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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 1, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number

001-35832

Science Applications International Corporation

(Exact name of registrant as specified in its charter)

Delaware

46-1932921

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

12010 Sunset Hills Road,

Reston,

Virginia

20190

(Address of principal executive offices)

(Zip Code)

(703)

676-4300

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.0001 per share	SAIC	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares issued and outstanding of the registrant’s common stock as of May 22, 2026 was as follows:

42,276,819 shares of common stock ($.0001 par value per share)


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
FORM 10-Q
TABLE OF CONTENTS


		Page
Part I	Financial Information

Item 1	Financial Statements	1
	Condensed Consolidated Statements of Income	1
	Condensed Consolidated Statements of Comprehensive Income	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
	Note 1—Business Overview and Summary of Significant Accounting Policies	6
	Note 2—Earnings Per Share, Share Repurchases and Dividends	8
	Note 3—Revenues	9
	Note 4—Acquisitions	11
	Note 5—Goodwill and Intangible Assets	12
	Note 6—Income Taxes	13
	Note 7—Debt Obligations	13
	Note 8—Changes in Accumulated Other Comprehensive Income (Loss) by Component	14
	Note 9—Sales of Receivables	15
	Note 10—Business Segments Information	15
	Note 11—Legal Proceedings and Other Commitments and Contingencies	17

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3	Quantitative and Qualitative Disclosures About Market Risk	28

Item 4	Controls and Procedures	28

Part II	Other Information	29

Item 1	Legal Proceedings	29

Item 1A	Risk Factors	29

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3	Defaults Upon Senior Securities	29

Item 4	Mine Safety Disclosures	29

Item 5	Other Information	30

Item 6	Exhibits	31

	Signatures	32

-i-

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)


	Three Months Ended
	May 1, 2026		May 2, 2025
	(in millions, except per share amounts)
Revenues	$	1,906	$	1,877
Cost of revenues	1,657		1,668
Selling, general and administrative expenses	83		89
Other operating (income) expense	(13)		(1)
Operating income	179		121
Interest expense, net	33		30
Other (income) expense, net	1		5
Income before income taxes	145		86
Income tax (expense) benefit	(30)		(18)
Net income	$	115	$	68
Earnings per share:
Basic	$	2.63	$	1.43
Diluted	$	2.61	$	1.42

See accompanying notes to condensed consolidated financial statements.

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Table of Contents


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)


	Three Months Ended
	May 1, 2026		May 2, 2025
	(in millions)
Net income	$	115	$	68
Other comprehensive (loss) income, net of tax:
Defined benefit obligation adjustment	(1)		—
Net unrealized (loss) gain on derivative instruments	—		(1)
Total other comprehensive (loss) income, net of tax	(1)		(1)
Comprehensive income	$	114	$	67

See accompanying notes to condensed consolidated financial statements.

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Table of Contents


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)


	May 1, 2026		January 30, 2026
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	109	$	182
Receivables, net	962		853
Prepaid expenses	102		122
Other current assets	26		22
Total current assets	1,199		1,179
Goodwill	2,944		2,944
Intangible assets, net	729		761
Property, plant, and equipment (net of accumulated depreciation of $221 million and $215 million at May 1, 2026 and January 30, 2026, respectively)	111		110
Operating lease right of use assets	184		193
Other assets	171		167
Total assets	$	5,338	$	5,354

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	634	$	500
Accrued payroll and employee benefits	278		316
Other accrued liabilities	99		147
Debt, current portion	26		19
Total current liabilities	1,037		982
Debt, net of current portion	2,460		2,468
Operating lease liabilities	189		198
Deferred income taxes	125		104
Other long-term liabilities	104		102
Commitments and contingencies (Note 11)
Equity:
Common stock, $0.0001 par value, 1 billion shares authorized, 43 million and 44 million shares issued and outstanding as of May 1, 2026 and January 30, 2026, respectively	—		—
Additional paid-in capital	—		—
Retained earnings	1,416		1,492
Accumulated other comprehensive income	7		8
Total stockholders' equity	1,423		1,500
Total liabilities and stockholders' equity	$	5,338	$	5,354

See accompanying notes to condensed consolidated financial statements.

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Table of Contents


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(UNAUDITED)


	Shares of common stock	Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Total
	(in millions)









Balance at January 30, 2026	44	$	—	$	1,492	$	8	$	1,500
Net income	—	—		115		—		115
Issuances of stock	1	5		—		—		5
Other comprehensive loss, net of tax	—	—		—		(1)		(1)
Cash dividends of $0.37 per share	—	—		(16)		—		(16)
Stock-based compensation, net of shares withheld for taxes(1)	—	(4)		—		—		(4)
Repurchases of stock	(2)	(1)		(175)		—		(176)
Balance at May 1, 2026	43	$	—	$	1,416	$	7	$	1,423










Balance at January 31, 2025	48	$	—	$	1,565	$	12	$	1,577
Net income	—	—		68		—		68
Issuances of stock	—	6		—		—		6
Other comprehensive loss, net of tax	—	—		—		(1)		(1)
Cash dividends of $0.37 per share	—	—		(18)		—		(18)
Stock-based compensation, net of shares withheld for taxes(1)	—	(2)		—		—		(2)
Repurchases of stock	(1)	(4)		(121)		—		(125)
Balance at May 2, 2025	47	$	—	$	1,494	$	11	$	1,505

(1) During the three months ended May 1, 2026 and May 2, 2025, shares withheld for taxes related to stock-based compensation arrangements amounted to $17 million.

See accompanying notes to condensed consolidated financial statements.

