What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-06-01 compared with 2025-12-04 · 75 added, 142 removed, 227 unchanged (49% of the section changed)

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We utilize a 52/53 week fiscal year, ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks.

Fiscal 2026 began on February 1, 2025 and ends on January 30, 2026, while fiscal 2025 began on February 3, 2024 and ended on January 31, 2025.

Fiscal 2027 began on January 31, 2026 and ends on January 29, 2027, while fiscal 2026 began on February 1, 2025 and ended on January 30, 2026.

Business Overview

We are a leading technology integrator providing full life cycle services and solutions in the technical, engineering and enterprise information technology ("IT") markets.

We developed our brand by addressing our customers’ mission critical needs and solving their most complex problems for over 50 years.

We are a leading technology integrator providing full life cycle services and solutions in the technical, engineering, and information technology ("IT") markets.

We have developed our brand for over 50 years by addressing our customers’ mission critical needs and solving their most complex problems.

As one of the largest pure-play technology service providers to the U.S.

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Our primary customers are the departments and agencies of the U.S.

We serve our customers through approximately 1,700 active contracts and task orders and employ approximately 24,000 individuals who are led by an experienced executive team of proven industry leaders.

We serve them through approximately 1,700 active contracts and task orders, employing approximately 23,000 individuals led by an experienced executive team of proven industry leaders.

Our long history of serving the U.S.

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Substantially all of our revenues and tangible long-lived assets are generated and located in the United States.

We have five customer facing business groups supported by the enterprise organizations, including the Innovation Factory.

The five business groups, which are also our operating segments, are aggregated into two reportable segments for financial reporting purposes given the similarity in economic and qualitative characteristics, and based on the nature of the customers they serve.

Effective January 31, 2026, the first day of fiscal 2027, we completed a business reorganization that consolidated our five previous business groups into three.

The reorganization was designed to simplify our organization structure and optimize operations and customer focus for growth.

The consolidated business groups will be led by three Executive Vice Presidents.

The three business groups will continue to report directly to our Chief Executive Officer (“CEO”), the chief operating decision maker (“CODM”).

The reorganization did not have an impact on our reportable segments.

We now have three customer facing business groups which are also our operating segments.

They are aggregated into two reportable segments for financial reporting purposes given the similarity in economic and qualitative characteristics, and based on the nature of the customers they serve.

Our 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 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.

This includes integrating solutions into a spectrum of public service missions that impact travel, trade, health and the economy.

The offerings of both reportable segments entail the integration of emerging technologies into mission critical operations that modernize and enable national imperatives, including IT modernization, digital engineering, artificial intelligence ("AI"), mission systems support and advisory, training and simulation, and ground vehicles support.

These services include end-to-end solutions spanning the design, development, integration, deployment, management and operations, sustainment and security of the customers’ entire IT infrastructure.

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 the Intelligence Community of the United States Government, supporting a variety of missions across land, sea, air, and space.

The Civilian segment provides solutions to the civilian markets, encompassing federal, state, and local governments.

This includes integrating solutions into a spectrum of public service missions that impact travel, security, trade, health and the economy.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Our Innovation Factory supports the operating segments by developing enterprise-class solutions which are delivered to our customers as stand-alone solutions or integrated with and aligned to our product offerings through the operations of the business to meet complex customer needs and accelerate digital transformation.

The Innovation Factory includes designated teams focused on AI, application development, network services, platforms and cloud, engineering, and cybersecurity.

It uses a highly automated, cloud-hosted tool set to rapidly build, test and deploy solutions and works with customers to enhance solutions going forward.

The offerings of both reportable segments entail the integration of emerging technologies into mission critical operations that modernize and enable national imperatives.

These services include end-to-end solutions spanning the design, development, integration, deployment, management, operation, sustainment, and security of customer hardware and software platforms.

Our Solutions and Technology Group ("STG") supports the operating segments by developing enterprise-class solutions to meet complex customer needs and accelerate digital transformation.

These capabilities are delivered to our customers as stand-alone solutions, or integrated with our product offerings through the operations of the business.

The STG includes designated teams focused on artificial intelligence, application development, network services, platforms and cloud, engineering, and cybersecurity.

