Science Applications International Corp. (Nasdaq: SAIC) recorded $1.82 billion in revenues, 2 percent organic growth and $1.2 billion in net bookings with a book-to-bill ratio of 0.6 during the second quarter of its fiscal year 2025.
In an earnings statement published Thursday, the Reston, Virginia-based government technology services contractor said it ended the quarter with an estimated backlog of approximately $22.9 billion, of which about $4.2 billion was funded.
Notable Contract Wins
SAIC won new and recompete contracts during the quarter, including a potential $134 million task order from the Department of the Treasury to support the Treasury Cloud program, a five-year, $206 million follow-on award from the Department of Veterans Affairs to provide information technology support for VA’s Financial Services Center and $250 million in contracts in support of defense and space programs.
SAIC’s Enterprise Growth Strategy Execution
At Thursday’s earnings conference call, Toni Townes-Whitley, CEO of SAIC and a 2024 Wash100 awardee, provided updates on the company’s implementation of its enterprise growth strategy.
Under the strategy, Townes-Whitley said SAIC continues to tune across portfolio, go-to-market, brand and culture pivots and expects the strategy execution to “initially translate into Bid More, Bid Better, Win More.”
“The first step, Bid More is significantly increasing the total value of submissions to a level more aligned with our growth aspirations. … The second step, Bid Better is aligning our pipeline and bid processes with key strategic and financial objectives,” she told analysts.
With the second step, the chief executive said the company will drive growth within the enterprise and mission IT and civilian sectors to strengthen its capability to expand market share.
“The third step, Win More is driving bookings and backlog growth and, eventually, revenue growth more aligned with our long-term target. We will accomplish this by increasing our volume and quality of bid submissions, returning our recompete win rate to the 90% range, and sustaining our strong new business performance,” Townes-Whitley added.
CFO Prabu Natarajan on Capital Deployment Strategy, M&As
During the call, SAIC Chief Financial Officer Prabu Natarajan told analysts that the company returned about $220 million to shareholders during the second quarter, including $201 million of share repurchases.
He said the contractor remains on track to surpass the high end of its previous target of $350 million to $400 million in repurchases while maintaining enough capacity for mergers and acquisitions.
The SAIC executive vice president also noted that the company’s “capital deployment strategy remains focused on maximizing long-term shareholder value” and that it expects the strategy to generate growth in free cash flow “in excess of what is implied by current market valuations.”
“Given this view and the opportunity we see to drive significant improvement from our existing business, we expect our threshold for M&A to remain high and capital deployment to remain targeted on our repurchase program. However, we retain sufficient balance sheet flexibility to add differentiated businesses to our company should an opportunity meet our risk adjusted threshold for returns,” Natarajan added.
