Science Applications International Corp. (NASDAQ:SAIC) stock rose Monday after the government services contractor reported fiscal first-quarter 2027 results that topped Wall Street estimates and raised its full-year profit outlook.

“I am proud of our team’s performance this quarter, delivering record margin and modest organic growth,” said Chief Executive Officer Jim Reagan.

SAIC Revenue, Earnings Beat Expectations

Revenue rose 2% year over year to $1.91 billion, exceeding the analyst consensus estimate of $1.82 billion. Adjusted earnings per share came in at $3.23, well above estimates of $2.29.

SAIC, which provides technical, engineering and enterprise IT services to defense, intelligence, civilian and space customers, also delivered stronger profitability during the quarter.

Operating income increased 48% to $179 million, while operating margin expanded 300 basis points to 9.4%. Adjusted operating income rose 40% to $221 million, lifting the adjusted operating margin by 320 basis points to 11.6%.

Adjusted EBITDA climbed 41% to $222 million, with adjusted EBITDA margin also improving 320 basis points to 11.6%.

Net bookings totaled approximately $2.1 billion, representing a book-to-bill ratio of 1.1. Operating cash flow reached $127 million, while free cash flow was $118 million.

SAIC ended the quarter with an estimated backlog of $22.9 billion, including $3.7 billion of funded backlog. Cash and cash equivalents stood at $109 million as of May 1, 2026.

Management Sees Growth Opportunities

Reagan said the company remains focused on rebuilding investor confidence through sustained organic growth while maintaining strong margins and cash generation.

Regan said SAIC is reshaping its portfolio toward mission-critical capabilities aligned with government spending priorities and away from more commoditized enterprise IT markets. He noted the company’s qualified pipeline has grown to approximately $85 billion, with increasing exposure to mission and engineering programs.

Artificial intelligence and mission modernization remain key growth drivers. Regan said SAIC is helping government agencies establish data standards, develop multimodal AI capabilities and build secure environments for sensitive missions. The company is also applying AI to legacy code modernization, operational planning, cybersecurity and human-machine teaming.

Chief Financial Officer and Executive Vice President Prabu Natarajan said funding is beginning to flow into several defense initiatives, including Navy programs, next-generation command-and-control systems, loitering munitions, Army air-defense programs, radar modernization efforts and space-related projects.

Natarajan also highlighted opportunities in the civilian market, including the U.S. Department of State’s Evolve contract vehicle, which carries a ceiling value of $10 billion over seven years.

SAIC Outlook Raised

SAIC raised its fiscal 2027 adjusted EPS outlook to a range of $9.90 to $10.10 from a prior forecast of $9.50 to $9.70. The new guidance exceeds the analyst consensus estimate of $9.63.

The company affirmed fiscal 2027 revenue guidance of $7 billion to $7.2 billion, compared with analyst expectations of $7.15 billion.

SAIC also increased its adjusted EBITDA forecast to $720 million-$730 million from $705 million-$715 million previously and affirmed its expectation for free cash flow of more than $600 million.

SAIC Price Action: Science Applications shares were up 17.87% at $122.82 at the time of publication on Monday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

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