Question · Q3 2026
Toby Sommer asked if the pressure on federal civil spending is expected to conclude in 2025 or if it's a longer-term headwind. He also questioned SAIC's approach to portfolio shaping for organic growth and margin objectives, and whether the company plans to toggle down its leverage target given market turbulence.
Answer
Interim CEO Jim Reagan anticipates continued pressure on civilian agency budgets, with greater emphasis on DoD, but feels SAIC is well-placed in faster-growing civilian areas like CBP and FAA. He noted that portfolio shaping opportunities are always considered, but no immediate announcements are expected. CFO Prabu Natarajan added that SAIC reviews areas of the portfolio unable to be transformed. Regarding leverage, Prabu Natarajan stated SAIC is comfortable around 3.0x, remains disciplined in M&A due to high valuations, and will deploy capital via share repurchases or deleveraging based on market conditions and return on investment, confident in cash flow visibility.
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