- Revenue: $1.85 billion, reflecting a 0.4% organic growth despite a 9% overall decline due to divestitures.
- Net Income: $77 million, down 21% year-over-year.
- Diluted EPS: $1.48, compared to $1.79 in the prior year quarter.
- Adjusted EBITDA: $166 million, representing 9.0% of revenues.
- Free Cash Flow: $13 million, a significant decrease from $76 million in the prior year.
- Net Bookings: $2.6 billion, with a book-to-bill ratio of 1.4.
- Fiscal Year 2025 Guidance: Revenue projected between $7.35 billion and $7.50 billion, with adjusted diluted EPS between $8.00 and $8.20.
On June 3, 2024, Science Applications International Corp (SAIC, Financial) released its 8-K filing detailing the financial results for the first quarter of fiscal year 2025. Science Applications International Corp provides technical, engineering, and enterprise IT services mainly to the U.S. government, focusing on higher-end technology services.
Performance Overview
For the quarter ended May 3, 2024, SAIC reported revenues of $1.85 billion, reflecting a 9% decrease from the $2.03 billion reported in the same period last year. This decline was primarily due to the sale of the logistics and supply chain management business and contract completions. Adjusting for the divestiture, organic revenue growth was 0.4%.
Net income for the quarter was $77 million, down 21% from $98 million in the prior year. Adjusted EBITDA was $166 million, representing 9.0% of revenues, compared to $189 million or 9.3% of revenues in the previous year. Diluted earnings per share (EPS) were $1.48, down from $1.79, while adjusted diluted EPS was $1.92, down from $2.14.
Financial Achievements and Challenges
Despite the revenue decline, SAIC achieved significant net bookings of $2.6 billion, resulting in a book-to-bill ratio of 1.4. The company also reaffirmed its fiscal year 2025 financial guidance, projecting revenues between $7.35 billion and $7.50 billion, adjusted EBITDA between $680 million and $700 million, and adjusted diluted EPS between $8.00 and $8.20.
“We reported solid financial results in the quarter as we began executing against our enterprise growth strategy introduced at SAIC's 2024 Investor Day,” said SAIC CEO Toni Townes-Whitley. "We are confident that the strategy and investments we are making best position the company to maximize long-term shareholder value."
Income Statement Highlights
| Metric | Q1 FY2025 | Q1 FY2024 | Change |
|---|---|---|---|
| Revenues | $1.85 billion | $2.03 billion | -9% |
| Net Income | $77 million | $98 million | -21% |
| Adjusted EBITDA | $166 million | $189 million | -12% |
| Diluted EPS | $1.48 | $1.79 | -17% |
| Adjusted Diluted EPS | $1.92 | $2.14 | -10% |
Balance Sheet and Cash Flow
SAIC's balance sheet showed total assets of $5.25 billion as of May 3, 2024, slightly down from $5.31 billion as of February 2, 2024. Cash and cash equivalents stood at $49 million, down from $94 million. The company generated $98 million in cash flows from operating activities, a 20% increase from $82 million in the prior year. However, free cash flow decreased significantly to $13 million from $76 million.
Segment Performance
Revenues from the Defense and Intelligence segment decreased by 10% to $1.44 billion, while the Civilian segment saw a 5% decline to $411 million. The operating income margin for Defense and Intelligence was 7.5%, down from 7.8%, and for Civilian, it was 8.3%, down from 9.7%.
Contract Awards and Backlog
SAIC secured several notable contracts during the quarter, including a $444 million contract with the U.S. Space Force and a $494 million recompete contract with NASA. The company's estimated backlog at the end of the quarter was approximately $23.6 billion, with $3.5 billion funded.
Conclusion
While SAIC faced challenges due to divestitures and contract completions, the company remains focused on its long-term growth strategy. The reaffirmation of its fiscal year 2025 guidance and significant contract awards highlight its resilience and strategic positioning in the market.
Explore the complete 8-K earnings release (here) from Science Applications International Corp for further details.
