SAIC reported Q4 FY25 revenues of $1.84 billion, with net income and adjusted EBITDA showing strong growth.
Quiver AI Summary
Science Applications International Corporation (SAIC) reported revenue of $1.84 billion for Q4 FY25, reflecting an increase of 5.8% in organic growth, while the full fiscal year revenues reached $7.48 billion with 3.1% organic growth. The company's Q4 net income was $98 million, leading to an adjusted EBITDA of $177 million, or 9.6% of revenue. For FY25, net income totaled $362 million, with an adjusted EBITDA of $710 million, maintaining a margin of 9.5%. The Q4 diluted earnings per share were $2.00, and adjusted diluted earnings per share stood at $2.57. Additionally, SAIC announced a significant contract win worth $1.8 billion for the System Software Lifecycle Engineering program and introduced FY26 revenue guidance above previous targets. The company demonstrated strong cash flow with $115 million from operating activities in Q4 and $494 million for the full year. SAIC's backlog was approximately $21.9 billion at year-end, confirming its growth momentum despite ongoing challenges in the market.
Potential Positives
- Q4 FY25 revenues reached $1.84 billion, indicating a 5.8% organic growth, showcasing strong operational performance.
- Q4 FY25 net income increased by 151% to $98 million, reflecting significant earnings growth.
- Subsequent to the quarter, the company secured a $1.8 billion contract award for the System Software Lifecycle Engineering program, marking a major win in recent years.
- FY26 guidance introduced above prior targets for revenue, adjusted EBITDA, adjusted EBITDA margin, and adjusted diluted EPS, indicating positive growth expectations.
Potential Negatives
- Operating income for FY25 decreased by 24% compared to the prior year, indicating potential operational challenges.
- Net income for FY25 decreased by 24% compared to the prior year, reflecting a decline in profitability.
- The book-to-bill ratio for the fourth quarter was 0.7, indicating that new bookings did not cover current revenue, which could signal future revenue challenges.
FAQ
What were SAIC's revenues for Q4 FY25?
SAIC reported revenues of $1.84 billion for Q4 FY25, reflecting a 5.8% organic growth.
How did SAIC's net income perform in FY25?
SAIC's net income for FY25 was $362 million, showing a 24% decrease compared to the previous year.
What is the adjusted EBITDA margin for Q4 FY25?
The adjusted EBITDA margin for Q4 FY25 was 9.6% of revenue, an increase from the previous year's 7.3%.
What free cash flow did SAIC generate in FY25?
For FY25, SAIC generated a free cash flow of $499 million, a 21% increase from the prior year.
What guidance did SAIC provide for FY26?
SAIC introduced FY26 guidance for revenues between $7.60 billion and $7.75 billion, exceeding prior targets.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$SAIC Congressional Stock Trading
Members of Congress have traded $SAIC stock 2 times in the past 6 months. Of those trades, 0 have been purchases and 2 have been sales.
Here’s a breakdown of recent trading of $SAIC stock by members of Congress over the last 6 months:
- REPRESENTATIVE GERALD E. CONNOLLY has traded it 2 times. They made 0 purchases and 2 sales worth up to $30,000 on 02/05, 10/10.
To track congressional stock trading, check out Quiver Quantitative's congressional trading dashboard.
$SAIC Insider Trading Activity
$SAIC insiders have traded $SAIC stock on the open market 5 times in the past 6 months. Of those trades, 4 have been purchases and 1 have been sales.
Here’s a breakdown of recent trading of $SAIC stock by insiders over the last 6 months:
- KATHARINA G. MCFARLAND sold 3,239 shares for an estimated $381,230
- BARBARA SUPPLEE (EVP, Navy) has made 2 purchases buying 575 shares for an estimated $70,060 and 0 sales.
- VINCENT P. DIFRONZO (EVP,-Air Force & Comb Commands) purchased 150 shares for an estimated $16,888
- SRINIVAS ATTILI (EVP, Civilian) purchased 100 shares for an estimated $11,341
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$SAIC Hedge Fund Activity
We have seen 215 institutional investors add shares of $SAIC stock to their portfolio, and 207 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- WELLINGTON MANAGEMENT GROUP LLP removed 1,031,285 shares (-37.5%) from their portfolio in Q4 2024, for an estimated $115,277,037
- BOSTON PARTNERS removed 642,481 shares (-21.8%) from their portfolio in Q4 2024, for an estimated $71,816,526
- FULLER & THALER ASSET MANAGEMENT, INC. added 464,989 shares (+27.0%) to their portfolio in Q4 2024, for an estimated $51,976,470
- INVESCO LTD. removed 439,643 shares (-53.0%) from their portfolio in Q4 2024, for an estimated $49,143,294
- FMR LLC removed 323,532 shares (-14.5%) from their portfolio in Q4 2024, for an estimated $36,164,406
- ADAGE CAPITAL PARTNERS GP, L.L.C. added 312,304 shares (+inf%) to their portfolio in Q4 2024, for an estimated $34,909,341
- AQR CAPITAL MANAGEMENT LLC added 179,963 shares (+68.4%) to their portfolio in Q4 2024, for an estimated $20,116,264
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
$SAIC Analyst Ratings
Wall Street analysts have issued reports on $SAIC in the last several months. We have seen 1 firms issue buy ratings on the stock, and 0 firms issue sell ratings.
Here are some recent analyst ratings:
- Citigroup issued a "Buy" rating on 10/10/2024
To track analyst ratings and price targets for $SAIC, check out Quiver Quantitative's $SAIC forecast page.
$SAIC Price Targets
Multiple analysts have issued price targets for $SAIC recently. We have seen 3 analysts offer price targets for $SAIC in the last 6 months, with a median target of $134.0.
