SAIC Raised Its Full-Year Adjusted EPS Guide to $10.65-$10.75. It Earned $10.75 on That Measure Last Year.

by Henry Nakamura · August 31, 2026

Earnings Reporter, Earnings Dispatch

SAIC reported results for its fiscal second quarter before the opening bell on Monday and raised its full-year fiscal 2027 outlook across revenue, adjusted EBITDA and adjusted earnings per share. It was the second raise of the year. The release went out at 07:10 ET, according to the timestamp on the version distributed through GlobeNewswire, and the company held its call at 10 a.m. ET.

The quarter itself, which ended July 31, produced revenue of $1,880 million, up 6.3% from $1,769 million a year earlier, with organic growth of 5.3%. Operating income was $152 million, or 8.1% of revenues, against $139 million in the prior-year quarter. Adjusted EBITDA was $193 million at a 10.3% margin, up from $185 million a year earlier, though the prior-year margin was 10.5%, so the dollar figure rose while the margin narrowed. Free cash flow was $131 million, down from $150 million.

Below the operating line the direction reverses. Net income was $102 million against $127 million a year earlier, a 20% decline. GAAP diluted earnings per share were $2.38, down from $2.71. Adjusted diluted earnings per share were $3.01, down from $3.63. Both bottom-line measures fell in a quarter in which revenue and operating income rose.

The company's own reconciliation explains the 63-cent distance between the GAAP and adjusted figures for the quarter, and it is unusually tidy: amortization of intangibles adds $0.63, acquisition and restructuring costs add $0.04, a recovery of costs subtracts $0.02, and a gain on divestitures subtracts $0.02. Nearly the entire adjustment is a single non-cash amortization line. That is a different construction from the equity-gain and stock-compensation wedges that have dominated this earnings season, and it is stable quarter to quarter, which makes the year-on-year comparison of the adjusted number meaningful in a way that some adjusted numbers are not.

The reason net income fell while operating income rose sits in tax. Per the release, the prior-year quarter carried a $19 million tax benefit; this quarter carried a $17 million tax expense, a $36 million swing. That swing on its own more than accounts for the $25 million decline in net income, given that operating income rose $13 million; the small remainder sits in non-operating lines below operating income rather than in any cost line above it. The tax swing is not excluded from the adjusted earnings-per-share calculation, which is why adjusted EPS fell 17% alongside the GAAP decline rather than moving the other way.

The raise, and what it is measured against

The new fiscal 2027 guidance is revenue of $7.2 billion to $7.3 billion, organic growth of negative 2% to zero, adjusted EBITDA of $750 million to $755 million at a 10.3% to 10.5% margin, adjusted diluted EPS of $10.65 to $10.75, and free cash flow above $600 million. The prior guidance, issued with first-quarter results on June 1, was revenue of $7.0 billion to $7.2 billion, organic growth of negative 4% to negative 2%, adjusted EBITDA of $720 million to $730 million, and adjusted diluted EPS of $9.90 to $10.10. The initial fiscal 2027 guidance given on March 16 was adjusted EPS of $9.50 to $9.70 on revenue of $7.0 billion to $7.2 billion.

So the adjusted EPS guide has moved up 70 cents at the midpoint since June and $1.10 since March. That is a real raise. The question this desk asks of any raise is what it is being measured against, and the strongest available comparison is the company's own prior-year result on the identical measure. SAIC's fiscal 2026, which ended January 30, produced revenue of $7,262 million, GAAP diluted EPS of $7.70, adjusted diluted EPS of $10.75, adjusted EBITDA of $708 million at a 9.7% margin, and free cash flow of $577 million.

Line those up. The raised revenue guide of $7.2 billion to $7.3 billion brackets last year's $7.262 billion. The raised adjusted EPS guide of $10.65 to $10.75 tops out at exactly last year's $10.75 and starts ten cents below it. After two raises, the company's own outlook still describes a year in which adjusted earnings per share are flat at best against fiscal 2026. The genuine improvement is in the margin line: adjusted EBITDA guidance of $750 million to $755 million is $42 million to $47 million above last year's $708 million, and the guided margin band of 10.3% to 10.5% sits well clear of last year's 9.7%.

What the guide implies for the back half

The arithmetic on the remaining two quarters is worth doing, because the reported first half and the guided full year are both company figures. First-half revenue was $3,786 million, per the six-month column in Monday's release. Subtract that from the guided full-year range and the implied second half is $3,414 million to $3,514 million, which is 7.2% to 9.8% below the first half the company just banked.

The organic growth line points the same way. Organic growth was 0.5% in the first quarter and 5.3% in the second. The full-year guide is negative 2% to zero. For a year that has run positive on that measure through July to land at or below flat, the second half has to be organically negative, and materially so.

The same exercise on earnings is less precise but points in the same direction. Adjusted diluted EPS was $3.23 in the first quarter and $3.01 in the second, a first-half total of $6.24 by simple addition. Against the guided full-year range of $10.65 to $10.75, that leaves roughly $4.41 to $4.51 for the second half, or about 28% less than the first half produced. Per-share arithmetic across halves is approximate because the share count moves; SAIC repurchased $90 million of stock during the quarter.

The bookings line offers a partial explanation for the shape. Net bookings were $1.2 billion in the quarter, for a book-to-bill ratio of 0.6, against $2.1 billion and a 1.1 ratio in the first quarter. Trailing twelve-month book-to-bill was 0.8. Total backlog stood at $22.1 billion, of which $3.8 billion was funded. A ratio below one means the company signed less new work than it delivered, and two consecutive quarters of that pattern is the kind of thing a raised revenue guide does not by itself resolve.

Jim Reagan, SAIC's chief executive, said in the release: "I am proud of our team's performance this quarter, delivering solid organic growth and double-digit margins as we continue to execute with discipline." The double-digit reference is to the 10.3% adjusted EBITDA margin. Separately, on August 28, the board declared a quarterly cash dividend of $0.37 a share payable October 23.

The US market was open as this was written and SAIC shares were trading; this article states no price or price move for Monday's session. The figures above are drawn from SAIC's own quarterly releases and the reconciliation tables within them, and every earnings-per-share figure is labelled GAAP or adjusted where it appears.