On September 5, 2024, Science Applications International Corp (SAIC, Financial) released its 8-K filing for the second quarter of fiscal year 2025, showcasing a mix of achievements and challenges. SAIC, a premier Fortune 500 technology integrator, provides technical, engineering, and enterprise IT services primarily to the U.S. government, focusing on higher-end technology services.
Performance Overview
SAIC reported revenues of $1.82 billion for Q2 FY2025, marking a 2% organic growth compared to the same period last year. The net income stood at $81 million, with an adjusted EBITDA of $170 million, representing 9.4% of revenues. Diluted earnings per share (EPS) were $1.58, while adjusted diluted EPS was $2.05. The company generated $138 million in cash flows from operating activities and $241 million in free cash flow.
Financial Achievements and Challenges
Despite the positive revenue growth, SAIC faced a significant decrease in operating income, which fell by 63% to $134 million, primarily due to the gain on the sale of the Supply Chain Business in the prior year. The EBITDA margin also decreased from 22.5% to 9.3%, reflecting the impact of contract completions and the absence of the previous year's one-time gain.
Our second quarter results were solid, reflecting strong program performance and exceptional cash flow with a continued focus on returning capital to shareholders," said SAIC CEO Toni Townes-Whitley.
Income Statement Highlights
| Metric | Q2 FY2025 | Q2 FY2024 | Change |
|---|---|---|---|
| Revenues | $1.82 billion | $1.78 billion | 2% |
| Operating Income | $134 million | $362 million | -63% |
| Net Income | $81 million | $247 million | -67% |
| EBITDA | $170 million | $402 million | -58% |
| Diluted EPS | $1.58 | $4.56 | -65% |
Balance Sheet and Cash Flow
SAIC's balance sheet showed total assets of $5.25 billion, with cash and cash equivalents of $48 million. The company’s total liabilities stood at $3.63 billion, and stockholders' equity was $1.62 billion. Cash flows from operating activities decreased by 8% to $138 million, while free cash flow increased by 67% to $241 million.
Backlog and Contract Awards
SAIC reported net bookings of $1.2 billion for the quarter, with a book-to-bill ratio of 0.6 and a trailing twelve months book-to-bill ratio of 1.1. The estimated backlog at the end of the quarter was approximately $22.9 billion, with $4.2 billion funded. Notable awards included a $134 million task order from the U.S. Treasury and a $206 million recompete contract from the Department of Veterans Affairs.
Fiscal Year 2025 Guidance
SAIC increased its adjusted diluted EPS guidance for fiscal year 2025 to $8.10 - $8.30, reaffirming all other financial guidance. The company expects revenues between $7.35 billion and $7.50 billion, adjusted EBITDA between $680 million and $700 million, and free cash flow between $490 million and $510 million.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Science Applications International Corp for further details.