-4-

Table of Contents


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)


	Three Months Ended
	May 1, 2026		May 2, 2025
	(in millions)
Cash flows from operating activities:
Net income	$	115	$	68
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	40		36
Stock-based compensation expense	13		15
Deferred income taxes	21		(1)
Gain on sales of investments	(12)		—
Other	(2)		1
Increase (decrease) resulting from changes in operating assets and liabilities:
Receivables	(109)		(9)
Prepaid expenses and other current assets	15		6
Accounts payable and other accrued liabilities	85		33
Accrued payroll and employee benefits	(38)		(51)
Operating lease assets and liabilities, net	(1)		(2)
Other assets and other long-term liabilities, net	—		4
Net cash provided by operating activities	127		100
Cash flows from investing activities:
Proceeds from sales of investments	15		—
Sales of marketable securities	5		3
Purchases of marketable securities	(4)		(4)
Expenditures for property, plant, and equipment	(9)		(8)
Contributions to investments	(6)		(6)
Net cash provided by (used in) investing activities	1		(15)
Cash flows from financing activities:
Stock repurchased and retired or withheld for taxes on equity awards	(188)		(142)
Dividend payments to stockholders	(17)		(19)
Principal payments on borrowings	(1)		(689)
Proceeds from borrowings	—		750
Issuances of stock	5		6
Net cash used in financing activities	(201)		(94)
Net decrease in cash, cash equivalents and restricted cash	(73)		(9)
Cash, cash equivalents and restricted cash at beginning of period	190		64
Cash, cash equivalents and restricted cash at end of period	$	117	$	55

See accompanying notes to condensed consolidated financial statements.

-5-

Table of Contents


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1—Business Overview and Summary of Significant Accounting Policies:

Overview

Science Applications International Corporation (collectively, with its consolidated subsidiaries, the “Company") is a leading provider of technical, engineering, and information technology ("IT") services primarily to the U.S. government. The Company integrates emerging technology securely and in real-time into mission critical operations that modernize and enable national imperatives. The Company provides these services for large, complex projects with a targeted emphasis on higher-end, differentiated technology services and solutions that accelerate and transform secure and resilient digital environments through system development, modernization, integration, and sustainment to drive enterprise and mission outcomes.

Effective January 31, 2026, the first day of fiscal 2027, the Company completed a business reorganization that consolidated its five previous business groups into three. The reorganization was designed to simplify the Company's 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 the Company’s Chief Executive Officer (“CEO”), the chief operating decision maker (“CODM”). The reorganization did not have an impact on the Company's reportable segments.

The Company now has three customer facing business groups which are also its 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. The Company’s two reportable segments are the Defense and Intelligence segment and the Civilian segment.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the Department of War ("DoW", formerly referred to as the Department of Defense) and the Intelligence Community of the United States Government, supporting a variety of missions across land, sea, air, and space.

The Civilian segment provides solutions to the civilian markets, encompassing federal, state, and local governments. This includes integrating solutions into a spectrum of public service missions that impact travel, security, trade, health and the economy.

The offerings of both reportable segments entail the integration of emerging technologies into mission critical operations that modernize and enable national imperatives. These services include end-to-end solutions spanning the design, development, integration, deployment, management, operation, sustainment, and security of customer hardware and software platforms.

The Company's Solutions and Technology Group ("STG") supports the operating segments by developing enterprise-class solutions to meet complex customer needs and accelerate digital transformation. These capabilities are delivered to the Company's customers as stand-alone solutions, or integrated with the Company's product offerings through the operations of the business. The STG includes teams focused on artificial intelligence, application development, network services, platforms and cloud, engineering, and cybersecurity. It uses a highly automated, cloud-hosted tool set to rapidly build, test, deploy, and continuously enhance solutions.

Costs associated with corporate functions that are not allocable to the reportable segments are presented as Corporate activities. See Note 10—Business Segments Information for additional information.

Principles of Consolidation and Basis of Presentation

References to “financial statements” refer to the condensed consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). All intercompany transactions and account balances within the Company have been eliminated.

-6-

Table of Contents


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended January 30, 2026.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to, estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates.

Reporting Periods

The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2027 began on January 31, 2026 and ends on January 29, 2027, while fiscal 2026 began on February 1, 2025 and ended on January 30, 2026.

Operating Cycle

The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts.

Investments in Equity Securities

The Company invests in certain companies that advance or develop new technologies applicable to its business. Each investment is evaluated for consolidation under the variable interest entities model and/or the voting interest model. As of May 1, 2026, none of the Company's investments in equity securities were consolidated.

On April 20, 2026, the Company sold all of its equity in one of its investments, which resulted in a gain of $12 million recognized within "Other operating (income) expense" on the condensed consolidated statements of income and $15 million in cash proceeds, recognized within "Proceeds from sales of investments" on the condensed consolidated statements of cash flows.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported on the condensed consolidated balance sheets for the periods presented:


	May 1, 2026		January 30, 2026
	(in millions)
Cash and cash equivalents	$	109	$	182
Restricted cash included in other current assets	3		3
Restricted cash included in other assets	5		5
Cash, cash equivalents and restricted cash	$	117	$	190

Accounting Standards Updates

Accounting Standards Updates Recently Issued But Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard includes new disclosure requirements relating to specified categories of expenses (purchases of inventory,

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

employee compensation, depreciation, and amortization) that are included in certain expense captions presented on the face of the income statement. Early adoption is permitted. The amendments can be applied on a prospective or retrospective basis. In January 2025, the FASB clarified the effective date of the standard by issuing ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of adoption of this standard on its financial statement disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The standard modernizes the accounting for internal-use software costs by removing all references to project stages and defining a probable-to-complete threshold to begin capitalizing costs. The standard also clarifies the disclosure requirements for capitalized internal-use software costs. The standard is effective for annual reporting periods, including interim reporting periods within those annual reporting periods, beginning after December 15, 2027. The amendment can be applied prospectively, retrospectively, or on a modified transition approach. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and related disclosures.

Note 2—Earnings Per Share, Share Repurchases and Dividends:

Earnings Per Share ("EPS")

Basic EPS is computed by dividing net income by the basic weighted-average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is increased to include the dilutive effect of outstanding stock-based awards. The dilutive effect of outstanding stock-based awards is computed using the treasury stock method.

The following table provides a reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS for the periods presented:


	Three Months Ended
	May 1, 2026	May 2, 2025
	(in millions)
Basic weighted-average number of shares outstanding	43.7	47.6
Dilutive common share equivalents - stock options and other stock-based awards	0.3	0.2
Diluted weighted-average number of shares outstanding	44.0	47.8

Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three months ended May 1, 2026 and May 2, 2025 were immaterial.