Here are some recent targets:
- Gavin Parsons from Goldman Sachs set a target price of $124.0 on 12/05/2024
- Gavin Parsons from UBS set a target price of $134.0 on 12/02/2024
- Sheila Kahyaoglu from Jefferies set a target price of $148.0 on 09/23/2024
Full Release
Q4 FY25 revenues of $1.84 billion, 5.8% organic growth
(1)
; FY25 revenues of $7.48 billion, 3.1% organic growth
(1)
; organic growth adjusted for divestitures
Q4 FY25 net income of $98 million, adjusted EBITDA
(1)
of $177 million or 9.6% of revenue; FY25 net income of $362 million, adjusted EBITDA
(1)
of $710 million or 9.5% of revenue
Q4 FY25 diluted earnings per share of $2.00, adjusted diluted earnings per share
(1)
of $2.57; FY25 diluted earnings per share of $7.17, adjusted diluted earnings per share
(1)
of $9.13
Q4 FY25 cash flows provided by operating activities of $115 million, free cash flow
(1)
and transaction-adjusted free cash flow
(1)
of $236 million; FY25 cash flows provided by operating activities of $494 million, free cash flow
(1)
of $499 million,
transaction-adjusted free cash flow
(1)
of $507 million
Q4 FY25 net bookings of
$1.3 billion
; book-to-bill ratio of
0.7
; trailing twelve months book-to-bill ratio of 0.9
FY26 guidance introduced above prior targets for revenues, adjusted EBITDA
(1)
, adjusted EBITDA margin
(1)
, and adjusted diluted EPS
(1)
RESTON, Va., March 17, 2025 (GLOBE NEWSWIRE) -- Science Applications International Corporation (NASDAQ:
SAIC
), a premier Fortune 500® technology integrator driving our nation's digital transformation across the defense, space, civilian, and intelligence markets, today announced results for the fourth quarter and full fiscal year ended January 31, 2025.
“I am proud of the results we delivered in the quarter with revenue, adjusted EBITDA, adjusted earnings per share, and free cash flow ahead of guidance,” said Toni Townes-Whitley, SAIC Chief Executive Officer. “Subsequent to quarter close, we received a $1.8 billion award for our largest recompete win in recent years, the System Software Lifecycle Engineering program. This important win along with a backlog of submitted bids valued at approximately $20 billion reflect the momentum we are building inside the company. I want to thank the team for a strong finish to the year and for their commitment and dedication to our customers' mission during these uncertain times."
Fourth Quarter and Full Fiscal Year 2025: Summary Operating Results
Three Months Ended | Year Ended | ||||||||||||||||||||
January 31, 2025 | Percent change | February 2, 2024 | January 31, 2025 | Percent change | February 2, 2024 | ||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||
Revenues | $ | 1,838 | 6 | % | $ | 1,737 | $ | 7,479 | — | % | $ | 7,444 | |||||||||
Operating income | 138 | 75 | % | 79 | 563 | (24 | )% | 741 | |||||||||||||
Operating income as a percentage of revenues | 7.5 | % | 300 bps | 4.5 | % | 7.5 | % | -250 bps | 10.0 | % | |||||||||||
Adjusted operating income (1) | 176 | 42 | % | 124 | 705 | 7 | % | 659 | |||||||||||||
Adjusted operating income as a percentage of revenues | 9.6 | % | 250 bps | 7.1 | % | 9.4 | % | 50 bps | 8.9 | % | |||||||||||
Net income | 98 | 151 | % | 39 | 362 | (24 | )% | 477 | |||||||||||||
EBITDA (1) | 175 | 48 | % | 118 | 708 | (21 | )% | 891 | |||||||||||||
EBITDA as a percentage of revenues | 9.5 | % | 270 bps | 6.8 | % | 9.5 | % | -250 bps | 12.0 | % | |||||||||||
Adjusted EBITDA (1) | 177 | 39 | % | 127 | 710 | 6 | % | 668 | |||||||||||||
Adjusted EBITDA as a percentage of revenues | 9.6 | % | 230 bps | 7.3 | % | 9.5 | % | 50 bps | 9.0 | % | |||||||||||
Diluted earnings per share | $ | 2.00 | 170 | % | $ | 0.74 | $ | 7.17 | (19 | )% | $ | 8.88 | |||||||||
Adjusted diluted earnings per share (1) | $ | 2.57 | 80 | % | $ | 1.43 | $ | 9.13 | 16 | % | $ | 7.88 | |||||||||
Net cash provided by operating activities | $ | 115 | 83 | % | $ | 63 | $ | 494 | 25 | % | $ | 396 | |||||||||
Free cash flow (1) | $ | 236 | 143 | % | $ | 97 | $ | 499 | 21 | % | $ | 414 | |||||||||
Transaction-adjusted free cash flow (1) | $ | 236 | 98 | % | $ | 119 | $ | 507 | 4 | % | $ | 486 | |||||||||
(1)
Non-GAAP measure, see Schedule 6 for information about this measure.
The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal years 2025 and 2024 both consisted of 52 weeks.
Fourth Quarter Summary Results
Revenues for the quarter increased $101 million compared to the prior year quarter primarily due to ramp up in volume on new and existing contracts, partially offset by contract completions.
Operating income as a percentage of revenues increased to 7.5% for the quarter as compared to 4.5% in the comparable prior year period primarily due to improved profitability across our contract portfolio, lower incentive-based compensation expense, and lower stock-based compensation related to the restructuring and executive transition.
Adjusted EBITDA
(1)
as a percentage of revenues for the quarter was 9.6%, compared to 7.3% for the prior year quarter primarily due to improved profitability across our contract portfolio, lower incentive-based compensation expense, and lower stock-based compensation related to the restructuring and executive transition.
Diluted earnings per share for the quarter was $2.00 compared to $0.74 in the prior year quarter. Adjusted diluted earnings per share
(1)
was $2.57 for the quarter compared to $1.43 in the prior year quarter. The weighted-average diluted shares outstanding during the quarter decreased to 49.0 million shares from 52.7 million during the prior year quarter.
