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Item 1. Financial Statements

2025-12-04 compared with 2025-09-04 · 191 added, 136 removed, 534 unchanged (38% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended Six Months Ended

2025 August 2,

2024 August 1,

2025 August 2,

Three Months Ended Nine Months Ended

2025 November 1,

2024 October 31,

2025 November 1,

(in millions, except per share amounts)

17 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

2025 August 2,

2024 August 1,

2025 August 2,

Three Months Ended Nine Months Ended

2025 November 1,

2024 October 31,

2025 November 1,

(in millions)

20 unchanged sentences

Intangible assets, net 779 779

Property, plant, and equipment (net of accumulated depreciation of $ 210 million and $ 200 million at August 1, 2025 and January 31, 2025, respectively)

Property, plant, and equipment (net of accumulated depreciation of $ 212 million and $ 200 million at October 31, 2025 and January 31, 2025, respectively)

Operating lease right of use assets 162 164

13 unchanged sentences

Commitments and contingencies (Note 12)

Common stock, $ 0.0001 par value, 1 billion shares authorized, 46 million and 48 million shares issued and outstanding as of August 1, 2025 and January 31, 2025, respectively

Common stock, $ 0.0001 par value, 1 billion shares authorized, 45 million and 48 million shares issued and outstanding as of October 31, 2025 and January 31, 2025, respectively

Additional paid-in capital — —

12 unchanged sentences

(in millions)

Balance at May 2, 2025 47 $ — $ 1,494 $ 11 $ 1,505

Balance at August 1, 2025 46 $ — $ 1,508 $ 9 $ 1,517

Net income — — 78 — 78

5 unchanged sentences

Repurchases of stock ( 1 ) ( 30 ) ( 65 ) — ( 95 )

Balance at August 1, 2025 46 $ — $ 1,508 $ 9 $ 1,517

Balance at October 31, 2025 45 $ — $ 1,504 $ 8 $ 1,512

Balance at January 31, 2025 48 $ — $ 1,565 $ 12 $ 1,577

2 unchanged sentences

Other comprehensive loss, net of tax — — — ( 4 ) ( 4 )

— — — ( 3 ) ( 3 )

Cash dividends of $ 1.11 per share

2 unchanged sentences

Repurchases of stock ( 3 ) ( 48 ) ( 281 ) — ( 329 )

Balance at October 31, 2025 45 $ — $ 1,504 $ 8 $ 1,512

Balance at August 2, 2024 50 $ 63 $ 1,551 $ 11 $ 1,625

Balance at May 3, 2024 51 $ 251 $ 1,489 $ 19 $ 1,759

Net income — — 106 — 106

6 unchanged sentences

Repurchases of stock ( 1 ) ( 79 ) ( 37 ) — ( 116 )

Balance at August 2, 2024 50 $ 63 $ 1,551 $ 11 $ 1,625

Balance at November 1, 2024 49 $ — $ 1,602 $ 10 $ 1,612

Balance at February 2, 2024 52 $ 337 $ 1,432 $ 16 $ 1,785

7 unchanged sentences

Repurchases of stock ( 3 ) ( 364 ) ( 37 ) — ( 401 )

Balance at August 2, 2024

50 $ 63 $ 1,551 $ 11 $ 1,625

(1) During the three months ended August 1, 2025 and August 2, 2024, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 2 million and $ 1 million, respectively.

During the six months ended August 1, 2025 and August 2, 2024, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 19 million and $ 23 million, respectively.

Balance at November 1, 2024 49 $ — $ 1,602 $ 10 $ 1,612

(1) During the three months ended October 31, 2025, there were no shares withheld for taxes related to stock-based compensation arrangements.

During the three months ended November 1, 2024, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 2 million.

During the nine months ended October 31, 2025 and November 1, 2024, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 19 million and $ 25 million, respectively.