Share Repurchases

The Company may repurchase shares in accordance with established repurchase plans. The Company retires its common stock upon repurchase with the excess over par value allocated to additional paid-in capital. When repurchases for the period exceed total additional paid-in capital, the excess repurchases are recorded as a reduction to retained earnings. The Company has not made any material purchases of common stock other than in connection with its established share repurchase plans.

During the three months ended May 1, 2026, the Company repurchased approximately 1.9 million shares of its common stock from the open market under its existing share repurchase plan for approximately $175 million. In December 2024, the Company's Board of Directors authorized the repurchase of up to $1.2 billion of the Company's outstanding common stock under its existing share repurchase plan. As of May 1, 2026, the Company has repurchased approximately 30.4 million shares of its common stock under the plan for approximately $2.7 billion, which included amounts previously authorized under the plan prior to December 2024.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Dividends

The Company declared and paid a quarterly dividend of $0.37 per share of its common stock during the three months ended May 1, 2026. Subsequent to the end of the quarter, on May 28, 2026, the Company's Board of Directors declared a quarterly dividend of $0.37 per share of the Company's common stock payable on July 24, 2026 to stockholders of record on July 10, 2026.

Note 3—Revenues:

Changes in Estimates on Contracts

Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can occur routinely over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated.

A significant portion of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss.

Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows:


	Three Months Ended
	May 1, 2026		May 2, 2025
	(in millions, except per share amounts)
Net favorable (unfavorable) adjustments	$	8	$	(2)
Net favorable (unfavorable) adjustments, after tax	6		(2)
Basic and Diluted EPS impact	$	0.14	$	(0.04)

Revenues were $3 million higher for the three months ended May 1, 2026 and were unchanged for the three months ended May 2, 2025, due to net revenue recognized from performance obligations satisfied in prior periods.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Disaggregation of Revenues

The Company's revenues are generated primarily from long-term contracts with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company disaggregates revenues by customer, contract type and prime versus subcontractor to the federal government for each of its reportable segments.

Disaggregated revenues by customer were as follows:


	Three Months Ended
	May 1, 2026						May 2, 2025
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Department of War	$	981	$	1	$	982	$	982	$	3	$	985
Intelligence and other federal government agencies	479		396		875		445		408		853
Commercial, state and local governments and international	6		43		49		6		33		39
Total	$	1,466	$	440	$	1,906	$	1,433	$	444	$	1,877

Disaggregated revenues by contract type were as follows:


	Three Months Ended
	May 1, 2026						May 2, 2025
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Cost reimbursement	$	1,164	$	8	$	1,172	$	1,134	$	20	$	1,154
Time and materials ("T&M")	138		306		444		141		292		433
Firm-fixed price ("FFP")	164		126		290		158		132		290
Total	$	1,466	$	440	$	1,906	$	1,433	$	444	$	1,877

Disaggregated revenues by prime versus subcontractor were as follows:


	Three Months Ended
	May 1, 2026						May 2, 2025
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Prime contractor to federal government	$	1,339	$	371	$	1,710	$	1,299	$	372	$	1,671
Subcontractor to federal government	121		26		147		128		39		167
Other	6		43		49		6		33		39
Total	$	1,466	$	440	$	1,906	$	1,433	$	444	$	1,877

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Contract Balances

Contract balances for the periods presented were as follows:


	Balance Sheet line item	May 1, 2026		January 30, 2026
		(in millions)
Billed and billable receivables, net(1)	Receivables, net	$	554	$	490
Contract assets - unbillable receivables	Receivables, net	408		363
Contract assets - unbillable receivables	Other assets	22		23
Contract assets - contract retentions	Other assets	18		18
Contract liabilities - current	Other accrued liabilities	36		41
Contract liabilities - non-current	Other long-term liabilities	$	2	$	2

(1) Net of allowance of $2 million as of May 1, 2026 and January 30, 2026.

During the three months ended May 1, 2026 and May 2, 2025, the Company recognized revenues of $18 million and $17 million relating to amounts that were included in the opening balance of contract liabilities as of January 30, 2026 and January 31, 2025, respectively.

Remaining Performance Obligations

Remaining performance obligations ("RPO") represent the transaction price of exercised contracts (both funded and unfunded) less inception to date revenue recognized. RPO does not include unexercised option periods and future task orders expected to be awarded under IDIQ contracts. As of May 1, 2026, the Company had approximately $6.6 billion of RPO. The Company expects to recognize revenue on approximately 76% of the RPO over the next 12 months and approximately 90% over the next 24 months, with the remaining recognized thereafter.

Note 4—Acquisitions:

Acquisition of SilverEdge Government Solutions (“SilverEdge”)

On October 15, 2025, the Company acquired SilverEdge, an innovative provider of mission-driven technology solutions and products, for a preliminary purchase price of $203 million, net of $6 million cash acquired, subject to post-closing adjustments. The acquisition advances the Company's strategy to provide mission focused, IP-based solutions and commercial products to its customers. The Company funded the transaction from increased borrowings and cash on hand.

As of May 1, 2026, the Company has substantially completed the purchase price allocation related to this acquisition, primarily subject to the finalization of working capital adjustments. The Company has preliminarily recorded goodwill and amortizable intangible assets of $93 million and $101 million, respectively. Substantially all of the goodwill recorded is tax deductible. The goodwill is primarily associated with intellectual capital and an acquired assembled workforce. The intangible assets consist of customer relationships of $90 million, developed technology of $9 million, and backlog of $2 million that will be amortized over a period of ten years, eight years, and one year, respectively.

During the three months ended May 1, 2026, revenues of $19 million related to SilverEdge were recorded to the Defense and Intelligence reportable segment.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 5—Goodwill and Intangible Assets:

Goodwill

The following table presents the carrying value of goodwill by reportable segment:


	May 1, 2026		January 30, 2026
	(in millions)
Defense and Intelligence	$	2,094	$	2,094
Civilian	850		850
Total	$	2,944	$	2,944

Goodwill is not amortized, but rather tested for potential impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The goodwill impairment test is performed at the reporting unit level. As a result of the internal reorganization on January 31, 2026, the Company reallocated its goodwill to its three new goodwill reporting units.

