Quick Verdict
The SAIC Q2 Fiscal 2027 Earnings report revealed that SAIC reported fiscal Q2 2027 adjusted diluted EPS of $3.01 and revenue of $1.88 billion, exceeding reported Wall Street consensus expectations for both measures. Revenue grew 6.3% year over year, while GAAP net income declined 20%. Shares reacted positively after the announcement as investors focused on the earnings beat and higher FY2027 guidance.
About SAIC
Science Applications International Corporation (NASDAQ: SAIC) is a Reston, Virginia-headquartered technology and mission-integration contractor serving U.S. defense, space, intelligence, and civilian-government customers. Founded in 1969, the company provides mission IT, enterprise IT, engineering, systems integration, and professional services designed to modernize critical government operations. Its work spans areas such as military systems, national security, digital transformation, cybersecurity, and civilian-agency operations.
SAIC reported approximately 23,000 employees and annual revenue of approximately $7.3 billion in its latest results release. It operates through two reportable business segments: Defense and Intelligence, its larger business, and Civilian. As of July 31, 2026, the company carried total estimated backlog of $22.1 billion, including $3.8 billion of funded backlog—an important indicator of contracted future work. The company also declared a quarterly cash dividend of $0.37 per share, payable October 23, 2026.
Top Financial Highlights
- Total fiscal Q2 2027 revenue was $1.88 billion, up 6.3% from $1.769 billion a year earlier.
- Organic revenue growth was 5.3%, excluding acquisition effects
- SilverEdge Government Solutions contributed $20 million of quarterly revenue following its acquisition.
- GAAP net income was $102 million, down 20% from $127 million in fiscal Q2 2026.
- GAAP diluted EPS was $2.38, down 12% from $2.71 in the prior-year quarter.
- Adjusted diluted EPS was $3.01, down 17% from $3.63 a year earlier, largely reflecting prior-year comparison effects cited by the company.
- Operating income increased 9% to $152 million; operating margin expanded 20 basis points to 8.1%.
- Adjusted EBITDA was $193 million, representing an adjusted EBITDA margin of 10.3%, versus $185 million and 10.5% in the prior-year quarter.
- Operating cash flow increased 20% to $146 million, from $122 million in fiscal Q2 2026.
- Free cash flow was $131 million, compared with $150 million a year earlier.
- Defense and Intelligence revenue reached $1.449 billion, up 5% year over year; adjusted operating margin improved to 9.5% from 9.0%.
- Civilian revenue was $431 million, up 9% year over year; adjusted operating margin was 13.0%, compared with 13.7% in the prior-year period.
- Cash and cash equivalents stood at $126 million on July 31, 2026, while total debt—including current and long-term debt—was approximately $2.485 billion.
- SAIC generated $1.2 billion in net bookings, with a quarterly book-to-bill ratio of 0.6 and trailing-12-month book-to-bill of 0.8.
- Fiscal 2027 revenue guidance was raised to $7.2 billion–$7.3 billion, and adjusted diluted EPS guidance was raised to $10.65–$10.75.
Science Applications International Corporation Segment Operating Results
(Source: investors.saic.com)
- The image presents Science Applications International Corporation (SAIC) Segment Operating Results for the three months and six months ended July 31, 2026, compared with the corresponding 2025 periods. Financial values are reported in USD millions.
- For the three months, total revenue increased to USD 1,880 million from USD 1,769 million. Defense and Intelligence generated USD 1,449 million, while the Civilian segment contributed USD 431 million. Total adjusted operating income reached USD 191 million, compared with USD 182 million in the prior-year period, with an overall adjusted operating margin of 10.2%.
- For the six-month period, total revenue rose to USD 3,786 million from USD 3,646 million. Defense and Intelligence revenue totaled USD 2,915 million, while Civilian revenue reached USD 871 million. Total adjusted operating income increased to USD 412 million from USD 340 million, while the adjusted operating margin improved to 10.9% from 9.3%.
- Overall, the table shows higher revenue and improved operating profitability in 2026, particularly in the Defense and Intelligence segment.
Beat or Miss?
