Science Applications International Corporation (NASDAQ:SAIC) saw its shares surge nearly 9% in pre-market trading on Monday after reporting stronger-than-expected first-quarter results and raising its profit outlook for the full fiscal year.
The defense technology and services provider delivered earnings and revenue ahead of analyst forecasts, supported by improved contract profitability, healthy cash generation and continued capital returns to shareholders.
First-Quarter Results Top Market Expectations
For the first quarter of fiscal 2027, SAIC reported adjusted earnings per share of $3.23, comfortably exceeding the Wall Street consensus estimate of $2.28.
Revenue rose to $1.91 billion, ahead of analyst expectations of $1.82 billion and up from $1.88 billion recorded in the same period last year.
Excluding contributions from the SilverEdge acquisition, the company generated organic revenue growth of 0.5%.
Company Raises Fiscal 2027 Earnings Outlook
Buoyed by the strong start to the year, SAIC increased its adjusted earnings per share guidance for fiscal 2027.
The company now expects adjusted EPS to range between $9.90 and $10.10, compared with its previous forecast of $9.50 to $9.70.
The midpoint of the revised outlook, $10.00 per share, stands above the current analyst consensus estimate of $9.63.
Revenue Forecast Remains Unchanged
While profit expectations moved higher, SAIC left its revenue guidance unchanged.
The company continues to project fiscal 2027 revenue between $7.0 billion and $7.2 billion, implying a midpoint of $7.1 billion.
That figure remains slightly below the analyst consensus forecast of approximately $7.15 billion.
Margin Outlook Improves
SAIC also upgraded its expectations for profitability.
Adjusted EBITDA guidance was raised to a range of $720 million to $730 million, compared with the prior forecast of $705 million to $715 million.
The company also increased its adjusted EBITDA margin outlook to between 10.1% and 10.3%, up from its earlier projection of 9.9% to 10.1%.
CEO Highlights Strong Execution
Commenting on the quarterly performance, Chief Executive Officer Jim Reagan credited the results to disciplined execution across the business.
“I am proud of our team’s performance this quarter, delivering record margin and modest organic growth,” said Jim Reagan, SAIC Chief Executive Officer. “These results reflect our focus on execution and our commitment to our financial targets.”
Profitability Improves Across Contract Portfolio
Adjusted EBITDA margin expanded significantly to 11.6% during the quarter, compared with 8.4% a year earlier.
The improvement was driven by stronger profitability across the company’s contract base, along with a $12 million gain generated from the sale of an investment.
SAIC also secured $2.1 billion in net bookings during the period, resulting in a quarterly book-to-bill ratio of 1.1, indicating new business awards exceeded recognized revenue.
Strong Cash Flow Supports Shareholder Returns
The company generated operating cash flow of $127 million and free cash flow of $118 million during the quarter.
SAIC returned significant capital to shareholders, deploying a total of $192 million during the period.
That included $175 million allocated to share repurchases and an additional $17 million distributed through dividends, underscoring management’s commitment to capital returns while continuing to invest in growth opportunities.
Science Applications International Corporation stock price