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

2025 August 2,

Nine Months Ended

2025 November 1,

(in millions)

5 unchanged sentences

Deferred income taxes 101 ( 15 )

Gain on sale of equity method investments

Other ( 4 ) ( 4 )

Increase (decrease) resulting from changes in operating assets and liabilities:

Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of acquisitions:

Receivables ( 31 ) ( 108 )

6 unchanged sentences

Cash flows from investing activities:

Cash paid for acquisitions, net of cash acquired ( 203 ) —

Expenditures for property, plant, and equipment ( 24 ) ( 21 )

1 unchanged sentence

Sales of marketable securities 5 10

Proceeds from sale of equity method investments — 10

Contributions to investments

7 unchanged sentences

Issuances of stock 16 14

Debt issuance costs ( 9 ) —

Net cash used in financing activities ( 125 ) ( 413 )

Net decrease in cash, cash equivalents and restricted cash

( 11 ) ( 49 )

Cash, cash equivalents and restricted cash at beginning of period 64 103

10 unchanged sentences

The Company’s two reportable segments are the Defense and Intelligence segment and the Civilian segment.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the Department of Defense ("DoD") and Intelligence Community of the United States Government.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the Department of War ("DoW", formerly referred to as the Department of Defense) and Intelligence Community of the United States Government.

The Civilian segment provides solutions to the civilian markets, encompassing federal, state, and local governments, in order to deliver services for citizen well-being, border security, and protecting lives.

34 unchanged sentences

Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1).

As of August 1, 2025 and January 31, 2025, the fair value of the Company's investments totaled $ 36 million and are included in "Other assets" on the condensed consolidated balance sheets.

As of October 31, 2025 and January 31, 2025, the fair value of the Company's investments totaled $ 39 million and $ 36 million, respectively, and are included in "Other assets" on the condensed consolidated balance sheets.

The Company's investments are primarily held in a custodial account, which includes investments to fund its deferred compensation plan liabilities.

6 unchanged sentences

Cash and cash equivalents $ 45 $ 56

Restricted cash included in prepaid expenses and other current assets 3 3

Restricted cash included in other current assets

Restricted cash included in other assets 5 5

30 unchanged sentences

The Company is currently evaluating the impact of adoption of this standard on its financial statement disclosures.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

The standard modernizes the accounting for internal-use software costs by removing all references to project stages and defining a probable-to-complete threshold to begin capitalizing costs.

The standard also clarifies the disclosure requirements for capitalized internal-use software costs.

The standard is effective for annual reporting periods, including interim reporting periods within those annual reporting periods, beginning after December 15, 2027.

The amendment can

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

be applied prospectively, retrospectively, or on a modified transition approach.

Early adoption is permitted.

The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and related disclosures.

Note 2—Earnings Per Share, Share Repurchases and Dividends:

1 unchanged sentence

Basic EPS is computed by dividing net income by the basic weighted-average number of shares outstanding.

Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

increased to include the dilutive effect of outstanding stock-based awards.

Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is increased to include the dilutive effect of outstanding stock-based awards.

The dilutive effect of outstanding stock-based awards is computed using the treasury stock method.

The following table provides a reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

Three Months Ended Six Months Ended

2025 August 2,

2024 August 1,

2025 August 2,

Three Months Ended Nine Months Ended

2025 November 1,

2024 October 31,

2025 November 1,

(in millions)

4 unchanged sentences

46.1 49.8 46.9 51.1

Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three and six months ended August 1, 2025 and August 2, 2024 were immaterial .

Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three and nine months ended October 31, 2025 and November 1, 2024 were immaterial .

Share Repurchases

3 unchanged sentences

The Company has not made any material purchases of common stock other than in connection with established share repurchase plans.

During the six months ended August 1, 2025, the Company repurchased approximately 2.1 million shares of its common stock from the open market under its existing share repurchase plan for approximately $ 231 million.

As of August 1, 2025, the Company has repurchased approximately 26.6 million shares of its common stock under the plan for approximately $ 2.3 billion.

The Company declared and paid a quarterly dividend of $ 0.37 per share of its common stock during the three months ended August 1, 2025.

Subsequent to the end of the quarter, on August 28, 2025, the Company's Board of Directors declared a quarterly dividend of $ 0.37 per share of the Company's common stock payable on October 24, 2025 to stockholders of record on October 10, 2025.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the nine months ended October 31, 2025, the Company repurchased approximately 3.0 million shares of its common stock from the open market under its existing share repurchase plan for approximately $ 325 million.

As of October 31, 2025, the Company has repurchased approximately 27.5 million shares of its common stock under the plan for approximately $ 2.4 billion.

The Company declared and paid a quarterly dividend of $ 0.37 per share of its common stock during the three months ended October 31, 2025.

Note 3—Revenues:

6 unchanged sentences

and performance being better or worse than previously estimated.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A significant portion of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion.

