Science Applications International Corporation (SAIC) reported QQ4 2025 results with revenue of $1.838 billion and a net income of $98 million, delivering EPS of $2.02 (diluted $2.00). The quarter showed a modest year-over-year revenue lift in gross margin, but a meaningful sequential revenue pull driven by seasonality and award timing. Gross margin expanded modestly to 12.6% from prior-year levels, while operating margin stood at 7.5% and net margin at 5.3%, illustrating stable profitability amid a leverage-heavy balance sheet. Free cash flow generation remained solid at $100 million for the quarter, supported by $115 million of operating cash flow and controlled capital expenditure of $15 million. However, liquidity indicators were constrained: cash and cash equivalents ended the period at $56 million, total debt stood at $2.39 billion, and the current ratio was 0.82, signaling a working-capitalsensitized balance sheet despite significant non-cash assets (goodwill and intangibles totaling ~$3.6 billion).
From a longer-term perspective, SAIC continues to benefit from a defensible, government-centric services portfolio—encompassing IT modernization, cloud migration, engineering, and security—supported by a broad U.S. federal client base (Army, Air Force, Navy, DHS, NASA, DoJ, etc.). The results imply a business delivering stable cash generation with opportunities to improve margins through cost discipline and mix optimization, though near-term deleveraging remains a key consideration given elevated long-term debt. The company’s earnings trajectory appears consistent with peers in government IT services, with earnings growth driven more by efficiency gains and contract phasing than by aggressive top-line expansion in the current period.