(1)
Non-GAAP measure, see Schedule 6 for information about this measure.
Fiscal Year 2025 Summary Results
Revenues for the fiscal year increased $35 million compared to the prior year primarily due to ramp up in volume in existing and new contracts. This was partially offset by the sale of the Supply Chain Business ($188 million) in the prior year, and contract completions. Adjusting for the impact of the divestiture, revenues grew approximately 3.1%.
Operating income as a percentage of revenues for the fiscal year decreased compared to the prior year primarily due to a $233 million gain recognized from the sale of the Supply Chain Business and a $7 million gain recognized from the deconsolidation of FSA in the prior year. This was partially offset by improved profitability across our contract portfolio, the resolution of the Assault Amphibious Vehicle ("AAV") contract termination, lower incentive-based compensation expense, and lower stock-based compensation related to the restructuring and executive transition.
Adjusted EBITDA
(1)
as a percentage of revenues for the fiscal year increased compared to the prior year. The increase was driven by improved profitability across our contract portfolio, the resolution of the AAV contract termination, lower incentive-based compensation expense, and lower stock-based compensation related to the restructuring and executive transition.
Diluted earnings per share for the year was $7.17 compared to $8.88 in the prior year. Adjusted diluted earnings per share
(1)
was $9.13 for the year compared to $7.88 in the prior year. The weighted-average diluted shares outstanding during the year decreased to 50.5 million shares from 53.7 million shares during the prior year.
(1)
Non-GAAP measure, see Schedule 6 for information about this measure.
Cash Generation and Capital Deployment
Total cash flows provided by operating activities for the fourth quarter were $115 million, an increase of $52 million compared to the prior year quarter, primarily due to lower tax payments in the current quarter, timing of vendor payments, and other changes in working capital, partially offset by higher cash outflows from the usage of the Master Accounts Receivable Purchase Agreement ("MARPA Facility") with MUFG bank, LTD.
Total cash flows provided by operating activities for the year were $494 million, an increase of $98 million from the prior year, primarily due to higher tax payments in fiscal 2024 from the sale of the Supply Chain Business and other changes in working capital, partially offset by higher incentive-based compensation payments in the current year.
During the quarter, SAIC deployed $163 million of capital, consisting of $130 million of share repurchases in accordance with established repurchase plans, $18 million in cash dividends to shareholders, and $15 million of capital expenditures. For the year, SAIC deployed $638 million of capital, consisting of share repurchases of $527 million (approximately 4.2 million shares) in accordance with established repurchase plans, cash dividends of $75 million to shareholders, and $36 million of capital expenditures.
Quarterly Dividend Declared
As previously announced, subsequent to fiscal year-end, the Company’s Board of Directors ("Board of Directors") declared a cash dividend of $0.37 per share of the Company’s common stock payable on April 25, 2025 to stockholders of record on April 11, 2025. SAIC intends to continue paying dividends on a quarterly basis, although the declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.
Backlog and Contract Awards
Net bookings for the quarter were approximately $1.3 billion, which reflects a book-to-bill ratio of approximately 0.7. Net bookings for the year were approximately $6.6 billion, which reflects a book-to-bill ratio of approximately 0.9.
SAIC’s estimated backlog at the end of fiscal year 2025 was approximately $21.9 billion of which $3.4 billion was funded.
SAIC was awarded the following contracts during the quarter:
Notable New Awards:
Department of Defense:
During the quarter, SAIC was awarded the Defense Readiness Reporting System ("DRRS") Sustainment task order under the recently awarded Personnel and Readiness Infrastructure Support Management ("PRISM") Multiple Award Task Order Contract (“MATOC”) vehicle to support the Department of Defense ("DoD") and its need to obtain critical services in a shorter time frame. The $187 million task order has a 3-year period of performance (one-year base, plus two, one-year options), tasking SAIC with modernizing DRRS to create a predictive, proactive readiness management tool for the DoD.
Notable Recompete Awards:
U.S. Space and Intelligence Community:
During the quarter, SAIC was awarded approximately $480 million of contract awards by space and intelligence organizations. These awards represent a combination of new business and recompetes.
Notable Awards Subsequent to Period End (not included in current quarter bookings):
U.S. Army Combat Capabilities Development Command (CCDC) Aviation and Missile Center (AvMC):
Subsequent to the end of the quarter, SAIC was awarded the System Software Lifecycle Engineering contract, a five-year (one year base, plus four, one-year option periods) $1.8 billion contract to continue mission engineering, integration, software development, and other life cycle support to CCDC-AvMC. Under the five-year award, SAIC will continue to develop and integrate advanced technologies throughout the software life cycle, including software development and maintenance.
Fiscal Year 2026 Guidance
The Company's outlook for fiscal year 2026 is being provided. The table below summarizes fiscal year 2026 guidance and represents our views as of March 17, 2025.
CURRENT Fiscal Year | PRIOR Fiscal Year | |
2026 Guidance | 2026 Targets | |
Revenue | $7.60B - $7.75B | $7.55B - $7.75B |
Adjusted EBITDA (1) | $715M - $735M | ~$720M |
Adjusted EBITDA Margin % (1) | 9.4% - 9.6% | 9.3% - 9.5% |
Adjusted Diluted EPS (1) | $9.10 - $9.30 | $8.90 - $9.10 |
Free Cash Flow (1) | $510M - $530M | $510M - $530M |
(1)
Non-GAAP measure, see Schedule 6 for information about this measure.
Webcast Information
SAIC management will discuss operations and financial results in anearnings conference callbeginning at 10 a.m. Eastern time on March 17, 2025. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the SAIC website (
investors.saic.com
). We will be providing webcast access only – “dial-in” access is no longer available. Additionally, a supplemental presentation will be available to the public through links to the Investor Relations section of the SAIC website. After the call concludes, an on-demand audio replay of the webcast can be accessed on the Investor Relations website.
