Science Applications International Corp
For the period ended Jul 31, 2026. Filed Aug 31, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2026 · Filed Aug 31, 2026
SAIC$146.30-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-05-01; filed 2026-06-01.
0001571123-26-000079
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-31; filed 2026-08-31.
0001571123-26-000133
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 100 current paragraphs.
65 unchanged; 20 reworded; 11 added; 3 removed; 2 previous and 4 current paragraphs rearranged.
Tables are not compared: 10 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Revenues increased $140 million for the six months ended July 31, 2026 as compared to the same period in the prior year primarily due to ramp up in volume on existing and new contracts and from the acquisition of SilverEdge of $39 million, partially offset by contract completions. Adjusting for the impact of acquisitions, revenues grew by approximately 2.9%.
Current report
Operating Income. Operating income as a percentage of revenues for the three months ended July 31, 2026 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio and costs related to the settlement of federal tax audits in the prior year, partially offset by higher selling, general and administrative expenses, including recovery of costs from the settlement of a patent infringement matter in the prior year.
Current report
Income Taxes. Our effective income tax rate was 14.2% and 17.9% for the three and six months ended July 31, 2026, respectively, and was (17.2)% and (0.4)% for the three and six months ended August 1, 2025, respectively. The effective tax rates for the prior year periods reflected a $47 million tax benefit related to the settlement of an IRS audit covering fiscal years 2016 through 2019.
Current report
Revenues. Revenues increased $75 million for the three months ended July 31, 2026 as compared to the same period in the prior year primarily due to ramp up in volume on existing and new contracts and from the acquisition of SilverEdge of $20 million, partially offset by contract completions.
Current report
Revenues increased $108 million for the six months ended July 31, 2026 as compared to the same period in the prior year primarily due to ramp up in volume on existing and new contracts and from the acquisition of SilverEdge of $39 million, partially offset by contract completions.
Current report
Adjusted operating income as a percentage of revenues for the six months ended July 31, 2026 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio.
Current report
Adjusted operating income was $4 million for the six months ended July 31, 2026, compared to an adjusted operating loss of $5 million during the same period in the prior year primarily due to a $12 million gain from the sale of an investment in the current year, partially offset by higher selling, general and administrative expenses, including recovery of costs from the settlement of a patent infringement matter in the prior year.
Current report
Gain on divestitures, net of transaction costs. The gain on divestitures includes gains recognized related to divestitures, net of transaction costs.
Current report
Adjusted operating income and adjusted EBITDA as a percentage of revenues for the three months ended July 31, 2026 decreased compared to the same period in the prior year primarily due to higher selling, general and administrative expenses, including recovery of costs from the settlement of a patent infringement matter in the prior year, partially offset by improved profitability across our contract portfolio.
Current report
Subsequent to quarter end, on August 14, 2026, we amended the MARPA to increase the aggregate facility limit from $300 million to $400 million.
Current report
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
Removed paragraphs (3)
Previous report
Revenues. Revenues decreased $4 million for the three months ended May 1, 2026 as compared to the same period in the prior year primarily due to contract completions, partially offset by new contracts.
Previous report
(1) Adjustment reflects the portion of acquisition, integration, restructuring and impairment costs recovered through our indirect rates in accordance with U.S. government Cost Accounting Standards.
Previous report
(1) Adjustment reflects the portion of acquisition, integration, restructuring and impairment costs recovered through our indirect rates in accordance with U.S. government Cost Accounting Standards.
Reworded paragraphs (20)
Previous wording
Effective January 31, 2026, the first day of fiscal 2027, we completed a business reorganization that consolidated our five previous business groups into three. The reorganization was designed to simplify our organization structure and optimize operations and customer focus for growth. The consolidated business groups will be led by three Executive Vice Presidents. The three business groups will continue to report directly to our Chief Executive Officer (“CEO”), the chief operating decision maker (“CODM”). The reorganization did not have an impact on our reportable segments.
