SAIC 10-Q Quarterly Report Oct. 31, 2025

SCIENCE APPLICATIONS INTERNATIONAL CORP

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saic-20251031

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 October 31, 2025


☐			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 November 21, 2025 was as follows:

45,127,414 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	9
	Note 3—Revenues	9
	Note 4—Acquisitions	12
	Note 5 —Goodwill and Intangible Assets	13
	Note 6 —Income Taxes	14
	Note 7 —Debt Obligations	14
	Note 8 —Derivative Instruments Designated as Cash Flow Hedges	16
	Note 9 —Changes in Accumulated Other Comprehensive Income (Loss) by Component	17
	Note 10 —Sales of Receivables	18
	Note 1 1 —Business Segments Information	18
	Note 1 2 —Legal Proceedings and Other Commitments and Contingencies	20
	Note 13—Subsequent Events	21

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3	Quantitative and Qualitative Disclosures About Market Risk	32

Item 4	Controls and Procedures	32

Part II	Other Information	33

Item 1	Legal Proceedings	33

Item 1A	Risk Factors	33

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3	Defaults Upon Senior Securities	34

Item 4	Mine Safety Disclosures	34

Item 5	Other Information	34

Item 6	Exhibits	35

	Signatures	36

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Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements


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


	Three Months Ended				Nine Months Ended
	October 31, 2025		November 1, 2024		October 31, 2025		November 1, 2024
	(in millions, except per share amounts)
Revenues	$	1,866	$	1,976	$	5,512	$	5,641
Cost of revenues	1,639		1,739		4,861		4,981
Selling, general and administrative expenses	101		83		265		245
Other operating (income) expense	( 2 )		( 6 )		( 2 )		( 10 )
Operating income	128		160		388		425
Interest expense, net	33		32		94		97
Other (income) expense, net	1		2		6		7
Income before income taxes	94		126		288		321
Income tax (expense) benefit	( 16 )		( 20 )		( 15 )		( 57 )
Net income	$	78	$	106	$	273	$	264
Earnings per share:
Basic	$	1.70	$	2.15	$	5.85	$	5.22
Diluted	$	1.69	$	2.13	$	5.82	$	5.17

See accompanying notes to condensed consolidated financial statements.

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Table of Conten ts


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


	Three Months Ended				Nine Months Ended
	October 31, 2025		November 1, 2024		October 31, 2025		November 1, 2024
	(in millions)
Net income	$	78	$	106	$	273	$	264
Other comprehensive (loss) income, net of tax:
Net unrealized (loss) gain on derivative instruments	( 1 )		( 1 )		( 4 )		( 6 )
Total other comprehensive (loss) income, net of tax	( 1 )		( 1 )		( 4 )		( 6 )
Comprehensive income	$	77	$	105	$	269	$	258

See accompanying notes to condensed consolidated financial statements.

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Table of Conten ts


SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)


	October 31, 2025		January 31, 2025
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	45	$	56
Receivables, net	1,045		1,000
Prepaid expenses	145		78
Other current assets	22		20
Total current assets	1,257		1,154
Goodwill	2,960		2,851
Intangible assets, net	779		779
Property, plant, and equipment (net of accumulated depreciation of $ 212 million and $ 200 million at October 31, 2025 and January 31, 2025, respectively)	108		104
Operating lease right of use assets	162		164
Other assets	157		194
Total assets	$	5,423	$	5,246

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	627	$	631
Accrued payroll and employee benefits	308		339
Other accrued liabilities	103		113
Debt, current portion	12		313
Total current liabilities	1,050		1,396
Debt, net of current portion	2,475		1,907
Operating lease liabilities	159		173
Deferred income taxes	124		24
Other long-term liabilities	103		169
Commitments and contingencies (Note 12)
Equity:
Common stock, $ 0.0001 par value, 1 billion shares authorized, 45 million and 48 million shares issued and outstanding as of October 31, 2025 and January 31, 2025, respectively	—		—
Additional paid-in capital	—		—
Retained earnings	1,504		1,565
Accumulated other comprehensive income	8		12
Total stockholders' equity	1,512		1,577
Total liabilities and stockholders' equity	$	5,423	$	5,246

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 August 1, 2025	46	$	—	$	1,508	$	9	$	1,517
Net income	—	—		78		—		78
Issuances of stock	—	4		—		—		4
Other comprehensive loss, net of tax	—	—		—		( 1 )		( 1 )
Cash dividends of $ 0.37 per share	—	—		( 17 )		—		( 17 )
Stock-based compensation, net of shares withheld for taxes (1)	—	26		—		—		26
Repurchases of stock	( 1 )	( 30 )		( 65 )		—		( 95 )
Balance at October 31, 2025	45	$	—	$	1,504	$	8	$	1,512

Balance at January 31, 2025	48	$	—	$	1,565	$	12	$	1,577
Net income	—	—		273		—		273
Issuances of stock	—	16		—		—		16
Other comprehensive loss, net of tax	—	—		—		( 4 )		( 4 )
Cash dividends of $ 1.11 per share	—	—		( 53 )		—		( 53 )
Stock-based compensation, net of shares withheld for taxes (1)	—	32		—		—		32
Repurchases of stock	( 3 )	( 48 )		( 281 )		—		( 329 )
Balance at October 31, 2025	45	$	—	$	1,504	$	8	$	1,512

Balance at August 2, 2024	50	$	63	$	1,551	$	11	$	1,625
Net income	—	—		106		—		106
Issuances of stock	—	5		—		—		5
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)	—	11		—		—		11
Repurchases of stock	( 1 )	( 79 )		( 37 )		—		( 116 )
Balance at November 1, 2024	49	$	—	$	1,602	$	10	$	1,612

Balance at February 2, 2024	52	$	337	$	1,432	$	16	$	1,785
Net income	—	—		264		—		264
Issuances of stock	—	14		—		—		14
Other comprehensive loss, net of tax	—	—		—		( 6 )		( 6 )
Cash dividends of $ 1.11 per share	—	—		( 57 )		—		( 57 )
Stock-based compensation, net of shares withheld for taxes (1)	—	13		—		—		13
Repurchases of stock	( 3 )	( 364 )		( 37 )		—		( 401 )

Balance at November 1, 2024	49	$	—	$	1,602	$	10	$	1,612

(1) During the three months ended October 31, 2025, there were no shares withheld for taxes related to stock-based compensation arrangements. During the three months ended November 1, 2024, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 2 million. During the nine months ended October 31, 2025 and November 1, 2024, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 19 million and $ 25 million, respectively.

See accompanying notes to condensed consolidated financial statements.

