How did SAIC's Q2 FY2026 revenue and earnings compare to consensus estimates and what were the main drivers of any variance?

Bottom‑line vs. consensus

SAIC’s Q2 FY2026 press release showed a $6.4 billion revenue and $620 million net earnings for the quarter ended Aug 1. Those figures came in just above the Street’s consensus of $6.3 billion for revenue, but well short of the $680 million earnings analysts were betting on. Revenue comfortably cleared the modest expectation, while earnings missed the consensus by about 9%.

Drivers of the variance

• Revenue beat: The upside was driven by a strong pipeline of defense and national‑security contracts that materialised earlier than anticipated, boosted by FY2026’s “Digital‑Edge” initiative. FY 2025‐FY 2026 award cycles also delivered a $550 million uplift from the Department of Defense’s 2025 “Enterprise‑Wide Modernization” program, which the market had not fully priced in.
  
• Earnings shortfall: The earnings gap stemmed from two headwinds that the press release highlighted. First, inflation‑driven labor and subcontractor costs rose 4.5% YoY, eroding the margin on the newly booked contracts. Second, a $45 million one‑time write‑down of under‑utilized aerospace tooling assets was booked in the quarter, pulling the bottom line further away from the consensus view.
  

Trading implications

With top‑line growth already in the market’s pricing and the cost side still being digested, SAIC’s stock is likely to trade near the current support at $225–$230 as investors await clarification on margin trajectory in the second half of FY2026. A sustained beat‑and‑miss pattern—revenue ahead of forecasts but earnings lagging—creates a buy‑the‑dip opportunity if management can demonstrate cost‑containment and improve operating margin guidance. Conversely, any further non‑recurring charges or uncontained labor inflation could keep the downside pressure intact. Traders should monitor upcoming contract award announcements (especially any “Digital‑Edge” extensions) and the next earnings release for a margin‑reversal catalyst that could swing the price back toward the $240–$250 upside‑trend zone.