Science Applications International Cuts FY2027 Revenue Outlook by 5% After $275M in Recompete Losses and Q4 Headwinds
Science Applications International cut its fiscal 2027 revenue outlook by 5% after losing recompetes—Army Corps of Engineers work ($200M) and Cloud One ($75M)—and slowing program ramps. Fourth-quarter revenue missed by about 2% due to January timing shifts, weather disruptions and material delays.
1. Fiscal 2027 Guidance Revision
Science Applications International reduced its fiscal 2027 revenue forecast by approximately 5%, reversing prior expectations of flat to 3% growth. The revision followed reassessed assumptions for on-contract growth and slower-than-expected ramps for already awarded work.
2. Recompete Contract Losses
The company lost two key recompetes: an Army Corps of Engineers contract representing about 3% of revenue (roughly $200 million year-over-year impact) and Cloud One worth about 1% of revenue (approximately $75 million impact). Transition revenues for the Corps work are expected to extend into early fiscal 2027.
3. Fourth-Quarter Revenue Headwinds
Fourth-quarter revenue came in about 2% below projections, driven by a compressed January, residual effects of an earlier shutdown ($5–10 million impact), weather disruptions in the Washington, D.C. area, and materials timing shifts pushing deliveries into the next quarter.
4. Future Ramp and Funding Assumptions
Management lowered assumptions on the robustness of on-contract growth and the pace of new program ramps amid uneven government funding flows. These conservative assumptions account for the remaining headwind in the revised guidance.