Science Applications International Q2 Earnings: Free Cash Flow Growth, Strong Pipeline For 2026, Annual Profit Outlook Hike

Science Applications International Corp (NYSE: SAIC) reported a 2% revenue growth year over year in the fiscal second quarter of 2025 to $1.82 billion, marginally beating the analyst consensus estimate of $1.79 billion.

Adjusted EPS of $2.05 beat the analyst consensus of $1.86. The topline growth reflects a ramp-up in volume on existing and new contracts.

The adjusted operating margin remained firm at 9.0%, down by ten bps Y/Y. Adjusted EBITDA margin declined by 40 bps to 9.4%.

SAIC generated $241 million in free cash flow for the quarter, compared to $144 million a year ago. As of August 2, 2024, the company held $48 million in cash and equivalents.

Net bookings for the quarter were $1.2 billion, reflecting a book-to-bill ratio of 0.6. At the end of the quarter, the estimated backlog was around $22.9 billion. 

Science Applications' board of directors declared a cash dividend of $0.37 per share of the company's common stock, payable on October 25 to stockholders of record on October 11.

SAIC CEO Toni Townes-Whitley: "Our expanded pipeline of qualified opportunities is now converting to a higher number and quality of submissions and increasing book-to-bill, trends which are expected to accelerate and drive growth into Fiscal Year 2026. This momentum fuels the confidence we have in our ability to meet our Fiscal Year 2027 targets of 5% organic revenue growth, mid 9% adjusted EBITDA margins, and approximately $12 of free cash flow per share."

Outlook: SAIC reiterated fiscal 2025 revenue of $7.35 billion–$7.50 billion vs. the consensus of $7.44 billion. SAIC now expects adjusted EPS guidance of $8.10-$8.30 (prior $8.00–$8.20) versus the consensus of $8.07.

Price Action: SAIC shares are trading down by 0.33% at $128.79 at the last check Thursday.