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By Nick Wakeman

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Nick Wakeman

SAIC breaks the $7B revenue mark, but COVID continues to be an overhang

Despite the COVID-19 pandemic's impacts over the last year, Science Applications International Corp. reported double-digit revenue growth and only a slight dip in its net income.

For the company’s 2021 fiscal year ended Jan. 29, revenue was $7.1 billion compared to $6.4 billion in the prior 12-month period.

Most of that growth came through the acquisition of Unisys Federal in March 2020. But after taking out the acquired sales, organic revenue growth was less than 1 percent.

Organic growth would have been 4 percent without the impacts of COVID-19, CEO Nazzic Keene said Thursday in a call with investors.

The organic growth was driven by new business with the intelligence community and the U.S. Air Force. SAIC also saw growth within its existing programs, according to SAIC’s filing with the Securities & Exchange Commission.

Among the notable new awards was the $1.3 billion Army Corps of Engineers Revolutionary IT Services contract known as RITS. During a recent Project 38 podcast, SAIC's defense and civilian president Bob Genter said that win was attributed to the company’s acquisition of Unisys Federal.

With Unisys Federal in tow, SAIC strengthened its bid for RITS and won the contract to provide modern and secure enterprise-wide IT support for more than 37,000 users spread across 1,500 field and project offices around the world.

Net bookings for the full year were $11.9 billion to achieve a book-to-bill ratio of 1.7. The company estimates it has a backlog of $21.5 billion, of which $3 billion is funded.

Looking ahead, SAIC offered conservative guidance for revenue of $7.1 billion-to-$7.3 billion. What should be a positive for the company is that only 10 percent of its revenue is up for recompete during fiscal 2022.

This is below the typical average, said Prabu Natarajan, SAIC’s chief financial officer.

A large recompete that will happen during fiscal 2022 is the NASA Integrated Communications Services contract, which SAIC won in 2011. Also known as NICS, the ceiling value is $1.5 billion and NASA is evaluating all bids with an award expected in the summer.

SAIC's strategy going forward is to focus on longer-term needs for the government so the company is expanding its IT modernization focus into broader digital transformation, Keene said.

“We are building on our heritage and engineering by deepening our digital engineering capabilities, so that we can help the government advance complex systems integration, saving costs and increasing mission readiness,” Keene said. “We're also looking at the growing and evolving missions of our customers, especially in areas like space and health where there are new agencies, missions and requirements.”

Posted by Nick Wakeman on Mar 26, 2021 at 11:03 AM

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