Science Applications International (SAIC) TD Cowen 47th Annual Aerospace & Defense Conference summary

Financial performance and guidance

• Guidance for FY 2027 was reduced by about 5% due to contract losses and slower on-contract growth.

• Loss of Army Corps of Engineers and Cloud One contracts contributed to a combined 4% sales impact.

• Q4 revenue was about 2% light, mainly due to January softness, shutdown remnants, weather disruptions, and material timing.

• Revised assumptions now expect lower on-contract growth and slower ramp on new programs.

• Book-to-bill expected to finish FY 2026 north of 1.0, indicating healthy backlog.

Market environment and growth outlook

• Funding flow is less efficient, causing delays in contract execution and revenue conversion.

• On-contract growth is at its lowest in five years, but stabilization and ramp-up in H2 could provide tailwinds.

• New business wins, such as Air Force TENCAP and Navy ATSO, are slow to ramp but could drive future growth.

• No large recompetes are expected in the next 12 months; pipeline remains healthy.

• Submit volume is expected to rebound after a decline due to shutdown effects.

Strategic focus and lessons learned

• Enterprise IT contracts, especially large cost-plus DoD work, are increasingly commoditized and less differentiated.

• Focus is shifting toward more selective bidding, mission and engineering work, and fixed-price contracts.

• Non-EIT win rates are high (85-90% for recompetes, 50%+ for new work), supporting a pivot to mission-oriented business.

• Large enterprise IT now represents about 10% of revenue, with only two major contracts remaining.

• Investments in automation and AI are prioritized, especially where differentiation is possible.