SAIC’s adjusted earnings and revenue came in above the consensus figures reported by market-data outlets. The beat was accompanied by an upgrade to full-year guidance, although GAAP and adjusted EPS both remained below the unusually favorable prior-year comparison.
| Metric | Reported | Difference/Analysis |
| Revenue | $1.88 billion | Above reported consensus of approximately $1.77 billion; a beat of roughly $110 million–$116 million |
| Adjusted diluted EPS | $3.01 | Above reported consensus of approximately $2.31; a beat of about $0.70 per share. |
| GAAP diluted EPS | $2.38 | Down 12% year over year from $2.71; the company’s reported GAAP figure is lower than adjusted EPS because of excluded items. |
| Organic revenue growth | 5.30% | Demonstrates that most of the top-line growth came from existing operations rather than acquisitions; SilverEdge added $20 million of reported revenue. |
| Adjusted EBITDA | $193 million | Up 4% year over year, but margin decreased 20 basis points to 10.3%. |
| FY2027 adjusted EPS outlook | $10.65–$10.75 | Raised from $9.90–$10.10, indicating management’s improved full-year outlook. |
What Leadership Is Saying
“I am proud of our team’s performance this quarter, delivering solid organic growth and double-digit margins as we continue to execute with discipline.” — Jim Reagan, Chief Executive Officer
“We are raising our guidance to reflect our strong year-to-date performance, and we are transforming our enterprise to support our customers’ most critical missions, drive long-term growth and margin expansion, while continuing to invest in strengthening our capabilities.” — Jim Reagan, Chief Executive Officer.
Historical Performance
| Category | Q2 Fiscal 2027 | Q2 Fiscal 2026 | Change (%) |
| Revenue | $1.880 billion | $1.769 billion | 6.30% |
| Net income | $102 million | $127 million | -19.70% |
| Cost of revenues | $1.641 billion | $1.554 billion | 5.60% |
| Selling, general and administrative expense | $87 million | $75 million | 16.00% |
| Operating income | $152 million | $139 million | 9.40% |
| Operating margin | 8.10% | 7.90% | +20 basis points |
| Adjusted EBITDA | $193 million | $185 million | 4.30% |
| Adjusted EBITDA margin | 10.30% | 10.50% | -20 basis points |
| Operating cash flow | $146 million | $122 million | 19.70% |
| Free cash flow | $131 million | $150 million | -12.70% |
Revenue growth was driven by higher volume on existing and new contracts, partly supplemented by the SilverEdge acquisition. However, profit comparisons were affected by prior-year items, including recovery of costs associated with patent-infringement settlement matters and federal-tax-audit settlement effects.
Segment Performance
SAIC does not provide a competitor-comparison table in its earnings release. The most relevant comparable operational view is its segment performance, which shows the contribution of the company’s Defense and Intelligence and Civilian operations.
| Category | Q2 Fiscal 2027 | Q2 Fiscal 2026 | Change (%) |
| Defense and Intelligence revenue | $1.449 billion | $1.374 billion | 5.50% |
| Defense and Intelligence adjusted operating income | $138 million | $124 million | 11.30% |
| Defense and Intelligence adjusted operating margin | 9.50% | 9.00% | +50 basis points |
| Civilian revenue | $431 million | $395 million | 9.10% |
| Civilian adjusted operating income | $56 million | $54 million | 3.70% |
| Civilian adjusted operating margin | 13.00% | 13.70% | -70 basis points |
| Corporate adjusted operating income/(loss) | $(3) million | $4 million | NM |
The Civilian segment delivered the faster revenue-growth rate, while Defense and Intelligence remained the scale driver, representing approximately 77% of quarterly revenue. Defense and Intelligence also improved its adjusted operating margin, while Civilian margin declined because of contract timing and volume mix.
How the Market Reacted
The market response was positive following the release, with reporting indicating that SAIC shares rose 2.91% to $129.62 as investors assessed the revenue and adjusted-EPS beat, improved guidance, and progress in operating execution. Other coverage characterized the post-results move as an approximately 8% surge, suggesting that the precise percentage depends on the intraday measurement point used.
The underlying report sentiment was constructive: SAIC produced 5.3% organic growth, lifted its fiscal 2027 revenue outlook by $100 million at the midpoint, and increased adjusted EPS guidance by roughly $0.70 per share at the midpoint. The main caution is that quarterly net income, adjusted EPS, adjusted EBITDA margin, free cash flow, bookings, and backlog conversion metrics warrant continued monitoring despite the headline beat.