2 unchanged sentences

Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows:

Three Months Ended Six Months Ended

2025 August 2,

2024 August 1,

2025 August 2,

Three Months Ended Nine Months Ended

2025 November 1,

2024 October 31,

2025 November 1,

(in millions, except per share amounts)

3 unchanged sentences

Diluted EPS impact $ 0.09 $ 0.26 $ 0.15 $ 0.23

Revenues were $ 7 million higher for the three and six months ended August 1, 2025, and $ 1 million higher for the six months ended August 2, 2024, due to net revenue recognized from performance obligations satisfied in prior periods.

There was no revenue recognized during the three months ended August 2, 2024 from performance obligations satisfied in prior periods.

Revenues were $ 8 million and $ 15 million higher for the three and nine months ended October 31, 2025, respectively, and $ 13 million and $ 14 million higher for the three and nine months ended November 1, 2024, respectively, due to net revenue recognized from performance obligations satisfied in prior periods.

Disaggregation of Revenues

4 unchanged sentences

Three Months Ended

August 1, 2025

August 2, 2024

October 31, 2025

November 1, 2024

Defense and Intelligence

1 unchanged sentence

(in millions)

Department of Defense $ 920 $ 2 $ 922 $ 950 $ — $ 950

Department of War $ 970 $ 2 $ 972 $ 992 $ 13 $ 1,005

Intelligence and other federal government agencies

3 unchanged sentences

Total $ 1,439 $ 427 $ 1,866 $ 1,515 $ 461 $ 1,976

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended

August 1, 2025

August 2, 2024

Nine Months Ended

October 31, 2025

November 1, 2024

Defense and Intelligence

1 unchanged sentence

(in millions)

Department of Defense $ 1,902 $ 5 $ 1,907 $ 1,924 $ 2 $ 1,926

Department of War $ 2,872 $ 7 $ 2,879 $ 2,916 $ 15 $ 2,931

Intelligence and other federal government agencies

3 unchanged sentences

Total $ 4,246 $ 1,266 $ 5,512 $ 4,366 $ 1,275 $ 5,641

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Disaggregated revenues by contract type were as follows:

Three Months Ended

August 1, 2025

August 2, 2024

October 31, 2025

November 1, 2024

Defense and Intelligence

7 unchanged sentences

Total $ 1,439 $ 427 $ 1,866 $ 1,515 $ 461 $ 1,976

Six Months Ended

August 1, 2025

August 2, 2024

Nine Months Ended

October 31, 2025

November 1, 2024

Defense and Intelligence

9 unchanged sentences

Three Months Ended

August 1, 2025 August 2, 2024

October 31, 2025 November 1, 2024

Defense and Intelligence

5 unchanged sentences

Total $ 1,439 $ 427 $ 1,866 $ 1,515 $ 461 $ 1,976

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Six Months Ended

August 1, 2025

August 2, 2024

Nine Months Ended

October 31, 2025

November 1, 2024

Defense and Intelligence

5 unchanged sentences

Total $ 4,246 $ 1,266 $ 5,512 $ 4,366 $ 1,275 $ 5,641

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

Contract balances for the periods presented were as follows:

Balance Sheet line item August 1,

Balance Sheet line item October 31,

2025 January 31,

8 unchanged sentences

Other long-term liabilities

(1) Net of allowance of $ 2 million and 3 million, respectively, as of August 1, 2025 and January 31, 2025.

During the three and six months ended August 1, 2025, the Company recognized revenues of $ 8 million and $ 25 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 31, 2025.

During the three and six months ended August 2, 2024, the Company recognized revenues of $ 10 million and $ 30 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of February 2, 2024.

(1) Net of allowance of $ 3 million as of October 31, 2025 and January 31, 2025.

During the three and nine months ended October 31, 2025, the Company recognized revenues of $ 2 million and $ 27 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 31, 2025.

During the three and nine months ended November 1, 2024, the Company recognized revenues of $ 3 million and $ 33 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of February 2, 2024.

Remaining Performance Obligations

1 unchanged sentence

RPO does not include unexercised option periods and future task orders expected to be awarded under IDIQ contracts.

As of August 1, 2025, the Company had approximately $ 6.1 billion of RPO.

As of October 31, 2025, the Company had approximately $ 6.5 billion of RPO.