The Company performed a goodwill impairment test immediately before and after the reorganization, both of which resulted in no impairment. For the goodwill impairment test immediately after the reorganization, the Company performed a quantitative assessment of its goodwill as of January 31, 2026 for its three new goodwill reporting units. The Company estimated the fair value of each reporting unit using a 50:50 weighting of fair values derived from an income approach and market approach.

Under the income approach, the Company estimated the fair value of its reporting units using a multi-year discounted cash flow model involving assumptions about projected future revenue growth, operating margins, income tax rates, capital expenditures, discount rate, and terminal value. Under the market approach, the Company estimated the fair value of its reporting units based on multiples of earnings derived from observable market data of comparable public companies.

Intangible Assets

Intangible assets, all of which were finite-lived, consisted of the following:


	May 1, 2026						January 30, 2026
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
	(in millions)
Customer relationships	$	1,551	$	(835)	$	716	$	1,551	$	(804)	$	747
Developed technology	19		(7)		12		19		(6)		13
Backlog	2		(1)		1		2		(1)		1
Total intangible assets	$	1,572	$	(843)	$	729	$	1,572	$	(811)	$	761

Amortization expense related to intangible assets was $32 million and $29 million for the three months ended May 1, 2026 and May 2, 2025, respectively. There were no intangible asset impairment losses during the periods presented.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

As of May 1, 2026, the estimated future annual amortization expense related to intangible assets is as follows:


Fiscal Year	(in millions)
Remainder of 2027	$	94
2028	108
2029	108
2030	105
2031	98
Thereafter	216
Total	$	729

Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, and other factors.

Note 6—Income Taxes:

The Company's 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 the Company's 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.

Note 7—Debt Obligations:

The Company’s debt as of the dates presented was as follows:


	May 1, 2026										January 30, 2026
	Stated interest rate		Effective interest rate		Principal		Unamortized debt issuance costs		Net		Principal		Unamortized debt issuance costs		Net
	(dollars in millions)
Term Loan A Facility due September 2030	4.90	%	4.98	%	$	1,100	$	(3)	$	1,097	$	1,100	$	(3)	$	1,097
Term Loan B3 Facility due February 2031	5.40	%	5.54	%	500		(3)		497		501		(3)		498
Senior Notes due April 2028	4.88	%	5.11	%	400		(2)		398		400		(2)		398
Senior Notes due November 2033	5.88	%	6.09	%	500		(6)		494		500		(6)		494
Total debt					$	2,500	$	(14)	$	2,486	$	2,501	$	(14)	$	2,487
Less current portion					26		—		26		19		—		19
Total debt, net of current portion					$	2,474	$	(14)	$	2,460	$	2,482	$	(14)	$	2,468

As of May 1, 2026, the Company had a $2.6 billion secured credit facility (the "Credit Facility") consisting of a Term Loan A Facility due September 2030, a Term Loan B3 Facility due February 2031 (together, the "Term Loan Facilities"), and a $1.0 billion Revolving Credit Facility due September 2030 (the "Revolving Credit Facility").

During the three months ended May 1, 2026, the Company made a scheduled principal payment of $1 million on the Term Loan B3 Facility due February 2031.

During the three months ended May 1, 2026, the Company made no borrowings or repayments under the Revolving Credit Facility, and as of May 1, 2026 and January 30, 2026, there were no borrowings outstanding.

As of May 1, 2026, the Company was in compliance with the covenants under its Credit Facility.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

As of May 1, 2026 and January 30, 2026, the carrying value of the Company’s outstanding debt obligations approximated its fair value. The fair value of debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s Term Loan Facilities and Senior Notes.

Maturities of debt as of May 1, 2026 are:


Fiscal Year	Total
	(in millions)
Remainder of 2027	$	18
2028	31
2029	489
2030	88
2031	899
Thereafter	975
Total principal payments	$	2,500

Note 8—Changes in Accumulated Other Comprehensive Income (Loss) by Component:

The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s fixed interest rate swap cash flow hedges and the Company's defined benefit plans.


	Defined Benefit Obligation Adjustment(1)		Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(2)		Total
	(in millions)
Three months ended May 1, 2026
Balance at January 30, 2026	$	8	$	—	$	8
Other comprehensive income before reclassifications	—		—		—
Amounts reclassified from accumulated other comprehensive income	(1)		—		(1)
Income tax impact	—		—		—
Net other comprehensive loss	(1)		—		(1)
Balance at May 1, 2026	$	7	$	—	$	7

Three months ended May 2, 2025
Balance at January 31, 2025	$	8	$	4	$	12
Other comprehensive income before reclassifications	—		—		—
Amounts reclassified from accumulated other comprehensive income	—		(2)		(2)
Income tax impact	—		1		1
Net other comprehensive loss	—		(1)		(1)
Balance at May 2, 2025	$	8	$	3	$	11

(1)The amount reclassified from accumulated other comprehensive income (loss) is included in "Other (income) expense, net."

(2)The amount reclassified from accumulated other comprehensive income (loss) is included in "Interest expense, net."

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 9—Sales of Receivables:

The Company has a Master Accounts Receivable Purchase Agreement ("MARPA Facility") for the sale of up to a maximum amount of $300 million of certain designated eligible receivables with the U.S. government.

MARPA Facility activity consisted of the following:


	Three Months Ended
	May 1, 2026		May 2, 2025
	(in millions)
Beginning balance	$	164	$	164
Sale of receivables	814		1,243
Cash collections	(814)		(1,107)
Outstanding balance sold(1)	164		300
Cash collected, not remitted(2)	(48)		(109)
Remaining sold receivables(3)	$	116	$	191

(1) For the three months ended May 1, 2026, there was no net impact to cash flows from operating activities from sold receivables. For the three months ended May 2, 2025, the Company recorded a net increase of $136 million to cash flows from operating activities from sold receivables.

(2) The Cash collected, not remitted balance is included in "Accounts payable" on the condensed consolidated balance sheets.

(3) The Remaining sold receivables balance is included in "Receivables, net" on the condensed consolidated balance sheets.

Note 10—Business Segments Information:

Effective January 31, 2026, the first day of fiscal 2027, the Company completed a business reorganization that consolidated its five previous business groups into three. The reorganization was designed to simplify the Company's 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 the Company’s CEO, the CODM. The reorganization did not have an impact on the Company's reportable segments.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the DoW and the Intelligence Community of the United States Government, supporting a variety of missions across land, sea, air, and space.

