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SAIC Q3 Earnings Beat: Will Strong FY26 Guidance Lift the Stock?
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Key Takeaways
SAIC posted Q3 EPS of $2.58 and $1.87B in revenues, beating estimates despite Y/Y declines.
Net bookings hit $2.2B with a 1.2 book-to-bill ratio and a $23.8B backlog at quarter's end.
FY26 guidance was raised, including higher revenue, EBITDA and EPS expectations.
Science Applications International ((SAIC - Free Report) ) delivered its third-quarter fiscal 2026 results, wherein the company reported non-GAAP earnings of $2.58 per share, surpassing the Zacks Consensus Estimate of $2.07 by 24.6%. However, the bottom line decreased 1.1% from the year-ago quarter’s earnings of $2.61 per share.
Science Applications’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of approximately 26%.
Science Applications' fiscal third-quarter revenues declined 5.6% year over year to $1.87 billion and came above the Zacks Consensus Estimate of $1.86 billion.
SAIC shares gained 16.3% on Thursday after a better-than-expected performance in the fiscal third quarter. Strong third-quarter performance, along with upbeat fiscal 2026 guidance, is likely to give a fresh boost to SAIC’s share price. Year to date, the stock has plunged 8.1%, outperforming the Zacks Computers – IT Services industry’s decline of 14.4%.
Science Applications International Corporation Price, Consensus and EPS Surprise
Segment-wise, revenues from Defence and Intelligence, which accounted for 77.1% of revenues, amounted to $1.44 billion and decreased 5% year over year. Civilian revenues, which constitute 22.9% of revenues, totalled $427 million and declined 7.4% year over year.
Net bookings were approximately $2.2 billion in the third quarter, which reflected a book-to-bill ratio of 1.2. The company’s trailing 12-month book-to-bill ratio was 1.2 at the end of the fiscal third quarter. SAIC’s estimated backlog at the end of the quarter was approximately $23.8 billion. Of the total backlog amount, approximately $3.8 billion was funded.
Selling, general and administrative (SG&A) expenses increased 21.7% to $101 million. SG&A expenses, as a percentage of revenues, increased to 5.4% from 4.2% in the year-ago quarter.
Non-GAAP operating income decreased year over year to $183 million from the year-ago quarter’s operating income of $195 million. The non-GAAP operating margin contracted 10 basis points (bps) year over year to 9.8%.
Adjusted EBITDA declined 6.1% to $185 million. Adjusted EBITDA margin for the quarter was 9.9% compared with 10% for the prior-year quarter.
Balance Sheet & Cash Flow Details of SAIC
Science Applications ended the fiscal third quarter with cash and cash equivalents of $45 million, slightly down from the previous quarter’s $48 million.
As of Oct. 31, 2025, Science Applications’ long-term debt (net of the current portion) was $2.48 billion compared with $1.84 billion as of Aug. 1, 2025.
The company generated operating and free cash flows of $129 million and $135 million, respectively, in the fiscal third quarter. In the first three quarters of fiscal 2026, it generated operating and free cash flows of $351 million and $241 million, respectively.
During the fiscal third quarter, Science Applications repurchased shares worth $95 million and paid $17 million in dividends. In the first three quarters of fiscal 2026, it bought back shares worth $347 million and paid $53 million in dividends.
SAIC Raises Guidance for Fiscal 2026
Science Applications now expects fiscal 2026 revenues between $7.275 billion and $7.325 billion, up from the previous guidance of $7.25-$7.325 billion. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $7.27 billion, indicating a year-over-year decline of 2.7%.
Guidance for adjusted EBITDA has been raised to approximately $695 million from $680-$690 million in the previous quarter. Adjusted EBITDA margin expected to be 9.5%, up from 9.3-9.5% projected earlier.
The company now forecasts adjusted EPS in the band of $9.80-$10.00, up from the earlier projection of $9.40-$9.60. The Zacks Consensus Estimate for the bottom line is pegged at $9.57 per share, indicating a year-over-year improvement of 4.8%.
Science Applications estimates free cash flow for fiscal 2026 to exceed $550 million.
SAIC’s Zacks Rank and Stocks to Consider
Currently, Science Applications carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Advanced Energy Industries’ 2025 earnings has been revised upward by 10 cents to $6.23 per share over the past 30 days and suggests a year-over-year increase of 67.9%. Advanced Energy Industries shares have jumped 85.8% year to date.
The Zacks Consensus Estimate for Amphenol’s 2025 earnings has moved upward by 7 cents to $3.29 per share in the past 30 days, calling for a year-over-year surge of 74.1%. Amphenol shares have soared 100.9% year to date.
The Zacks Consensus Estimate for Logitech International’s fiscal 2026 earnings has been revised upward by 2.4% to $5.61 per share in the past 30 days, suggesting a year-over-year increase of 15.9%. Logitech International shares have surged 44.6% year to date.
