Science Applications International Corp. (NYSE: SAIC) saw its shares drop 10.4% on Wednesday after the company lowered its revenue forecast for fiscal 2027, attributing the change to procurement timing and several unfavorable customer award decisions.
SAIC now projects fiscal 2027 revenue to fall in a $7.0 billion to $7.2 billion range, down from its prior $7.35 billion to $7.55 billion outlook. The company also updated its organic revenue expectation to a decline of 2% to 4%, a shift from the previously anticipated 0% to 3% growth.
Management identified recent recompete decisions that did not go SAIC's way and difficult market conditions as the principal drivers of the reduced top-line outlook. The company said the revenue pressure is concentrated - disproportionately within its portfolio of larger, more commoditized Enterprise IT programs.
On profitability, SAIC raised its adjusted EBITDA margin guidance for fiscal 2027 to 9.9% to 10.1%, up from the former 9.7% to 9.9% range. Despite the improved margin percentage, overall adjusted EBITDA is now expected to be lower in dollar terms, at $705 million to $715 million versus the prior $725 million to $735 million projection.
For the fiscal fourth quarter of 2026, SAIC reported preliminary revenue of roughly $1.745 billion. The company also indicated that full-year fiscal 2026 revenue should come in at about $7.26 billion, marginally under its earlier guidance range of $7.275 billion to $7.325 billion.
Commenting on the outlook, Jim Reagan, SAIC’s Interim Chief Executive Officer, said the company is continuing to invest in capabilities that support national security and broader government transformation, even as recent dynamics weigh on the near-term revenue picture.
SAIC intends to publish its full fourth-quarter and fiscal-year 2026 results on March 16.
Context and implications
The guidance revision highlights two simultaneous trends in SAIC's near-term financial profile: constrained top-line expectations tied to contract awards and procurement timing, and management efforts to protect margins through efficiency or other margin-supporting measures. The firm’s acknowledgement that revenue shortfalls are concentrated in larger, commoditized Enterprise IT programs points to specific pockets of weakness within its portfolio.
Investors reacted sharply to the reduction in revenue and adjusted EBITDA dollars, reflected in the stock’s one-day drop. The company’s decision to maintain higher margin guidance while lowering absolute EBITDA suggests a focus on margin quality amid reduced scale.