The Company expects to recognize revenue on approximately 80 % of the RPO over the next 12 months and approximately 89 % over the next 24 months, with the remaining recognized thereafter.

Note 4—Acquisitions:

Acquisition of SilverEdge Government Solutions (“SilverEdge”)

On October 15, 2025, the Company acquired SilverEdge, an innovative provider of mission-driven technology solutions and products, for a preliminary purchase price of $ 203 million, net of $ 6 million cash acquired, subject to post-closing adjustments.

The acquisition advances the Company's strategy to provide mission focused, IP-based solutions and commercial products to its customers.

The Company funded the transaction from increased borrowings (see Note 7—Debt Obligations for additional information) and cash on hand.

As of October 31, 2025, the Company is in the process of obtaining the information required to complete the valuation and purchase price allocation related to this acquisition.

The Company has preliminarily recorded goodwill and amortizable intangible assets of $ 109 million and $ 87 million, respectively.

The goodwill is primarily associated with intellectual capital and an acquired assembled workforce.

The intangible assets consist of customer relationships of $ 44 million, developed technology of $ 36 million, and backlog of $ 7 million that will be amortized over a period of thirteen years, eight years, and one year, respectively.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 5—Goodwill and Intangible Assets:

5 unchanged sentences

$ 2,960 $ 2,851

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended October 31, 2025, goodwill increased by $ 109 million in the Defense and Intelligence reportable segment due to the acquisition of SilverEdge (see Note 4—Acquisitions for additional information).

Goodwill is not amortized, but rather tested for potential impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

3 unchanged sentences

Intangible assets, all of which were finite-lived, consisted of the following:

August 1, 2025 January 31, 2025

October 31, 2025 January 31, 2025

Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value

4 unchanged sentences

Total intangible assets $ 1,558 $ ( 779 ) $ 779 $ 1,473 $ ( 694 ) $ 779

Amortization expense related to intangible assets was $ 29 million and $ 58 million for the three and six months ended August 1, 2025 and August 2, 2024, respectively.

During the three months ended October 31, 2025, the gross carrying value of intangible assets increased by $ 87 million due to the acquisition of SilverEdge (see Note 4—Acquisitions for additional information).

Amortization expense related to intangible assets was $ 29 million and $ 87 million for the three and nine months ended October 31, 2025 and November 1, 2024, respectively.

There were no intangible asset impairment losses during the periods presented.

As of August 1, 2025, the estimated future annual amortization expense related to intangible assets is as follows:

As of October 31, 2025, the estimated future annual amortization expense related to intangible assets is as follows:

Fiscal Year (in millions)

1 unchanged sentence

Thereafter 305

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, and other factors.

Note 6—Income Taxes:

The Company's effective income tax rate was ( 17.2 )% and ( 0.4 )% for the three and six months ended August 1, 2025, respectively, and 19.6 % and 19.3 % for the three and six months ended August 2, 2024, respectively.

The effective tax rate significantly decreased compared to the same period last year primarily due to a $ 47 million benefit from an IRS audit settlement subject to final administrative approvals covering fiscal years 2016 through 2019 and decreases in liabilities for uncertain tax positions for the remaining open tax years.

Additionally, the Company’s effective tax rate differs from the statutory tax rate primarily due to research and development tax credits and tax benefits from employee share-based compensation.

On July 4, 2025, the One Big Beautiful Bill Act ("the Act") was enacted, introducing several significant changes to U.S.

The Company's effective income tax rate was 16.7 % and 5.2 % for the three and nine months ended October 31, 2025, respectively, and 15.6 % and 17.8 % for the three and nine months ended November 1, 2024, respectively.

The effective tax rate for the three months ended October 31, 2025 increased compared to the same period last year primarily due to the impacts of the One Big Beautiful Bill Act (“the Act”).

The effective tax rate for the nine months ended October 31, 2025 decreased compared to the same period last year primarily due to a $ 47 million benefit from an IRS audit settlement, pending final administrative approvals, covering fiscal years 2016 through 2019, and reductions in liabilities for uncertain tax positions for the remaining open tax years.

Additionally, the Company’s effective tax rate further differs from the statutory tax rate due to research and development tax credits and tax benefits from employee share-based compensation.

On July 4, 2025, the Act was enacted, introducing several significant changes to U.S.

corporate income tax law.