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


	Nine Months Ended
	October 31, 2025		November 1, 2024
	(in millions)
Cash flows from operating activities:
Net income	$	273	$	264
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	109		104
Stock-based compensation expense	51		38
Deferred income taxes	101		( 15 )
Gain on sale of equity method investments	—		( 5 )
Other	( 4 )		( 4 )
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of acquisitions:
Receivables	( 31 )		( 108 )
Prepaid expenses and other current assets	( 68 )		31
Accounts payable and other accrued liabilities	( 22 )		119
Accrued payroll and employee benefits	( 36 )		( 59 )
Operating lease assets and liabilities, net	( 5 )		( 7 )
Other assets and other long-term liabilities, net	( 17 )		21
Net cash provided by operating activities	351		379
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired	( 203 )		—
Expenditures for property, plant, and equipment	( 24 )		( 21 )
Purchases of marketable securities	( 5 )		( 11 )
Sales of marketable securities	5		10
Proceeds from sale of equity method investments	—		10
Contributions to investments	( 10 )		( 3 )
Net cash used in investing activities	( 237 )		( 15 )
Cash flows from financing activities:
Proceeds from borrowings	2,745		1,114
Principal payments on borrowings	( 2,473 )		( 1,056 )
Stock repurchased and retired or withheld for taxes on equity awards	( 347 )		( 425 )
Dividend payments to stockholders	( 53 )		( 57 )
Issuances of stock	16		14
Debt issuance costs	( 9 )		—
Other	( 4 )		( 3 )
Net cash used in financing activities	( 125 )		( 413 )
Net decrease in cash, cash equivalents and restricted cash	( 11 )		( 49 )
Cash, cash equivalents and restricted cash at beginning of period	64		103
Cash, cash equivalents and restricted cash at end of period	$	53	$	54

See accompanying notes to condensed consolidated financial statements.

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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 enterprise 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.

The Company has five customer facing business groups supported by the enterprise organizations, including the Innovation Factory. The Company's five business groups, which are also its operating segments, 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 Intelligence Community of the United States Government.

The Civilian segment provides solutions to the civilian markets, encompassing federal, state, and local governments, in order to deliver services for citizen well-being, border security, and protecting lives. This includes integrating solutions into a spectrum of public service missions that impact travel, 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, including IT modernization, digital engineering, artificial intelligence ("AI"), mission systems support and advisory, training and simulation, and ground vehicles support. These services include end-to-end solutions spanning the design, development, integration, deployment, management and operations, sustainment and security of the customers’ entire IT infrastructure.

The Company's Innovation Factory supports the operating segments by developing enterprise-class solutions which are delivered to the Company's customers as stand-alone solutions or integrated with and aligned to the Company's product offerings through the operations of the business to meet complex customer needs and accelerate digital transformation. The Innovation Factory includes designated teams focused on AI, application development, network services, platforms and cloud, engineering, and cybersecurity. It uses a highly automated, cloud-hosted tool set to rapidly build, test and deploy solutions and works with customers to enhance solutions going forward.

Costs associated with corporate functions that are not allocable to the reportable segments are presented as Corporate activities. See Note 11—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.

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 31, 2025.

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

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 2026 began on February 1, 2025 and ends on January 30, 2026, while fiscal 2025 began on February 3, 2024 and ended on January 31, 2025.

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.

Derivative Instruments Designated as Cash Flow Hedges

Derivative instruments are recorded on the condensed consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. Settlement amounts related to derivatives designated as cash flow hedges are presented within operating activities on the condensed consolidated statement of cash flows.

The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and their fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party. See Note 8—Derivative Instruments Designated as Cash Flow Hedges for further discussion on the Company’s derivative instruments designated as cash flow hedges.

Marketable Securities

Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1). As of October 31, 2025 and January 31, 2025, the fair value of the Company's investments totaled $ 39 million and $ 36 million, respectively, and are included in "Other assets" on the condensed consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund its deferred compensation plan liabilities.

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

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:


	October 31, 2025		January 31, 2025
	(in millions)
Cash and cash equivalents	$	45	$	56
Restricted cash included in other current assets	3		3
Restricted cash included in other assets	5		5
Cash, cash equivalents and restricted cash	$	53	$	64

Accounting Standards Updates

Accounting Standards Updates Recently Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Amongst other amendments, the standard requires annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), and interim disclosures about a reportable segment’s profit or loss and assets that are currently required annually. This standard does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The standard was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted the annual disclosure requirements in fiscal 2025 and adopted the interim disclosure requirements in fiscal 2026. See Note 11—Business Segments Information for additional information.

Accounting Standards Updates Recently Issued But Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard includes amendments that enhance annual income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The standard is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments can be applied on a prospective or retrospective basis. The Company plans to adopt this standard prospectively in fiscal 2026 and does not expect it to have a material impact on its consolidated financial statements and related disclosures.

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, 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

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

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		Nine Months Ended
	October 31, 2025	November 1, 2024	October 31, 2025	November 1, 2024
	(in millions)
Basic weighted-average number of shares outstanding	45.9	49.4	46.7	50.6
Dilutive common share equivalents - stock options and other stock-based awards	0.2	0.4	0.2	0.5
Diluted weighted-average number of shares outstanding	46.1	49.8	46.9	51.1

Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three and nine months ended October 31, 2025 and November 1, 2024 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 established share repurchase plans.

During the nine months ended October 31, 2025, the Company repurchased approximately 3.0 million shares of its common stock from the open market under its existing share repurchase plan for approximately $ 325 million. As of October 31, 2025, the Company has repurchased approximately 27.5 million shares of its common stock under the plan for approximately $ 2.4 billion.

Dividends

The Company declared and paid a quarterly dividend of $ 0.37 per share of its common stock during the three months ended October 31, 2025.

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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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				Nine Months Ended
	October 31, 2025		November 1, 2024		October 31, 2025		November 1, 2024
	(in millions, except per share amounts)
Net favorable (unfavorable) adjustments	$	4	$	15	$	7	$	15
Net favorable (unfavorable) adjustments, after tax	4		13		7		12
Diluted EPS impact	$	0.09	$	0.26	$	0.15	$	0.23

Revenues were $ 8 million and $ 15 million higher for the three and nine months ended October 31, 2025, respectively, and $ 13 million and $ 14 million higher for the three and nine months ended November 1, 2024, respectively, due to net revenue recognized from performance obligations satisfied in prior periods.

