SAIC lifts annual profit outlook as federal IT backlog builds

Science Applications International Corp. (NASDAQ:SAIC) raised its full-year profitability and earnings forecasts after a steady opening quarter marked by expanding operating margins and an accumulation of new federal contract awards.

The government information-technology contractor reported revenue of $1.91 billion for the first quarter of fiscal 2027, up about 2% from the prior year.

When adjusted for the impact of the SilverEdge acquisition, organic revenue growth stood at 0.5%, reflecting a selective bidding approach across its portfolio of enterprise programs.

Net income for the three-month period was $115 million, yielding diluted earnings per share of $2.61.

On an adjusted basis, diluted earnings per share reached $3.23.

The company reported adjusted EBITDA of $222 million, generating an adjusted EBITDA margin of 11.6% due to disciplined cost management and strong program execution.

On the balance sheet, SAIC reported that cash generated from operations reached $127 million, while free cash flow stood at $118 million for the three-month stretch.

The company's financial performance was underpinned by positive contract procurement momentum.

Net bookings for the quarter totaled $2.1 billion, resulting in a book-to-bill ratio of 1.1, which indicates that the firm is capturing new business faster than it is billing out current projects.

This intake pushed SAIC's total contract backlog to $22.9 billion, providing clear visibility into multi-year defense and federal funding streams.

Based on the first-quarter operational results, SAIC lifted its full-year fiscal 2027 outlook.

Full-year revenue targets were reiterated at $7 billion to $7.2 billion, which continues to mirror an anticipated organic revenue contraction of 4% to 2% as the organization continues to prune lower-margin commercial portfolios.