SAIC Profit Beats Estimates by 30% as Revenue Falters

Adjusted EPS Beats Estimates by 30% Despite Revenue Dip

Science Applications International Corporation (NASDAQ:SAIC) announced on March 16, 2026, that its fourth-quarter adjusted earnings per share reached $2.62, substantially outperforming the consensus estimate of $2.01 by 30%. This result also represents a 2% increase from the $2.57 per share reported in the same quarter a year ago. The strong profitability was driven by effective cost management, with adjusted EBITDA climbing to $181 million, a 5.7% beat against estimates, and the adjusted EBITDA margin expanding to 10.3% from 9.6% year-over-year. However, the market's response was muted, with the stock trading up just 1.4% to $93.18 following the announcement, reflecting investor concerns over the company's top-line performance.

Revenue Declines 4.8% on Weaker Contract Volume

While profitability improved, SAIC's revenue for the quarter ending January 30, 2026, fell by 4.8% year-over-year to $1.75 billion, slightly missing analyst expectations of $1.77 billion. The company attributed the decline primarily to the ramp-down of existing contracts and other contract completions. This top-line pressure is further highlighted by a weak quarterly book-to-bill ratio of approximately 0.3, indicating that new business is not replacing completed work at a sufficient pace. For the full fiscal year 2026, revenue was $7.26 billion, a 3% decrease from the prior year, underscoring persistent challenges in generating growth.

Our fourth-quarter results reflected ongoing top-line challenges, balanced by strong operational execution that supports our ability to raise margin expectations moving forward.

— Jim Reagan, CEO, SAIC

FY2027 Guidance Signals 2-4% Organic Revenue Contraction

Looking ahead, SAIC's guidance for fiscal year 2027 projects revenue between $7.0 billion and $7.2 billion. The midpoint of this range is 2.8% below analyst consensus and points to an organic revenue contraction of 2% to 4%. This cautious outlook overshadows the company's otherwise solid operational performance. Despite the weak revenue forecast, SAIC's guidance for adjusted EPS of $9.50 to $9.70 and adjusted EBITDA of $705 million to $715 million came in line with expectations, demonstrating management's focus on maintaining profitability. The company also expects strong free cash flow of over $600 million, supported by a total contract backlog that grew 3.5% year-over-year to $22.6 billion, providing some cushion against near-term revenue softness.