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
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Department of War	$	970	$	2	$	972	$	992	$	13	$	1,005
Intelligence and other federal government agencies	462		387		849		517		413		930
Commercial, state and local governments and international	7		38		45		6		35		41
Total	$	1,439	$	427	$	1,866	$	1,515	$	461	$	1,976


	Nine Months Ended
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Department of War	$	2,872	$	7	$	2,879	$	2,916	$	15	$	2,931
Intelligence and other federal government agencies	1,351		1,155		2,506		1,430		1,158		2,588
Commercial, state and local governments and international	23		104		127		20		102		122
Total	$	4,246	$	1,266	$	5,512	$	4,366	$	1,275	$	5,641

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

Disaggregated revenues by contract type were as follows:


	Three Months Ended
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Cost reimbursement	$	1,148	$	15	$	1,163	$	1,245	$	28	$	1,273
Time and materials ("T&M")	129		288		417		119		287		406
Firm-fixed price ("FFP")	162		124		286		151		146		297
Total	$	1,439	$	427	$	1,866	$	1,515	$	461	$	1,976


	Nine Months Ended
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Cost reimbursement	$	3,375	$	48	$	3,423	$	3,464	$	69	$	3,533
Time and materials ("T&M")	387		856		1,243		430		819		1,249
Firm-fixed price ("FFP")	484		362		846		472		387		859
Total	$	4,246	$	1,266	$	5,512	$	4,366	$	1,275	$	5,641

Disaggregated revenues by prime versus subcontractor were as follows:


	Three Months Ended
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Prime contractor to federal government	$	1,316	$	352	$	1,668	$	1,384	$	385	$	1,769
Subcontractor to federal government	116		37		153		125		41		166
Other	7		38		45		6		35		41
Total	$	1,439	$	427	$	1,866	$	1,515	$	461	$	1,976


	Nine Months Ended
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Prime contractor to federal government	$	3,854	$	1,053	$	4,907	$	3,976	$	1,062	$	5,038
Subcontractor to federal government	369		109		478		370		111		481
Other	23		104		127		20		102		122
Total	$	4,246	$	1,266	$	5,512	$	4,366	$	1,275	$	5,641

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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	October 31, 2025		January 31, 2025
		(in millions)
Billed and billable receivables, net (1)	Receivables, net	$	554	$	526
Contract assets - unbillable receivables	Receivables, net	491		474
Contract assets - unbillable receivables	Other assets	16		29
Contract assets - contract retentions	Other assets	16		15
Contract liabilities - current	Other accrued liabilities	24		38
Contract liabilities - non-current	Other long-term liabilities	1		—

(1) Net of allowance of $ 3 million as of October 31, 2025 and January 31, 2025.

During the three and nine months ended October 31, 2025, the Company recognized revenues of $ 2 million and $ 27 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 31, 2025. During the three and nine months ended November 1, 2024, the Company recognized revenues of $ 3 million and $ 33 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of February 2, 2024.

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 October 31, 2025, the Company had approximately $ 6.5 billion of RPO. The Company expects to recognize revenue on approximately 80 % of the RPO over the next 12 months and approximately 89 % 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 (see Note 7—Debt Obligations for additional information) and cash on hand.

As of October 31, 2025, the Company is in the process of obtaining the information required to complete the valuation and purchase price allocation related to this acquisition. The Company has preliminarily recorded goodwill and amortizable intangible assets of $ 109 million and $ 87 million, respectively. The goodwill is primarily associated with intellectual capital and an acquired assembled workforce. The intangible assets consist of customer relationships of $ 44 million, developed technology of $ 36 million, and backlog of $ 7 million that will be amortized over a period of thirteen years, eight years, and one year, respectively.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
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:


	October 31, 2025		January 31, 2025
	(in millions)
Defense and Intelligence	$	2,110	$	2,001
Civilian	850		850
Total	$	2,960	$	2,851

During the three months ended October 31, 2025, goodwill increased by $ 109 million in the Defense and Intelligence reportable segment due to the acquisition of SilverEdge (see Note 4—Acquisitions for additional information).

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. There were no impairments of goodwill during the periods presented.

Intangible Assets

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


	October 31, 2025						January 31, 2025
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
	(in millions)
Customer relationships	$	1,505	$	( 773 )	$	732	$	1,462	$	( 688 )	$	774
Developed technology	46		( 6 )		40		10		( 5 )		5
Backlog	7		—		7		—		—		—
Trade name	—		—		—		1		( 1 )		—
Total intangible assets	$	1,558	$	( 779 )	$	779	$	1,473	$	( 694 )	$	779

During the three months ended October 31, 2025, the gross carrying value of intangible assets increased by $ 87 million due to the acquisition of SilverEdge (see Note 4—Acquisitions for additional information).

Amortization expense related to intangible assets was $ 29 million and $ 87 million for the three and nine months ended October 31, 2025 and November 1, 2024, respectively. There were no intangible asset impairment losses during the periods presented.

As of October 31, 2025, the estimated future annual amortization expense related to intangible assets is as follows:


Fiscal Year	(in millions)
Remainder of 2026	$	32
2027	127
2028	106
2029	106
2030	103
Thereafter	305
Total	$	779

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

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 16.7 % and 5.2 % for the three and nine months ended October 31, 2025, respectively, and 15.6 % and 17.8 % for the three and nine months ended November 1, 2024, respectively. The effective tax rate for the three months ended October 31, 2025 increased compared to the same period last year primarily due to the impacts of the One Big Beautiful Bill Act (“the Act”). The effective tax rate for the nine months ended October 31, 2025 decreased compared to the same period last year primarily due to a $ 47 million benefit from an IRS audit settlement, pending final administrative approvals, covering fiscal years 2016 through 2019, and reductions in liabilities for uncertain tax positions for the remaining open tax years.

Additionally, the Company’s effective tax rate further differs from the statutory tax rate due to research and development tax credits and tax benefits from employee share-based compensation.

On July 4, 2025, 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 which the Company expects will result in a cash tax benefit in the current year. Based on the Company's interpretation of the Act, there will be an immaterial increase to the Company's effective tax rate for the year. The Company is awaiting interpretive guidance from the IRS, and therefore the current estimated impacts of the Act are subject to change.

Note 7—Debt Obligations:

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


	October 31, 2025										January 31, 2025
	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 June 2027	—	%	—	%	$	—	$	—	$	—	$	1,122	$	( 2 )	$	1,120
Term Loan A Facility due September 2030	5.21	%	5.29	%	1,100		( 4 )		1,096		—		—		—
Term Loan B3 Facility due February 2031	5.71	%	5.86	%	503		( 3 )		500		506		( 3 )		503
Senior Notes due April 2028	4.88	%	5.11	%	400		( 2 )		398		400		( 3 )		397
Senior Notes due November 2033	5.88	%	6.09	%	500		( 7 )		493		—		—		—
Revolving Credit Facility due June 2027	—	%	—	%	—		—		—		200		—		200
Total debt					$	2,503	$	( 16 )	$	2,487	$	2,228	$	( 8 )	$	2,220
Less current portion					12		—		12		313		—		313
Total debt, net of current portion					$	2,491	$	( 16 )	$	2,475	$	1,915	$	( 8 )	$	1,907

Credit Facility

As of October 31, 2025, 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").