Current wording
Effective January 31, 2026, the first day of fiscal 2027, we completed a business reorganization that consolidated our five previous business groups into three. The reorganization was designed to simplify our organization structure and optimize operations and customer focus for growth. The consolidated business groups are led by three Executive Vice Presidents. The three business groups report directly to our Chief Executive Officer (“CEO”), the chief operating decision maker (“CODM”). The reorganization did not have an impact on our reportable segments.
Previous wording
We now have three customer facing business groups which are also our operating segments. They are aggregated into two reportable segments for financial reporting purposes given the similarity in economic and qualitative characteristics, and based on the nature of the customers they serve. Our two reportable segments are the Defense and Intelligence segment and the Civilian segment.
Current wording
We have three customer facing business groups which are also our operating segments. They are aggregated into two reportable segments for financial reporting purposes given the similarity in economic and qualitative characteristics, and based on the nature of the customers they serve. Our two reportable segments are the Defense and Intelligence segment and the Civilian segment.
Previous wording
During the three months ended May 1, 2026, we generated 97% of our revenues from contracts with the U.S. government, including subcontracts on which we perform. Our business performance is affected by the overall level of U.S. government spending and the alignment of our offerings and capabilities with the budget priorities of the U.S. government.
Current wording
During the three and six months ended July 31, 2026, we generated 97% of our revenues from contracts with the U.S. government, including subcontracts on which we perform. Our business performance is affected by the overall level of U.S. government spending and the alignment of our offerings and capabilities with the budget priorities of the U.S. government.
Previous wording
Revenues. Revenues increased $29 million for the three months ended May 1, 2026 as compared to the same period in the prior year primarily due to revenues from the acquisition of SilverEdge Government Solutions ("SilverEdge") of $19 million and ramp up in volume on existing and new contracts, partially offset by contract completions. Adjusting for the acquisition of SilverEdge, revenues grew by approximately 0.5%.
Current wording
Revenues. Revenues increased $111 million for the three months ended July 31, 2026 as compared to the same period in the prior year primarily due to ramp up in volume on existing and new contracts and from the acquisition of SilverEdge Government Solutions ("SilverEdge") of $20 million, partially offset by contract completions. Adjusting for the impact of acquisitions, revenues grew by approximately 5.3%.
Previous wording
Operating Income. Operating income as a percentage of revenues for the three months ended May 1, 2026 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio and a $12 million gain from the sale of an investment in the current year.
Current wording
Operating income as a percentage of revenues for the six months ended July 31, 2026 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio and a $12 million gain from the sale of an investment in the current year, partially offset by recovery of costs from the settlement of a patent infringement matter in the prior year.
Previous wording
Income Taxes. Our effective income tax rate was 20.9% and 20.6% for the three months ended May 1, 2026 and May 2, 2025, respectively. The rate for both periods was below our combined federal and state statutory tax rate, primarily due to research and development tax credits and the tax deduction for foreign-derived deduction eligible income.
Current wording
For the three and six months ended July 31, 2026, our effective tax rates were lower than the combined federal and state statutory tax rates, primarily due to research and development tax credits and the tax deduction for foreign-derived deduction eligible income.
Previous wording
The primary financial performance measures we use to manage our reportable segments and monitor results of operations are revenues and adjusted operating income. Adjusted operating income is calculated by taking operating income and excluding depreciation and amortization, acquisition, integration, restructuring, and impairment costs, and any other material non-recurring costs.
Current wording
The primary financial performance measures we use to manage our reportable segments and monitor results of operations are revenues and adjusted operating income. Adjusted operating income is calculated by taking operating income and excluding amortization of intangible assets, depreciation of property, plant, and equipment, acquisition, integration, restructuring, and impairment costs, and any other material non-recurring costs.
Previous wording
Adjusted operating income. Adjusted operating income as a percentage of revenues for the three months ended May 1, 2026 increased compared to the comparable prior year period primarily due to improved profitability and timing and volume mix in our contract portfolio, partially offset by contract completions.
Current wording
Adjusted operating income. Adjusted operating income as a percentage of revenues for the three and six months ended July 31, 2026 increased compared to the same periods in the prior year primarily due to improved profitability across our contract portfolio.
