Q4 2026 Science Applications International Corp Earnings Call Transcript
Key Points
- SAIC reported a strong adjusted EBITDA margin of 10.3% for the fourth quarter, reflecting effective program execution and cost efficiency efforts.
- The company exceeded its free cash flow guidance by 10%, demonstrating strong execution and resilience of its business model.
- SAIC is focusing on higher-margin programs and has set a goal of $25 billion to $28 billion in submissions for FY27, aiming to grow the top line and improve margins.
- The company is investing in areas with high demand signals, such as AI-powered agents and mission-critical programs, to drive innovation and differentiation.
- SAIC has initiated an enterprise transformation to streamline processes and increase investment capacity, which is expected to enhance growth and margins.
- Fourth quarter revenue was below initial expectations due to procurement delays and customer disruptions, highlighting an uneven environment.
- SAIC expects another year of organic revenue contraction in FY27, primarily due to recompete losses in the large enterprise IT market.
- The company faces challenges in differentiating in commoditized enterprise IT work, which has impacted recompete win rates.
- SAIC's guidance for FY27 reflects a 2% to 4% organic revenue decline, driven by recompete losses and slower ramp-up of new business wins.
- The funding environment remains choppy and uneven, with procurement disruptions affecting the timing of revenue realization.
Good day, and thank you for standing by. Welcome to SAIC's Fourth Quarter Fiscal Year 2026 Earnings Call. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Jon Raviv, Vice President of Investor Relations. Please go ahead.
Good morning, and thank you for joining SAIC's Fourth Quarter Fiscal Year 2026 Earnings Call. My name is John Raviv, Vice President of Investor Relations, and joining me today to discuss our business and financial results are Jim Regan, our Chief Executive Officer; and Prabu Natarajan, our Chief Financial Officer. Today, we will discuss our results for the quarter that ended January 30. Please note that we may make forward-looking statements on today's call that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from statements made on this call. I refer you to our SEC filings for a discussion of these risks.
In addition, we will
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