Costs associated with corporate functions that are not allocable to the reportable segments are presented as Corporate.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The CODM reviews and evaluates segment operating performance using segment "Revenues" and "Adjusted operating income (loss)". Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions and activities that the Company does not consider to be indicative of its 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. The CODM uses revenues and adjusted operating income to assess the financial performance of each operating segment against pre-established performance targets and to allocate resources for strategic business decisions, including investments in certain products or services, potential acquisitions or divestitures, and capital deployment. Labor base is the significant expense that is regularly provided to the CODM, and primarily includes direct labor on customer contracts.

The segment information for the periods presented was as follows:


	Three Months Ended May 1, 2026
	Defense and Intelligence		Civilian		Corporate		Total SAIC
	(in millions)
Revenues	$	1,466	$	440	$	—	$	1,906
Labor base	436		128		—		564
Other operating expenses (income)(1)	884		244		(7)		1,121
Adjusted operating income (loss)	$	146	$	68	$	7	$	221


	Three Months Ended May 2, 2025
	Defense and Intelligence		Civilian		Corporate		Total SAIC
	(in millions)
Revenues	$	1,433	$	444	$	—	$	1,877
Labor base	431		133		—		564
Other operating expenses (income)(1)	887		259		9		1,155
Adjusted operating income (loss)	$	115	$	52	$	(9)	$	158

(1) "Other operating expenses (income)" includes cost of revenues, selling, general and administrative expenses, and other operating income or expenses which are not regularly provided to the CODM. This excludes labor base which is presented separately.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The table below includes a reconciliation of total "Adjusted operating income" to "Income before income taxes" for the three months ended May 1, 2026 and May 2, 2025.


	Three Months Ended
	May 1, 2026		May 2, 2025
	(in millions)
Adjusted operating income	$	221	$	158
Depreciation of property, plant, and equipment	8		7
Amortization of intangible assets	32		29
Acquisition, integration, restructuring and impairment costs	2		3
Recovery of acquisition, integration, restructuring and impairment costs(1)	(1)		(2)
Costs related to the settlement of federal tax audits	1		—
Interest expense, net	33		30
Other (income) expense, net	1		5
Income before income taxes	$	145	$	86

(1) Adjustment reflects the portion of acquisition, integration, restructuring and impairment costs recovered through the Company's indirect rates in accordance with U.S. government Cost Accounting Standards.

Asset information by segment is not a key measure of performance used by the CODM.

Note 11—Legal Proceedings and Other Commitments and Contingencies:

Legal Proceedings

The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

In April 2022 and October 2023, the Company received Federal Grand Jury Subpoenas in connection with a criminal investigation being conducted by the U.S. Department of Justice, Antitrust Division ("DOJ"). As required by the subpoenas, the Company has provided the DOJ with a broad range of documents related to the investigation, and the Company’s collection and production process remains ongoing. The Company is fully cooperating with the investigation. At this time, it is not possible to determine whether the Company will incur, or to reasonably estimate the amount of, any fines, penalties or further liabilities in connection with the investigation pursuant to which the subpoenas were issued.

Government Investigations, Audits and Reviews

The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect, in particular, to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the United States. U.S. government agencies, including the Defense Contract Audit Agency ("DCAA"), the Defense Contract Management Agency and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review the adequacy of the contractor’s compliance with government standards for its business systems. Adverse findings in these investigations, audits, or reviews can lead to criminal, civil or administrative proceedings, and the Company could face disallowance of previously billed costs, penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. Due to the Company’s reliance on government contracts, adverse findings could also have a material impact on the Company’s business, including its financial position, results of operations and cash flows.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

The indirect cost audits by the DCAA of the Company’s business remain open for certain prior years and the current year. Although the Company has recorded contract revenues based on an estimate of costs that the Company believes will be approved on final audit, the Company does not know the outcome of any ongoing or future audits. If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected.

As of May 1, 2026, the Company believes it has adequately reserved for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with U.S. government Cost Accounting Standards.

Letters of Credit and Surety Bonds

The Company has outstanding obligations relating to letters of credit of $8 million as of May 1, 2026, principally related to guarantees on insurance policies. The Company also has outstanding obligations relating to surety bonds of $19 million, principally related to performance and payment bonds on the Company’s contracts.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures about market risk should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes. It contains forward-looking statements (which may be identified by words such as those described in “Risk Factors—Forward-Looking Statement Risks” in Part I of the most recently filed Annual Report on Form 10-K), including statements regarding our intent, belief, or current expectations with respect to, among other things, trends affecting our financial condition or results of operations (including our financial targets discussed below under “Management of Operating Performance and Reporting” and “Liquidity and Capital Resources”); backlog; our industry; government budgets and spending; market opportunities; the impact of competition; and the impact of acquisitions and divestitures. Such statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Risks, uncertainties and assumptions that could cause or contribute to these differences include those discussed below, in “Risk Factors” in Part II of this report and in Part I of the most recently filed Annual Report on Form 10-K. Due to such risks, uncertainties and assumptions, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to update these factors or to publicly announce the results of any changes to our forward-looking statements due to future results or developments.

We use the terms "SAIC," the “Company,” “we,” “us” and “our” to refer to Science Applications International Corporation and its consolidated subsidiaries.

We utilize a 52/53 week fiscal year, ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2027 began on January 31, 2026 and ends on January 29, 2027, while fiscal 2026 began on February 1, 2025 and ended on January 30, 2026.

Business Overview

We are a leading technology integrator providing full life cycle services and solutions in the technical, engineering, and information technology ("IT") markets. We have developed our brand for over 50 years by addressing our customers’ mission critical needs and solving their most complex problems. As one of the largest pure-play technology service providers to the U.S. government, we serve markets of significant scale and opportunity. Our primary customers are the departments and agencies of the U.S. government. We serve them through approximately 1,700 active contracts and task orders, employing approximately 23,000 individuals led by an experienced executive team of proven industry leaders. Our long history of serving the U.S. government has afforded us the ability to develop strong and longstanding relationships with some of the largest customers in the markets we serve. Substantially all of our revenues and tangible long-lived assets are generated and located in the United States.