3 unchanged sentences

The Company is awaiting interpretive guidance from the IRS, and therefore the current estimated impacts of the Act are subject to change.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 7—Debt Obligations:

The Company’s debt as of the dates presented was as follows:

August 1, 2025 January 31, 2025

October 31, 2025 January 31, 2025

rate Effective

3 unchanged sentences

Term Loan A Facility due June 2027 — % — % $ — $ — $ — $ 1,122 $ ( 2 ) $ 1,120

Term Loan B3 Facility due February 2031

Term Loan A Facility due September 2030

5.21 % 5.29 % 1,100 ( 4 ) 1,096 — — —

Term Loan B3 Facility due February 2031 5.71 % 5.86 % 503 ( 3 ) 500 506 ( 3 ) 503

Senior Notes due April 2028 4.88 % 5.11 % 400 ( 2 ) 398 400 ( 3 ) 397

Senior Notes due November 2033

5.88 % 6.09 % 500 ( 7 ) 493 — — —

Revolving Credit Facility due June 2027

4 unchanged sentences

$ 2,491 $ ( 16 ) $ 2,475 $ 1,915 $ ( 8 ) $ 1,907

(1) The stated interest rate for the Revolving Credit Facility due June 2027 reflects the weighted average interest rate for outstanding borrowings as of August 1, 2025.

As of August 1, 2025, the Company had a $ 2.6 billion secured credit facility (the Credit Facility) consisting of a Term Loan A Facility due June 2027, a Term Loan B3 Facility due February 2031 (together, the "Term Loan Facilities"), and a $ 1.0 billion Revolving Credit Facility due June 2027 (the "Revolving Credit Facility").

During the three and six months ended August 1, 2025, the Company made scheduled principal payments of $ 23 million and $ 46 million on the Term Loan A Facility due June 2027 and made scheduled principal payments of $ 1 million and $ 2 million on the Term Loan B3 Facility due February 2031, respectively.

During the three and six months ended August 1, 2025, the Company borrowed $ 557 million and $ 1.3 billion, respectively, and repaid $ 522 million and $ 1.2 billion, respectively, under the Revolving Credit Facility.

As of August 1, 2025, the outstanding principal under the Revolving Credit Facility was classified as "Debt, current portion" on the condensed consolidated balance sheets.

Subsequent to quarter end, the Company repaid $ 95 million of the outstanding principal under the Revolving Credit Facility.

Credit Facility

As of October 31, 2025, the Company had a $ 2.6 billion secured credit facility (the "Credit Facility") consisting of a Term Loan A Facility due September 2030, a Term Loan B3 Facility due February 2031 (together, the "Term Loan Facilities"), and a $ 1.0 billion Revolving Credit Facility due September 2030 (the "Revolving Credit Facility").

On September 30, 2025, the Company executed the Eighth Amendment to the Third Amended and Restated Credit Agreement ("Eighth Amendment"), which established a new $ 1.1 billion senior secured term loan credit facility due on September 30, 2030 ("Term Loan A Facility due September 2030").

The entire Term Loan A Facility due September 2030 was immediately borrowed by the Company and the proceeds were used to pay in full the

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

outstanding principal balance and accrued interest under the Term Loan A Facility due June 2027, transaction related fees and expenses, and for general corporate purposes.

The Term Loan A Facility due September 2030 is secured by substantially all of the assets of the Company and the Company’s wholly owned domestic subsidiaries, and is guaranteed by each of the Company’s wholly owned domestic subsidiaries.

The Term Loan A Facility due September 2030 is subject to the same covenants and events of default as the Company’s existing term loans under the Credit Facility.

Borrowings under the Term Loan A Facility due September 2030 amortize quarterly beginning on October 31, 2026 at 0.625 % of the original borrowed amount, with such quarterly amortization increasing to 1.25 % on October 31, 2027, and to 1.875 % on October 31, 2028, with the remaining unamortized balance due in full upon maturity.

The Term Loan A Facility due September 2030 may be prepaid at any time without penalty and is subject to the same mandatory prepayments, including from excess cash flow, as the Company’s existing term loans under the Credit Facility.

The Eighth Amendment also established a new $ 1.0 billion revolving credit facility with a termination date of September 30, 2030 ("Revolving Credit Facility due September 2030") that replaced the Revolving Credit Facility due June 2027.