It uses a highly automated, cloud-hosted tool set to rapidly build, test, deploy and continuously enhance solutions.

Costs associated with corporate functions that are not allocable to the reportable segments are presented as Corporate.

See Note 10—Business Segments Information to the condensed consolidated financial statements contained within this report for additional information.

On October 15, 2025, we acquired SilverEdge Government Solutions ("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 our strategy to provide mission focused, IP-based solutions and commercial products to our customers.

Economic Opportunities, Challenges, and Risks

During the three and nine months ended October 31, 2025, we generated 98% of our revenues from contracts with the U.S.

During the three months ended May 1, 2026, we generated 97% of our revenues from contracts with the U.S.

government, including subcontracts on which we perform.

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government spending and the alignment of our offerings and capabilities with the budget priorities of the U.S.

In March 2025, the President signed a continuing resolution ("CR") that extends government funding through the close of government fiscal year ("GFY") 2025.

The measure provides budget certainty for agencies through September 30, 2025.

The CR also provides flexibility for new starts on programs at the DoW, which are typically not allowed under CRs.

In July 2025, Congress passed a budget reconciliation package that will add approximately $150 billion in new non-border defense spending, and $175 billion in new border security and enforcement spending, among other provisions.

This funding is available to agencies immediately, and can be used through GFY 2029.

Portions of this new funding will increase spending in areas addressable to us, including new investments in Naval operations and border surveillance.

The measure also extended and expanded key tax provisions that will positively impact our Company.

On October 1, 2025, the federal government shut down following the expiration of the March 2025 CR.

On November 12, 2025, the President signed a spending agreement that officially reopened the government after 43 days.

The agreement includes three full-year appropriations bills, including the Agriculture-FDA, Military Construction-Veterans Affairs, and Legislative Branch packages.

All agencies and functions funded by those bills will now be covered in full through September 30, 2026, the close of GFY 2026.

All remaining agencies have resumed operations under a CR that runs through January 30, 2026.

If Congress is not able to pass the remaining appropriations by that date, it could potentially lead to a partial or full government shutdown affecting any outstanding unfunded agencies.

Any additional delay in funding could negatively impact our business operations, revenues, cash flows, and profitability.

As part of the budget reconciliation package signed into law in July 2025, the federal debt limit was increased by $5 trillion.

This is expected to extend protection from a potential government default until at least the end of calendar year 2026.

In February 2026, the President signed an appropriations package that finalized full-year funding for all government agencies with the exception of the Department of Homeland Security ("DHS").

As a result, the DHS was shut down from February 2026 through April 2026.

In April 2026, the President signed a bill to fund substantially all the DHS, ending the shutdown.

The bill provides full-year funding for all DHS functions except Immigration and Customs Enforcement and Customs and Border Protection.

All agencies and functions funded by those bills will now be covered in full through September 30, 2026, the close of government fiscal year 2026.

government administration has put in place a number of executive orders and actions which could affect our business.

In addition, the Department of Government Efficiency is driving changes in the structure and priorities of Federal agencies.

In addition, the U.S.

government performs an ongoing evaluation of the structure and priorities of Federal agencies.

Agencies are conducting comprehensive reviews of existing and new contracting activity to identify potential efficiencies or nonalignment with new Administration priorities.

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However, ongoing reductions in personnel, changes in agency alignment, required reviews of new contracting activity, decreases or delays in new or existing contract awards and in government spending on the types of programs that we support, and terminations or stop-work-orders and delay in funding on government contracts on which we are currently performing could adversely affect our future revenues, cash flows, and profitability.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Adverse changes in fiscal and economic conditions could materially impact our business.

Some changes that could have an adverse impact on our business include adverse regulations, the implementation of future spending reductions (including sequestration), government shut downs, delayed passage of appropriations bills resulting in temporary or full-year continuing resolutions, extreme inflationary increases adversely impacting fixed price contracts, and potential government shutdowns.

Some changes that could have an adverse impact on our business include the implementation of future spending reductions (including sequestration), delayed passage of appropriations bills resulting in temporary or full-year continuing resolutions, inflationary increases adversely impacting fixed price contracts, and potential government shutdowns.

