Science Applications International's Strong Q2 Performance Insights
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Science Applications International Corp Reports Impressive Q2 Earnings
Science Applications International Corp (NYSE: SAIC) has announced a solid revenue increase of 2% year over year for its fiscal second quarter, generating earnings of $1.82 billion. This figure slightly surpasses analysts' expectations, which were pegged at $1.79 billion.
Financial Highlights and Adjusted Earnings
In this quarter, the adjusted earnings per share (EPS) reached $2.05, exceeding the anticipated consensus of $1.86. This growth demonstrates a substantial increase in the volume associated with current and new contracts.
Profit Margins and Cash Flow Generation
The adjusted operating margin remained stable at 9.0%, although it did decrease by ten basis points year-over-year. The adjusted EBITDA margin saw a slight decline of 40 basis points, landing at 9.4%. Importantly, SAIC also reported an impressive $241 million in free cash flow during the quarter, a substantial growth from the $144 million reported in the same period last year. As of August 2, 2024, SAIC's cash and equivalents stood at $48 million.
Robust Net Bookings and Backlog Position
During this quarter, SAIC achieved net bookings of $1.2 billion, resulting in a book-to-bill ratio of 0.6. By the quarter's conclusion, the estimated backlog reached approximately $22.9 billion, indicating a robust foundation for future growth.
Dividend Announcement and Future Growth Outlook
In a positive move for shareholders, the board of directors has declared a cash dividend of $0.37 per share, which is slated to be payable on October 25 to stockholders recorded as of October 11. CEO Toni Townes-Whitley expressed confidence regarding the company's prospects, stating that the expanded pipeline of qualified opportunities is converting into greater submissions and an improved book-to-bill ratio. This trend is expected to accelerate growth into Fiscal Year 2026, reinforcing their confidence in achieving targets of 5% organic revenue growth, mid-9% adjusted EBITDA margins, and around $12 of free cash flow per share by Fiscal Year 2027.
Fiscal Year 2025 Guidance and Price Movement
For fiscal year 2025, SAIC reaffirmed its revenue outlook between $7.35 billion and $7.50 billion, compared to the current consensus of $7.44 billion. The company has also adjusted its EPS guidance to $8.10–$8.30, which is slightly higher than the previous guidance of $8.00–$8.20, versus the consensus of $8.07. Following this announcement, shares of SAIC experienced a slight decrease of 0.33%, trading at $128.79.
Frequently Asked Questions
What drove the revenue growth for Science Applications International Corp?
The revenue growth was primarily driven by increased volume from both existing and new contracts, demonstrating strong operational performance.
How much free cash flow did SAIC generate in Q2?
SAIC generated $241 million in free cash flow for the quarter, which marked a significant increase from the previous year's $144 million.
What is the estimated backlog for Science Applications International?
The estimated backlog at the end of the quarter was around $22.9 billion, showcasing a solid foundation for future revenue.
What is the declared cash dividend for SAIC shareholders?
SAIC has declared a cash dividend of $0.37 per share, which is payable on October 25 to recorded stockholders.
How did SAIC's stock perform following the earnings release?
After announcing the earnings, SAIC's shares dropped by 0.33%, trading at $128.79 at the last check.
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