The Term Loan A Facility due September 2030 and the Revolving Credit Facility due September 2030 bear interest at a variable rate of interest equal to a base rate or a Secured Overnight Financing Rate (SOFR) rate, plus the applicable interest rate margin of 0 % to 0.75 % for base rate loans and 0.75 % to 1.75 % for SOFR rate loans, dependent on the Company’s leverage ratio.

The Eighth Amendment eliminated the 0.10 % credit spread adjustment used in the calculation of SOFR rate loans on the Term Loan A Facility due 2027 and the Revolving Credit Facility due June 2027.

During the nine months ended October 31, 2025, the Company made scheduled principal payments of $ 46 million on the Term Loan A Facility due June 2027.

During the three months ended October 31, 2025, the Company made no scheduled principal payments on the Term Loan A Facility due June 2027 or the Term Loan A Facility due September 2030.

During the three and nine months ended October 31, 2025, the Company made scheduled principal payments of $ 2 million and $ 4 million on the Term Loan B3 Facility due February 2031, respectively.

During the three and nine months ended October 31, 2025, the Company borrowed $ 275 million and $ 1.6 billion, respectively, and repaid $ 595 million and $ 1.8 billion, respectively, under the Revolving Credit Facility due June 2027.

During the three months ended October 31, 2025, the Company borrowed $ 320 million and repaid $ 320 million under the Revolving Credit Facility due September 2030.

There was no balance outstanding on the Revolving Credit Facility as of October 31, 2025.

Commitment fees for undrawn amounts under the Revolving Credit Facility range from 0.125 % to 0.25 % per annum based on the Company’s leverage ratio.

As of August 1, 2025, the Company was in compliance with the covenants under its Credit Facility.

As of August 1, 2025 and January 31, 2025, the carrying value of the Company’s outstanding debt obligations approximated its fair value.

As of October 31, 2025, the Company was in compliance with the covenants under its Credit Facility.

On September 25, 2025, the Company issued $ 500 million of unsecured 5.875 % Senior Notes due 2033 ("Senior Notes due November 2033") through a private offering.

Proceeds received from the offering were used to repay all indebtedness outstanding under the Revolving Credit Facility due June 2027 and fees and expenses from the offering, with remaining proceeds to be used for general corporate purposes, including working capital to fund growth and strategic projects and transactions.

The Senior Notes due November 2033 were issued pursuant to an indenture, dated September 25, 2025, and are the senior unsecured obligations of the Company and are fully and unconditionally guaranteed by each of the Company’s existing and future domestic subsidiaries that guarantee the Company’s obligations under its credit facilities and certain other indebtedness.

Interest is payable semi annually on May 1 and November 1 of each year, commencing on May 1, 2026.

The principal is due on November 1, 2033.

At any time prior to November 1, 2028, the Company may redeem some or all of the Senior Notes due November 2033 at a price equal to 100 % of the principal amount, plus accrued and unpaid interest, plus an applicable “make-whole premium.” On or after November 1, 2028, the Company may redeem in whole or in part the Senior Notes due November 2033 at set redemption prices, plus accrued and unpaid interest.

At any time on or prior to November 1, 2028, the Company may redeem up to 40 % of the original aggregate principal amount of the Senior Notes due

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

November 2033 with the net cash proceeds from certain equity offerings at a redemption price equal to 105.875 % of the outstanding principal amount, together with accrued and unpaid interest.

Upon the occurrence of certain events constituting a change of control, the Company may be required to make an offer to repurchase all of the Senior Notes due November 2033 then outstanding at a price equal to 101 % of the principal amount thereof, plus accrued and unpaid interest.

The Company incurred $ 12 million of debt issuance costs associated with the Eighth Amendment and the Senior Notes due November 2033, of which $ 1 million was recognized in interest expense and the remaining $ 11 million deferred and amortized to interest expense through the maturity date of the facility utilizing the effective interest rate method.

As of October 31, 2025 and January 31, 2025, the carrying value of the Company’s outstanding debt obligations approximated its fair value.

The fair value of debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s Term Loan Facilities and Senior Notes.