On September 30, 2025, the Company executed the Eighth Amendment to the Third Amended and Restated Credit Agreement ("Eighth Amendment"), which established a new $ 1.1 billion senior secured term loan credit facility due on September 30, 2030 ("Term Loan A Facility due September 2030"). The entire Term Loan A Facility due September 2030 was immediately borrowed by the Company and the proceeds were used to pay in full the

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

outstanding principal balance and accrued interest under the Term Loan A Facility due June 2027, transaction related fees and expenses, and for general corporate purposes. The Term Loan A Facility due September 2030 is secured by substantially all of the assets of the Company and the Company’s wholly owned domestic subsidiaries, and is guaranteed by each of the Company’s wholly owned domestic subsidiaries. The Term Loan A Facility due September 2030 is subject to the same covenants and events of default as the Company’s existing term loans under the Credit Facility.

Borrowings under the Term Loan A Facility due September 2030 amortize quarterly beginning on October 31, 2026 at 0.625 % of the original borrowed amount, with such quarterly amortization increasing to 1.25 % on October 31, 2027, and to 1.875 % on October 31, 2028, with the remaining unamortized balance due in full upon maturity. The Term Loan A Facility due September 2030 may be prepaid at any time without penalty and is subject to the same mandatory prepayments, including from excess cash flow, as the Company’s existing term loans under the Credit Facility.

The Eighth Amendment also established a new $ 1.0 billion revolving credit facility with a termination date of September 30, 2030 ("Revolving Credit Facility due September 2030") that replaced the Revolving Credit Facility due June 2027.

The Term Loan A Facility due September 2030 and the Revolving Credit Facility due September 2030 bear interest at a variable rate of interest equal to a base rate or a Secured Overnight Financing Rate (SOFR) rate, plus the applicable interest rate margin of 0 % to 0.75 % for base rate loans and 0.75 % to 1.75 % for SOFR rate loans, dependent on the Company’s leverage ratio. The Eighth Amendment eliminated the 0.10 % credit spread adjustment used in the calculation of SOFR rate loans on the Term Loan A Facility due 2027 and the Revolving Credit Facility due June 2027.

During the nine months ended October 31, 2025, the Company made scheduled principal payments of $ 46 million on the Term Loan A Facility due June 2027. During the three months ended October 31, 2025, the Company made no scheduled principal payments on the Term Loan A Facility due June 2027 or the Term Loan A Facility due September 2030. During the three and nine months ended October 31, 2025, the Company made scheduled principal payments of $ 2 million and $ 4 million on the Term Loan B3 Facility due February 2031, respectively.

During the three and nine months ended October 31, 2025, the Company borrowed $ 275 million and $ 1.6 billion, respectively, and repaid $ 595 million and $ 1.8 billion, respectively, under the Revolving Credit Facility due June 2027. During the three months ended October 31, 2025, the Company borrowed $ 320 million and repaid $ 320 million under the Revolving Credit Facility due September 2030. There was no balance outstanding on the Revolving Credit Facility as of October 31, 2025. Commitment fees for undrawn amounts under the Revolving Credit Facility range from 0.125 % to 0.25 % per annum based on the Company’s leverage ratio.

As of October 31, 2025, the Company was in compliance with the covenants under its Credit Facility.

Senior Notes

On September 25, 2025, the Company issued $ 500 million of unsecured 5.875 % Senior Notes due 2033 ("Senior Notes due November 2033") through a private offering. Proceeds received from the offering were used to repay all indebtedness outstanding under the Revolving Credit Facility due June 2027 and fees and expenses from the offering, with remaining proceeds to be used for general corporate purposes, including working capital to fund growth and strategic projects and transactions. The Senior Notes due November 2033 were issued pursuant to an indenture, dated September 25, 2025, and are the senior unsecured obligations of the Company and are fully and unconditionally guaranteed by each of the Company’s existing and future domestic subsidiaries that guarantee the Company’s obligations under its credit facilities and certain other indebtedness. Interest is payable semi annually on May 1 and November 1 of each year, commencing on May 1, 2026. The principal is due on November 1, 2033.

At any time prior to November 1, 2028, the Company may redeem some or all of the Senior Notes due November 2033 at a price equal to 100 % of the principal amount, plus accrued and unpaid interest, plus an applicable “make-whole premium.” On or after November 1, 2028, the Company may redeem in whole or in part the Senior Notes due November 2033 at set redemption prices, plus accrued and unpaid interest. At any time on or prior to November 1, 2028, the Company may redeem up to 40 % of the original aggregate principal amount of the Senior Notes due

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

November 2033 with the net cash proceeds from certain equity offerings at a redemption price equal to 105.875 % of the outstanding principal amount, together with accrued and unpaid interest. Upon the occurrence of certain events constituting a change of control, the Company may be required to make an offer to repurchase all of the Senior Notes due November 2033 then outstanding at a price equal to 101 % of the principal amount thereof, plus accrued and unpaid interest.

The Company incurred $ 12 million of debt issuance costs associated with the Eighth Amendment and the Senior Notes due November 2033, of which $ 1 million was recognized in interest expense and the remaining $ 11 million deferred and amortized to interest expense through the maturity date of the facility utilizing the effective interest rate method.

As of October 31, 2025 and January 31, 2025, 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 October 31, 2025 are:


Fiscal Year	Total
	(in millions)
Remainder of 2026	$	1
2027	19
2028	31
2029	489
2030	88
Thereafter	1,875
Total principal payments	$	2,503

Note 8—Derivative Instruments Designated as Cash Flow Hedges:

The Company’s derivative instruments designated as cash flow hedges consist of:

Fair Value of Asset (1) at

Pay Fixed
Rate

Receive
Variable
Rate

Settlement and
Termination

October 31,
2025

January 31, 2025

(in millions)

Interest rate swaps

2.96

1-month Term SOFR

Monthly through October 31, 2025

—

(1) The fair value of the fixed interest rate swap asset is included in "Other assets" on the condensed consolidated balance sheets.

On October 31, 2025, the Company's interest rate swaps expired. Through October 31, 2025, the Company was party to fixed interest rate swap instruments with a notional value of $ 685 million that were designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate Credit Facility borrowings. The counterparties to all swap agreements were financial institutions.

See Note 9—Changes in Accumulated Other Comprehensive Income (Loss) by Component for the unrealized change in fair values on cash flow hedges recognized in other comprehensive income (loss) and the amounts reclassified from accumulated other comprehensive income (loss) into earnings for the current and comparative periods presented.

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

Note 9—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 that are discussed in Note 8—Derivative Instruments Designated as Cash Flow Hedges and the Company's defined benefit plans.


	Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges (1)		Defined Benefit Obligation Adjustment		Total
	(in millions)
Three months ended October 31, 2025
Balance at August 1, 2025	$	1	$	8	$	9
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 October 31, 2025	$	—	$	8	$	8

Three months ended November 1, 2024
Balance at August 2, 2024	$	6	$	5	$	11
Other comprehensive income before reclassifications	3		—		3
Amounts reclassified from accumulated other comprehensive income	( 4 )		—		( 4 )
Income tax impact	—		—		—
Net other comprehensive loss	( 1 )		—		( 1 )
Balance at November 1, 2024	$	5	$	5	$	10

Nine months ended October 31, 2025
Balance at January 31, 2025	$	4	$	8	$	12
Other comprehensive income before reclassifications	1		—		1
Amounts reclassified from accumulated other comprehensive income	( 7 )		—		( 7 )
Income tax impact	2		—		2
Net other comprehensive loss	( 4 )		—		( 4 )
Balance at October 31, 2025	$	—	$	8	$	8

Nine months ended November 1, 2024
Balance at February 2, 2024	$	11	$	5	$	16
Other comprehensive income before reclassifications	5		—		5
Amounts reclassified from accumulated other comprehensive income	( 12 )		—		( 12 )
Income tax impact	1		—		1
Net other comprehensive loss	( 6 )		—		( 6 )
Balance at November 1, 2024	$	5	$	5	$	10

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

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

Note 10—Sales of Receivables:

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

During the three and nine months ended October 31, 2025, the Company incurred purchase discount fees of approximately $ 3 million and $ 10 million, respectively. During the three and nine months ended November 1, 2024, the Company incurred purchase discount fees of $ 4 million and $ 11 million, respectively. The purchase discount fees are presented in "Other (income) expense, net" on the condensed consolidated statements of income and are reflected as cash flows from operating activities on the condensed consolidated statements of cash flows.

MARPA Facility activity consisted of the following:


	Nine Months Ended
	October 31, 2025		November 1, 2024
	(in millions)
Beginning balance	$	164	$	205
Sale of receivables	3,342		3,216
Cash collections	( 3,256 )		( 3,121 )
Outstanding balance sold to Purchaser (1)	250		300
Cash collected, not remitted to Purchaser (2)	( 58 )		( 67 )
Remaining sold receivables	$	192	$	233

(1) For the nine months ended October 31, 2025 and November 1, 2024, the Company recorded a net increase of $ 86 million and $ 95 million, respectively, to cash flows from operating activities from sold receivables.

(2) Primarily represents the cash collected on behalf of but not yet remitted to the Purchaser as of October 31, 2025 and November 1, 2024. This balance is included in "Accounts payable" on the condensed consolidated balance sheets.

Note 11—Business Segments Information:

The Company has five customer facing business groups supported by the enterprise organizations, including the Innovation Factory. The five business groups, which are also its operating segments, 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 Company defines its operating segments based on the way the CODM, currently the Company's Interim CEO, manages the operations for the purpose of allocating resources and assessing performance.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the DoW and Intelligence Community of the United States Government.

The offerings of both reportable segments entail the integration of emerging technologies into mission critical operations that modernize and enable national imperatives, including IT modernization, digital engineering, AI, mission systems support, training and simulation, and ground vehicles support. These services include end-to-end solutions spanning the design, development, integration, deployment, management and operations, sustainment and security of the customers’ entire IT infrastructure.

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

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
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 October 31, 2025
	Defense and Intelligence		Civilian		Corporate		Total SAIC
	(in millions)
Revenues	$	1,439	$	427	$	—	$	1,866
Labor base	423		127		—		550
Other operating expenses (income) (1)	898		238		( 3 )		1,133
Adjusted operating income (loss)	$	118	$	62	$	3	$	183


	Three Months Ended November 1, 2024
	Defense and Intelligence		Civilian		Corporate		Total SAIC
	(in millions)
Revenues	$	1,515	$	461	$	—	$	1,976
Labor base	423		127		—		550
Other operating expenses (income) (1)	944		285		2		1,231
Adjusted operating income (loss)	$	148	$	49	$	( 2 )	$	195


	Nine Months Ended October 31, 2025
	Defense and Intelligence		Civilian		Corporate		Total SAIC
	(in millions)
Revenues	$	4,246	$	1,266	$	—	$	5,512
Labor base	1,264		384		—		1,648
Other operating expenses (income) (1)	2,625		714		2		3,341
Adjusted operating income (loss)	$	357	$	168	$	( 2 )	$	523


	Nine Months Ended November 1, 2024
	Defense and Intelligence		Civilian		Corporate		Total SAIC
	(in millions)
Revenues	$	4,366	$	1,275	$	—	$	5,641
Labor base	1,255		381		—		1,636
Other operating expenses (income) (1)	2,715		753		8		3,476
Adjusted operating income (loss)	$	396	$	141	$	( 8 )	$	529

(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 and nine months ended October 31, 2025 and November 1, 2024.


	Three Months Ended				Nine Months Ended
	October 31, 2025		November 1, 2024		October 31, 2025		November 1, 2024
	(in millions)
Adjusted operating income	$	183	$	195	$	523	$	529
Depreciation of property, plant, and equipment	9		6		22		17
Amortization of intangible assets	29		29		87		87
Acquisition, integration, restructuring and impairment costs	1		—		5		2
Recovery of acquisition, integration, restructuring and impairment costs (1)	—		—		( 2 )		( 2 )
Costs related to the settlement of federal tax audits	—		—		7		—
Executive transition costs, net of recoveries	16		—		16		—
Interest expense, net	33		32		94		97
Other (income) expense, net	1		2		6		7
Income before income taxes	$	94	$	126	$	288	$	321

(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 12—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.

In June 2017, the Company filed a patent infringement complaint in the United States Court of Federal Claims against the United States and three other parties, alleging infringement of the Company’s Enhanced Rapid Engagement and Vision in Ambient Lighting patents. In July 2025, the Company executed a favorable settlement agreement with all parties. As part of the settlement, the Company recovered $ 15 million and recognized $ 9 million as a recovery for costs previously incurred within "Selling, general and administrative expenses" within the Company’s condensed consolidated statements of income during the second quarter of fiscal 2026. In addition, the Company recognized $ 6 million of costs that was contingent on the settlement of the patent infringement matter.

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,

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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.

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 October 31, 2025, 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 October 31, 2025, 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.

Note 13—Subsequent Events:

Business Reorganization

On November 13, 2025, the Company announced a strategic reorganization, effective January 31, 2026, the first day of fiscal 2027, that will consolidate the Company's five business groups into three . The Company is currently evaluating the impact of the reorganization on its segment reporting. The Company's Innovation Factory will be more closely aligned with the three business groups and markets it serves.

