Science Applications International (SAIC) Q3 2026 earnings summary

Executive summary

• Q3 FY26 revenue was $1.87 billion, down 5.6%–6% year-over-year, impacted by contract ramp-downs, completions, and a government shutdown, but modestly ahead of guidance after adjustment.

• Net income for the quarter was $78 million, a 26% decrease year-over-year; adjusted EBITDA was $185 million (9.9% margin), and adjusted diluted EPS was $2.58, aided by favorable tax rates.

• Free cash flow for the quarter was $135 million, a significant increase from $9 million in the prior year, despite delayed collections due to the shutdown.

• The SilverEdge acquisition for $203 million is expected to accelerate growth, enhance AI and IP-based capabilities, and be accretive to margins and EPS.

• CEO transition and strategic reorganization are underway, with a focus on efficiency, margin improvement, and consolidating business groups.

Financial highlights

• Q3 net bookings were $2.2 billion, with a book-to-bill ratio of 1.2x for the quarter and trailing 12 months; year-to-date net bookings reached $7.2 billion.

• Major contract wins included a $1.4 billion Air Force recompete, $413 million Army OSINT, $171 million Navy MMEW, $242 million Naval Undersea Warfare Center, and $515 million in space and intelligence.

• Operating income for the quarter was $128 million, down 20% year-over-year; operating margin decreased to 6.9% from 8.1%.

• Cash flows from operating activities were $129 million, down $14 million from the prior year.

• Weighted-average diluted shares outstanding decreased to 46.1 million from 49.8 million.

Outlook and guidance

• FY26 revenue guidance raised to $7.275–$7.325 billion, with organic growth of (2%)–(3%).

• Adjusted EBITDA guidance increased to ~$695 million (9.5% margin); adjusted diluted EPS guidance raised to $9.80–$10.00.

• Free cash flow guidance maintained at >$550 million.

• FY27 outlook: revenue $7.35–$7.55 billion, organic growth 0%–3%, adjusted EBITDA $725–$735 million, adjusted EPS up by $0.50, and free cash flow guidance >$600 million (~$13.50/share).

• $1 billion–$1.2 billion in share repurchases planned across FY26 and FY27, representing up to 25% of market value.