Science Applications (SAIC) Q2 2026 Earnings Report

SAIC delivered a mixed Q2 FY2026, with revenue of $1.769 billion, down 2.7% year over year but with margin improvement and a healthy backlog supporting longer-term visibility. Management attributed the revenue shortfall to three drivers: slower on-contract growth conversion, program disruptions, and delays in new business awards. Despite the revenue headwinds, adjusted EBITDA reached $185 million (margin 10.5%), and the underlying EBITDA margin rose 80 basis points year over year to approximately 10.2%, aided by strong program execution and a favorable tax settlement. Free cash flow was robust at $150 million for the quarter. The company reaffirmed and refined its long-run plan, revising FY2026 revenue guidance to $7.25–$7.325 billion (organic decline of 2% to 3%) and guiding FY2027 revenue growth of 0–3% with 2–3% on-contract growth and a modest benefit from new business. FY2026 adjusted EPS was raised to $9.40–$9.60, while FY2027 EPS is guided at $9.00–$9.20. Free cash flow guidance improved to >$550 million in FY2026 and $600 million in FY2027, with a projection of nearly $12 per share in FCF for FY2026 and $13–$14 for FY2027. Management emphasized strategic acceleration toward mission integration and AI-enabled efficiency, positioning SAIC to benefit from a more fixed-price, outcome-oriented contracting environment and a favorable long-term demand outlook despite near-term volatility.