Q1 2025 Science Applications International Corp Earnings Call Transcript
Key Points
- Science Applications International Corp (SAIC) reported solid financial results with 40 basis points of pro forma organic growth.
- First-quarter adjusted EBITDA of $166 million resulted in an adjusted EBITDA margin of 9%, reflecting increased investment in the business.
- Transaction adjusted free cash flow of $21 million was ahead of plan, showing good momentum on working capital efforts.
- SAIC's multi-year growth strategy focuses on five national imperatives and four key growth vectors, positioning the company for long-term profitable growth.
- The company submitted proposals with a total value of over $8 billion in the first quarter, aiming for $22 billion in FY25, with two-thirds representing new business.
- SAIC faced a roughly five-point headwind from previously discussed recompete losses, impacting overall growth.
- First-quarter revenue was affected by a $30 million year-over-year headwind due to non-recurring material sales from the prior year.
- The company expects second-quarter revenue to be roughly flat year over year, with a 5% to 6% headwind from recompete losses.
- Margins are expected to improve in the second half of the year, indicating current pressure on profitability.
- The company is cautious about the potential impact of normalizing government outlay trends on revenue growth.
Thank you for standing by. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the SAIC first-quarter fiscal year 2025 earnings conference call. (Operator Instructions)
I would now like to turn the conference over to Joe DeNardi, Senior Vice President of Investor Relations and Treasurer. Joe, you may begin your conference.
Good morning, and thank you for joining SAIC's first-quarter fiscal year 2025 earnings call. My name is Joe DeNardi, Senior Vice President of Investor Relations and Treasurer, and joining me today to discuss our business and financial results are Toni Townes-Whitley, our Chief Executive Officer; and Prabu Natarajan, our Chief Financial Officer.
Today, we will discuss our results for the first quarter of fiscal year 2025 that ended May 3, 2024. Earlier this morning, we issued our earnings release, which can be found at investors.saic.com, where you will also find supplemental
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