On December 5, 2024, Science Applications International Corp (SAIC, Financial) released its 8-K filing detailing the financial results for the third quarter of fiscal year 2025. SAIC, a leading provider of technical, engineering, and enterprise IT services to the U.S. government, reported significant financial achievements and strategic initiatives aimed at driving future growth.
Financial Highlights and Strategic Initiatives
SAIC reported revenues of $1.98 billion for the quarter, marking a 4.3% increase from the previous year. This growth was primarily driven by increased volume on existing and new contracts, despite some contract completions. The company's net income rose to $106 million, with an adjusted EBITDA of $197 million, representing 10.0% of revenues. Diluted earnings per share (EPS) were $2.13, while adjusted diluted EPS stood at $2.61.
SAIC's strategic focus on expanding its business development efforts is evident as the company expects to exceed $25 billion in submissions this year, surpassing its previous target of $22 billion. This is anticipated to improve the book-to-bill ratio and accelerate growth in fiscal year 2026.
Key Financial Metrics and Achievements
The company's operating income increased by 12% to $160 million, with operating income as a percentage of revenues rising to 8.1%. Adjusted operating income also saw a 10% increase, reaching $195 million. These improvements were attributed to the resolution of the Assault Amphibious Vehicle (AAV) contract termination and increased contract volumes.
SAIC's cash flows from operating activities increased by 42% to $143 million, although free cash flow decreased significantly to $9 million. The company deployed $142 million in capital during the quarter, including $115 million in share repurchases and $18 million in cash dividends.
Balance Sheet and Cash Flow Analysis
SAIC's balance sheet reflects total assets of $5.275 billion, with current assets amounting to $1.160 billion. The company's liabilities include $1.337 billion in current liabilities and $1.939 billion in long-term debt. Notably, the company's stockholders' equity stands at $1.612 billion.
From a cash flow perspective, SAIC's net cash provided by operating activities was $143 million for the quarter. The company also reported a net decrease in cash and cash equivalents, ending the period with $54 million.
Outlook and Future Prospects
SAIC has increased its fiscal year 2025 guidance for revenue and adjusted diluted EPS, reflecting confidence in its strategic direction and operational execution. The company has also announced a $1.2 billion share repurchase program, highlighting its commitment to returning capital to shareholders.
Our results in the third quarter demonstrate progress towards meeting our near-term financial goals and executing our long-term strategy to drive profitable growth and value for our customers and shareholders," said SAIC CEO Toni Townes-Whitley.
Overall, SAIC's third-quarter performance underscores its robust position in the technology integration market, with a focus on leveraging emerging technologies to enhance government operations. The company's strategic initiatives and financial discipline are expected to support continued growth and shareholder value creation.
Explore the complete 8-K earnings release (here) from Science Applications International Corp for further details.