About SAIC
SAIC
is a premier Fortune 500® technology integrator focused on advancing the power of technology and innovation to serve and protect our world. Our robust portfolio of offerings across the defense, space, civilian and intelligence markets includes secure high-end solutions in mission IT, enterprise IT, engineering services and professional services. We integrate emerging technology, rapidly and securely, into mission critical operations that modernize and enable critical national imperatives.
We are approximately 24,000 strong; driven by mission, united by purpose, and inspired by opportunities. Headquartered in Reston, Virginia, SAIC has annual revenues of approximately $7.5 billion. For more information, visit
saic.com
. For ongoing news, please visit our
newsroom
.
Contacts
Investor Relations: Joe DeNardi,
joseph.w.denardi@saic.com
Media: Kara Ross,
kara.g.ross@saic.com
GAAP to Non-GAAP Guidance Reconciliation
The Company does not provide a reconciliation of forward-looking adjusted diluted EPS to GAAP diluted EPS or adjusted EBITDA margin to GAAP net income due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because certain deductions for non-GAAP exclusions used to calculate net income may vary significantly based on actual events, the Company is not able to forecast GAAP diluted EPS or GAAP net income with reasonable certainty. The variability of the above charges may have an unpredictable and potentially significant impact on our future GAAP financial results.
Forward-Looking Statements
Certain statements in this release contain or are based on “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “guidance,” and similar words or phrases. Forward-looking statements in this release may include, among others, estimates of future revenues, operating income, earnings, earnings per share, charges, total contract value, backlog, outstanding shares and cash flows, as well as statements about future dividends, share repurchases and other capital deployment plans. Such statements are not guarantees of future performance and involve risk, uncertainties and assumptions, and actual results may differ materially from the guidance and other forward-looking statements made in this release as a result of various factors. Risks, uncertainties and assumptions that could cause or contribute to these material differences include those discussed in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Legal Proceedings” sections of our Annual Report on Form 10-K, as updated in any subsequent Quarterly Reports on Form 10-Q and other filings with the SEC, which may be viewed or obtained through the Investor Relations section of our website at
saic.com
or on the SEC’s website at
sec.gov
. Due to such risks, uncertainties and assumptions you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. SAIC expressly disclaims any duty to update any forward-looking statement provided in this release to reflect subsequent events, actual results or changes in SAIC’s expectations. SAIC also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others.
Schedule 1:
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
January 31, 2025 | February 2, 2024 | January 31, 2025 | February 2, 2024 | ||||||||||||
(in millions, except per share amounts) | |||||||||||||||
Revenues | $ | 1,838 | $ | 1,737 | $ | 7,479 | $ | 7,444 | |||||||
Cost of revenues | 1,606 | 1,545 | 6,587 | 6,572 | |||||||||||
Selling, general and administrative expenses | 94 | 114 | 339 | 373 | |||||||||||
(Gain) loss on divestitures, net of transaction costs | — | — | — | (240 | ) | ||||||||||
Other operating (income) expense | — | (1 | ) | (10 | ) | (2 | ) | ||||||||
Operating income | 138 | 79 | 563 | 741 | |||||||||||
Interest expense, net | 29 | 32 | 126 | 120 | |||||||||||
Other (income) expense, net | 2 | (1 | ) | 9 | 1 | ||||||||||
Income before income taxes | 107 | 48 | 428 | 620 | |||||||||||
Provision for income taxes | (9 | ) | (9 | ) | (66 | ) | (143 | ) | |||||||
Net income | $ | 98 | $ | 39 | $ | 362 | $ | 477 | |||||||
Weighted-average number of shares outstanding: | |||||||||||||||
Basic | 48.6 | 52.0 | 50.1 | 53.1 | |||||||||||
Diluted | 49.0 | 52.7 | 50.5 | 53.7 | |||||||||||
Earnings per share: | |||||||||||||||
Basic | $ | 2.02 | $ | 0.75 | $ | 7.23 | $ | 8.98 | |||||||
Diluted | $ | 2.00 | $ | 0.74 | $ | 7.17 | $ | 8.88 | |||||||
Schedule 2:
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED AND CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||
January 31, 2025 | February 2, 2024 | ||||
(in millions) | |||||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 56 | $ | 94 | |
Receivables, net | 1,000 | 914 | |||
Prepaid expenses and other current assets | 98 | 123 | |||
Total current assets | 1,154 | 1,131 | |||
Goodwill | 2,851 | 2,851 | |||
Intangible assets, net | 779 | 894 | |||
Property, plant, and equipment, net | 104 | 91 | |||
Operating lease right of use assets | 164 | 152 | |||
Other assets | 194 | 195 | |||
Total assets | $ | 5,246 | $ | 5,314 | |
LIABILITIES AND EQUITY | |||||
Current liabilities: | |||||
Accounts payable and accrued liabilities | $ | 744 | $ | 711 | |
Accrued payroll and employee benefits | 339 | 370 | |||
Debt, current portion | 313 | 77 | |||
Total current liabilities | 1,396 | 1,158 | |||
Debt, net of current portion | 1,907 | 2,022 | |||
Operating lease liabilities | 173 | 147 | |||
Deferred income taxes | 24 | 28 | |||
Other long-term liabilities | 169 | 174 | |||
Equity: | |||||
Total stockholders' equity | 1,577 | 1,785 | |||
Total liabilities and stockholders' equity | $ | 5,246 | $ | 5,314 | |
