Science Applications International Corporation raised its FY 2027 revenue guidance to $7.25 billion midpoint and outlined $150 million in annual run-rate savings from its Project ORBIT efficiency program, according to the company's Q2 earnings announcement.
The defense contractor also set a path to roughly 11% operating margin by FY 2030, contingent on full execution of ORBIT. The company reported second-quarter earnings above estimates and raised full-year expectations in the same statement.
SAIC initiated Project ORBIT to consolidate redundant operations and reduce costs across government solutions and intelligence services segments. The $150 million run-rate figure represents savings the company expects to sustain annually once the program reaches full maturity. ORBIT improvements flow directly to operating margin, the metric SAIC is using to anchor its long-term profitability target.
The 11% margin target by FY 2030 compares to historical operating margins that have ranged between 7% and 9% in recent fiscal years. Reaching that level would require ORBIT to deliver its planned savings while revenue continues to grow. The FY 2027 guidance raise to $7.25 billion midpoint shows SAIC's confidence in organic growth from its government customer base, particularly in defense modernization and intelligence contracts.
Defense contractors have faced cost pressure from clients demanding efficiency while growth in spending remains uneven by segment. SAIC's articulation of a specific margin target tied to a named program gives investors a measurable checkpoint for the company's operational discipline.
SAIC must show sustained progress on ORBIT implementation and demonstrate that savings stick even as it invests in growth areas. The number to watch is whether operating margin reaches 10% or higher by the end of FY 2029, a year before the 11% target arrives.