Spending packages, including the infrastructure bill, Inflation Reduction Act, and CHIPS and Science Act, as well as future potential spending packages, may provide additional opportunity in areas of our focus such as digital modernization, cyber, microelectronics support, and climate resiliency.

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Our scale, size, and prime contractor leadership position are expected to help differentiate us from our competitors, especially on large contract opportunities.

We believe our long-term, trusted customer relationships and deep technical expertise provide us with the sophistication to handle highly complex, mission-critical contracts.

We believe our long-term, trusted customer relationships and deep

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

technical expertise provide us with the sophistication to handle highly complex, mission-critical contracts.

Our value proposition is found in the proven ability to serve as a trusted adviser to our customers.

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Our solutions are inspired through innovation based on adoption of best practices and technology integration of the best capabilities available.

Our Innovation Factory develops superior enterprise-class solutions which are delivered to our customers as stand-alone solutions or integrated with and aligned to our product offerings to meet complex customer needs and accelerate the digital transformation.

Our STG develops superior enterprise-class solutions which are delivered to our customers as stand-alone solutions or integrated with and aligned to our product offerings to meet complex customer needs and accelerate digital transformation.

Our past performance was achieved by employees dedicated to supporting our customers' most challenging missions.

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The following table summarizes our condensed consolidated results of operations:

Three Months Ended Nine Months Ended

change November 1,

2024 October 31,

change November 1,

Three Months Ended

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(dollars in millions)

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Selling, general and administrative expenses

101 22 % 83 265 8 % 245

Other operating (income) expense

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$ 115 69 % $ 68

Revenues decreased $110 million and $129 million for the three and nine months ended October 31, 2025, respectively, as compared to the same period in the prior year primarily due to ramp down in volume on existing contracts, including approximately $16 million attributable to the government shutdown, and contract completions, partially offset by new contracts.

Revenues recognized from the acquisition of SilverEdge for the three months ended October 31, 2025 were immaterial.

Revenues increased $29 million for the three months ended May 1, 2026 as compared to the same period in the prior year primarily due to revenues from the acquisition of SilverEdge Government Solutions ("SilverEdge") of $19 million and ramp up in volume on existing and new contracts, partially offset by contract completions.

Adjusting for the acquisition of SilverEdge, revenues grew by approximately 0.5%.

Operating Income.

Operating income as a percentage of revenues for the three months ended October 31, 2025 decreased from the comparable prior year period primarily due to executive transition costs, net of recoveries, and the favorable resolution of the Assault Amphibious Vehicle ("AAV") contract termination in the prior year ($14 million), partially offset by timing and volume mix in our contract portfolio.

Operating income as a percentage of revenues for the nine months ended October 31, 2025 decreased from the comparable prior year period primarily due to executive transition costs, net of recoveries, the favorable resolution of the AAV contract termination in the prior year ($14 million), and costs related to the settlement of federal tax audits, partially offset by a recovery of costs from the settlement of a patent infringement matter (see Note 12—Legal Proceedings and Other Commitments and Contingencies for additional information) and timing and volume mix in our contract portfolio.

Operating income as a percentage of revenues for the three months ended May 1, 2026 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio and a $12 million gain from the sale of an investment in the current year.

Income Taxes.

Our effective income tax rate was 16.7% and 5.2% for the three and nine months ended October 31, 2025 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, our 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.

Our effective income tax rate was 20.9% and 20.6% for the three months ended May 1, 2026 and May 2, 2025, respectively.

The rate for both periods was below our combined federal and state statutory tax rate, primarily due to research and development tax credits and the tax deduction for foreign-derived deduction eligible income.

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

corporate income tax law.

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research and development expenditures.

Based on our interpretation, the Act results in an increase to our income taxes receivable with an offsetting decrease to our deferred tax assets and an immaterial increase to our effective tax rate for the year.

These changes are reflected in our current period effective tax rate.

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

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

In December 2021, the Organisation for Economic Co-operation and Development (OECD) enacted a 15% global minimum tax framework (“Pillar Two”) which became effective in certain jurisdictions beginning in fiscal 2024.

adoption is uncertain, several countries where we operate have implemented it, and others are in the process of adopting.