Schedule 3:
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
January 31, 2025 | February 2, 2024 | January 31, 2025 | February 2, 2024 | ||||||||||||
(in millions) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 98 | $ | 39 | $ | 362 | $ | 477 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 36 | 36 | 140 | 142 | |||||||||||
Deferred income taxes | 12 | 16 | (3 | ) | (17 | ) | |||||||||
Stock-based compensation expense | 15 | 26 | 53 | 68 | |||||||||||
Gain on divestitures | — | — | — | (247 | ) | ||||||||||
Other | 2 | (2 | ) | (7 | ) | (6 | ) | ||||||||
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of the acquisitions and divestitures: | |||||||||||||||
Receivables | 22 | 96 | (86 | ) | (46 | ) | |||||||||
Prepaid expenses and other current assets | (7 | ) | (56 | ) | 24 | (43 | ) | ||||||||
Other assets | (9 | ) | (19 | ) | 1 | (14 | ) | ||||||||
Accounts payable and accrued liabilities | (71 | ) | (128 | ) | 48 | 13 | |||||||||
Accrued payroll and employee benefits | 28 | 53 | (31 | ) | 49 | ||||||||||
Operating lease assets and liabilities, net | 1 | (1 | ) | (6 | ) | (4 | ) | ||||||||
Other long-term liabilities | (12 | ) | 3 | (1 | ) | 24 | |||||||||
Net cash provided by operating activities | 115 | 63 | 494 | 396 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Expenditures for property, plant, and equipment | (15 | ) | (11 | ) | (36 | ) | (27 | ) | |||||||
Purchases of marketable securities | (3 | ) | (2 | ) | (14 | ) | (8 | ) | |||||||
Sales of marketable securities | 2 | 1 | 12 | 6 | |||||||||||
Proceeds from sale of equity method investments | — | — | 10 | — | |||||||||||
Proceeds from divestitures | — | — | — | 356 | |||||||||||
Cash divested upon deconsolidation of joint venture | — | — | — | (8 | ) | ||||||||||
Other | (4 | ) | 2 | (7 | ) | (5 | ) | ||||||||
Net cash (used in) provided by investing activities | (20 | ) | (10 | ) | (35 | ) | 314 | ||||||||
Cash flows from financing activities: | |||||||||||||||
Principal payments on borrowings | (325 | ) | (166 | ) | (1,381 | ) | (441 | ) | |||||||
Proceeds from borrowings | 385 | — | 1,499 | 160 | |||||||||||
Stock repurchased and retired or withheld for taxes on equity awards | (133 | ) | (89 | ) | (558 | ) | (382 | ) | |||||||
Dividend payments to stockholders | (18 | ) | (19 | ) | (75 | ) | (79 | ) | |||||||
Issuances of stock | 6 | 4 | 20 | 17 | |||||||||||
Other | — | — | (3 | ) | — | ||||||||||
Net cash used in financing activities | (85 | ) | (270 | ) | (498 | ) | (725 | ) | |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 10 | (217 | ) | (39 | ) | (15 | ) | ||||||||
Cash, cash equivalents and restricted cash at beginning of period | 54 | 320 | 103 | 118 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 64 | $ | 103 | $ | 64 | $ | 103 | |||||||
Schedule 4:
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION SEGMENT OPERATING RESULTS (Unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
January 31, 2025 | February 2, 2024 | January 31, 2025 | February 2, 2024 | ||||||||||||
(in millions) | |||||||||||||||
Revenues | |||||||||||||||
Defense and Intelligence | $ | 1,360 | $ | 1,352 | $ | 5,726 | $ | 5,817 | |||||||
Civilian | 478 | 385 | 1,753 | 1,627 | |||||||||||
Total revenues | $ | 1,838 | $ | 1,737 | $ | 7,479 | $ | 7,444 | |||||||
Operating income (loss) | |||||||||||||||
Defense and Intelligence | $ | 96 | $ | 100 | $ | 440 | $ | 436 | |||||||
Civilian | 63 | 19 | 168 | 158 | |||||||||||
Corporate | (21 | ) | (40 | ) | (45 | ) | 147 | ||||||||
Total operating income | $ | 138 | $ | 79 | $ | 563 | $ | 741 | |||||||
Operating margin | |||||||||||||||
Defense and Intelligence | 7.1 | % | 7.4 | % | 7.7 | % | 7.5 | % | |||||||
Civilian | 13.2 | % | 4.9 | % | 9.6 | % | 9.7 | % | |||||||
Total operating margin | 7.5 | % | 4.5 | % | 7.5 | % | 10.0 | % | |||||||
Adjusted operating income (loss) (1) | |||||||||||||||
Defense and Intelligence | $ | 113 | $ | 117 | $ | 509 | $ | 504 | |||||||
Civilian | 75 | 31 | 216 | 206 | |||||||||||
Corporate | (12 | ) | (24 | ) | (20 | ) | (51 | ) | |||||||
Total adjusted operating income (1) | $ | 176 | $ | 124 | $ | 705 | $ | 659 | |||||||
Adjusted operating margin (1) | |||||||||||||||
Defense and Intelligence | 8.3 | % | 8.7 | % | 8.9 | % | 8.7 | % | |||||||
Civilian | 15.7 | % | 8.1 | % | 12.3 | % | 12.7 | % | |||||||
Total adjusted operating margin (1) | 9.6 | % | 7.1 | % | 9.4 | % | 8.9 | % | |||||||
Defense and Intelligence Results
Revenues in the fourth quarter increased $8 million or 0.6% compared to the same period in the prior year primarily due to ramp up in volume on existing and new contracts, partially offset by contract completions.
Revenues in the fiscal year decreased $91 million or 2% compared to the prior year primarily due to the sale of the Supply Chain Business ($188 million) in the prior year, and contract completions. This was partially offset by ramp up in volume on existing and new contracts. Adjusting for the impact of the divestiture, revenues grew 1.7%.
Operating income and adjusted operating income
(1)
as a percentage of revenues in the fourth quarter decreased compared to the same period in the prior year primarily due to timing and volume mix.
Operating income and adjusted operating income
(1)
as a percentage of revenues in the fiscal year increased from the prior year primarily due to ramp up in volume on existing and new contracts, and the resolution of the AAV contract termination, partially offset by contract completions and the gain on sale of the Supply Chain Business in the prior year.
