SAIC Contracts Drove Up Q3 FY23 Revenue; Nazzic Keene on Capital Deployment Plans, ‘GTA’ Focus Area

Science Applications International Corp. (NYSE: SAIC) posted $1.91 billion in revenue for the third quarter of its 2023 fiscal year, up 1 percent from the prior-year period, and recorded $1.45 in diluted earnings per share and adjusted diluted EPS of $1.90.

The Reston, Virginia-based government technology services contractor recorded $2 billion in Q3 FY 2023 net bookings with a book-to-bill ratio of 1.1 and ended the quarter with an estimated total backlog of approximately $24.4 billion, of which approximately $4 billion was funded.

SAIC’s significant contract awards in the previous quarter include $950 million in space and intelligence contracts, the $208 million Scenarios Training Operation Research and Modeling and Simulation contract with the U.S. Army’s Space and Missile Defense Command and a potential $181 million follow-on contract with USASMDC for system utility analysis and combat development support.

SAIC CEO Nazzic Keene told analysts in a conference call Monday that capabilities within its GTA area of focus, also known as growth and technology accelerants, are driving profitability. 

GTA covers enterprise information technology, secure cloud and systems integration and delivery, while its core area focuses on IT and technical services, engineering, logistics and supply chain.

Keene, a five-time Wash100 awardee, noted that SAIC has allocated most of its capital towards mergers and acquisitions in the last few years but will now focus more on “aligning capital allocation with long-term shareholder value creation.”

“Based on the current market conditions and competitive landscape, we expect capital deployment to be focused more towards returning capital to shareholders while opportunistically leveraging M&A to add capabilities, solutions or technologies where and when we can accelerate our growth strategy,” she noted.

In response to an analyst’s question about M&As, Keene said she believes the “market continues to be active” and that the company would be interested in assets that lie within its GTA area of focus while being “very, very selective” as it looks at future acquisitions.

“So … if an asset were to come to bear that accelerates, our ability to drive profitable organic growth in those areas of our portfolio where we have decided, we believe is in our best interest to grow. Those would be of interest to us,” she added.