SAIC Cuts FY27 Revenue Guidance, Citing Contract Losses and Procurement Delays

summarizeSummary

Science Applications International Corp announced preliminary FY26 results and significantly lowered its FY27 revenue guidance due to recent contract recompete losses and ongoing market disruptions, despite improved profitability metrics.

check_boxKey Events

• FY27 Revenue Guidance Significantly Lowered

  The company revised its fiscal year 2027 revenue guidance to $7.0B-$7.2B, a notable reduction from the prior guidance of $7.35B-$7.55B.

• Organic Growth Outlook Shifts to Decline

  The FY27 organic growth outlook was changed from a previous expectation of 0%-3% growth to a projected decline of (4%)-(2%).

• Contract Losses Cited as Primary Driver

  The revenue reduction is primarily attributed to two unfavorable recompete award decisions, specifically the Army RITS and Air Force Cloud 1 contracts.

• Preliminary FY26 Profitability Exceeds Expectations

  Preliminary fiscal year 2026 Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow are expected to be above prior guidance, driven by strong execution and operational efficiency.

auto_awesomeAnalysis

Science Applications International Corporation's significant downward revision of its fiscal year 2027 revenue guidance, shifting from expected organic growth to a decline, is a material negative development. The loss of two major recompete contracts (Army RITS and Air Force Cloud 1) directly impacts future revenue streams and signals increased competitive pressures. While the company's preliminary fiscal year 2026 profitability and cash flow metrics exceeded prior expectations, and management outlined strategic adjustments to its portfolio and operations, the reduced forward outlook will likely weigh on investor sentiment. Investors will closely monitor the effectiveness of the new enterprise transformation initiative and the company's ability to stabilize revenue and return to growth in its targeted segments.