Quarterly Dividend Declared

On December 2, 2025, the Company's Board of Directors declared a quarterly dividend of $ 0.37 per share of the Company's common stock payable on January 28, 2026 to stockholders of record on January 14, 2026.

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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 2026 began on February 1, 2025 and ends on January 30, 2026, while fiscal 2025 began on February 3, 2024 and ended on January 31, 2025.

Business Overview

We are a leading technology integrator providing full life cycle services and solutions in the technical, engineering and enterprise information technology ("IT") markets. We developed our brand by addressing our customers’ mission critical needs and solving their most complex problems for over 50 years. 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 our customers through approximately 1,700 active contracts and task orders and employ approximately 24,000 individuals who are 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.

We have five customer facing business groups supported by the enterprise organizations, including the Innovation Factory. The five business groups, which are also our operating segments, 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 Innovation Factory supports the operating segments by developing enterprise-class solutions which are delivered to our customers as stand-alone solutions or integrated with and aligned to our product offerings through the operations of the business to meet complex customer needs and accelerate digital transformation. The Innovation Factory includes designated teams focused on AI, application development, network services, platforms and cloud, engineering, and cybersecurity. It uses a highly automated, cloud-hosted tool set to rapidly build, test and deploy solutions and works with customers to enhance solutions going forward.

Costs associated with corporate functions that are not allocable to the reportable segments are presented as Corporate. See Note 11—Business Segments Information to the condensed consolidated financial statements contained within this report for additional information.

On October 15, 2025, we acquired SilverEdge Government Solutions ("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 our strategy to provide mission focused, IP-based solutions and commercial products to our customers.

Economic Opportunities, Challenges, and Risks

During the three and nine months ended October 31, 2025, we generated 98% 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 March 2025, the President signed a continuing resolution ("CR") that extends government funding through the close of government fiscal year ("GFY") 2025. The measure provides budget certainty for agencies through September 30, 2025. The CR also provides flexibility for new starts on programs at the DoW, which are typically not allowed under CRs.

In July 2025, Congress passed a budget reconciliation package that will add approximately $150 billion in new non-border defense spending, and $175 billion in new border security and enforcement spending, among other provisions. This funding is available to agencies immediately, and can be used through GFY 2029. Portions of this new funding will increase spending in areas addressable to us, including new investments in Naval operations and border surveillance. The measure also extended and expanded key tax provisions that will positively impact our Company.

On October 1, 2025, the federal government shut down following the expiration of the March 2025 CR. On November 12, 2025, the President signed a spending agreement that officially reopened the government after 43 days. The agreement includes three full-year appropriations bills, including the Agriculture-FDA, Military Construction-Veterans Affairs, and Legislative Branch packages. All agencies and functions funded by those bills will now be covered in full through September 30, 2026, the close of GFY 2026.

All remaining agencies have resumed operations under a CR that runs through January 30, 2026. If Congress is not able to pass the remaining appropriations by that date, it could potentially lead to a partial or full government shutdown affecting any outstanding unfunded agencies. Any additional delay in funding could negatively impact our business operations, revenues, cash flows, and profitability.

As part of the budget reconciliation package signed into law in July 2025, the federal debt limit was increased by $5 trillion. This is expected to extend protection from a potential government default until at least the end of calendar 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 Department of Government Efficiency is driving changes in 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.

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Adverse changes in fiscal and economic conditions could materially impact our business. Some changes that could have an adverse impact on our business include adverse regulations, the implementation of future spending reductions (including sequestration), government shut downs, delayed passage of appropriations bills resulting in temporary or full-year continuing resolutions, extreme 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 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 Innovation Factory 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 the 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								Nine Months Ended
	October 31, 2025			Percent change		November 1, 2024			October 31, 2025			Percent change		November 1, 2024
	(dollars in millions)
Revenues	$	1,866		(6	%)	$	1,976		$	5,512		(2	%)	$	5,641
Cost of revenues	1,639			(6	%)	1,739			4,861			(2	%)	4,981
As a percentage of revenues	87.8		%			88.0		%	88.2		%			88.3		%
Selling, general and administrative expenses	101			22	%	83			265			8	%	245
Other operating (income) expense	(2)			(67	%)	(6)			(2)			(80	%)	(10)
Operating income	128			(20	%)	160			388			(9	%)	425
As a percentage of revenues	6.9		%			8.1		%	7.0		%			7.5		%
Income tax (expense) benefit	(16)			(20	%)	(20)			(15)			(74	%)	(57)
Net income	$	78		(26	%)	$	106		$	273		3	%	$	264

Revenues. Revenues decreased $110 million and $129 million for the three and nine months ended October 31, 2025, respectively, as compared to the same period in the prior year primarily due to ramp down in volume on existing contracts, including approximately $16 million attributable to the government shutdown, and contract completions, partially offset by new contracts. Revenues recognized from the acquisition of SilverEdge for the three months ended October 31, 2025 were immaterial.

Operating Income. Operating income as a percentage of revenues for the three months ended October 31, 2025 decreased from the comparable prior year period primarily due to executive transition costs, net of recoveries, and the favorable resolution of the Assault Amphibious Vehicle ("AAV") contract termination in the prior year ($14 million), partially offset by timing and volume mix in our contract portfolio.

Operating income as a percentage of revenues for the nine months ended October 31, 2025 decreased from the comparable prior year period primarily due to executive transition costs, net of recoveries, the favorable resolution of the AAV contract termination in the prior year ($14 million), and costs related to the settlement of federal tax audits, partially offset by a recovery of costs from the settlement of a patent infringement matter (see Note 12—Legal Proceedings and Other Commitments and Contingencies for additional information) and timing and volume mix in our contract portfolio.

Income Taxes. Our effective income tax rate was 16.7% and 5.2% for the three and nine months ended October 31, 2025 and 15.6% and 17.8% for the three and nine months ended November 1, 2024, respectively. The effective tax rate for the three months ended October 31, 2025 increased compared to the same period last year, primarily due to the impacts of the One Big Beautiful Bill Act (“the Act”). The effective tax rate for the nine months ended October 31, 2025 decreased compared to the same period last year primarily due to a $47 million benefit from an IRS audit settlement, pending final administrative approvals, covering fiscal years 2016 through 2019, and reductions in liabilities for uncertain tax positions for the remaining open tax years.

Additionally, our effective tax rate further differs from the statutory tax rate due to research and development tax credits and tax benefits from employee share-based compensation.

On July 4, 2025, 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. Based on our interpretation, the Act results in an increase to our income taxes receivable with an offsetting decrease to our deferred tax assets and an immaterial increase to our effective tax rate for the year. These changes are reflected in our current period effective tax rate. We are awaiting interpretive guidance from the IRS, and therefore the current estimated impacts of the Act are subject to change.