We do not anticipate Pillar Two to have a significant impact on our effective tax rate or our condensed consolidated results of operations, financial position, and cash flows.

We are continuing to evaluate the full impact of the Act, including the treatment of previously capitalized costs, and are awaiting interpretive guidance from the IRS.

Accordingly, the estimated impacts of the Act are subject to change as we complete our analysis.

Segment and Corporate Results

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The following tables summarize our results of operations by reportable segment:

Defense and Intelligence Three Months Ended Nine Months Ended

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2024 October 31,

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Defense and Intelligence Three Months Ended

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(dollars in millions)

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As a percentage of revenues 10.0 % 8.0 %

Revenues decreased $76 million and $120 million for the three and nine months ended October 31, 2025, respectively, as compared to the same period in the prior year primarily due to contract completions and ramp down in volume on existing contracts, partially offset by new contracts.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Revenues increased $33 million for the three months ended May 1, 2026 as compared to the same period in the prior year primarily due to revenues from the acquisition of SilverEdge of $19 million and ramp up in volume on existing and new contracts, partially offset by contract completions.

Adjusted operating income.

Adjusted operating income as a percentage of revenues for the three and nine months ended October 31, 2025 decreased compared to the comparable prior year period primarily due to timing and volume mix in our contract portfolio and the favorable resolution of the AAV contract termination in the prior year ($14 million).

Three Months Ended Nine Months Ended

change November 1,

2024 October 31,

change November 1,

Adjusted operating income as a percentage of revenues for the three months ended May 1, 2026 increased compared to the comparable prior year period primarily due to improved profitability and timing and volume mix in our contract portfolio, partially offset by contract completions.

Three Months Ended

change May 2,

(dollars in millions)

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As a percentage of revenues 15.5 % 11.7 %

Revenues decreased $34 million and $9 million for the three and nine months ended October 31, 2025, respectively, as compared to the same period in the prior year primarily due to ramp down in volume on existing contracts and contract completions, partially offset by new contracts.

Revenues decreased $4 million for the three months ended May 1, 2026 as compared to the same period in the prior year primarily due to contract completions, partially offset by new contracts.

Adjusted operating income.

Adjusted operating income as a percentage of revenues for the three and nine months ended October 31, 2025 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio.

Three Months Ended Nine Months Ended

change November 1,

2024 October 31,

change November 1,

Adjusted operating income as a percentage of revenues for the three months ended May 1, 2026 increased from the comparable prior year period primarily due to improved profitability across our contract portfolio.

Three Months Ended

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(dollars in millions)

Adjusted operating income (loss) $ 7 178 % $ (9)

$ 3 (250 %) $ (2) $ (2) (75 %) $ (8)

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Adjusted operating income (loss).

Adjusted operating income was $3 million for the three months ended October 31, 2025, compared to an adjusted operating loss of $2 million during the same period in the prior year primarily due to lower other selling, general and administrative expenses.

Adjusted operating loss decreased $6 million for the nine months ended October 31, 2025 as compared to the same period in the prior year primarily due to a recovery of costs from the settlement of a patent infringement matter, partially offset by higher other selling, general and administrative expenses.

Adjusted operating income was $7 million for the three months ended May 1, 2026, compared to an adjusted operating loss of $9 million during the same period in the prior year primarily due to a gain on an investment sale of $12 million in the current year and lower selling, general and administrative expenses.

Non-GAAP Measures

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Adjusted operating income is calculated by taking operating income and excluding depreciation and amortization, acquisition, integration, restructuring, and impairment costs, and any other material non-recurring costs.

Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment.

Adjusted operating income excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition.

Acquisition, integration, restructuring and impairment costs represent costs incurred related to acquisitions, the reorganization, facilities optimization efforts, and impairments of long-lived assets, along with associated depreciation.

Recovery of acquisition, integration, restructuring and impairment costs represents costs recovered through our indirect rates in accordance with Cost Accounting Standards.

Depreciation of property, plant, and equipment relates to property, plant, and equipment specifically identifiable for each segment.

Adjusted operating income also excludes amortization of intangible assets because we do not have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and the related amortization term are unique to each acquisition.

Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019 .

