Sometimes a company just has a really good quarter. That's the story with Science Applications International Corp. (SAIC), whose stock jumped nearly 12% on Monday after the government services contractor reported fiscal second-quarter results that blew past Wall Street's expectations and raised its full-year profit outlook.
The numbers were hard to miss. Revenue rose 6.3% year over year to $1.88 billion, comfortably above the analyst consensus of $1.77 billion. The growth came from a ramp-up in volume on existing and new contracts, plus a $20 million boost from the acquisition of SilverEdge Government Solutions, partially offset by contract completions. Strip out the acquisition impact, and revenue still grew about 5.3%.
Adjusted earnings per share came in at $3.01, well above the $2.31 analysts were looking for. That's a big beat, and it's the kind of thing that gets investors excited.
SAIC, which provides technical, engineering and enterprise IT services to defense, intelligence, civilian and space customers, also showed stronger profitability during the quarter. Operating income increased 9% to $152 million, with operating margin expanding 20 basis points to 8.1%. That improvement was driven by better profitability across its contract portfolio and costs related to the settlement of federal tax audits in the prior year, partially offset by higher selling, general and administrative expenses, including recovery of costs from the settlement of a patent infringement matter in the prior year.
Adjusted operating income rose 5% to $191 million, though the margin slipped 10 basis points to 10.2%. Adjusted EBITDA climbed 4% to $193 million, with the margin dipping 20 basis points to 10.3%. Not everything was perfect, but the overall picture was solid.
Net bookings totaled approximately $1.2 billion, representing a book-to-bill ratio of 0.6. Operating cash flow reached $146 million, while free cash flow was $131 million.
During the quarter, SAIC deployed $106 million of capital, consisting of $90 million of plan share repurchases and $16 million in cash dividends. Subsequent to quarter end, on August 14, 2026, SAIC amended the MARPA to increase the aggregate facility limit from $300 million to $400 million.
The company ended the quarter with an estimated backlog of $22.1 billion, including $3.8 billion of funded backlog. Cash and cash equivalents stood at $126 million as of July 31, 2026.