Civilian Results
Revenues in the fourth quarter increased $93 million or 24% compared to the same period in the prior year primarily due to ramp up in volume on existing contracts, partially offset by contract completions.
Revenues in the fiscal year increased $126 million or 8% compared to the prior year primarily due to ramp up in volume on existing and new contracts, partially offset by contract completions.
Operating income and adjusted operating income
(1)
as a percentage of revenues in the fourth quarter increased compared to the same period in the prior year primarily due to improved profitability across our contract portfolio.
Operating income and adjusted operating income
(1)
as a percentage of revenues in the fiscal year decreased compared to the prior year primarily due to timing and volume mix.
Corporate Results
Operating loss and adjusted operating loss
(1)
in the fourth quarter decreased $19 million and $12 million, respectively, compared to the same period in the prior year primarily due to lower incentive-based compensation expense, including acceleration of stock-based compensation related to the reorganization and executive transition in the prior year.
Operating loss in the fiscal year increased $192 million compared to the prior year primarily due to gain on the sale of the Supply Chain Business in the prior year ($233 million) and the gain recognized from the deconsolidation of FSA ($7 million) in the prior year, partially offset by lower incentive-based compensation expense, and lower stock-based compensation related to the restructuring and executive transition.
Adjusted operating loss
(1)
in the fiscal year decreased $31 million compared to the prior year primarily due to lower incentive-based compensation expense, and lower stock-based compensation related to the restructuring and executive transition.
(1)
Non-GAAP measure, see Schedule 6 for information about this measure.
Schedule 5:
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION BACKLOG (Unaudited) | |||||||||||||
The estimated value of our total backlog as of the dates presented was: | |||||||||||||
January 31, 2025 | February 2, 2024 | ||||||||||||
Defense and Intelligence | Civilian | Total SAIC | Defense and Intelligence | Civilian | Total SAIC | ||||||||
(in millions) | |||||||||||||
Funded backlog | $ | 2,599 | $ | 845 | $ | 3,444 | $ | 2,707 | $ | 832 | $ | 3,539 | |
Negotiated unfunded backlog | 15,341 | 3,072 | 18,413 | 16,316 | 2,908 | 19,224 | |||||||
Total backlog | $ | 17,940 | $ | 3,917 | $ | 21,857 | $ | 19,023 | $ | 3,740 | $ | 22,763 | |
Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts and task orders as work is performed and excludes contract awards which have been protested by competitors until the protest is resolved in our favor. SAIC segregates backlog into two categories, funded backlog and negotiated unfunded backlog. Funded backlog for contracts with government agencies primarily represents contracts for which funding is appropriated less revenues previously recognized on these contracts, and does not include the unfunded portion of contracts where funding is incrementally appropriated or authorized by the U.S. government and other customers even though the contract may call for performance over a number of years. Funded backlog for contracts with non-government agencies represents the estimated value of contracts which may cover multiple future years under which SAIC is obligated to perform, less revenues previously recognized on these contracts. Negotiated unfunded backlog represents the estimated future revenues to be earned from negotiated contracts for which funding has not been appropriated or authorized, and unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders expected to be awarded under indefinite delivery, indefinite quantity (IDIQ), U.S. General Services Administration (GSA) schedules or other master agreement contract vehicles, with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future anticipated task orders.
Schedule 6:
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
This schedule describes the non-GAAP financial measures included in this earnings release. While we believe that these non-GAAP financial measures may be useful in evaluating our financial information, they should be considered as supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Reconciliations, definitions, and how we believe these measures are useful to management and investors are provided below. Other companies may define similar measures differently.
EBITDA and Adjusted EBITDA
Three Months Ended | Year Ended | ||||||||||||||
January 31, 2025 | February 2, 2024 | January 31, 2025 | February 2, 2024 | ||||||||||||
(in millions) | |||||||||||||||
Revenues | $ | 1,838 | $ | 1,737 | $ | 7,479 | $ | 7,444 | |||||||
Net income | 98 | 39 | 362 | 477 | |||||||||||
Interest expense, net and loss on sale of receivables | 32 | 34 | 140 | 129 | |||||||||||
Provision for income taxes | 9 | 9 | 66 | 143 | |||||||||||
Depreciation and amortization | 36 | 36 | 140 | 142 | |||||||||||
EBITDA (1) | $ | 175 | $ | 118 | $ | 708 | $ | 891 | |||||||
EBITDA as a percentage of revenues | 9.5 | % | 6.8 | % | 9.5 | % | 12.0 | % | |||||||
Acquisition and integration costs | — | — | (2 | ) | 1 | ||||||||||
Restructuring and impairment costs | 4 | 15 | 8 | 23 | |||||||||||
Depreciation included in restructuring and impairment costs | (1 | ) | (1 | ) | (1 | ) | (1 | ) | |||||||
Recovery of acquisition and integration costs and restructuring and impairment costs | (1 | ) | (5 | ) | (3 | ) | (6 | ) | |||||||
Gain on divestitures, net of transaction costs | — | — | — | (240 | ) | ||||||||||
Adjusted EBITDA (1) | $ | 177 | $ | 127 | $ | 710 | $ | 668 | |||||||
Adjusted EBITDA as a percentage of revenues | 9.6 | % | 7.3 | % | 9.5 | % | 9.0 | % | |||||||
EBITDA is a performance measure that is calculated by taking net income and excluding interest and loss on sale of receivables, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is a performance measure that excludes the impact
of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets, along with associated depreciation included in those restructuring and impairment costs. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. The (gain) loss on divestitures includes gains associated with the deconsolidation of FSA and the sale of the logistics and supply chain management business, net of transaction costs. We believe that these performance measures provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company.
(1)
Non-GAAP measure, see above for definition.
