Science Applications International SAIC reported better-than-expected results for the first quarter of fiscal 2027, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
SAIC’s non-GAAP earnings of $3.23 per share beat the Zacks Consensus Estimate of $2.26 by 42.9%. The bottom line increased 68.2% from the year-ago quarter’s earnings of $1.92.
Science Applications' fiscal first-quarter revenues increased 1.5% year over year to $1.91 billion and surpassed the Zacks Consensus Estimate of $1.78 billion by 6.9%.
Science Applications International Corporation Price, Consensus and EPS Surprise
Science Applications International Corporation price-consensus-eps-surprise-chart | Science Applications International Corporation Quote
SAIC’s Q1 in Detail
Segment-wise, revenues from Defense and Intelligence, which accounted for 76.9% of revenues, totaled $1.47 billion and increased 2.3% year over year. Civilian revenues, which constitute 23.1% of revenues, totaled $440 million and decreased 0.9% year over year.
Net bookings were approximately $2.1 billion in the first quarter, which reflected a book-to-bill ratio of 1.1. The company’s trailing 12-month book-to-bill ratio was 1.0 at the end of the fiscal first quarter. SAIC’s estimated backlog at the end of the quarter was approximately $22.9 billion. Of the total backlog amount, approximately $3.7 billion was funded.
Selling, general and administrative (SG&A) expenses decreased 6.7% to $83 million. SG&A expenses, as a percentage of revenues, declined to 4.4% from 4.7% in the year-ago quarter.
Non-GAAP operating income increased year over year to $221 million from the year-ago quarter’s operating income of $158 million. The non-GAAP operating margin expanded 320 basis points (bps) year over year to 11.6%.
Adjusted EBITDA rose 41% to $222 million. Adjusted EBITDA margin for the quarter was 11.6% compared with 8.4% in the prior-year quarter.
Balance Sheet & Cash Flow Details of SAIC
Science Applications ended the fiscal first quarter with cash and cash equivalents of $109 million, significantly down from the previous quarter’s $182 million.
As of May 1, 2026, Science Applications’ long-term debt (net of the current portion) was $2.46 billion compared with $2.47 billion as of Jan. 30, 2026.
The company generated operating and free cash flows of $127 million and $118 million, respectively, in the fiscal first quarter.
During the fiscal first quarter, Science Applications repurchased shares worth $175 million and paid $17 million in dividends.
SAIC Provides Fiscal 2027 Guidance
Science Applications expects fiscal 2027 revenues between $7 billion and $7.2 billion. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $7.11 billion, indicating a year-over-year decline of 2.1%.
Adjusted EBITDA is anticipated to be in the range of $720-$730 million, up from the earlier guidance of $705-$715 million. Adjusted EBITDA margin is expected to be in the band of 10.1-10.3%, up from the previous guided range of 9.9-10.1% band.
The company forecasts adjusted EPS in the range of $9.90-$10.10, up from the earlier guidance of $9.50-$9.70. The Zacks Consensus Estimate for the bottom line is pegged at $9.61 per share, indicating a year-over-year decline of 10.6%.
Science Applications estimates free cash flow for fiscal 2027 to exceed $600 million.
SAIC’s Zacks Rank & Stocks to Consider
Currently, Science Applications carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Applied Materials AMAT, Celestica CLS and Amphenol APH, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Applied Materials have rallied 75.1% year to date. The Zacks Consensus Estimate for Applied Materials’ fiscal 2026 earnings is pegged at $12.02 per share, up by 8.3% over the past 30 days, indicating a year-over-year surge of 27.6%.
Shares of Celestica have gained 30.4% year to date. The Zacks Consensus Estimate for Celestica’s 2026 earnings is pegged at $10.16 per share, up 15.1% over the past 30 days, implying a year-over-year jump of 67.9%.
Amphenol shares have jumped 10.1% year to date. The Zacks Consensus Estimate for APH’s 2026 earnings is pegged at $4.76 per share, up 11.4% over the past 30 days, indicating a year-over-year increase of 42.5%.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amphenol Corporation (APH): Free Stock Analysis Report
Applied Materials, Inc. (AMAT): Free Stock Analysis Report
Celestica, Inc. (CLS): Free Stock Analysis Report
Science Applications International Corporation (SAIC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).