Science Applications International Corporation (SAIC): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of Science Applications International Corporation's portfolio, so let's map their segments onto the four quadrants of the Boston Consulting Group Matrix. We'll see where the 77.1% revenue driver-the Cash Cow core, backed by a $23.8 billion backlog-is funding the high-growth Stars like their Space and Intelligence work, especially after the SilverEdge buy. Honestly, the picture isn't perfectly rosy; we've got legacy Dogs facing a 7.4% revenue dip in Civilian segments, while the Question Marks-like their AI push-demand serious investment to scale against bigger players. Dive in to see exactly where Science Applications International Corporation is sitting today, from their strong 1.2 book-to-bill ratio in Q3 FY26 to their expected FY25 Free Cash Flow guidance of $510 million to $530 million.

Background of Science Applications International Corporation (SAIC)

You're looking at the history of a major government tech partner, and honestly, the story of Science Applications International Corporation (SAIC) starts way back in 1969. Dr. J. Robert "Bob" Beyster, a physicist, founded the company in San Diego, California, initially with just a small amount of his own savings and a couple of small government contracts. The original mission was simple: provide top-notch research and technical advice, focusing heavily on scientific projects for the U.S. military, like studying the effects of underwater explosions for the Navy. That early focus on high-end technical problem-solving really set the tone for what Science Applications International Corporation (SAIC) would become.

What made Science Applications International Corporation (SAIC) different early on was its culture. Dr. Beyster established an employee-ownership model, meaning ownership was tied to merit and contribution, not just how long you'd been there. This fostered a real entrepreneurial spirit. Through the 1970s, 80s, and 90s, the company grew steadily by winning contracts with the Department of Defense (DoD) and the Department of Energy, but it also diversified into areas like environmental services and healthcare technology. By 1990, Science Applications International Corporation (SAIC) had hit $1B in revenue with about 11,500 employees, showing a strong ability to pivot beyond just defense work.

The most defintely critical moment in the modern history of Science Applications International Corporation (SAIC) happened on September 27, 2013. The original entity split into two separate, publicly traded companies. The part focused on capability development became Leidos, while the current Science Applications International Corporation (SAIC) retained the name and the focus on direct support and technical advice for government organizations. This separation was a strategic necessity to get around conflicts of interest rules in federal contracting, allowing the new Science Applications International Corporation (SAIC) to sharpen its focus entirely on being a premier technology integrator for the U.S. government.

Today, Science Applications International Corporation (SAIC) is headquartered in Reston, Virginia, and it's a Fortune 500 powerhouse. For the full Fiscal Year 2025, the company reported revenues of $7.48 billion, with nearly 98% coming from long-term federal contracts across defense, space, and civilian agencies. To bolster its capabilities, Science Applications International Corporation (SAIC) made big moves, like acquiring Engility Holdings for $2.5 billion in 2019 and Unisys Federal for $1.2 billion in 2020. To keep that focus tight, they divested their logistics unit in 2023 for about $350 million. As of late 2025, the company has a workforce of over 25,000 people and an estimated backlog of contracts reaching nearly $23.6 billion.

Science Applications International Corporation (SAIC) - BCG Matrix: Stars

You're looking at the core growth engines for Science Applications International Corporation, the units that dominate high-growth segments and are poised to become the next generation of cash generators. These Stars are defined by their high market share in expanding markets, demanding significant investment to maintain that lead.

The business units driving this quadrant for Science Applications International Corporation are heavily weighted toward high-end Mission IT and Digital Modernization solutions, coupled with significant contract wins in the Space and Intelligence Community sectors, which represent high-growth areas within the defense spending landscape.

The recent strategic move to acquire SilverEdge Government Solutions underscores this focus. This acquisition, completed for a real-life cash consideration of $205 million, is explicitly aimed at bolstering capabilities in sought-after areas like AI for the intelligence community, which is a clear indicator of investing in a high-growth, high-market-share play. The integration is expected to be accretive to margins and Earnings Per Share (EPS) next year.

The forward-looking indicator for these growth areas is exceptionally strong, as shown by the company's booking performance. A trailing twelve months book-to-bill ratio of 1.2 in Q3 FY26 signals that Science Applications International Corporation is winning new business faster than it is executing current work, securing future market share.