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.

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.

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Our Solutions and Technology Group ("STG") supports the operating segments by developing enterprise-class solutions to meet complex customer needs and accelerate digital transformation. These capabilities are delivered to our customers as stand-alone solutions, or integrated with our product offerings through the operations of the business. The STG includes designated teams focused on artificial intelligence, application development, network services, platforms and cloud, engineering, and cybersecurity. It uses a highly automated, cloud-hosted tool set to rapidly build, test, deploy and continuously enhance solutions.

Costs associated with corporate functions that are not allocable to the reportable segments are presented as Corporate. See Note 10—Business Segments Information to the condensed consolidated financial statements contained within this report for additional information.

Economic Opportunities, Challenges, and Risks

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.

In February 2026, the President signed an appropriations package that finalized full-year funding for all government agencies with the exception of the Department of Homeland Security ("DHS"). As a result, the DHS was shut down from February 2026 through April 2026. In April 2026, the President signed a bill to fund substantially all the DHS, ending the shutdown. The bill provides full-year funding for all DHS functions except Immigration and Customs Enforcement and Customs and Border Protection. All agencies and functions funded by those bills will now be covered in full through September 30, 2026, the close of government fiscal year 2026.

The U.S. government administration has put in place a number of executive orders and actions which could affect our business. In addition, the U.S. government performs an ongoing evaluation of the structure and priorities of Federal agencies. Agencies are conducting comprehensive reviews of existing and new contracting activity to identify potential efficiencies or nonalignment with new Administration priorities. Our contracts have been, and will continue to be, subject to these reviews. We have not experienced a material financial statement impact from recent executive orders or program cancellations across the government. However, ongoing reductions in personnel, changes in agency alignment, required reviews of new contracting activity, decreases or delays in new or existing contract awards and in government spending on the types of programs that we support, and terminations or stop-work-orders and delay in funding on government contracts on which we are currently performing could adversely affect our future revenues, cash flows, and profitability.

Adverse changes in fiscal and economic conditions could materially impact our business. Some changes that could have an adverse impact on our business include the implementation of future spending reductions (including sequestration), delayed passage of appropriations bills resulting in temporary or full-year continuing resolutions, inflationary increases adversely impacting fixed price contracts, and potential government shutdowns.

Spending packages, including the infrastructure bill, Inflation Reduction Act, and CHIPS and Science Act, as well as future potential spending packages, may provide additional opportunity in areas of our focus such as digital modernization, cyber, microelectronics support, and climate resiliency.

The U.S. government has increasingly relied on contracts that are subject to a competitive bidding process (including indefinite delivery, indefinite quantity ("IDIQ"), U.S. General Services Administration ("GSA") schedules, and other multi-award contracts), which has resulted in greater competition and increased pricing pressure. Additionally, the U.S. government has put renewed emphasis on increasing the number of small business prime set-aside contracts that further reduce the addressable market in some areas.

Despite the budget and competitive pressures affecting the industry, we believe we are well-positioned to protect and expand existing customer relationships and benefit from opportunities that we have not previously pursued. Our scale, size, and prime contractor leadership position are expected to help differentiate us from our competitors, especially on large contract opportunities. We believe our long-term, trusted customer relationships and deep

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technical expertise provide us with the sophistication to handle highly complex, mission-critical contracts. Our value proposition is found in the proven ability to serve as a trusted adviser to our customers. In doing so, we leverage our expertise and scale to help them execute their mission.

We succeed as a business based on the solutions we deliver, our past performance, and our ability to compete on price. Our solutions are inspired through innovation based on adoption of best practices and technology integration of the best capabilities available. Our STG develops superior enterprise-class solutions which are delivered to our customers as stand-alone solutions or integrated with and aligned to our product offerings to meet complex customer needs and accelerate digital transformation. Our past performance was achieved by employees dedicated to supporting our customers' most challenging missions. Our current cost structure and ongoing efforts to reduce costs by strategic sourcing and developing repeatable offerings sold "as a service" and as managed services in a more commercial business model are expected to allow us to compete effectively on price in an evolving environment. Our ability to be competitive in the future will continue to be driven by our reputation for successful program execution, competitive cost structure, development of new pricing and business models, and efficiencies in assigning the right people, at the right time, in support of our contracts.

Management of Operating Performance and Reporting

Our business and program management process is directed by professionals focused on serving our customers by providing high quality services in achieving program requirements. These professionals carefully monitor contract margin performance by constantly evaluating contract risks and opportunities. Throughout each contract's life cycle, program managers review performance and update contract performance estimates to reflect their understanding of the best information available.

The primary financial measures used to evaluate our consolidated results of operations include revenues, operating income, adjusted operating income(1), adjusted EBITDA(1), and operating cash flows. Given that revenues fluctuate on our contract portfolio over time due to contract awards and completions, changes in customer requirements, and increases or decreases in ordering volume of materials, we evaluate significant trends and fluctuations resulting from these factors. Whether performed by our employees or by our subcontractors, we primarily provide services and, as a result, our cost of revenues are predominantly variable. We also analyze our cost mix (labor, subcontractor and materials) in order to understand operating margin because programs with a higher proportion of SAIC labor are generally more profitable. Changes in cost of revenues as a percentage of revenues other than from revenue volume or cost mix are normally driven by fluctuations in shared or corporate costs, or cumulative revenue adjustments due to changes in estimates.

Changes in operating cash flows are described with regard to changes in cash generated through the provision of services, significant drivers of fluctuations in assets or liabilities and the impacts of changes in timing of cash receipts or disbursements.

(1) Non-GAAP measure, see "Non-GAAP Measures" section below for additional information about this measure.

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Condensed Consolidated Results of Operations

The following table summarizes our condensed consolidated results of operations:


	Three Months Ended
	May 1, 2026			Percent change		May 2, 2025
	(dollars in millions)
Revenues	$	1,906		2	%	$	1,877
Cost of revenues	1,657			(1	%)	1,668
As a percentage of revenues	86.9		%			88.9		%
Selling, general and administrative expenses	83			(7	%)	89
Other operating (income) expense	(13)			1,200	%	(1)
Operating income	179			48	%	121
As a percentage of revenues	9.4		%			6.4		%
Income tax (expense) benefit	(30)			67	%	(18)
Net income	$	115		69	%	$	68

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%.

