Science Applications International (NASDAQ:SAIC) stock slid on Thursday after reporting the second-quarter 2026 earnings.

The company reported a quarterly sales decline of 3% year-on-year to $1.77 billion, missing the analyst consensus estimate of $1.86 billion.

The adjusted EPS of $3.63 beat the analyst consensus estimate of $2.24.

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Operating income for the quarter rose by 4% to $139 million, and the operating margin expanded by 50 basis points to 7.9%.

Adjusted EBITDA increased 9% to $185 million with an adjusted EBITDA margin of 10.5%, a 110 basis points growth.

Net bookings for the quarter were approximately $2.6 billion, which reflects a book-to-bill ratio of 1.5. 

The quarter’s operating cash flow totaled $122 million. Free cash flow was $150 million.

SAIC’s estimated backlog for the quarter was approximately $23.2 billion, of which $3.6 billion was funded. As of August 1, 2025, the company held $48 million in cash and equivalents.

SAIC CEO Toni Townes-Whitley said second-quarter results showed strong program execution and solid bookings, but slower on-contract growth and delays in new business awards and program ramps created a tougher revenue environment than expected. She noted the company is adjusting its cost structure while maintaining critical investments to build long-term value.

Outlook

Science Applications revised the 2026 revenue outlook to $7.250 billion-$7.325 billion (prior $7.60 billion-$7.75 billion), below the analyst consensus estimate of $7.65 billion.

The company revised its annual adjusted EPS outlook to $9.40-$9.60 (prior $9.10-$9.30) above the analyst consensus estimate of $9.17.

「Our revised guidance assumes that the operating environment remains stable but does not improve this year. We believe that this more cautious outlook is prudent, and we are confident in our ability to execute against it,」 added Toni Townes-Whitley.

Science Applications stock has gained just over 2% year to date as it failed to reach the revenue consensus estimates and one adjusted EPS estimate in at least two out of last three quarters as it grappled with Department of Government Efficiency-related headwinds.

Price Action: SAIC shares are trading lower by 15.41% to $96.52 at last check Thursday.

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