Executive transition costs, net of recoveries, represent costs associated with the immediate departure of our CEO and other executives, net of the portion recovered through our indirect rates in accordance with Cost Accounting Standards.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

We believe that this performance measure provides management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding our long-term financial performance.

Adjusted operating income for the periods presented were calculated as follows:

Three Months Ended Nine Months Ended

2025 November 1,

2024 October 31,

2025 November 1,

Three Months Ended

(dollars in millions)

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Operating income

$ 128 $ 160 $ 388 $ 425

Operating income as a percentage of revenues

6.9 % 8.1 % 7.0 % 7.5 %

Depreciation of property, plant and equipment

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Costs related to the settlement of federal tax audits

Executive transition costs, net of recoveries

Adjusted operating income

$ 183 $ 195 $ 523 $ 529

Adjusted operating income as a percentage of revenues

9.8 % 9.9 % 9.5 % 9.4 %

(1) Adjustment reflects the portion of acquisition, integration, restructuring and impairment costs recovered through our indirect rates in accordance with U.S.

government Cost Accounting Standards.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

EBITDA and Adjusted EBITDA.

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Costs related to the settlement of federal tax audits represent costs related to the IRS audit settlement for fiscal years 2016 through 2019 .

We believe that EBITDA and adjusted EBITDA provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding our long-term financial performance.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

EBITDA and adjusted EBITDA for the periods presented were calculated as follows:

Three Months Ended Nine Months Ended

2025 November 1,

2024 October 31,

2025 November 1,

Three Months Ended

(dollars in millions)

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Interest expense, net and loss on sale of receivables

36 36 104 108

Income tax expense (benefit)

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Costs related to the settlement of federal tax audits

Executive transition costs, net of recoveries

Adjusted EBITDA $ 222 $ 157

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government Cost Accounting Standards.

Adjusted operating income and adjusted EBITDA as a percentage of revenues for the three months ended October 31, 2025 decreased compared to the same period in the prior year primarily due to the favorable resolution of the AAV contract termination in the prior year ($14 million), partially offset by timing and volume mix in our contract portfolio.

Adjusted operating income and adjusted EBITDA as a percentage of revenues for the nine months ended October 31, 2025 increased compared to the same period in the prior year primarily due to a recovery of costs from the settlement of a patent infringement matter and timing and volume mix in our contract portfolio, partially offset by the favorable resolution of the AAV contract termination in the prior year ($14 million).

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Adjusted operating income and adjusted EBITDA as a percentage of revenues for the three months ended May 1, 2026 increased compared to the same period in the prior year due to improved profitability across our contract portfolio, a $12 million gain from the sale of an investment in the current year, and lower selling, general and administrative expenses.

Other Key Performance Measures

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Funded backlog for contracts with non-government customers represents the estimated value on contracts, which may cover multiple future years, under which we are obligated to perform, less revenues previously recognized on these contracts.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

• Negotiated Unfunded Backlog.

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The estimated value of our total backlog as of the dates presented was:

October 31, 2025 January 31, 2025

May 1, 2026 January 30, 2026

Defense and Intelligence

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Total backlog $ 18,621 $ 4,239 $ 22,860 $ 18,380 $ 4,242 $ 22,622

We had net bookings worth an estimated $2.2 billion and $7.2 billion during the three and nine months ended October 31, 2025, respectively.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

We had net bookings worth an estimated $2.1 billion during the three months ended May 1, 2026.

Contract Types.

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Three Months Ended

October 31, 2025

November 1, 2024

Defense and Intelligence

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Total 100 % 100 % 100 % 100 % 100 % 100 %

Nine Months Ended

October 31, 2025

November 1, 2024

Defense and Intelligence

Cost reimbursement 80 % 4 % 62 % 79 % 6 % 63 %

Time and materials ("T&M")

9 % 68 % 23 % 10 % 64 % 22 %

Firm-fixed price ("FFP")

11 % 28 % 15 % 11 % 30 % 15 %

Total 100 % 100 % 100 % 100 % 100 % 100 %

Cost of Revenues Mix.

