SAIC raises FY27 guidance as defence and space contracts drive growth
Science Applications International Corporation (SAIC) has lifted its full-year fiscal 2027 revenue guidance to a range of $7.2bn to $7.3bn, up from a prior range of $7.0bn to $7.2bn, after posting quarterly revenues of $1.88bn, a 6.3% year-on-year rise, with 5.3% coming from organic growth. The Reston, Virginia-based defence and intelligence integrator also raised its adjusted EBITDA target to $750m-$755m and pushed adjusted diluted earnings per share guidance to $10.65-$10.75, from a prior midpoint of roughly $10.00. Net income for the quarter was $102m, on an adjusted EBITDA margin of 10.3%.
The results arrive as US defence procurement enters a structurally elevated phase. A combination of multi-domain warfare doctrine, renewed NATO commitments, and growing pressure to digitise legacy military infrastructure is sustaining demand for the kind of systems-engineering and mission-IT work that forms the bulk of SAIC's revenue. The company's Defence and Intelligence segment contributed $1.45bn of the quarter's total, growing 5% year on year with an adjusted operating margin improvement to 9.5%.
Contract awards anchor a $22bn backlog
Net bookings for the quarter reached $1.2bn, producing a quarterly book-to-bill ratio of 0.6 and a trailing twelve-month ratio of 0.8. Total backlog stood at approximately $22.1bn, of which $3.8bn was funded. Key awards in the period included a five-year, approximately $400m recompete contract supporting a US Intelligence Agency on ground-based Intelligence Community programmes, and a $330m US Army contract covering system-of-systems modelling, simulation and multi-domain operations analysis.
Two subsequent awards, disclosed after the quarter's close, extend the picture further. A $740m Department of Homeland Security recompete covering Customs and Border Protection systems adds a significant civilian-side anchor. More strategically notable is SAIC's position on the $14bn COMET (Contract Operations for Missile Evaluation and Testing) IDIQ vehicle with the Missile and Space Intelligence Center. If task orders follow, SAIC would provide hardware, software and military intelligence capabilities spanning five mission areas, work that sits squarely at the intersection of space-domain awareness and national defence.
Convergence read-across: digital sovereignty and the defence-tech capital cycle
For cross-sector investors, SAIC's trajectory is a useful proxy for a broader shift: the accelerating convergence of digital infrastructure and national security. Defence departments in the UK, Australia and across the EU are running parallel modernisation programmes that mirror the US model, layering AI-enabled analysis, cloud migration, and resilient communications atop legacy platforms. That spending profile favours established mission integrators with high security clearances and existing contract vehicles, creating a durable competitive moat that venture-backed defence-tech startups find difficult to replicate quickly.
The capital-allocation signal here is worth noting. SAIC deployed $106m in the quarter on share repurchases and dividends, simultaneously expanding its receivables facility from $300m to $400m. That combination, returning capital while maintaining liquidity headroom, reflects confidence in a contracted revenue base rather than speculative growth. For institutional investors calibrating exposure across defence, space and digital-sovereignty themes, the pattern is consistent with peers such as Leidos and Booz Allen Hamilton, which have also reported resilient government IT demand in recent quarters.
CEO Jim Reagan described the results as reflecting "operational excellence" and a commitment to "long-term growth and margin expansion" while investing in capability, language that points to further M&A alongside organic contract pursuit. The SilverEdge Government Solutions acquisition, completed earlier in the fiscal year, contributed approximately $20m of revenue in the quarter, indicating the integration is progressing without drag.
The next meaningful data point will be the cadence of COMET task-order awards and any movement on SAIC's unfunded backlog of $18.3bn, which represents the largest share of contracted-but-not-yet-appropriated work. Congressional budget cycles and continuing resolutions remain the primary risk to conversion speed. For investors tracking the defence modernisation theme, SAIC's updated guidance provides a relatively firm floor for the sector's second half.