Previous wording
Revenues. Revenues increased $33 million for the three months ended May 1, 2026 as compared to the same period in the prior year primarily due to revenues from the acquisition of SilverEdge of $19 million and ramp up in volume on existing and new contracts, partially offset by contract completions.
Current wording
Revenues. Revenues increased $36 million and $32 million for the three and six months ended July 31, 2026, respectively, as compared to the same periods in the prior year primarily due to ramp up in volume on existing and new contracts, partially offset by contract completions.
Previous wording
Adjusted operating income (loss). Adjusted operating income was $7 million for the three months ended May 1, 2026, compared to an adjusted operating loss of $9 million during the same period in the prior year primarily due to a gain on an investment sale of $12 million in the current year and lower selling, general and administrative expenses.
Current wording
Adjusted operating income (loss). Adjusted operating loss was $3 million for the three months ended July 31, 2026, compared to an adjusted operating income of $4 million during the same period in the prior year primarily due to higher selling, general and administrative expenses, including recovery of costs from the settlement of a patent infringement matter in the prior year.
Previous wording
Adjusted operating income. Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions and activities that we do not consider to be indicative of our ongoing operating performance. Adjusted operating income is calculated by taking operating income and excluding depreciation and amortization, acquisition, integration, restructuring, and impairment costs, and any other material non-recurring costs. Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment. Adjusted operating income excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition. Acquisition, integration, restructuring and impairment costs represent costs incurred related to acquisitions, the reorganization, facilities optimization efforts, and impairments of long-lived assets, along with associated depreciation. Recovery of acquisition, integration, restructuring and impairment costs represents costs recovered through our indirect rates in accordance with Cost Accounting Standards. Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019.
Current wording
Adjusted operating income. Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions and activities that we do not consider to be indicative of our ongoing operating performance. Adjusted operating income is calculated by taking operating income and excluding amortization of intangible assets, depreciation of property, plant, and equipment, acquisition, integration, restructuring, and impairment costs, and any other material non-recurring costs. Adjusted operating income excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition.
Previous wording
EBITDA and Adjusted EBITDA. EBITDA is a performance measure that is calculated by taking net income and excluding interest and loss on sale of receivables, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is a performance measure that excludes the impact of non-recurring transactions and activities that we do not consider to be indicative of our ongoing operating performance. Adjusted EBITDA is calculated by taking EBITDA and excluding acquisition, integration, restructuring and impairment costs, and any other material non-recurring costs. Acquisition, integration, restructuring and impairment costs represent costs incurred related to acquisitions, the reorganization, facilities optimization efforts, and impairments of long-lived assets, along with associated depreciation. Recovery of acquisition, integration, restructuring and impairment costs represents costs recovered through our indirect rates in accordance with Cost Accounting Standards. Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019.
Current wording
EBITDA and Adjusted EBITDA. EBITDA is a performance measure that is calculated by taking net income and excluding interest and loss on sale of receivables, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is a performance measure that excludes the impact of non-recurring transactions and activities that we do not consider to be indicative of our ongoing operating performance. Adjusted EBITDA is calculated by taking EBITDA and excluding acquisition, integration, restructuring and impairment costs, and any other material non-recurring costs.
Previous wording
We believe that this performance measure provides management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding our long-term financial performance.
Current wording
We believe that these performance measures provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding our long-term financial performance.
Previous wording
Adjusted operating income and adjusted EBITDA as a percentage of revenues for the three months ended May 1, 2026 increased compared to the same period in the prior year due to improved profitability across our contract portfolio, a $12 million gain from the sale of an investment in the current year, and lower selling, general and administrative expenses.
Current wording
Adjusted operating income and adjusted EBITDA as a percentage of revenues for the six months ended July 31, 2026 increased compared to the same period in the prior year due to improved profitability across our contract portfolio and a $12 million gain from the sale of an investment in the current year, partially offset by higher selling, general and administrative expenses, including recovery of costs from the settlement of a patent infringement matter in the prior year.