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.

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.

On July 4, 2025 the One Big Beautiful Bill Act (“the Act”) was enacted, introducing several significant changes to U.S. corporate income tax law. One key provision of the Act is the permanent reinstatement of the immediate expensing of U.S. research and development expenditures. These changes are reflected in our current period effective tax rate. We are continuing to evaluate the full impact of the Act, including the treatment of previously capitalized costs, and are awaiting interpretive guidance from the IRS. Accordingly, the estimated impacts of the Act are subject to change as we complete our analysis.

Segment and Corporate Results

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.

The following tables summarize our results of operations by reportable segment:


Defense and Intelligence	Three Months Ended
	May 1, 2026			Percent change		May 2, 2025
	(dollars in millions)
Revenues	$	1,466		2	%	$	1,433
Adjusted operating income	$	146		27	%	$	115
As a percentage of revenues	10.0		%			8.0		%

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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.

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.


Civilian	Three Months Ended
	May 1, 2026			Percent change		May 2, 2025
	(dollars in millions)
Revenues	$	440		(1	%)	$	444
Adjusted operating income	$	68		31	%	$	52
As a percentage of revenues	15.5		%			11.7		%

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.

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.


Corporate	Three Months Ended
	May 1, 2026		Percent change		May 2, 2025
	(dollars in millions)
Adjusted operating income (loss)	$	7	178	%	$	(9)

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.

Non-GAAP Measures

Consolidated adjusted operating income, earnings before interest, taxes, depreciation and amortization ("EBITDA"), and adjusted EBITDA are non-GAAP financial measures. While we believe that these non-GAAP financial measures are also useful for management and investors in evaluating our financial information, they should be considered as supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Reconciliations, definitions, and how we believe these measures are useful to management and investors are provided below. Other companies may define similar measures differently.

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.

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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.

Adjusted operating income for the periods presented were calculated as follows:


	Three Months Ended
	May 1, 2026			May 2, 2025
	(dollars in millions)
Revenues	$	1,906		$	1,877
Operating income	$	179		$	121
Operating income as a percentage of revenues	9.4		%	6.4		%
Depreciation of property, plant and equipment	8			7
Amortization of intangible assets	32			29
Acquisition, integration, restructuring and impairment costs	2			3
Recovery of acquisition, integration, restructuring and impairment costs(1)	(1)			(2)
Costs related to the settlement of federal tax audits	1			—
Adjusted operating income	$	221		$	158
Adjusted operating income as a percentage of revenues	11.6		%	8.4		%

(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.

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.

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.

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EBITDA and adjusted EBITDA for the periods presented were calculated as follows:


	Three Months Ended
	May 1, 2026			May 2, 2025
	(dollars in millions)
Revenues	$	1,906		$	1,877
Net income	$	115		$	68
Interest expense, net and loss on sale of receivables	35			34
Income tax expense (benefit)	30			18
Depreciation and amortization	40			36
EBITDA	220			156
EBITDA as a percentage of revenues	11.5		%	8.3		%
Acquisition, integration, restructuring and impairment costs	2			3
Recovery of acquisition, integration, restructuring and impairment costs(1)	(1)			(2)
Costs related to the settlement of federal tax audits	1			—
Adjusted EBITDA	$	222		$	157
Adjusted EBITDA as a percentage of revenues	11.6		%	8.4		%

(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.

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.

Other Key Performance Measures

In addition to the financial measures described above, we believe that bookings and backlog are useful measures for management and investors to evaluate our potential future revenues. We also consider measures such as contract types and cost of revenues mix to be useful for management and investors to evaluate our operating income and performance.

Net Bookings and Backlog. Net bookings represent the estimated amount of revenues to be earned in the future from funded and negotiated unfunded contract awards that were received during the period, net of adjustments to estimates on previously awarded contracts. We calculate net bookings as the period’s ending backlog plus the period’s revenues less the prior period’s ending backlog and initial backlog obtained through acquisitions.

Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts as work is performed. We do not include in backlog estimates of revenues to be derived from IDIQ contracts, but rather record backlog and bookings when task orders are awarded on these contracts. Given that much of our revenue is derived from IDIQ contract task orders that renew annually, bookings on these contracts tend to refresh annually as the task orders are renewed. Additionally, we do not include in backlog contract awards that are under protest until the protest is resolved in our favor.

We segregate our backlog into two categories as follows:

•Funded Backlog. Funded backlog for contracts with government agencies primarily represents estimated amounts of revenue to be earned in the future from contracts for which funding is appropriated less revenues previously recognized on these contracts. It does not include the unfunded portion of contracts in which funding is incrementally appropriated or authorized on a quarterly or annual basis by the U.S. government and other customers even though the contract may call for performance over a number of years. Funded backlog for contracts with non-government customers represents the estimated value on contracts, which may cover multiple future years, under which we are obligated to perform, less revenues previously recognized on these contracts.

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•Negotiated Unfunded Backlog. Negotiated unfunded backlog represents estimated amounts of revenue to be earned in the future from negotiated contracts for which funding has not been appropriated or otherwise authorized and from unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders expected to be awarded under IDIQ, GSA Schedules or other master agreement contract vehicles, with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future anticipated task orders.

We expect to recognize revenue from a substantial portion of our funded backlog within the next twelve months. However, the U.S. government can adjust the scope of services of or cancel contracts at any time. Similarly, certain contracts with commercial customers include provisions that allow the customer to cancel prior to contract completion. Most of our contracts have cancellation terms that would permit us to recover all or a portion of our incurred costs and fees (contract profit) for work performed.

The estimated value of our total backlog as of the dates presented was:


	May 1, 2026						January 30, 2026
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Funded backlog	$	2,675	$	1,061	$	3,736	$	2,511	$	1,061	$	3,572
Negotiated unfunded backlog	15,946		3,178		19,124		15,869		3,181		19,050
Total backlog	$	18,621	$	4,239	$	22,860	$	18,380	$	4,242	$	22,622

We had net bookings worth an estimated $2.1 billion during the three months ended May 1, 2026.

