SAIC reported fiscal third‑quarter 2026 revenue of $1.87 billion, a 5.6% decline from the $1.98 billion earned in the same period a year earlier. The drop was driven primarily by a reduction in volume on existing defense contracts and a $16 million headwind from a brief government shutdown, which slowed the ramp‑up of new work. The civilian segment, which had been a growth engine in prior quarters, contracted as several long‑term contracts reached maturity and the company shifted focus to higher‑margin defense and intelligence work.
Net income fell to $78 million, but adjusted diluted earnings per share rose to $2.58, beating the consensus estimate of $2.15 by $0.43 or 20%. The EPS beat was largely a result of disciplined cost management and a favorable mix shift toward higher‑margin defense and intelligence contracts. Adjusted EBITDA reached $185 million, or 9.9% of revenue, a slight compression from the 10.0% margin recorded a year earlier, reflecting the impact of the shutdown headwind and the need to invest in emerging‑technology capabilities. Free cash flow swung to $135 million, up from a $9 million free cash flow in Q3 FY25, underscoring the company’s ability to convert operating cash into liquidity even amid revenue contraction.
Management highlighted that the 5.6% revenue contraction was “slightly ahead of our guidance when adjusting for the approximate 1% headwind from the government shutdown, and strong margins due to continued sound program execution.” The company raised its full‑year fiscal 2026 guidance for adjusted EBITDA to roughly $695 million and for adjusted diluted EPS to $9.80–$10.00, while tightening or slightly increasing revenue guidance to $7.275–$7.325 billion. These upgrades signal confidence in the company’s backlog of $23.8 billion and net bookings of $2.2 billion, which provide a solid pipeline for future revenue growth.
In addition to the earnings release, SAIC announced a preliminary acquisition of SilverEdge Government Solutions for $203 million, a move aimed at bolstering its artificial‑intelligence capabilities and expanding its footprint in the defense‑tech market. The company also declared a quarterly dividend of $0.37 per share, payable January 28 2026, reaffirming its commitment to shareholder returns.
Investors responded favorably to the earnings beat and the raised guidance, with the EPS beat and the company’s strong free‑cash‑flow generation cited as key drivers of the positive reception. The robust backlog and net bookings, combined with the strategic acquisition of SilverEdge, reinforced confidence in SAIC’s long‑term growth prospects.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.