Previous wording
We had net bookings worth an estimated $2.1 billion during the three months ended May 1, 2026.
Current wording
We had net bookings worth an estimated $1.2 billion and $3.3 billion during the three and six months ended July 31, 2026, respectively.
Previous wording
As a services provider, our business generally requires minimal infrastructure investment. We expect to fund our ongoing working capital, commitments and any other discretionary investments with cash on hand, future operating cash flows and, if needed, borrowings under our $1.0 billion Revolving Credit Facility and $300 million Master Accounts Receivable Purchase Agreement ("MARPA Facility") Facility.
Current wording
As a services provider, our business generally requires minimal infrastructure investment. We expect to fund our ongoing working capital, commitments and any other discretionary investments with cash on hand, future operating cash flows and, if needed, borrowings under our $1.0 billion Revolving Credit Facility and $300 million Master Accounts Receivable Purchase Agreement ("MARPA") Facility.
Previous wording
Net Cash Provided by Operating Activities. Cash flows provided by operating activities for the three months ended May 1, 2026 increased $27 million compared to the prior year primarily due to timing of vendor payments, lower cash incentive-based compensation payments, and other changes in working capital, partially offset by lower cash inflows from the usage of the MARPA Facility and higher interest paid in the current year.
Current wording
Net Cash Provided by Operating Activities. Cash flows provided by operating activities for the six months ended July 31, 2026 increased $51 million compared to the prior year period primarily due to timing of vendor payments, lower cash incentive-based compensation payments, and other changes in working capital, partially offset by lower cash inflows from the usage of the MARPA Facility, timing of customer collections, and higher interest paid on our debt.
Previous wording
Net Cash Provided by (Used in) Investing Activities. Cash provided by investing activities for the three months ended May 1, 2026 was $1 million compared to cash used in investing activities of $15 million in the prior year period, primarily due to proceeds from the sale of investments in the current year.
Current wording
Net Cash Used in Investing Activities. Cash used in investing activities for the six months ended July 31, 2026 decreased $8 million compared to the prior year period primarily due to proceeds from the sale of investments in the current year, partially offset by higher cash paid for capital expenditures.
Previous wording
Net Cash Used in Financing Activities. Cash used in financing activities for the three months ended May 1, 2026 increased $107 million compared to the prior year period primarily due to lower proceeds from borrowings, net of lower principal payments, and higher plan share repurchases in the current year.
Current wording
Net Cash Used in Financing Activities. Cash used in financing activities for the six months ended July 31, 2026 increased $107 million compared to the prior year period primarily due to lower proceeds from borrowings, net of lower principal payments, and higher plan share repurchases in the current year.
Previous wording
There have been no changes to our critical accounting policies and estimates during the three months ended May 1, 2026 from those disclosed in our most recently filed Annual Report on Form 10-K.
Current wording
There have been no changes to our critical accounting policies and estimates during the six months ended July 31, 2026 from those disclosed in our most recently filed Annual Report on Form 10-K.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Adjusted operating income. Adjusted operating income as a percentage of revenues for the three months ended July 31, 2026 decreased from the same period in the prior year primarily due to timing and volume mix in our contract portfolio.
Current report — wording carried from elsewhere
Acquisition, integration, restructuring and impairment costs. Acquisition and integration costs represent costs incurred related to our acquisitions and subsequent integration with acquired businesses. Restructuring and impairment costs represent costs incurred related to internal reorganizations and initiatives (e.g., Project Orbit), facilities optimization efforts, and impairments of long-lived assets, along with associated depreciation.
Current report — wording carried from elsewhere
Recovery of acquisition, integration, restructuring and impairment costs. Recovery of acquisition, integration, restructuring and impairment costs represents costs recovered through our indirect rates in accordance with Cost Accounting Standards.
Current report — wording carried from elsewhere
Costs related to the settlement of federal tax audits. Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Adjusted operating income. Adjusted operating income as a percentage of revenues for the three months ended May 1, 2026 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio.
Previous report — wording carried elsewhere
We believe that EBITDA and adjusted EBITDA provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding our long-term financial performance.