10-Q · June 1, 2026
SAIC's Q1 2026 results showed revenue growth of 2% year-over-year to $1.91 billion, which exceeded consensus estimates of $1.81 billion. Diluted EPS also surpassed expectations at $2.61, well above the estimated $2.27,…
Earnings analysis · 10-Q
SAIC earnings analysis
Filed August 31, 2026 · Our reading of the company's report
The latest report
SAIC delivered $1.77 billion of revenue, 12.2% gross margin, 7.9% operating margin, and $2.71 diluted EPS, with margins, EPS, and free cash flow improving versus the prior listed quarter. Management also raised FY2027…
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SAIC delivered $1.77 billion of revenue, 12.2% gross margin, 7.9% operating margin, and $2.71 diluted EPS, with margins, EPS, and free cash flow improving versus the prior listed quarter. Management also raised FY2027 revenue and adjusted EPS guidance to $7.2-$7.3 billion and $10.65-$10.75, respectively, while reiterating free cash flow above $600 million. The principal concern is demand visibility: the prior disclosure cited a 0.6 book-to-bill ratio, while quarterly revenue declined approximately 5.9% sequentially.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Reported figures
- Earnings per share
- $2.71
What stood out
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Margins expanded despite lower revenue
Revenue was $1.77 billion, down from $1.88 billion in the prior listed quarter, while gross margin improved to 12.2% from 11.1% and operating margin increased to 7.9% from 6.5%.
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EPS increased sharply
Diluted EPS was $2.71 versus $1.42 in the prior listed quarter, an increase of $1.29, or approximately 91%.
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Cash generation improved
Free cash flow was $115 million, up from $92 million in the prior listed quarter, an increase of $23 million, or approximately 25%.
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Significant share repurchases
SAIC repurchased 877,540 shares under publicly announced programs during the quarter at an average price of $102.60 per share; total purchases, including tax-withholding activity, were 881,913 shares.
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Long-term capital return continued
As of July 31, 2026, the company had repurchased approximately 31.2 million shares for approximately $2.8 billion under its repurchase program.
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Controls remained effective
Management concluded that disclosure controls were effective as of July 31, 2026, and reported no material changes in internal controls during the quarter.
What to watch
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Quarterly revenue volatility
Quarterly revenue of $1.77 billion was below the prior listed quarter's $1.88 billion, a decline of approximately 5.9%, indicating uneven quarterly demand despite improved profitability.
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Low bookings and backlog conversion
The prior earnings disclosure cited a quarterly book-to-bill ratio of 0.6, signaling bookings below recognized revenue and potential pressure on future growth and funded backlog.
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Capital allocation and liquidity tradeoff
The company repurchased 881,913 shares during the quarter and had repurchased approximately 31.2 million shares for approximately $2.8 billion as of July 31, 2026; continued buybacks could reduce liquidity available for other uses.
Management's outlook
Management raised FY2027 revenue guidance to $7.2-$7.3 billion, adjusted EBITDA guidance to $750-$755 million, adjusted EBITDA margin guidance to 10.3%-10.5%, and adjusted diluted EPS guidance to $10.65-$10.75. Free cash flow guidance was reiterated at greater than $600 million.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.