SAIC Reports 4% Revenue Growth in Q3 Fiscal 2025, Net Income Rises 14%

Science Applications International Corporation (SAIC) reported its financial results for the third quarter of fiscal 2025, ending November 1, 2024, revealing a revenue increase of 4% to $1.976 billion compared to $1.895 billion in the same period last year. However, for the nine months ended November 1, 2024, revenues decreased by 1% to $5.641 billion from $5.707 billion, primarily due to the prior year's divestiture of its logistics and supply chain management business, which accounted for a $188 million revenue loss. The company’s net income for the quarter rose 14% to $106 million, or $2.15 per share, compared to $93 million, or $1.79 per share, in the prior year. For the nine-month period, net income fell 40% to $264 million from $438 million.

SAIC's operating income for the third quarter increased by 12% to $160 million, reflecting improved contract volumes and the resolution of a contract termination with the U.S. Marine Corps. However, operating income for the nine months decreased by 36% to $425 million, impacted by significant gains from divestitures in the previous year. The effective tax rate for the quarter was 15.6%, down from 18.0% in the prior year, attributed to the non-recurrence of prior year gains and the release of certain tax liabilities.

In terms of strategic developments, SAIC underwent a significant organizational restructuring effective February 3, 2024, transitioning from two operating sectors to five customer-facing business groups. This reorganization aims to enhance operational efficiency and align more closely with customer needs. The company continues to focus on integrating emerging technologies into its service offerings, particularly in areas such as IT modernization and artificial intelligence.

Operationally, SAIC reported approximately 24,000 employees and maintained a backlog of $22.387 billion as of November 1, 2024, with $4.466 billion classified as funded backlog. The company secured net bookings of $1.5 billion and $5.3 billion for the three and nine months ended November 1, 2024, respectively. The revenue mix showed a continued reliance on cost-reimbursement contracts, which constituted 64% of total revenues, while the proportion of firm-fixed price contracts decreased due to the divestiture of the Supply Chain Business.

Looking ahead, SAIC anticipates continued revenue growth driven by increased contract volumes and strategic focus areas, despite potential challenges from government budget constraints and competitive pressures. The company remains committed to leveraging its scale and expertise to capture new opportunities in the evolving market landscape.