A month has gone by since the last earnings report for SAIC (SAIC). Shares have lost about 2.6% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is SAIC due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Science Applications International Corporation before we dive into how investors and analysts have reacted as of late.
Science Applications' Q1 Earnings Beat Expectations, Revenues Rise Y/Y
Science Applications International reported better-than-expected results for the first quarter of fiscal 2027, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
SAIC’s non-GAAP earnings of $3.23 per share beat the Zacks Consensus Estimate of $2.26 by 42.9%. The bottom line increased 68.2% from the year-ago quarter’s earnings of $1.92.
Science Applications' fiscal first-quarter revenues increased 1.5% year over year to $1.91 billion and surpassed the Zacks Consensus Estimate of $1.78 billion by 6.9%.
SAIC’s Q1 in Detail
Segment-wise, revenues from Defense and Intelligence, which accounted for 76.9% of revenues, totaled $1.47 billion and increased 2.3% year over year. Civilian revenues, which constitute 23.1% of revenues, totaled $440 million and decreased 0.9% year over year.
Net bookings were approximately $2.1 billion in the first quarter, which reflected a book-to-bill ratio of 1.1. The company’s trailing 12-month book-to-bill ratio was 1.0 at the end of the fiscal first quarter. SAIC’s estimated backlog at the end of the quarter was approximately $22.9 billion. Of the total backlog amount, approximately $3.7 billion was funded.
Selling, general and administrative (SG&A) expenses decreased 6.7% to $83 million. SG&A expenses, as a percentage of revenues, declined to 4.4% from 4.7% in the year-ago quarter.
Non-GAAP operating income increased year over year to $221 million from the year-ago quarter’s operating income of $158 million. The non-GAAP operating margin expanded 320 basis points (bps) year over year to 11.6%.
Adjusted EBITDA rose 41% to $222 million. Adjusted EBITDA margin for the quarter was 11.6% compared with 8.4% in the prior-year quarter.
Balance Sheet & Cash Flow Details of SAIC
Science Applications ended the fiscal first quarter with cash and cash equivalents of $109 million, significantly down from the previous quarter’s $182 million.
As of May 1, 2026, Science Applications’ long-term debt (net of the current portion) was $2.46 billion compared with $2.47 billion as of Jan. 30, 2026.
The company generated operating and free cash flows of $127 million and $118 million, respectively, in the fiscal first quarter.
During the fiscal first quarter, Science Applications repurchased shares worth $175 million and paid $17 million in dividends.
SAIC Provides Fiscal 2027 Guidance
Science Applications expects fiscal 2027 revenues between $7 billion and $7.2 billion.
Adjusted EBITDA is anticipated to be in the range of $720-$730 million, up from the earlier guidance of $705-$715 million. Adjusted EBITDA margin is expected to be in the band of 10.1-10.3%, up from the previous guided range of 9.9-10.1% band.
The company forecasts adjusted EPS in the range of $9.90-$10.10, up from the earlier guidance of $9.50-$9.70.
Science Applications estimates free cash flow for fiscal 2027 to exceed $600 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, SAIC has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a score of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, SAIC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