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Contracts performed with a higher proportion of SAIC labor are generally more profitable.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

The following table presents cost mix as a percentage of each reportable segment and total SAIC revenues for the periods presented:

Three Months Ended

October 31, 2025

November 1, 2024

Defense and Intelligence

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Total 100 % 100 % 100 % 100 % 100 % 100 %

Nine Months Ended

October 31, 2025

November 1, 2024

Defense and Intelligence

Labor-related cost of revenues 58 % 59 % 59 % 56 % 58 % 56 %

Subcontractor-related cost of revenues 29 % 32 % 29 % 29 % 31 % 30 %

Other materials-related cost of revenues 13 % 9 % 12 % 15 % 11 % 14 %

Total 100 % 100 % 100 % 100 % 100 % 100 %

Liquidity and Capital Resources

As a services provider, our business generally requires minimal infrastructure investment.

We expect to fund our ongoing working capital, commitments and any other discretionary investments with cash on hand, future operating cash flows and, if needed, borrowings under our $1.0 billion Revolving Credit Facility and $300 million MARPA Facility.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

We anticipate that our future cash needs will be for working capital, capital expenditures, and contractual and other commitments.

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Nevertheless, we believe that our existing cash on hand, generation of future operating cash flows, and access to bank financing and capital markets will provide adequate resources to meet our short-term liquidity and long-term capital needs.

During the third quarter of fiscal 2026, we issued unsecured senior notes through a private offering and amended our Credit Facility.

See Note 7—Debt Obligations to the condensed consolidated financial statements contained within this report for additional information.

Historical Cash Flow Trends

The following table summarizes our cash flows:

Nine Months Ended

2025 November 1,

Three Months Ended

(in millions)

Net cash provided by operating activities $ 127 $ 100

Net cash used in investing activities

Net cash provided by (used in) investing activities

Net cash used in financing activities (201) (94)

Net decrease in cash, cash equivalents and restricted cash $ (73) $ (9)

$ (11) $ (49)

Net Cash Provided by Operating Activities.

Cash flows provided by operating activities for the nine months ended October 31, 2025 decreased $28 million compared to the prior year primarily due to timing of vendor payments, lower cash inflows from the usage of the Master Accounts Receivable Purchase Agreement ("MARPA Facility") in the current year, and other changes in working capital, partially offset by timing of customer collections, lower cash taxes paid, and lower incentive-based compensation payments in the current year.

Net Cash Used in Investing Activities.

Cash used in investing activities for the nine months ended October 31, 2025 increased $222 million compared to the prior year primarily due to $203 million of cash paid in the current year for the acquisition of SilverEdge, net of cash acquired (see Note 4 to the condensed consolidated financial statements) and proceeds from the sale of equity method investments in the prior year.

Cash flows provided by operating activities for the three months ended May 1, 2026 increased $27 million compared to the prior year primarily due to timing of vendor payments, lower cash incentive-based compensation payments, and other changes in working capital, partially offset by lower cash inflows from the usage of the MARPA Facility and higher interest paid in the current year.

Net Cash Provided by (Used in) Investing Activities.

Cash provided by investing activities for the three months ended May 1, 2026 was $1 million compared to cash used in investing activities of $15 million in the prior year period, primarily due to proceeds from the sale of investments in the current year.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Net Cash Used in Financing Activities.

Cash used in financing activities for the nine months ended October 31, 2025 decreased $288 million compared to the prior year period primarily due to higher proceeds from borrowings, net of principal payments and debt issuance costs, and lower plan share repurchases in the current year.

Cash used in financing activities for the three months ended May 1, 2026 increased $107 million compared to the prior year period primarily due to lower proceeds from borrowings, net of lower principal payments, and higher plan share repurchases in the current year.

Critical Accounting Policies and Estimates

There have been no changes to our critical accounting policies and estimates during the nine months ended October 31, 2025 from those disclosed in our most recently filed Annual Report on Form 10-K.

There have been no changes to our critical accounting policies and estimates during the three months ended May 1, 2026 from those disclosed in our most recently filed Annual Report on Form 10-K.

Recently Issued But Not Yet Adopted Accounting Pronouncements

For information on recently issued but not yet adopted accounting pronouncements, see Note 1 to the condensed consolidated financial statements contained within this report.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Quantitative and Qualitative Disclosures About Market Risk

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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 2. Management’s Discussion and Analysis