Executive Summary
Science Applications International Corporation (0V9N.L) delivered a solid QQ3 2025 performance, registering revenue of $1.976 billion, up 6.98% year-over-year and 8.69% quarter-over-quarter. The quarter produced a gross profit of $237 million and a gross margin of 11.99%, with operating income of $160 million (operating margin ~8.10%) and net income of $106 million (net margin ~5.36%). Diluted EPS stood at $2.13, with non-diluted $2.15 per share. Cash flow remains a strength, with operating cash flow of $143 million and free cash flow of $134 million, supported by disciplined working capital management and moderate capital expenditures. Management continued to deploy capital toward shareholder returns, evidenced by $121 million of share repurchases and $18 million in dividends, while cash at period end was $54 million and total debt stood at $2.349 billion (net debt ~$2.303 billion). The balance sheet shows a meaningful level of goodwill and intangibles ( goodwill $3.658 billion; intangibles $807 million), reflecting a history of strategic acquisitions to augment capabilities in defense IT modernization, cloud migration, and managed services. While leverage remains a consideration, SAIC’s high-quality government exposure and resilient profitability underpin a constructive near-term outlook, contingent on DoD and federal budget dynamics and ongoing execution on large, long-duration contracts.
Key Performance Indicators
Key Insights
Revenue: $1.976B; YoY growth: 6.98%; QoQ growth: 8.69%
Gross Profit: $237.0M; YoY gross profit growth: 28.80%; QoQ: 12.86%
Operating Income: $160.0M; YoY: 25.00%; QoQ: 19.40%
Net Income: $106.0M; YoY: 37.66%; QoQ: 30.86%
EPS (diluted): $2.13; YoY: 44.30%; QoQ: 35.22%
EBITDA: $193.0M; EBITDA margin: ~9.77%
Gross Margin: ~11.99%; Operating Margin: ~8.10%; Net Margin: ~5.36%
Operating Cash Flow: $143.0M; Free Cash Flow: $134.0M; Capex: $9.0M
Cash and cash equivalents: $46.0M; Cash at end of period:...
Financial Highlights
Revenue: $1.976B; YoY growth: 6.98%; QoQ growth: 8.69%
Gross Profit: $237.0M; YoY gross profit growth: 28.80%; QoQ: 12.86%
Operating Income: $160.0M; YoY: 25.00%; QoQ: 19.40%
Net Income: $106.0M; YoY: 37.66%; QoQ: 30.86%
EPS (diluted): $2.13; YoY: 44.30%; QoQ: 35.22%
EBITDA: $193.0M; EBITDA margin: ~9.77%
Gross Margin: ~11.99%; Operating Margin: ~8.10%; Net Margin: ~5.36%
Operating Cash Flow: $143.0M; Free Cash Flow: $134.0M; Capex: $9.0M
Cash and cash equivalents: $46.0M; Cash at end of period: $54.0M
Total Debt: $2.349B; Net Debt: $2.303B; Equity: $1.612B
Current Ratio: 0.87; Cash Ratio: 0.0344; Debt/Equity: 0.254; LT Debt to Capitalization: 10.5%
P/E: 16.86; P/B: 4.43; P/S: 3.62; Enterprise Value Multiple: 38.92
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.98B |
6.98% |
8.69% |
| Gross Profit |
237.00M |
28.80% |
12.86% |
| Operating Income |
160.00M |
25.00% |
19.40% |
| Net Income |
106.00M |
37.66% |
30.86% |
| EPS |
2.15 |
44.30% |
35.22% |
Key Financial Ratios
operatingProfitMargin
8.1%
operatingCashFlowPerShare
$2.89
freeCashFlowPerShare
$3.14
Management Commentary
No earnings call transcript data provided in the input. Consequently, no verbatim management quotes or transcript-derived highlights are available. The analysis below relies on reported quarterly metrics and stated financials.
Forward Guidance
There is no explicit forward guidance included in the provided data. Given SAIC’s exposure to U.S. government IT modernization, cloud migration, and managed services, near-term growth should remain supported by defense budget appropriations, civil agency modernization programs, and ongoing cloud adoption. However, visibility is highly tied to U.S. federal procurement cycles and contract awards. Investors should monitor: (1) DoD and federal civilian agency backlog progression and new awards; (2) mix shift toward higher-margin services and higher-value contracts; (3) operating leverage from ongoing SG&A discipline; (4) liquidity management given the elevated debt load and modest cash balance. If SAIC can sustain mid-to-high single-digit revenue growth while modestly expanding margins and maintaining robust free cash flow, the outlook remains constructive; a meaningful reduction in net leverage would further bolster optionality.