Science Applications International Corp. saw its revenue grow 4.3 percent to $1.98 billion and reported net bookings of $1.5 billion with a book-to-bill ratio of 0.7 during the third quarter of its fiscal year 2025.
In an earnings statement published Thursday, the Reston, Virginia-based government technology services contractor said its Q3 net income was $106 million, while its diluted earnings per share and adjusted diluted EPS were $2.13 and $2.61, respectively.
SAIC ended the quarter with an estimated total backlog of approximately $22.4 billion, of which about $4.5 billion was funded.
Notable Contract Awards
SAIC secured new and recompete contracts during the quarter, including a potential seven-year, $229 million contract from the Department of Defense to provide IT platforms under the NORAD/USNORTHCOM Information Technology Enterprise Services program, or NITES, and a potential five-year, $148 million contract from the Department of Veterans Affairs for security compliance and product and operations support for the Veterans Health Administration Finance Product Line.
The VA recompete contract was awarded to SAIC’s joint venture with Higher Echelon, H2 Technology Group.
CFO Prabu Natarajan on Updated Fiscal 2025 Guidance, Share Repurchase Program
At Thursday’s earnings conference call, SAIC Chief Financial Officer Prabu Natarajan told analysts that the company is increasing its fiscal year 2025 revenue guidance to $7.425 billion to $7.475 billion, reflecting 3 percent organic growth for the year.
“The improvement versus our prior guidance is largely due to improved on-contract revenue trends and a focus to deliver on our commitments. As we have said previously, we continue to see FY ’26 revenue growth in a range of 2% to 4%, and our expectation is for slower growth in the first half of the year, improving to the 5% range by the end of the year as new business pursuits, which are being submitted this year, convert into revenue next year,” Natarajan said.
“Our focus will be to continue driving on contract growth on our existing programs even as we anticipate growth from new business to inflect next year,” he added.
The SAIC executive vice president noted that the company is focusing its capital deployment efforts on its share repurchase program to maximize shareholder value over the long term and now expects to repurchase about $500 million of shares this year.
He stated that SAIC will start executing against its new $1.2 billion authorization in the fourth quarter.
“We continue to target repurchases of $350 million to $400 million annually in the coming years, with the option of being opportunistic based on market conditions while maintaining capacity for capability-focused M&A and holding leverage at around 3.0,” the CFO added.
CEO on SAIC’s Enterprise Growth Strategy
During the call, Toni Townes-Whitley, CEO of SAIC and a 2024 Wash100 awardee, said the company has seen progress on the first phase of its enterprise growth strategy, which calls for the contractor to “bid more, bid better and win more.”
“With $22 billion in submitted bids through the third quarter, we now expect to submit more than $25 billion for the full year compared to our prior target of $22 billion,” Townes-Whitley told analysts.
The chief executive stated that the company expects the momentum to continue in fiscal years 2026 and 2027 and is raising its targets for submitted offers in both years.
“We now, in fact, see a pipeline to over $30 billion of submits in fiscal year ’27. Our backlog of submitted bids increased to nearly $19 billion on a trailing 12-month basis in the third quarter and increased from $17 billion in the second quarter. While our bookings in the quarter of $1.5 billion resulted in our trailing 12 months book-to-bill moderating to 0.9, we continue to have good visibility into reaching our target of 1.2 by the first half of fiscal year ’26,” she added.
