• $728 million Department of Treasury task order for cloud services
• Multiple U.S. Navy contracts totaling over $650 million
• $547 million Department of State IT services extension

The company ended the quarter with an estimated backlog of $23.2 billion, of which $3.6 billion was funded. The quarterly book-to-bill ratio of 1.5 and year-to-date ratio of 1.4 suggest healthy future revenue potential despite current headwinds.

Capital Deployment and Dividend

SAIC maintained its commitment to shareholder returns, deploying $130 million in capital during the quarter through $106 million in share repurchases and $17 million in dividend payments. The board declared a quarterly cash dividend of $0.37 per share payable in October, continuing the company's pattern of returning capital to shareholders.

For more detailed earnings information and future estimates, review the complete earnings and estimates data.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. The information presented should not be interpreted as a recommendation to buy or sell any security. Readers should conduct their own research and consult with a qualified financial advisor before making investment decisions.