Contract Types. Our earnings and profitability may vary materially depending on changes in the proportionate amount of revenues derived from each type of contract. For a discussion of the types of contracts under which we generate revenues, see “Business - Contract Types” in Part I, Item 1 of the most recently filed Annual Report on Form 10-K.

The following table summarizes revenues by contract type as a percentage of each reportable segment and total SAIC revenues for the periods presented:


	Three Months Ended
	May 1, 2026						May 2, 2025
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
Cost reimbursement	79	%	2	%	62	%	79	%	4	%	62	%
Time and materials ("T&M")	10	%	69	%	23	%	10	%	66	%	23	%
Firm-fixed price ("FFP")	11	%	29	%	15	%	11	%	30	%	15	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Cost of Revenues Mix. We generate revenues by providing a customized mix of services to our customers. The profit generated from our service contracts is affected by the proportion of cost of revenues incurred from the efforts of our employees (which we refer to below as labor-related cost of revenues), the efforts of our subcontractors and the cost of materials used in the performance of our service obligations under our contracts. Contracts performed with a higher proportion of SAIC labor are generally more profitable.

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The following table presents cost mix as a percentage of each reportable segment and total SAIC revenues for the periods presented:


	Three Months Ended
	May 1, 2026						May 2, 2025
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
Labor-related cost of revenues	58	%	58	%	58	%	59	%	58	%	59	%
Subcontractor-related cost of revenues	29	%	30	%	29	%	29	%	32	%	29	%
Other materials-related cost of revenues	13	%	12	%	13	%	12	%	10	%	12	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

Liquidity and Capital Resources

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.

We anticipate that our future cash needs will be for working capital, capital expenditures, and contractual and other commitments. We consider various financial measures when we develop and update our capital deployment strategy, which include evaluating cash provided by operating activities, free cash flow and financial leverage.

Our ability to fund these needs will depend, in part, on our ability to generate cash in the future, which depends on our future financial results. Our future results are subject to general economic, financial, competitive, legislative and regulatory factors that may be outside of our direct control. Although we believe that the financing arrangements in place will permit us to finance our operations on acceptable terms and conditions for at least the next year, our future access to, and the availability of financing on acceptable terms and conditions will be impacted by many factors (including our credit rating, capital market liquidity and overall economic conditions). Therefore, we cannot ensure that such financing will be available to us on acceptable terms or that such financing will be available at all. Nevertheless, we believe that our existing cash on hand, generation of future operating cash flows, and access to bank financing and capital markets will provide adequate resources to meet our short-term liquidity and long-term capital needs.

Historical Cash Flow Trends

The following table summarizes our cash flows:


	Three Months Ended
	May 1, 2026		May 2, 2025
	(in millions)
Net cash provided by operating activities	$	127	$	100
Net cash provided by (used in) investing activities	1		(15)
Net cash used in financing activities	(201)		(94)
Net decrease in cash, cash equivalents and restricted cash	$	(73)	$	(9)

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.

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.

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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.

Critical Accounting Policies and Estimates

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.

Recently Issued But Not Yet Adopted Accounting Pronouncements

For information on recently issued but not yet adopted accounting pronouncements, see Note 1 to the condensed consolidated financial statements contained within this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks from those discussed in our most recently filed Annual Report on Form 10-K.

Item 4. Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) and have concluded that as of May 1, 2026 these controls and procedures were operating and effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarterly period covered by this report which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We have provided information about legal proceedings in which we are involved in our fiscal 2026 Annual Report on Form 10-K, and we have provided an update to this information in Note 11—Legal Proceedings and Other Commitments and Contingencies to the condensed consolidated financial statements contained within this report, which is incorporated herein by reference.

In addition to the described legal proceedings, we are routinely subject to investigations and reviews relating to compliance with various laws and regulations. Additional information regarding such investigations and reviews is included in our fiscal 2026 Annual Report on Form 10-K, and we have also updated this information in Note 11—Legal Proceedings and Other Commitments and Contingencies to the condensed consolidated financial statements contained within this report, under the heading “Government Investigations, Audits and Reviews,” which is incorporated herein by reference.

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in our most recently filed Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities. We may repurchase shares on the open market in accordance with established repurchase plans. Whether repurchases are made and the timing and amount of repurchases depend on a variety of factors including market conditions, our capital position, internal cash generation and other factors. We also repurchase shares in connection with stock option and stock award activities to satisfy tax withholding obligations.

The following table presents repurchases of our common stock during the three months ended May 1, 2026:


Period(1)	Total Number of Shares (or Units) Purchased(2)	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(3)(4)
January 31, 2026 - March 6, 2026	864,855	$	90.53	864,361	6,638,859
March 7, 2026 - April 3, 2026	495,515	94.90		495,188	5,857,101
April 4, 2026 - May 1, 2026	515,623	95.66		515,623	5,599,323
Total	1,875,993	$	93.09	1,875,172

(1)Date ranges represent our fiscal periods during the current quarter. Our fiscal quarters typically consist of one five-week period and two four-week periods.

(2)Includes shares purchased on surrender by stockholders of previously owned shares to satisfy minimum statutory tax withholding obligations related to vesting of stock awards in addition to shares purchased under our publicly announced plans or programs.

(3)In December 2024, our Board of Directors authorized the repurchase of up to $1.2 billion of our outstanding common stock under our existing share repurchase plan. As of May 1, 2026, we have repurchased approximately 30.4 million shares of common stock under the program for approximately $2.7 billion, which included amounts previously authorized under the plan prior to December 2024.

(4)The maximum number of shares that may yet be purchased under our publicly announced plans or programs is calculated by taking the total remaining dollars authorized at the end of each period and dividing it by the closing stock price as of the period end date.

Item 3. Defaults Upon Senior Securities

No information is required in response to this item.

Item 4. Mine Safety Disclosures

No information is required in response to this item.

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Item 5. Other Information

During the three months ended May 1, 2026, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as such terms are defined in Item 408 of Regulation S-K.

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Item 6. Exhibits


Exhibit Number			Description of Exhibit

31.1			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101			Interactive Data File. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

104			The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: June 1, 2026


Science Applications International Corporation

/s/ Prabu Natarajan
Prabu Natarajan Executive Vice President and Chief Financial Officer

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