Schedule 6 (continued):
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
Adjusted Operating Income
Three Months Ended January 31, 2025 | |||||||||||||||||||||||||||
GAAP results | Restructuring and impairment costs | Depreciation included in restructuring and impairment costs | Recovery of acquisition and integration costs and restructuring and impairment costs | Depreciation of property, plant, and equipment | Amortization of intangible assets | Non-GAAP results (1) | Non-GAAP operating margin (1) | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Defense and Intelligence | $ | 96 | $ | — | $ | — | $ | — | $ | 1 | $ | 16 | $ | 113 | 8.3 | % | |||||||||||
Civilian | 63 | — | — | — | — | 12 | 75 | 15.7 | % | ||||||||||||||||||
Corporate | (21 | ) | 4 | (1 | ) | (1 | ) | 7 | — | (12 | ) | NM | |||||||||||||||
Total | $ | 138 | $ | 4 | $ | (1 | ) | $ | (1 | ) | $ | 8 | $ | 28 | $ | 176 | 9.6 | % | |||||||||
Three Months Ended February 2, 2024 | |||||||||||||||||||||||||||
GAAP results | Restructuring and impairment costs | Depreciation included in restructuring and impairment costs | Recovery of acquisition and integration costs and restructuring and impairment costs | Depreciation of property, plant, and equipment | Amortization of intangible assets | Non-GAAP results (1) | Non-GAAP operating margin (1) | ||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||
Defense and Intelligence | $ | 100 | $ | — | $ | — | $ | — | $ | — | $ | 17 | $ | 117 | 8.7 | % | |||||||||||
Civilian | 19 | — | — | — | — | 12 | 31 | 8.1 | % | ||||||||||||||||||
Corporate | (40 | ) | 15 | (1 | ) | (5 | ) | 7 | — | (24 | ) | NM | |||||||||||||||
Total | $ | 79 | $ | 15 | $ | (1 | ) | $ | (5 | ) | $ | 7 | $ | 29 | $ | 124 | 7.1 | % | |||||||||
Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets, along with associated depreciation included in those restructuring and impairment costs. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment. Adjusted operating income also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. We believe that these performance measures provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company.
(1)
Non-GAAP measure, see above for definition.
Schedule 6 (continued):
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
Adjusted Operating Income
Year Ended January 31, 2025 | |||||||||||||||||||||||||||||||
GAAP results | Acquisition and integration costs | Restructuring and impairment costs | Depreciation included in restructuring and impairment costs | Recovery of acquisition and integration costs and restructuring and impairment costs | Depreciation of property, plant, and equipment | Amortization of intangible assets | Non-GAAP results (1) | Non-GAAP operating margin (1) | |||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||
Defense and Intelligence | $ | 440 | $ | — | $ | — | $ | — | $ | — | $ | 2 | $ | 67 | $ | 509 | 8.9 | % | |||||||||||||
Civilian | 168 | — | — | — | — | — | 48 | 216 | 12.3 | % | |||||||||||||||||||||
Corporate | (45 | ) | (2 | ) | 8 | (1 | ) | (3 | ) | 23 | — | (20 | ) | NM | |||||||||||||||||
Total | $ | 563 | $ | (2 | ) | $ | 8 | $ | (1 | ) | $ | (3 | ) | $ | 25 | $ | 115 | $ | 705 | 9.4 | % | ||||||||||
Year Ended February 2, 2024 | |||||||||||||||||||||||||||||||||
GAAP results | Acquisition and integration costs | Restructuring and impairment costs | Depreciation included in restructuring and impairment costs | Recovery of acquisition and integration costs and restructuring and impairment costs | Depreciation of property, plant, and equipment | Amortization of intangible assets | Gain on divestitures, net of transaction costs | Non-GAAP results (1) | Non-GAAP operating margin (1) | ||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||||||||||
Defense and Intelligence | $ | 436 | $ | — | $ | — | $ | — | $ | — | $ | 1 | $ | 67 | $ | — | $ | 504 | 8.7 | % | |||||||||||||
Civilian | 158 | — | — | — | — | — | 48 | — | 206 | 12.7 | % | ||||||||||||||||||||||
Corporate | 147 | 1 | 23 | (1 | ) | (6 | ) | 25 | — | (240 | ) | (51 | ) | NM | |||||||||||||||||||
Total | $ | 741 | $ | 1 | $ | 23 | $ | (1 | ) | $ | (6 | ) | $ | 26 | $ | 115 | $ | (240 | ) | $ | 659 | 8.9 | % | ||||||||||
Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets, along with associated depreciation included in those restructuring and impairment costs. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment. Adjusted operating income also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. The (gain) loss on divestitures includes gains associated with the deconsolidation of FSA and the sale of the logistics and supply chain management business, net of transaction costs. We believe that these performance measures provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company.
(1)
Non-GAAP measure, see above for definition.
Schedule 6 (continued):
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
Adjusted Diluted Earnings Per Share
Three Months Ended January 31, 2025 | |||||||||||||||||||
As Reported | Restructuring and impairment costs | Recovery of acquisition and integration costs and restructuring and impairment costs | Amortization of intangible assets | Non-GAAP results (1) | |||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||
Income before income taxes | $ | 107 | $ | 4 | $ | (1 | ) | $ | 28 | $ | 138 | ||||||||
Income tax expense | (9 | ) | (1 | ) | — | (2 | ) | (12 | ) | ||||||||||
Net income | $ | 98 | $ | 3 | $ | (1 | ) | $ | 26 | $ | 126 | ||||||||
Diluted EPS | $ | 2.00 | $ | 0.06 | $ | (0.02 | ) | $ | 0.53 | $ | 2.57 | ||||||||
Three Months Ended February 2, 2024 | ||||||||||||||||||||||
As Reported | Restructuring and impairment costs | Recovery of acquisition and integration costs and restructuring and impairment costs | Amortization of intangible assets | Gain on divestitures, net of transaction costs | Non-GAAP results (1) | |||||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||||||||
Income before income taxes | $ | 48 | $ | 15 | $ | (5 | ) | $ | 29 | $ | — | $ | 87 | |||||||||
Income tax expense | (9 | ) | (1 | ) | 1 | (5 | ) | 2 | (12 | ) | ||||||||||||
Net Income | $ | 39 | $ | 14 | $ | (4 | ) | $ | 24 | $ | 2 | $ | 75 | |||||||||
Diluted EPS | $ | 0.74 | $ | 0.27 | $ | (0.08 | ) | $ | 0.46 | $ | 0.04 | $ | 1.43 | |||||||||
Adjusted diluted earnings per share is a performance measure that excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance. The acquisition and integration costs relate to the Comp
any's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. Adjusted diluted earnings per share also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. The (gain) loss on divestitures includes gains associated with the sale of the logistics and supply chain management business, net of transaction costs. We believe that this performance measure provides management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company.
