SAIC's 2026 Q1: Navigating Key Contradictions in Book-to-Bill Ratios and Defense Budgets

Book-to-bill ratios and new business wins, defense budget expectations and impact, 2026Q1 book-to-bill target, Defense and Civil margin improvement, book-to-bill ratios and new business expectations are the key contradictions discussed in SAIC's latest 2026Q1 earnings call.



Revenue and Financial Performance:
- Science Applications International Corporation (SAIC) reported revenue of $1.877 billion for the first quarter of fiscal year 2026, representing 2% growth.
- The growth was attributed to the ramp-up of new and existing programs like T-Cloud, IMDC2, and GMASS, offsetting lower revenue from contract completions and transitions.

Book-to-Bill Ratio and Business Development:
- SAIC delivered net bookings of $2.4 billion for a book-to-bill ratio of 1.3, including securing key contracts such as the five-year System Software Lifecycle Engineering contract for the Army.
- The strong business development efforts were reflected in subsequent awards totaling over $2 billion, with an expectation for submit volumes to reach $28 billion to $30 billion for the full year.

Operating Environment and Strategic Alignment:
- The operating environment stabilized with improved clarity around future spending, with a focus on leveraging technology adoption to increase lethality and efficiency.
- The company's strategic pivot to mission and enterprise IT solutions aligned with the priorities of the new administration, positioning it well to capitalize on defense spending increases and civilian budget support.

Cost and Margin Challenges:
- Adjusted EBITDA in the first quarter was $157 million, with an adjusted EBITDA margin of 8.4%, impacted by higher costs on fixed-price programs and seasonal investments.
- The company received favorable option period extensions on a fixed-price program, which is expected to improve financial performance going forward by transitioning into the sustainment phase.