SAIC Tops Earnings Estimates and Raises Full-Year Outlook, Shares Rise

Science Applications International Corp, the government-services and defense-technology contractor known as SAIC, does information-technology and services work for U.S. military branches and intelligence agencies. It topped Wall Street’s profit and revenue targets for its latest quarter and raised its outlook for the rest of the year.

The Reston, Virginia-based company released the results before markets opened on Monday, Aug. 31, 2026, and held a conference call with investors at 10 a.m. Eastern that morning.

Key facts

Revenue: $1.88 billion for the quarter ended July 31, 2026, up 6.3% year over year — above the roughly $1.76 billion Wall Street expected
Adjusted earnings: $3.01 a share, versus consensus estimates reported across sources in the roughly $2.25-$2.31 range
GAAP (Generally Accepted Accounting Principles) earnings: $2.38 a share, down from $2.71 a year earlier; net income fell to $102 million from $127 million
Raised guidance: full fiscal-2027 revenue now expected at $7.2 billion to $7.3 billion, up from $7.0 billion to $7.2 billion
Book-to-bill ratio: 0.6 for the quarter, 0.8 over the trailing 12 months — both below the 1.0 mark
Backlog: $22.1 billion, including $3.8 billion funded

Timeline

October 2025 — Toni Townes-Whitley leaves as CEO; Jim Reagan becomes interim CEO
February 2026 — Reagan is named permanent CEO
July 31, 2026 — SAIC’s fiscal quarter ends
August 31, 2026 — SAIC reports results before markets open and holds an investor call at 10 a.m. Eastern

What SAIC reported

For the quarter ended July 31, 2026, SAIC posted revenue of $1.88 billion, up 6.3% from a year earlier, with about 5.3% organic growth. Much of that came from the government moving money onto SAIC’s existing contracts faster than it had a year earlier — a sign the military branches and intelligence agencies the company works for are spending more quickly on work already under contract, not just adding new business. That beat the roughly $1.76 billion Wall Street had expected.

Adjusted diluted earnings came in at $3.01 a share, well above consensus estimates reported across sources in the roughly $2.25-$2.31 range — a beat of about 30%. Adjusted EBITDA, a measure of underlying operating profit, was $193 million, a 10.3% margin.

Under standard accounting rules, though, profit actually fell. GAAP diluted earnings per share were $2.38, down from $2.71 a year earlier, and net income dropped to $102 million from $127 million. One source attributed the year-over-year decline to a tax swing: SAIC recorded $17 million in income tax expense this quarter, versus a $19 million tax benefit a year ago tied to a favorable settlement, even as the underlying business grew.

Why it matters: guidance went up

SAIC raised its outlook for the full 2027 fiscal year. It now expects revenue of $7.2 billion to $7.3 billion, up from a prior range of $7.0 billion to $7.2 billion; adjusted EBITDA of $750 million to $755 million, up from $720 million to $730 million, with an adjusted EBITDA margin of 10.3% to 10.5%; and adjusted diluted earnings of $10.65 to $10.75 a share, up from $9.90 to $10.10. Guidance for free cash flow was left unchanged, at more than $600 million for the year.

CEO’s comment

CEO Jim Reagan, who was named permanent chief executive in February 2026 after serving as interim CEO since October 2025 — stepping in after predecessor Toni Townes-Whitley left the company that same month — credited the quarter’s momentum to what he called “solid organic growth and double-digit margins,” saying in the earnings release that the results reflect the company’s operational discipline and the targets it set for the year.

New business booked was softer

Not every measure moved in the company’s favor. SAIC booked $1.2 billion in new contract awards during the quarter, less than the revenue it recognized in the same period — a book-to-bill ratio of 0.6 for the quarter and 0.8 over the trailing 12 months, both below the 1.0 mark that would mean new work kept pace with what was billed. Its backlog of already-won work stood at $22.1 billion, of which $3.8 billion was funded. Free cash flow was $131 million, down from $150 million a year earlier, on operating cash flow of $146 million.

How the stock moved

Shares surged as much as roughly 13% intraday right after the earnings release, before giving back most of that gain as the day went on — the advance faded to roughly 3% by mid-morning and, briefly, to a loss versus the previous close. The stock closed at $128.22, below its earnings-day opening levels but still modestly above where it had closed the prior trading day. Analyst target changes were less clear. A single-source report said Stifel raised its price target to $154 from $137 while maintaining a Buy rating around Sept. 1, 2026, after the earnings release; Jefferies had raised its target to $130 from $115 before the report. Those reports do not establish a broad post-earnings trend.