Science Applications International Corporation

SAIC reported first-quarter revenue of $1.9 billion for the quarter ended 05/01/2026. Organic growth was 50 basis points better than expected, adjusted EBITDA was $222 million, and adjusted diluted EPS was $3.23. Management said the quarter included a $12 million gain from an IPO of a venture investment, which added 60 basis points to EBITDA margin and approximately $0.20 to EPS. Free cash flow was $118 million and net leverage was 3.1x. For full-year FY27, SAIC maintained sales guidance but said it expects revenue to finish at or slightly above the midpoint because of the RITS extension. The company raised full-year EBITDA margin guidance to 10.1%-10.3% and lifted adjusted EPS guidance to $9.9-$10.10, while keeping free cash flow guidance above $600 million and at least $14 per share.

Jim Reagan framed the quarter as a good start and repeatedly emphasized execution, discipline, and rebuilding trust through sustained organic growth. He said SAIC is reviewing the portfolio, likely spending less on commoditized enterprise IT, and focusing more on mission-critical areas where it can win with speed and agility. His tone was confident but cautious: he called FY27 a “year of commitment,” said the company is being selective, and stressed that the organic growth recovery is a multi-quarter journey.

Prabu Natarajan highlighted that Q1 revenue was $1.9 billion, adjusted EBITDA was $222 million, adjusted EPS was $3.23, free cash flow was $118 million, and leverage was 3.1x. He said the venture sale boosted EBITDA margin by 60 basis points and EPS by about $0.20, and that the full-year margin guide now reflects 20 basis points of added benefit, to 10.1%-10.3%. He also said the company expects to remain disciplined on capital allocation, with buybacks still opportunistic and the full-year repurchase plan unchanged at roughly $400 million.

Analysts pressed on the seemingly conservative revenue guide after Q1 organic growth came in better than expected, and management said it is keeping a “conservative hat” on because of volatility and limited visibility into the rest of the year. On bookings and awards, management said proposal activity is strong, submissions should be healthy in Q2 and Q3, and it expects to finish comfortably above 1.0x book-to-bill for the year. Questions on the Vanguard/Evolve State Department recompete brought the response that the opportunity is larger, with a $10 billion ceiling over 7 years, but management does not expect material FY27 impact and wants to de-risk it over several quarters. Capital allocation questions led management to say buybacks were timely and prudent, but it is also evaluating tuck-in M&A and other investments aligned with strategy.