Here's a quick look at the financial context supporting the Star category's momentum:

The investment required to keep these units leading involves deploying financial resources to drive growth and prioritizing bid quality. The company's strategy involves reinvesting $100 million in annual savings into higher Return on Investment (ROI) areas, which directly funds these Star segments.

The key components within the Star quadrant that are consuming cash for growth include:

• High-end Mission IT and Digital Modernization solutions.
• Space and Intelligence Community contracts.
• Integration of SilverEdge's differentiated technology, including the MynAI platform.
• Securing large, multi-year recompete and new awards, like the $1.4 billion Air Force task order.

If Science Applications International Corporation sustains this success until the high-growth defense and intelligence markets slow, these units are positioned to transition into Cash Cows, generating significant net cash flow. The raised FY2026 Adjusted EPS guidance to $9.80-$10.00, up $0.40 from prior expectations, reflects confidence in the profitability of these growth areas, even while they consume capital.

Science Applications International Corporation (SAIC) - BCG Matrix: Cash Cows

You're analyzing Science Applications International Corporation (SAIC) business units, and the Cash Cows are where the real financial stability lies. These are the established market leaders that fund the rest of the portfolio. For Science Applications International Corporation (SAIC), this quadrant is heavily anchored by its core government services.

The Core Defense and Intelligence segment is the primary engine here, which drove an estimated 77.1% of Science Applications International Corporation (SAIC)'s Q3 FY26 revenue. This level of concentration in a mature, high-spending sector signals a dominant market position, which translates directly into high margins and predictable cash generation, exactly what you look for in a Cash Cow.

The stability comes from the nature of the work itself. You see this reflected in stable, large-scale Enterprise IT and Managed Services contracts. For example, in Q2 FY26, Science Applications International Corporation (SAIC) secured a $164 million contract to continue delivering comprehensive IT managed services for Orange County, California, demonstrating the recurring, foundational nature of these revenue streams.

The sheer volume of committed future work underpins this stability. Science Applications International Corporation (SAIC) reported a massive estimated backlog of approximately $23.8 billion as of late 2025. This backlog acts as a significant revenue buffer, providing high visibility into future performance, which is crucial for managing administrative costs and capital allocation.

Financially, the Cash Cow status is evident in the strong cash flow metrics reported for the prior fiscal year. Science Applications International Corporation (SAIC) provided FY25 Free Cash Flow guidance of $510 million to $530 million. This consistent generation of Free Cash Flow (FCF) is what allows the company to service debt and return capital to shareholders.

Furthermore, the profitability is predictable, as shown by the full-year FY25 figures. Science Applications International Corporation (SAIC) reported FY25 adjusted EBITDA of $710 million, representing an adjusted EBITDA margin of approximately 9.5% for the full year. This performance confirms the high-margin reality of a market leader in a mature segment.

Here's a quick look at the key financial markers defining this Cash Cow position, based on the latest full-year guidance/results available:

Because these units consume relatively low investment for growth-low growth market means low promotional spend-the focus shifts to efficiency. Science Applications International Corporation (SAIC) can use this cash to maintain the infrastructure supporting these large contracts, which further improves the cash flow it generates passively. You're definitely looking to 'milk' these gains.

The operational focus for these units is maintaining the advantage:

• Maintain current productivity levels.
• Invest in infrastructure for efficiency gains.
• Service corporate debt obligations.
• Fund shareholder dividends and buybacks.

Finance: draft 13-week cash view by Friday.

Science Applications International Corporation (SAIC) - BCG Matrix: Dogs

You're looking at the parts of Science Applications International Corporation (SAIC) that aren't driving high growth or high cash flow, the classic 'Dogs' in the matrix. These are areas where market share is low relative to competitors, or the market itself isn't expanding quickly, tying up capital that could go elsewhere.

Legacy, low-margin IT infrastructure contracts fit this profile, especially those facing significant renewal risk. Management noted recompete headwinds were expected to be a little over 2% in fiscal year 2026. These older, often cost-plus or less strategically aligned contracts require constant management without offering substantial margin expansion potential, making them cash traps if not carefully managed or exited.

