Science Applications International Corp Reports Strong Q2 Earnings
Science Applications International Corp (NYSE: SAIC) has reported a noteworthy revenue increase of 2% compared to the previous year for its fiscal second quarter, generating earnings of $1.82 billion. This result slightly exceeds analysts' expectations, which were set at $1.79 billion.
Financial Highlights and Adjusted Earnings
In this quarter, the adjusted earnings per share (EPS) reached $2.05, surpassing the anticipated consensus of $1.86. This growth reflects a significant increase in the volume of both current and new contracts.
Profit Margins and Cash Flow Generation
The adjusted operating margin held steady at 9.0%, although it did experience a slight decrease of ten basis points year-over-year. The adjusted EBITDA margin also saw a minor decline of 40 basis points, settling at 9.4%. Notably, SAIC reported an impressive $241 million in free cash flow for the quarter, a substantial rise from the $144 million reported during the same period last year. As of August 2, 2024, SAIC's cash and equivalents totaled $48 million.
Strong 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 end of the quarter, the estimated backlog reached approximately $22.9 billion, indicating a solid foundation for future growth.
Dividend Announcement and Future Growth Outlook
In a positive development for shareholders, the board of directors has declared a cash dividend of $0.37 per share, which is set to be paid on October 25 to stockholders on record as of October 11. CEO Toni Townes-Whitley expressed optimism about the company's future, noting that the expanded pipeline of qualified opportunities is translating into more submissions and an improved book-to-bill ratio. This trend is expected to enhance growth into Fiscal Year 2026, bolstering 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 Stock Movement
For fiscal year 2025, SAIC has reaffirmed its revenue outlook to be between $7.35 billion and $7.50 billion, compared to the current consensus of $7.44 billion. The company has also updated its EPS guidance to $8.10–$8.30, which is slightly above the previous guidance of $8.00–$8.20, in comparison to the consensus of $8.07. Following this announcement, shares of SAIC saw a slight decline 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.
