• Q4 FY24 revenues of $1.74 billion, 7.7% organic growth⁽¹⁾; FY24 revenues of $7.44 billion, 7.4% organic growth⁽¹⁾; organic growth reflects impacts of divestitures and additional five working days in the prior year

• Q4 FY24 net income of $39 million, adjusted EBITDA⁽¹⁾ of $127 million or 7.3% of revenue; FY24 net income of $477 million, adjusted EBITDA⁽¹⁾ of $668 million or 9.0% of revenue; impacted by higher incentive-based compensation

• Q4 FY24 diluted earnings per share of $0.74, adjusted diluted earnings per share⁽¹⁾ of $1.43; FY24 diluted earnings per share of $8.88, adjusted diluted earnings per share⁽¹⁾ of $7.88

• Q4 FY24 cash flows provided by operating activities of $63 million, transaction-adjusted free cash flow⁽¹⁾ of $119 million; FY24 cash flows provided by operating activities of $396 million, transaction-adjusted free cash flow⁽¹⁾ of $486 million

• Updated FY25 guidance reflects higher revenue and free cash flow⁽¹⁾

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 February 2, 2024.

“We delivered strong financial results in the quarter with revenue, earnings per share and free cash flow ahead of expectations,” said Toni Townes-Whitley, SAIC Chief Executive Officer. “As we embark on the next phase of our corporate strategy to become the premier mission integrator in our market, I am confident that the investments we are making in Fiscal Year 2025 will accelerate our ability to drive value for all our stakeholders. I want to thank all of our employees for a strong Fiscal Year 2024, their enthusiasm towards embracing our vision, and their focus on execution of our strategy.”

Fourth Quarter and Full Fiscal Year 2024: Summary Operating Results

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 year 2024 consisted of 52 weeks, while fiscal year 2023 consisted of 53 weeks with the extra week occurring in the fourth quarter.

Fourth Quarter Summary Results

Revenues for the quarter decreased $231 million compared to the prior year quarter primarily due to the sale of the logistics and supply chain management business (Supply Chain Business) ($183 million), the deconsolidation of the Forfeiture Support Associates J.V. (FSA) ($37 million), five additional working days in the prior year period, contract completions, and a reserve on a customer receivable related to a program completed prior to FY2022, partially offset by ramp up on new and existing contracts. Adjusting for the impact of the divestiture, deconsolidation and estimated impact of the additional five working days in the prior year period, revenues increased by approximately 7.7%.

Operating income as a percentage of revenues decreased to 4.5% for the quarter as compared to 6.0% in the comparable prior year period primarily due to the sale of the Supply Chain Business, deconsolidation of FSA, higher incentive-based compensation expense, including acceleration of stock-based compensation related to the reorganization and executive transition, and a reserve on a customer receivable related to a program completed prior to FY2022.

Adjusted EBITDA⁽¹⁾ as a percentage of revenues for the quarter was 7.3%, compared to 8.7% for the prior year quarter primarily due to the sale of the Supply Chain Business, deconsolidation of FSA, higher incentive-based compensation expense, including acceleration of stock-based compensation related to the reorganization and executive transition, and a reserve on a customer receivable related to a program completed prior to FY2022.

Diluted earnings per share for the quarter was $0.74 compared to $1.34 in the prior year quarter. Adjusted diluted earnings per share⁽¹⁾ was $1.43 for the quarter compared to $2.04 in the prior year quarter. The weighted-average diluted shares outstanding during the quarter decreased to 52.7 million shares from 55.3 million during the prior year quarter.

Fiscal Year 2024 Summary Results

Revenues for the fiscal year decreased $260 million compared to the prior year primarily due to the sale of the Supply Chain Business ($493 million) and the deconsolidation of FSA ($143 million), contract completions, and five additional working days in the prior year period. This was partially offset by ramp up in volume on existing and new contracts. Adjusting for the impact of the divestiture, deconsolidation and estimated impact of the additional five working days in the prior year period, revenues grew approximately 7.4%.

Operating income as a percentage of revenues for the fiscal year was 10.0%, an increase from 6.5% of revenues in the prior fiscal year. The increase was primarily due to the sale of the Supply Chain business ($233 million), deconsolidation of FSA ($7 million), improved profitability across our contract portfolio and lower acquisition and integration costs, partially offset by higher incentive-based compensation expense, including acceleration of stock-based compensation related to the reorganization and executive transition.

Adjusted EBITDA⁽¹⁾ as a percentage of revenues for the fiscal year increased to 9.0%, compared to 8.8% in the prior fiscal year. The increase was driven by improved profitability across our contract portfolio, partially offset by higher incentive-based compensation expense, including acceleration of stock-based compensation related to the reorganization and executive transition.

Diluted earnings per share for the year was $8.88 compared to $5.38 in the prior year. Adjusted diluted earnings per share⁽¹⁾ was $7.88 for the year compared to $7.55 in the prior year. The weighted-average diluted shares outstanding during the year decreased to 53.7 million shares from 55.8 million shares during the prior year.

Cash Generation and Capital Deployment

Total cash flows provided by operating activities for the fourth quarter were $63 million, a decrease of $82 million compared to the prior year quarter, primarily due to lower cash provided by the Master Accounts Receivable Purchase Agreement (MARPA) Facility with MUFG Bank, LTD and other changes in working capital.

Total cash flows provided by operating activities for the year were $396 million, a decrease of $136 million from the prior year, primarily due to lower cash provided by the Master Accounts Receivable Purchase Agreement (MARPA) Facility with MUFG Bank, LTD and higher tax payments in the current year, partially offset by lower incentive-based compensation payments in the current year and other changes in working capital.