Maturities of debt as of August 1, 2025 are:

Maturities of debt as of October 31, 2025 are:

Fiscal Year Total

3 unchanged sentences

Total principal payments $ 2,503

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8—Derivative Instruments Designated as Cash Flow Hedges:

1 unchanged sentence

Fair Value of Asset (1) at

Notional Amount at August 1, 2025 Pay Fixed

Rate Settlement and

Termination August 1,

Termination October 31,

2025 January 31, 2025

(in millions) (in millions)

(in millions)

Interest rate swaps

1 unchanged sentence

(1) The fair value of the fixed interest rate swap asset is included in "Other assets" on the condensed consolidated balance sheets.

The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate Credit Facility borrowings.

The counterparties to all swap agreements are financial institutions.

On October 31, 2025, the Company's interest rate swaps expired.

Through October 31, 2025, the Company was party to fixed interest rate swap instruments with a notional value of $ 685 million that were designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate Credit Facility borrowings.

The counterparties to all swap agreements were financial institutions.

See Note 9—Changes in Accumulated Other Comprehensive Income (Loss) by Component for the unrealized change in fair values on cash flow hedges recognized in other comprehensive income (loss) and the amounts reclassified from accumulated other comprehensive income (loss) into earnings for the current and comparative periods presented.

The Company estimates that it will reclassify $ 2 million of unrealized gains from accumulated other comprehensive income into earnings from August 2, 2025 until the interest rate swaps mature on October 31, 2025.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

9 unchanged sentences

(in millions)

Three months ended August 1, 2025

Balance at May 2, 2025 $ 3 $ 8 $ 11

Three months ended October 31, 2025

Balance at August 1, 2025 $ 1 $ 8 $ 9

Other comprehensive income before reclassifications — — —

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Net other comprehensive loss ( 1 ) — ( 1 )

Balance at October 31, 2025 $ — $ 8 $ 8

Three months ended November 1, 2024

Balance at August 2, 2024 $ 6 $ 5 $ 11

Three months ended August 2, 2024

Balance at May 3, 2024 $ 14 $ 5 $ 19

Other comprehensive loss before reclassifications

( 6 ) — ( 6 )

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive income

3 unchanged sentences

( 1 ) — ( 1 )

Balance at August 2, 2024 $ 6 $ 5 $ 11

Six months ended August 1, 2025

Balance at November 1, 2024 $ 5 $ 5 $ 10

Nine months ended October 31, 2025

Balance at January 31, 2025 $ 4 $ 8 $ 12

3 unchanged sentences

Net other comprehensive loss ( 4 ) — ( 4 )

Balance at August 1, 2025 $ 1 $ 8 $ 9

Six months ended August 2, 2024

Balance at October 31, 2025 $ — $ 8 $ 8

Nine months ended November 1, 2024

Balance at February 2, 2024 $ 11 $ 5 $ 16

5 unchanged sentences

( 6 ) — ( 6 )

Balance at August 2, 2024 $ 6 $ 5 $ 11

Balance at November 1, 2024 $ 5 $ 5 $ 10

(1) The amount reclassified from accumulated other comprehensive income (loss) is included in "Interest expense, net.

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(the "Purchaser") for the sale of up to a maximum amount of $ 300 million of certain designated eligible receivables with the U.S.

During the three and six months ended August 1, 2025, the Company incurred purchase discount fees of approximately $ 3 million and $ 7 million, respectively.

During the three and six months ended August 2, 2024, the Company incurred purchase discount fees of $ 4 million and $ 7 million, respectively.

During the three and nine months ended October 31, 2025, the Company incurred purchase discount fees of approximately $ 3 million and $ 10 million, respectively.

During the three and nine months ended November 1, 2024, the Company incurred purchase discount fees of $ 4 million and $ 11 million, respectively.

The purchase discount fees are presented in "Other (income) expense, net" on the condensed consolidated statements of income and are reflected as cash flows from operating activities on the condensed consolidated statements of cash flows.

MARPA Facility activity consisted of the following:

Six Months Ended

2025 August 2,

Nine Months Ended

2025 November 1,

(in millions)

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Remaining sold receivables $ 192 $ 233

(1) For the six months ended August 1, 2025, the Company recorded a net increase of $ 101 million to cash flows from operating activities from sold receivables.

For the six months ended August 2, 2024, the Company recorded a net decrease of $ 30 million to cash flows from operating activities from sold receivables.

(2) Primarily represents the cash collected on behalf of but not yet remitted to the Purchaser as of August 1, 2025 and August 2, 2024.