(1)
Non-GAAP measure, see above for definition.
Schedule 6 (continued):
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
Adjusted Diluted Earnings Per Share
Year Ended January 31, 2025 | |||||||||||||||||||||||
As Reported | Acquisition and integration costs | Restructuring and impairment costs | Recovery of acquisition and integration costs and restructuring and impairment costs | Amortization of intangible assets | Non-GAAP results (1) | ||||||||||||||||||
(in millions, except per share amounts) | |||||||||||||||||||||||
Income before income taxes | $ | 428 | $ | (2 | ) | $ | 8 | $ | (3 | ) | $ | 115 | $ | 546 | |||||||||
Income tax expense | (66 | ) | — | (1 | ) | — | (18 | ) | (85 | ) | |||||||||||||
Net income | $ | 362 | $ | (2 | ) | $ | 7 | $ | (3 | ) | $ | 97 | $ | 461 | |||||||||
Diluted EPS | $ | 7.17 | $ | (0.04 | ) | $ | 0.14 | $ | (0.06 | ) | $ | 1.92 | $ | 9.13 | |||||||||
Year Ended February 2, 2024 | ||||||||||||||||||||||||||
As Reported | Acquisition and integration costs | Restructuring and impairment costs | Recovery of acquisition and integration costs and restructuring and impairment costs | Amortization of intangible assets | Gain on divestitures, net of transaction costs | Non-GAAP results (1) | ||||||||||||||||||||
(in millions, except per share amounts) | ||||||||||||||||||||||||||
Income before income taxes | $ | 620 | $ | 1 | $ | 23 | $ | (6 | ) | $ | 115 | $ | (240 | ) | $ | 513 | ||||||||||
Income tax expense | (143 | ) | — | (2 | ) | 1 | (21 | ) | 75 | (90 | ) | |||||||||||||||
Net Income | $ | 477 | $ | 1 | $ | 21 | $ | (5 | ) | $ | 94 | $ | (165 | ) | $ | 423 | ||||||||||
Diluted EPS | $ | 8.88 | $ | 0.02 | $ | 0.39 | $ | (0.09 | ) | $ | 1.75 | $ | (3.07 | ) | $ | 7.88 | ||||||||||
Adjusted diluted earnings per share is a performance measure that excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing o
perating performance. The acquisition and integration costs relate to the Company's acquisitions. The restructuring and impairment costs represent the reorganization and facilities optimization costs or impairments of long-lived assets. The recovery of acquisition and integration costs and restructuring and impairment costs relate to costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards. Adjusted diluted earnings per share also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. The (gain) loss on divestitures includes gains associated with the deconsolidation of FSA and the sale of the logistics and supply chain management business, net of transaction costs. We believe that this performance measure provides management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company.
(1)
Non-GAAP measure, see above for definition.
Schedule 6 (continued):
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
Free Cash Flow
Three Months Ended | Year Ended | ||||||||||||||
January 31, 2025 | February 2, 2024 | January 31, 2025 | February 2, 2024 | ||||||||||||
(in millions) | |||||||||||||||
Net cash provided by operating activities | $ | 115 | $ | 63 | $ | 494 | $ | 396 | |||||||
Expenditures for property, plant, and equipment | (15 | ) | (11 | ) | (36 | ) | (27 | ) | |||||||
Cash used (provided) by MARPA Facility | 136 | 45 | 41 | 45 | |||||||||||
Free cash flow (1) | $ | 236 | $ | 97 | $ | 499 | $ | 414 | |||||||
L&SCM divestiture transaction fees | — | — | — | 7 | |||||||||||
L&SCM divestiture cash taxes | — | 18 | — | 74 | |||||||||||
L&SCM divestiture transition services | — | 4 | 8 | (9 | ) | ||||||||||
Transaction-adjusted free cash flow (1) | $ | 236 | $ | 119 | $ | 507 | $ | 486 | |||||||
FY26 Guidance | |
(in millions) | |
Net cash provided by operating activities | $545M to $565M |
Expenditures for property, plant, and equipment | Approximately $35M |
Free cash flow (1) | $510M to $530M |
Free cash flow is calculated by taking cash flows provided by operating activities less expenditures for property, plant, and equipment and less cash flows from our Master Accounts Receivable Purchasing Agreement (MARPA Facility) for the sale of certain designated eligible U.S. government receivables. Under the MARPA Facility, the Company can sell eligible receivables up to a maximum amount of $300 million. Transaction-adjusted free cash flow excludes cash taxes, transaction fees, and other costs related to the divestiture of the logistics and supply chain management business from free cash flow as previously defined. We believe that free cash flow and transaction-adjusted free cash flow provides management and investors with useful information in assessing trends in our cash flows and in comparing them to other peer companies, many of whom present similar non-GAAP liquidity measures. These measures should not be considered as a measure of residual cash flow available for discretionary purposes.
(1)
Non-GAAP measure, see above for definition.
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