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SAIC Q3 Earnings Beat: Will Strong FY26 Guidance Lift the Stock?
Key Takeaways
Science Applications International ((SAIC - Free Report) ) delivered its third-quarter fiscal 2026 results, wherein the company reported non-GAAP earnings of $2.58 per share, surpassing the Zacks Consensus Estimate of $2.07 by 24.6%. However, the bottom line decreased 1.1% from the year-ago quarter’s earnings of $2.61 per share.
Science Applications’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of approximately 26%.
Science Applications' fiscal third-quarter revenues declined 5.6% year over year to $1.87 billion and came above the Zacks Consensus Estimate of $1.86 billion.
SAIC shares gained 16.3% on Thursday after a better-than-expected performance in the fiscal third quarter. Strong third-quarter performance, along with upbeat fiscal 2026 guidance, is likely to give a fresh boost to SAIC’s share price. Year to date, the stock has plunged 8.1%, outperforming the Zacks Computers – IT Services industry’s decline of 14.4%.
Science Applications International Corporation Price, Consensus and EPS Surprise
Science Applications International Corporation price-consensus-eps-surprise-chart | Science Applications International Corporation Quote
SAIC’s Q3 in Detail
Segment-wise, revenues from Defence and Intelligence, which accounted for 77.1% of revenues, amounted to $1.44 billion and decreased 5% year over year. Civilian revenues, which constitute 22.9% of revenues, totalled $427 million and declined 7.4% year over year.
Net bookings were approximately $2.2 billion in the third quarter, which reflected a book-to-bill ratio of 1.2. The company’s trailing 12-month book-to-bill ratio was 1.2 at the end of the fiscal third quarter. SAIC’s estimated backlog at the end of the quarter was approximately $23.8 billion. Of the total backlog amount, approximately $3.8 billion was funded.
Selling, general and administrative (SG&A) expenses increased 21.7% to $101 million. SG&A expenses, as a percentage of revenues, increased to 5.4% from 4.2% in the year-ago quarter.
Non-GAAP operating income decreased year over year to $183 million from the year-ago quarter’s operating income of $195 million. The non-GAAP operating margin contracted 10 basis points (bps) year over year to 9.8%.
Adjusted EBITDA declined 6.1% to $185 million. Adjusted EBITDA margin for the quarter was 9.9% compared with 10% for the prior-year quarter.
Balance Sheet & Cash Flow Details of SAIC
Science Applications ended the fiscal third quarter with cash and cash equivalents of $45 million, slightly down from the previous quarter’s $48 million.
As of Oct. 31, 2025, Science Applications’ long-term debt (net of the current portion) was $2.48 billion compared with $1.84 billion as of Aug. 1, 2025.
The company generated operating and free cash flows of $129 million and $135 million, respectively, in the fiscal third quarter. In the first three quarters of fiscal 2026, it generated operating and free cash flows of $351 million and $241 million, respectively.
During the fiscal third quarter, Science Applications repurchased shares worth $95 million and paid $17 million in dividends. In the first three quarters of fiscal 2026, it bought back shares worth $347 million and paid $53 million in dividends.
SAIC Raises Guidance for Fiscal 2026
Science Applications now expects fiscal 2026 revenues between $7.275 billion and $7.325 billion, up from the previous guidance of $7.25-$7.325 billion. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $7.27 billion, indicating a year-over-year decline of 2.7%.
Guidance for adjusted EBITDA has been raised to approximately $695 million from $680-$690 million in the previous quarter. Adjusted EBITDA margin expected to be 9.5%, up from 9.3-9.5% projected earlier.
The company now forecasts adjusted EPS in the band of $9.80-$10.00, up from the earlier projection of $9.40-$9.60. The Zacks Consensus Estimate for the bottom line is pegged at $9.57 per share, indicating a year-over-year improvement of 4.8%.
Science Applications estimates free cash flow for fiscal 2026 to exceed $550 million.
SAIC’s Zacks Rank and Stocks to Consider
Currently, Science Applications carries a Zacks Rank #3 (Hold).
Advanced Energy Industries ((AEIS - Free Report) ), Amphenol ((APH - Free Report) ) and Logitech International ((LOGI - Free Report) ) are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector. Advanced Energy Industries, Amphenol and Logitech International sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Advanced Energy Industries’ 2025 earnings has been revised upward by 10 cents to $6.23 per share over the past 30 days and suggests a year-over-year increase of 67.9%. Advanced Energy Industries shares have jumped 85.8% year to date.
The Zacks Consensus Estimate for Amphenol’s 2025 earnings has moved upward by 7 cents to $3.29 per share in the past 30 days, calling for a year-over-year surge of 74.1%. Amphenol shares have soared 100.9% year to date.
The Zacks Consensus Estimate for Logitech International’s fiscal 2026 earnings has been revised upward by 2.4% to $5.61 per share in the past 30 days, suggesting a year-over-year increase of 15.9%. Logitech International shares have surged 44.6% year to date.