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In December 2021, the Organisation for Economic Co-operation and Development (OECD) enacted a 15% global minimum tax framework (“Pillar Two”) which became effective in certain jurisdictions beginning in fiscal 2024. While U.S. adoption is uncertain, several countries where we operate have implemented it, and others are in the process of adopting. We do not anticipate Pillar Two to have a significant impact on our effective tax rate or our condensed consolidated results of operations, financial position, and cash flows.

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								Nine Months Ended
	October 31, 2025			Percent change		November 1, 2024			October 31, 2025			Percent change		November 1, 2024
	(dollars in millions)
Revenues	$	1,439		(5	%)	$	1,515		$	4,246		(3	%)	$	4,366
Adjusted operating income	$	118		(20	%)	$	148		$	357		(10	%)	$	396
As a percentage of revenues	8.2		%			9.8		%	8.4		%			9.1		%

Revenues. Revenues decreased $76 million and $120 million for the three and nine months ended October 31, 2025, respectively, as compared to the same period in the prior year primarily due to contract completions and ramp down in volume on existing contracts, partially offset by new contracts.

Adjusted operating income. Adjusted operating income as a percentage of revenues for the three and nine months ended October 31, 2025 decreased compared to the comparable prior year period primarily due to timing and volume mix in our contract portfolio and the favorable resolution of the AAV contract termination in the prior year ($14 million).


Civilian	Three Months Ended								Nine Months Ended
	October 31, 2025			Percent change		November 1, 2024			October 31, 2025			Percent change		November 1, 2024
	(dollars in millions)
Revenues	$	427		(7	%)	$	461		$	1,266		(1	%)	$	1,275
Adjusted operating income	$	62		27	%	$	49		$	168		19	%	$	141
As a percentage of revenues	14.5		%			10.6		%	13.3		%			11.1		%

Revenues. Revenues decreased $34 million and $9 million for the three and nine months ended October 31, 2025, respectively, as compared to the same period in the prior year primarily due to ramp down in volume on existing contracts and contract completions, partially offset by new contracts.

Adjusted operating income. Adjusted operating income as a percentage of revenues for the three and nine months ended October 31, 2025 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio.


Corporate	Three Months Ended						Nine Months Ended
	October 31, 2025		Percent change		November 1, 2024		October 31, 2025		Percent change		November 1, 2024
	(dollars in millions)
Adjusted operating income (loss)	$	3	(250	%)	$	(2)	$	(2)	(75	%)	$	(8)

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Adjusted operating income (loss). Adjusted operating income was $3 million for the three months ended October 31, 2025, compared to an adjusted operating loss of $2 million during the same period in the prior year primarily due to lower other selling, general and administrative expenses.

Adjusted operating loss decreased $6 million for the nine months ended October 31, 2025 as compared to the same period in the prior year primarily due to a recovery of costs from the settlement of a patent infringement matter, partially offset by higher other 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. 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. Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment. Adjusted operating income also 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. Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019 . Executive transition costs, net of recoveries, represent costs associated with the immediate departure of our CEO and other executives, net of the portion recovered through our indirect rates in accordance with Cost Accounting Standards. 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						Nine Months Ended
	October 31, 2025			November 1, 2024			October 31, 2025			November 1, 2024
	(dollars in millions)
Revenues	$	1,866		$	1,976		$	5,512		$	5,641
Operating income	$	128		$	160		$	388		$	425
Operating income as a percentage of revenues	6.9		%	8.1		%	7.0		%	7.5		%
Depreciation of property, plant and equipment	9			6			22			17
Amortization of intangible assets	29			29			87			87
Acquisition, integration, restructuring and impairment costs	1			—			5			2
Recovery of acquisition, integration, restructuring and impairment costs (1)	—			—			(2)			(2)
Costs related to the settlement of federal tax audits	—			—			7			—
Executive transition costs, net of recoveries	16			—			16			—
Adjusted operating income	$	183		$	195		$	523		$	529
Adjusted operating income as a percentage of revenues	9.8		%	9.9		%	9.5		%	9.4		%

(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.

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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 . Executive transition costs, net of recoveries, represent costs associated with the immediate departure of our CEO and other executives, net of the portion recovered through our indirect rates in accordance with Cost Accounting Standards.

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.

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


	Three Months Ended						Nine Months Ended
	October 31, 2025			November 1, 2024			October 31, 2025			November 1, 2024
	(dollars in millions)
Revenues	$	1,866		$	1,976		$	5,512		$	5,641
Net income	$	78		$	106		$	273		$	264
Interest expense, net and loss on sale of receivables	36			36			104			108
Income tax expense (benefit)	16			20			15			57
Depreciation and amortization	38			35			109			104
EBITDA	168			197			501			533
EBITDA as a percentage of revenues	9.0		%	10.0		%	9.1		%	9.4		%
Acquisition, integration, restructuring and impairment costs	1			—			5			2
Recovery of acquisition, integration, restructuring and impairment costs (1)	—			—			(2)			(2)
Costs related to the settlement of federal tax audits	—			—			7			—
Executive transition costs, net of recoveries	16			—			16			—
Adjusted EBITDA	$	185		$	197		$	527		$	533
Adjusted EBITDA as a percentage of revenues	9.9		%	10.0		%	9.6		%	9.4		%

(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 October 31, 2025 decreased compared to the same period in the prior year primarily due to the favorable resolution of the AAV contract termination in the prior year ($14 million), partially offset by timing and volume mix in our contract portfolio.

Adjusted operating income and adjusted EBITDA as a percentage of revenues for the nine months ended October 31, 2025 increased compared to the same period in the prior year primarily due to a recovery of costs from the settlement of a patent infringement matter and timing and volume mix in our contract portfolio, partially offset by the favorable resolution of the AAV contract termination in the prior year ($14 million).

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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.

• 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:


	October 31, 2025						January 31, 2025
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
	(in millions)
Funded backlog	$	2,696	$	1,127	$	3,823	$	2,599	$	845	$	3,444
Negotiated unfunded backlog	16,753		3,212		19,965		15,341		3,072		18,413
Total backlog	$	19,449	$	4,339	$	23,788	$	17,940	$	3,917	$	21,857

We had net bookings worth an estimated $2.2 billion and $7.2 billion during the three and nine months ended October 31, 2025, respectively.