The Civilian segment performance illustrates the low-growth/low-share pressure. For the third quarter of fiscal year 2026, Science Applications International Corporation reported a revenue contraction of 5.6% year-over-year, totaling revenues of $1.87 billion for the quarter. While the overall Adjusted EBITDA margin for the quarter was 9.9%, this segment has historically shown lower profitability; for instance, the operating margin in Q1 FY25 was 8.0%, with management expecting a trough around 12% for the segment margin in FY25 before seeing expansion over the next few years.

A clear strategic move away from a 'Dog' area was the Divested Supply Chain Business. Science Applications International Corporation completed the sale of this business to ASRC Federal in May 2023, which was part of fiscal year 2024. This exit aligns with the strategy to focus on Growth & Technology Accelerants, effectively shedding a unit characterized by low growth and low market share to redeploy resources.

Here's a look at some figures that characterize these lower-performing or exiting areas:

You should definitely watch the recompete schedule for any remaining fixed-price work that lacks clear paths to margin improvement. The shift toward mission/enterprise IT with higher margins, where two-thirds of planned submissions for the next year were targeted in Q1 FY25, suggests the remaining portfolio is less desirable.

The company is actively trying to migrate select contracts to fixed price with margin uplift potential, but this is a slow process when dealing with older engagements.

• Legacy IT infrastructure contracts facing recompete risk.
• Divestiture of Supply Chain Business in FY24.
• Civilian segment revenue contraction in Q3 FY26.
• Older fixed-price contracts with limited scope for margin expansion.

Finance: draft 13-week cash view by Friday.

Science Applications International Corporation (SAIC) - BCG Matrix: Question Marks

You're looking at the areas of Science Applications International Corporation (SAIC) that are burning cash now but hold the promise of becoming future Stars. These are the high-growth bets where market share is still being fought for. Honestly, the numbers show where the cash is being directed to try and win those future battles.

The aggressive push into emerging technologies is clear through strategic acquisitions. Science Applications International Corporation paid a preliminary purchase price of $203 million, net of $6 million cash acquired, for SilverEdge Government Solutions on October 15, 2025. This move directly injects AI capabilities into the portfolio. While the overall revenue for Fiscal Year 2025 was $7.48 billion, the company is actively reprogramming resources to fund this growth. Specifically, Science Applications International Corporation identified over $100 million in annual indirect spend to be redeployed into higher-return areas, including business development and account management.

Here's a look at the investment areas and the associated data points:

The need for this investment is underscored by the fact that the Civilian segment experienced a 7.4% year-over-year revenue decline in the third quarter of Fiscal Year 2026, landing at $427 million. Still, management points to funding tailwinds in specific agencies like the Federal Aviation Administration (FAA) and Customs and Border Protection (CBP) as areas for future growth.

The strategic organizational restructuring itself is a major cash-consuming action designed to drive future growth, effective January 31, 2026. This involves realigning the Chief Innovation Office and consolidating five business groups into three. The company is actively shifting capital, having identified over $100 million in annual indirect spend for reprogramming. For context on capital deployment, in Fiscal Year 2025, Science Applications International Corporation deployed $638 million in capital, including $527 million for share repurchases. Furthermore, the company plans to repurchase approximately $500 million in shares over Fiscal Years 2026 and 2027.

When you look at the bidding environment, the company is clearly trying to win the next wave of work, as evidenced by its strong booking activity. Net bookings for the third quarter of Fiscal Year 2026 hit $2.2 billion, yielding a book-to-bill ratio of 1.2. This strong ratio, against a backdrop of a 5.6% year-over-year revenue contraction in that quarter ($1.87 billion revenue), shows they are winning new work, which is the definition of a Question Mark needing investment to convert that pipeline into recognized revenue.

The current financial position shows the cash burn potential versus the pipeline:

• Estimated Backlog (as of Oct 31, 2025): $23.8 billion
• Funded portion of Backlog: Approximately $3.8 billion
• Long-term Debt (net of current portion): $2.48 billion (as of Oct 31, 2025)
• FY2025 Adjusted EBITDA Margin: 9.5%
• FY2026 Adjusted EBITDA Guidance (Midpoint): $695 million

These high-growth, high-investment areas are consuming cash now, with the hope that the $2.2 billion in Q3 FY2026 net bookings converts quickly enough to avoid becoming Dogs.