Mon, Mar 17, 4:17 PM (40 days ago)
**Summary of SAIC's 2025 Annual Report (Form 10-K)** **Company Overview:** - **Ticker:** SAIC - **Full Name:** Science Applications International Corporation - **Business:** Leading provider of technical, engineering, and enterprise IT services primarily to the U.S. government. - **Market Position:** One of the largest pure-play technology service providers to the U.S. government. - **Key Customers:** Departments and agencies of the U.S. government, including the Department of Defense, National Aeronautics and Space Administration, Department of State, Department of Justice, Department of Homeland Security, and members of the Intelligence Community. - **Revenue Breakdown:** 98% from contracts with the U.S. government, either as a prime contractor or as a subcontractor. **Financial Performance (Fiscal Year Ended January 31, 2025):** - **Revenue:** $7,479 million - **Net Income:** $362 million - **Earnings Per Share (EPS):** Basic $7.23, Diluted $7.17 - **Operating Income:** $563 million - **Operating Margin:** 7.5% - **Cash Flow from Operations:** $494 million **Segment Performance:** - **Defense and Intelligence Segment:** - **Revenue:** $5,726 million - **Operating Income:** $440 million - **Operating Margin:** 7.7% - **Civilian Segment:** - **Revenue:** $1,753 million - **Operating Income:** $168 million - **Operating Margin:** 9.6% **Strategic Overview:** - **Business Reorganization:** Completed in February 2024, replacing two operating sectors with five customer-facing business groups supported by enterprise organizations, including the Innovation Factory. - **Innovation Factory:** Supports operating segments by developing enterprise-class solutions, focusing on AI, application development, network services, platforms and cloud, engineering, and cybersecurity. - **Key Strengths:** Enduring customer relationships, full life cycle offerings, significant scale, technical experts led by experienced management, repeatable methodologies, and certified processes. **Future Outlook:** - **Growth Opportunities:** Addressable market in areas such as digital modernization, cybersecurity, microelectronics support, and climate resiliency. - **Challenges:** Budgetary pressures, competitive bidding processes, and potential government shutdowns. - **Risk Factors:** Dependence on U.S. government spending, competitive pressures, regulatory changes, and potential economic downturns. **Financial Condition:** - **Liquidity:** Strong cash position with $56 million in cash and cash equivalents as of January 31, 2025. - **Debt:** $2,228 million in total debt, with a strong credit rating and manageable leverage ratios. - **Capital Expenditures:** Minimal infrastructure investment required, with future cash needs expected to be funded by operating cash flows and borrowings under the credit facility. **Market Position Changes:** - **Stock Listing:** Transferred from the New York Stock Exchange to The Nasdaq Stock Market LLC, continuing to trade under the symbol “SAIC.” - **Dividends:** Declared and paid cash dividends of $0.37 per share each quarterly period of fiscal 2025, 2024, and 2023. - **Share Repurchases:** Authorized the repurchase of up to $1.2 billion of outstanding common stock under the existing share repurchase plan. **Risk Factors:** - **Industry and Economic Risks:** Dependence on U.S. government spending, competitive pressures, and regulatory changes. - **Legal and Regulatory Risks:** Compliance with various laws and regulations, potential investigations, and audits. - **Business and Operational Risks:** Attracting and retaining skilled employees, potential acquisitions and divestitures, and cybersecurity threats. **Conclusion:** SAIC continues to be a leading provider of technical and IT services to the U.S. government, with a strong financial position and strategic initiatives to drive future growth. The company faces challenges from competitive pressures and regulatory changes but is well-positioned to capitalize on opportunities in key growth areas.