Defense Contractor SAIC Raises Annual Forecast Despite Revenue Dip

Science Applications International (NASDAQ:SAIC) stock gained on Thursday after reporting the fiscal third-quarter 2026 earnings.

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The company reported a quarterly sales decline of 6% year-on-year to $1.87 billion, missing the analyst consensus estimate of $1.89 billion.

The adjusted EPS of $2.58 beat the analyst consensus estimate of $2.15.

SAIC provides technical, engineering, and enterprise information technology services, primarily for the defense, space, civilian, and intelligence markets.

Also Read: Science Applications Trims Sales Outlook As CEO Highlights Delays

Margins And Cash Flow

Operating income for the quarter fell 20% to $128 million, and the operating margin declined by 120 basis points to 6.9%. The adjusted operating income was $183 million, and the margin was 9.8%.

Adjusted EBITDA decreased 6% to $185 million with an adjusted EBITDA margin of 9.9%, a 10 basis point decline.

Net bookings for the quarter were approximately $2.2 billion, which reflects a book-to-bill ratio of 1.2.

The quarter's operating cash flow totaled $129 million. Free cash flow was $135 million.

SAIC's estimated backlog for the quarter was approximately $23.8 billion, of which $3.8 billion was funded.

As of October 31, 2025, the company held $45 million in cash and equivalents.

The company's Board of Directors declared a cash dividend of $0.37 per share.

SAIC's quarterly results showed a 5.6% revenue contraction, slightly better than guidance after accounting for an estimated 1% headwind from the government shutdown, alongside strong margins driven by continued solid program execution, interim CEO Jim Reagan said.

Outlook

Science Applications revised the 2026 revenue outlook to $7.275 billion-$7.325 billion (up from prior outlook of $7.250 billion-$7.325 billion), compared to the analyst consensus estimate of $7.290 billion.

The company raised its annual adjusted EPS outlook to $9.80-$10.00 (up from the previous forecast of $9.40-$9.60), above the analyst consensus estimate of $9.55.

SAIC has raised the fiscal year 2026 adjusted EBITDA outlook from $680 million – $690 million to $695 million. It maintained the free cash flow outlook of more than $550 million.

SAIC Price Action: Science Applications Intl shares were up 5.68% at $92.50 during premarket trading on Wednesday, according to Benzinga Pro data.

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