Q2 2026 Science Applications International Corp Earnings Call Transcript
Key Points
- SAIC achieved a book-to-bill ratio comfortably over 1.0, driving the year-to-date book-to-bill to 1.4, indicating strong future revenue potential.
- The company reported an adjusted EBITDA margin of 10.5%, reflecting improved profitability across its contract portfolio.
- SAIC's year-to-date recompete win rate is in line with its target, showing stability in retaining existing contracts.
- The company is leveraging artificial intelligence to drive greater efficiency across its operations, which is expected to be a tailwind for margins and customer savings.
- SAIC increased its FY26 free cash flow guidance to greater than $550 million, reflecting strong cash generation capabilities.
- Second-quarter revenue declined by 2.7% year-over-year, falling below expectations due to slower conversion of on-contract growth opportunities and program disruptions.
- The company lowered its FY26 revenue guidance to a range of $7.25 billion to $7.325 billion, representing an organic contraction of 2% to 3%.
- SAIC is facing delays in new business awards and slower ramp-up of recent wins, impacting revenue growth.
- The company anticipates a challenging revenue environment due to funding uncertainty and increased scrutiny on government spending.
- SAIC's FY26 adjusted EBITDA margin guidance was lowered due to the one-time impact from changes in state and local taxes.
Good day, and thank you for standing by. Welcome to the SAIC Fiscal Year 2026 second-quarter earnings conference call. (Operator Instructions) Please be advised, today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Joseph DeNardi, Senior Vice President, Investor Relations, and Treasurer. Please go ahead.
Good morning, and thank you for joining SAIC's second-quarter fiscal year 2026 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 Tony Townes-Whitley, our Chief Executive Officer; and Prabu Natarajan, our Chief Financial Officer.
Today, we will discuss our results for the second quarter of fiscal year 2026 that ended August 1, 2025. Please note that we may make forward-looking statements on today's calls that are subject to known and unknown risks and uncertainties that could cause
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