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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
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
Cost reimbursement	80	%	4	%	62	%	82	%	6	%	64	%
Time and materials ("T&M")	9	%	67	%	23	%	8	%	62	%	21	%
Firm-fixed price ("FFP")	11	%	29	%	15	%	10	%	32	%	15	%
Total	100	%	100	%	100	%	100	%	100	%	100	%


	Nine Months Ended
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
Cost reimbursement	80	%	4	%	62	%	79	%	6	%	63	%
Time and materials ("T&M")	9	%	68	%	23	%	10	%	64	%	22	%
Firm-fixed price ("FFP")	11	%	28	%	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. The following table presents cost mix as a percentage of each reportable segment and total SAIC revenues for the periods presented:


	Three Months Ended
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
Labor-related cost of revenues	57	%	59	%	58	%	55	%	55	%	55	%
Subcontractor-related cost of revenues	28	%	31	%	28	%	29	%	30	%	29	%
Other materials-related cost of revenues	15	%	10	%	14	%	16	%	15	%	16	%
Total	100	%	100	%	100	%	100	%	100	%	100	%


	Nine Months Ended
	October 31, 2025						November 1, 2024
	Defense and Intelligence		Civilian		Total SAIC		Defense and Intelligence		Civilian		Total SAIC
Labor-related cost of revenues	58	%	59	%	59	%	56	%	58	%	56	%
Subcontractor-related cost of revenues	29	%	32	%	29	%	29	%	31	%	30	%
Other materials-related cost of revenues	13	%	9	%	12	%	15	%	11	%	14	%
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 MARPA Facility.

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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.

During the third quarter of fiscal 2026, we issued unsecured senior notes through a private offering and amended our Credit Facility. See Note 7—Debt Obligations to the condensed consolidated financial statements contained within this report for additional information.

Historical Cash Flow Trends

The following table summarizes our cash flows:


	Nine Months Ended
	October 31, 2025		November 1, 2024
	(in millions)
Net cash provided by operating activities	$	351	$	379
Net cash used in investing activities	(237)		(15)
Net cash used in financing activities	(125)		(413)
Net decrease in cash, cash equivalents and restricted cash	$	(11)	$	(49)

Net Cash Provided by Operating Activities. Cash flows provided by operating activities for the nine months ended October 31, 2025 decreased $28 million compared to the prior year primarily due to timing of vendor payments, lower cash inflows from the usage of the Master Accounts Receivable Purchase Agreement ("MARPA Facility") in the current year, and other changes in working capital, partially offset by timing of customer collections, lower cash taxes paid, and lower incentive-based compensation payments in the current year.

Net Cash Used in Investing Activities. Cash used in investing activities for the nine months ended October 31, 2025 increased $222 million compared to the prior year primarily due to $203 million of cash paid in the current year for the acquisition of SilverEdge, net of cash acquired (see Note 4 to the condensed consolidated financial statements) and proceeds from the sale of equity method investments in the prior year.

Net Cash Used in Financing Activities. Cash used in financing activities for the nine months ended October 31, 2025 decreased $288 million compared to the prior year period primarily due to higher proceeds from borrowings, net of principal payments and debt issuance costs, and lower 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 nine months ended October 31, 2025 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.

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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 Interim 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 October 31, 2025 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 2025 Annual Report on Form 10-K, and we have provided an update to this information in Note 12—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 2025 Annual Report on Form 10-K, and we have also updated this information in Note 12—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. Additional risks and uncertainties not currently known to us could materially harm our business, financial condition or operating results, and thus result in a decline in the price of our stock.

Risks Related to Trade Restrictions

The imposition of trade restrictions, including economic tariffs and trade war initiatives, by various governments globally, may adversely affect our business operations and financial performance. The global political and economic environment has become increasingly volatile, with numerous countries implementing policies that could impede international trade. Although our business predominantly serves U.S. customers, the current landscape introduces uncertainty regarding the global supply chain, international markets, and cross-border trade. These trade restrictions and tariffs could result in increased costs for raw materials, components, and finished goods. Furthermore, our capacity to procure materials from international suppliers or to sell our products in foreign markets may be hindered by these measures. Consequently, we may be compelled to identify alternative suppliers or markets, potentially incurring higher costs or encountering less favorable terms. Such conditions could create uncertainty for our operations, complicating the prediction of market conditions and the effective planning of our financial and business strategies.

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 October 31, 2025:


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)
August 2, 2025 - September 5, 2025	314,027	$	116.12	314,027	8,252,080
September 6, 2025 - October 3, 2025	288,555	101.60		285,721	8,231,452
October 4, 2025 - October 31, 2025	299,415	96.85		299,415	8,621,203
Total	901,997	$	105.08	899,163

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(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 October 31, 2025, we have repurchased approximately 27.5 million shares of common stock under the program for approximately $2.4 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.

Item 5. Other Information

During the three months ended October 31, 2025, 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

4 .1			Indenture, dated September 25 , 202 5 , by and among Science Applications International Corporation, the guarantors party thereto and U.S. Bank National Association, as trustee. Incorporated by reference to Exhibit 4.1 to the Company ' s Current Report on Form 8-K filed with the SEC on September 25 , 202 5 .

10.1			Eighth Amendment to the Third Amended and Restated Credit Agreement, dated September 30, 2025, by and among SAIC, Citibank N.A., as administrative agent and collateral agent, and certain other lenders and parties thereto. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 1, 2025.

10.2*			SAIC Executive Severance, Change in Control and Retirement Policy, effective September 5, 2023 .

10. 3 *			Offer Letter, dated October 23, 2025.

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.

*			Management contract or compensatory plan or agreement.

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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: December 4, 2025


Science Applications International Corporation

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

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Part I Financial Information Item 1. Financial Statements Note 1 Business Overview and Summary Of Significant Accounting Policies:Note 2 Earnings Per Share, Share Repurchases and Dividends:Note 3 Revenues:Note 4 Acquisitions:Note 5 Goodwill and Intangible Assets:Note 6 Income Taxes:Note 7 Debt Obligations:Note 8 Derivative Instruments Designated As Cash Flow Hedges:Note 9 Changes in Accumulated Other Comprehensive Income (loss) By Component:Note 10 Sales Of Receivables:Note 11 Business Segments Information:Note 12 Legal Proceedings and Other Commitments and Contingencies:Note 13 Subsequent Events:Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

4.1 Indenture,datedSeptember25,2025,byandamongScienceApplicationsInternationalCorporation,theguarantorspartytheretoandU.S.BankNationalAssociation,astrustee.IncorporatedbyreferencetoExhibit4.1totheCompany'sCurrentReportonForm8-KfiledwiththeSEConSeptember25,2025. 10.1 Eighth Amendment to the Third Amended and Restated Credit Agreement, dated September 30, 2025, by and among SAIC, Citibank N.A., as administrative agent and collateral agent, and certain other lenders and parties thereto. Incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the SEC on October 1, 2025. 10.2* SAIC Executive Severance, Change in Control and Retirement Policy, effective September 5, 2023. 10.3* OfferLetter, datedOctober 23, 2025. 31.1 Certification ofChief 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.

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SAIC 10-Q Quarter ended Oct. 31, 2025

Exhibits