(1) For the nine months ended October 31, 2025 and November 1, 2024, the Company recorded a net increase of $ 86 million and $ 95 million, respectively, to cash flows from operating activities from sold receivables.

(2) Primarily represents the cash collected on behalf of but not yet remitted to the Purchaser as of October 31, 2025 and November 1, 2024.

This balance is included in "Accounts payable" on the condensed consolidated balance sheets.

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The Company’s two reportable segments are the Defense and Intelligence segment and the Civilian segment.

The Company defines its operating segments based on the way the CODM, currently the Company's CEO, manages the operations for the purpose of allocating resources and assessing performance.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the DoD and Intelligence Community of the United States Government.

The Company defines its operating segments based on the way the CODM, currently the Company's Interim CEO, manages the operations for the purpose of allocating resources and assessing performance.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the DoW and Intelligence Community of the United States Government.

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The segment information for the periods presented was as follows:

Three Months Ended August 1, 2025

Three Months Ended October 31, 2025

Defense and Intelligence

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Adjusted operating income (loss) $ 118 $ 62 $ 3 $ 183

Three Months Ended August 2, 2024

Three Months Ended November 1, 2024

Defense and Intelligence Civilian Corporate Total SAIC

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Adjusted operating income (loss) $ 148 $ 49 $ ( 2 ) $ 195

Six Months Ended August 1, 2025

Nine Months Ended October 31, 2025

Defense and Intelligence

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Adjusted operating income (loss) $ 357 $ 168 $ ( 2 ) $ 523

Six Months Ended August 2, 2024

Nine Months Ended November 1, 2024

Defense and Intelligence Civilian Corporate Total SAIC

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The table below includes a reconciliation of total "Adjusted operating income" to "Income before income taxes" for the three and six months ended August 1, 2025 and August 2, 2024.

The table below includes a reconciliation of total "Adjusted operating income" to "Income before income taxes" for the three and nine months ended October 31, 2025 and November 1, 2024.

Three Months Ended

Six Months Ended

2025 August 2,

2024 August 1,

2025 August 2,

Nine Months Ended

2025 November 1,

2024 October 31,

2025 November 1,

(in millions)

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Costs related to the settlement of federal tax audits

Executive transition costs, net of recoveries

Interest expense, net

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The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect, in particular, to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the United States.

government agencies, including the Defense Contract Audit Agency ("DCAA"), the Defense Contract Management Agency and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards.

They also review the adequacy of the contractor’s compliance with government standards for its business systems.

Adverse findings in

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

these investigations, audits, or reviews can lead to criminal, civil or administrative proceedings, and the Company could face disallowance of previously billed costs, penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies.

and compliance with applicable contracting and procurement laws, regulations and standards.

They also review the adequacy of the contractor’s compliance with government standards for its business systems.

Adverse findings in these investigations, audits, or reviews can lead to criminal, civil or administrative proceedings, and the Company could face disallowance of previously billed costs, penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies.

Due to the Company’s reliance on government contracts, adverse findings could also have a material impact on the Company’s business, including its financial position, results of operations and cash flows.

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If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected.

As of August 1, 2025, the Company believes it has adequately reserved for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with U.S.

As of October 31, 2025, the Company believes it has adequately reserved for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with U.S.

government Cost Accounting Standards.

Letters of Credit and Surety Bonds

The Company has outstanding obligations relating to letters of credit of $ 8 million as of August 1, 2025, principally related to guarantees on insurance policies.

The Company has outstanding obligations relating to letters of credit of $ 8 million as of October 31, 2025, principally related to guarantees on insurance policies.

The Company also has outstanding obligations relating to surety bonds of $ 19 million, principally related to performance and payment bonds on the Company’s contracts.

Note 13—Subsequent Events:

Business Reorganization

On November 13, 2025, the Company announced a strategic reorganization, effective January 31, 2026, the first day of fiscal 2027, that will consolidate the Company's five business groups into three .

The Company is currently evaluating the impact of the reorganization on its segment reporting.

The Company's Innovation Factory will be more closely aligned with the three business groups and markets it serves.

Quarterly Dividend Declared

On December 2, 2025, the Company's Board of Directors declared a quarterly dividend of $ 0.37 per share of the Company's common stock payable on January 28, 2026 to stockholders of record on January 14, 2026.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements