Science Applications International Corp SEC 10-Q Report
Science Applications International Corp (SAIC), a leading provider of national security, engineering, and IT solutions, has released its Form 10-Q report for the third quarter. The report provides a comprehensive overview of the company's financial performance and operational highlights, reflecting its strategic initiatives and market positioning.
Financial Highlights
Revenues: $1,769 million, a decrease of 3% compared to the same period last year due to contract completions and ramp down in volume on existing contracts, partially offset by new contracts.
Cost of Revenues: $1,554 million, representing 87.8% of revenues, slightly improved from 88.4% in the prior year period.
Operating Income: $139 million, increased by 4% from the prior year period, with an operating margin of 7.9%, up from 7.4% due to improved profitability across the contract portfolio and a recovery of costs from a patent infringement settlement.
Net Income: $127 million, increased by 57% from the prior year period, primarily due to a $47 million benefit from an IRS audit settlement and improved contract profitability.
Diluted EPS: $2.71, up from $1.58 in the prior year period, reflecting the significant increase in net income.
Business Highlights
Revenue Segments: The company operates through two main segments: Defense and Intelligence, and Civilian. The Defense and Intelligence segment provides national security solutions to the Department of Defense and the Intelligence Community, while the Civilian segment serves federal, state, and local governments with solutions for citizen well-being, border security, and public service missions.
Customer Segments: The company's revenues are primarily generated from long-term contracts with the U.S. government, including subcontracts. The Defense and Intelligence segment accounted for a significant portion of the revenue, with the Department of Defense being a major customer.
Operational Performance: The company has approximately 1,700 active contracts and task orders, employing around 24,000 individuals. The Innovation Factory supports the operating segments by developing enterprise-class solutions, focusing on areas such as AI, application development, network services, platforms and cloud, engineering, and cybersecurity.
Future Outlook: The company anticipates recognizing revenue from a substantial portion of its funded backlog within the next twelve months. However, it remains cautious about potential impacts from government budget constraints, competitive pressures, and regulatory changes.
Market Opportunities: Recent legislative measures, including a budget reconciliation package, have increased funding for non-border defense spending and border security, which are expected to provide additional opportunities for the company, particularly in areas like Naval operations and border surveillance.
Competitive Landscape: The U.S. government’s emphasis on competitive bidding processes and small business set-asides has increased competition and pricing pressure. Despite these challenges, the company believes its scale, technical expertise, and long-term customer relationships position it well to capture large contract opportunities.
Innovation and Technology: The company continues to focus on integrating emerging technologies into mission-critical operations, including IT modernization, digital engineering, AI, and cybersecurity, to modernize and enable national imperatives.
Contract Types: The company’s contracts include cost reimbursement, time and materials, and firm-fixed price contracts, with a significant portion of revenue derived from IDIQ contracts that renew annually.
SEC Filing: Science Applications International Corp [ SAIC ] - 10-Q - Sep. 04, 2025