SAIC delivered a solid start to fiscal year 2026 (quarter ended May 2, 2025), highlighted by modest revenue growth, sizable net bookings, and a constructive backlog trajectory. Revenue of $1.877 billion rose roughly 2% year over year, supported by ramp on strategic programs (tCloud, IMDC2, GMAS) and offset by reduced revenue from contract completions and transitions. Net bookings reached $2.4 billion with a book-to-bill ratio of 1.3, anchoring near-term visibility and underpinning an expectation for continued bookings strength to support 1.2x trailing twelve-month book-to-bill in the coming quarters. The quarter featured an adjusted EBITDA of $157 million, for an 8.4% margin, pressured by seasonality in investments and higher costs on a fixed-price space program; management notes an expected margin improvement as the program transitions to sustainment and option periods extend. Net income was $68 million ($1.42–$1.43 per share), with adjusted diluted EPS of $1.92, flat YoY on a lower share count but offset by higher taxes and lower EBITDA.
Management reaffirmed FY26 guidance: revenue of $7.60–$7.75 billion (midpoint ~2.5% organic growth), adjusted EBITDA margin of 9.4%–9.6%, adjusted diluted EPS of $9.10–$9.30, and free cash flow of $510–$530 million (~$11 per share). The company continues to deploy capital into buybacks (approx. $125 million in Q1) and remains positioned to pursue tuck-ins while sustaining a robust pipeline (~$19.8 billion intended awards) and ~ $20 billion backlog. Given a flexible government CR environment and a diversified portfolio across DoD, civilian, intelligence, and space, SAIC is balancing defense priorities with civil agency demand (DOT/FAA, DHS, DOS Vanguard, VA) and expanding mission IT offerings. Investors should monitor: (1) evolving DoD priorities and agency procurement cycles, (2) timing of awards and potential rightward shifts in bookings, (3) fixed-price program execution maturity (notably in the SDA space program), and (4) the company’s ability to sustain on-contract growth to offset any near-term headwinds in new business.