During the quarter, SAIC deployed $116 million of capital, consisting of $86 million of share repurchases in accordance with established repurchase plans, $19 million in cash dividends to shareholders, and $11 million of capital expenditures. For the year, SAIC deployed $463 million of capital, consisting of share repurchases of $357 million (approximately 3.3 million shares) in accordance with established repurchase plans, cash dividends of $79 million to shareholders, and $27 million of capital expenditures.

⁽¹⁾Non-GAAP measure, see Schedule 5 for information about this measure

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 26, 2024 to stockholders of record on April 12, 2024. 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 $1.4 billion, which reflects a book-to-bill ratio of approximately 0.8. Net bookings for the year were approximately $6.7 billion, which reflects a book-to-bill ratio of approximately 0.9.

SAIC’s estimated backlog at the end of fiscal year 2024 was approximately $22.8 billion of which $3.5 billion was funded.

SAIC was awarded the following contracts during the quarter:

Notable New Awards:

U.S. Navy Torpedo Test Sets: During the quarter, SAIC was awarded a five-year, $80 million contract by the U.S. Navy for the completion of the MK710 TSTS design and then to produce and deliver MK 710 Torpedo System Test Sets (TSTS) to enhance the Navy’s capability to provide the Submarine force with high quality, tested and validated MK 48 heavyweight torpedoes. Under the contract, SAIC will provide MK 710 TSTS which will be used to test and validate the integrity and operational status of warshot MK 48 heavyweight torpedoes prior to delivery to the Navy. The testing and validation of exercise torpedoes supports the training, tactics development and certification of torpedo upgrades for Navy.

U.S. Navy Hypersonics Advanced Concepts and Strategic Missions Programs: During the quarter, SAIC was awarded a five-year, $63 million contract from the U.S. Navy to support hypersonics advanced concepts and strategic mission solutions for the Navy’s Strategic Systems Programs (SSP) and the Naval Surface Warfare Center (NSWC) Crane, Ind., Strategic Systems Hardware Division (GXW). Under the new contract, SAIC will enhance hypersonics advanced concepts and strategic missions focused on next-generation systems, subsystems, components, features and technologies to include Hardware-in-the-Loop (HWIL) and Software-in-the-Loop (SWIL) simulations, manufacturing techniques and other strategic mission areas.

Notable Recompete Awards:

U.S. Army Reserve Command (USARC): During the quarter, SAIC was awarded a five-year (one year base, plus four, one-year option periods), $141 million contract to provide system support to the USARC through their United States Army Reserve Command Information Technology Support Services (USARC ITSS II) contract. Under this contract, SAIC will support USARC’s mission by consolidating enterprise IT services at a global scale through standardized, responsive and cost-effective solutions. The USARC ITSS II program will be managed out of Fort Liberty, North Carolina, and provide a wide range of IT services for more than 65,000 users across over 700 locations, primarily in the U.S. with additional sites in Asia, Europe, Pacific region and Puerto Rico. This effort will focus on delivering mission value and enhanced user experience, while improving cybersecurity, network availability and reliability for USARC and its customers.

U.S. Space and Intelligence Community: During the quarter, SAIC was awarded approximately $315 million of contract awards by space and intelligence community 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. Space Force: Subsequent to the end of the quarter, SAIC was awarded a five-year (one year base, plus four, one-year option periods), $444 million contract to support Digital Transformation, Acquisition, Modernization and Modification (DTAMM) for the U.S. Space Force's Space Systems Command and Space Launch Deltas (SLDs) 30 and 45. SAIC will support the modernization of the space launch range instrumentation. The efforts will support an accelerated national launch cadence across the Eastern Range (ER) and Western Range (WR) including Cape Canaveral Space Force Station and Patrick Space Force Base in Fla. and Vandenberg Space Force Base in Calif. Experts from SAIC and partners will collaborate to modernize antiquated instrumentation and processes to enable a faster and more integrated launch environment. SAIC remains at the forefront of national priorities to explore, secure and influence space by leveraging industry expertise and legacy in this domain. In addition to DTAMM, SAIC's work facilitates future unmanned spacecraft, earth science data-collecting satellites, space-ground systems for military joint all-domain command and control and more.

Other Notable News

SAIC Announces to Realign Organization to Optimize Strategic Pivots and Increase Organic Growth: During the quarter, SAIC announced a business reorganization that replaces its current two operating sectors with five customer facing business groups supported by the enterprise organizations, including the Innovation Factory. The reorganization is effective February 3, 2024 and is designed to enhance management's involvement with customers and advance SAIC’s innovation and go-to-market strategy.

SAIC’s ReadyOne™ software named Big Idea at the 2024 BIG Innovation Awards: The Business Intelligence Group named SAIC’s ReadyOne™ software a winning product at the of the 2024 BIG Innovation Awards. This annual business awards program recognizes organizations, products, and people that are bringing new ideas to life in innovative ways. ReadyOne™ is SAIC’s platform to rapidly install and configure readily usable digital engineering ecosystems for engineering teams and stakeholders.

Fiscal Year 2025 Guidance

The Company's outlook for fiscal year 2025 is being provided. The table below summarizes fiscal year 2025 guidance and represents our views as of March 18, 2024.

Webcast Information

SAIC management will discuss operations and financial results in an earnings conference call beginning at 10 a.m. Eastern time on March 18, 2024. The conference call will be webcast simultaneously to the public through a link on the Investor Relations section of the SAIC website (http://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. SAIC is an Equal Opportunity Employer, fostering a culture of diversity, equity and inclusion, which is core to our values and important to attract and retain exceptional talent. Headquartered in Reston, Virginia, SAIC has annual revenues of approximately $7.4 billion.​​​​ For more information, visit saic.com. For ongoing news, please visit our newsroom.

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 www.saic.com or on the SEC’s website at www.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.

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.