Science Applications International (SAIC) Q4 2026 earnings summary

Executive summary

• Leadership transition completed with a focus on continuity, operational excellence, and portfolio realignment toward Mission IT & Engineering and non-commoditized Enterprise IT.

• Operating discipline and business development initiatives drove robust EBITDA and cash flow despite a challenging sales environment and revenue declines.

• Enterprise transformation and process efficiency initiatives launched to streamline operations and increase investment capacity.

• Revenue declined year-over-year due to recompete losses, contract ramp downs, and customer disruptions, but cost efficiencies and program mix supported profitability.

• Executive transition costs and federal tax audit settlements were notable non-recurring items in FY26.

Financial highlights

• FY26 revenue was $7.26B, down 3% year-over-year; Q4 revenue was $1.75B, down 5–6% organically, mainly due to contract ramp downs, no-bid decisions, and government shutdown.

• Adjusted EBITDA for FY26 was $708M (9.7% margin), nearly flat from FY25; Q4 adjusted EBITDA margin improved to 10.3%.

• Adjusted diluted EPS was $2.62 for Q4 (up 2%) and $10.75 for FY26 (up 18%), driven by strong margins, cost efficiencies, and favorable tax rate.

• Free cash flow was $336M in Q4 (up 42%) and $577M for FY26 (up 16%), surpassing guidance.

• Q4 net income was $85M (down 13%); FY26 net income was $358M (down 1%).

Outlook and guidance

• FY27 revenue guidance: $7.0B–$7.2B, representing a 2–4% organic contraction due to recompete losses.

• Adjusted EBITDA guidance: $705M–$715M (9.9–10.1% margin); adjusted diluted EPS: $9.50–$9.70.

• Free cash flow guidance: at least $600M, including $70M in non-recurring tax benefits; FY28 free cash flow expected at $530M, excluding tax benefit.

• Guidance assumes a 23% effective tax rate, $135M net interest expense, and $130M intangible amortization.

• Headwinds from recompete losses expected to persist through all four quarters of FY27.