Science Applications International Corporation (SAIC): Business Model Canvas [10-2024 Updated]

Understanding the Business Model Canvas of Science Applications International Corporation (SAIC) reveals how this key player in the defense and intelligence sectors operates and thrives. With a focus on long-term government contracts and innovative technology solutions, SAIC's model emphasizes strategic partnerships, a skilled workforce, and a commitment to digital transformation. Dive in below to explore the critical components that drive SAIC's success in delivering mission-critical services to U.S. government agencies and beyond.

Science Applications International Corporation (SAIC) - Business Model: Key Partnerships

Collaborations with U.S. government agencies

SAIC's primary revenue stream is derived from long-term contracts with U.S. government agencies. In the three months ended August 2, 2024, the company generated $950 million from the Department of Defense and $824 million from intelligence and other federal government agencies, contributing significantly to its total revenue of $1.818 billion. The revenue breakdown for the six months ended August 2, 2024, shows similar dependencies, with $1.926 billion from the Department of Defense and $1.658 billion from other federal agencies.

Partnerships with technology providers

SAIC collaborates with various technology providers to enhance its service offerings. These partnerships are crucial for integrating advanced technologies into their solutions, which include IT modernization, digital engineering, and cybersecurity. For instance, the company has established relationships with leading technology firms to support its mission-critical operations. In fiscal 2024, SAIC's ability to leverage technology partnerships has been instrumental in responding to government needs, particularly in areas like digital transformation and cyber resilience.

Alliances with subcontractors for project execution

SAIC employs a network of subcontractors to execute its projects effectively. In the three months ending August 2, 2024, revenue from subcontracting accounted for $156 million across both defense and civilian sectors. For the six months ended August 2, 2024, subcontracting revenue totaled $315 million, illustrating the importance of these alliances in fulfilling contractual obligations. The company utilizes a mix of prime and subcontractor arrangements, which allows it to scale operations and manage complex projects efficiently.

Period	Department of Defense Revenue (in millions)	Intelligence and Other Federal Revenue (in millions)	Total Revenue (in millions)	Subcontractor Revenue (in millions)
Three Months Ended August 2, 2024	$950	$824	$1,818	$156
Six Months Ended August 2, 2024	$1,926	$1,658	$3,665	$315

Science Applications International Corporation (SAIC) - Business Model: Key Activities

Delivering IT and engineering solutions

Science Applications International Corporation (SAIC) provides a range of IT and engineering solutions primarily to government clients. For the three months ended August 2, 2024, SAIC reported revenues of $1,818 million, which reflects a 2% increase compared to $1,784 million in the same period of the previous year. The Defense and Intelligence segment contributed $1,415 million to revenues, showing a 2% increase from $1,389 million year-over-year. Key services include:

• Systems engineering and integration
• Cybersecurity solutions
• Data analytics and cloud services

Managing government contracts and compliance

SAIC's business model heavily relies on managing government contracts, which requires strict adherence to compliance regulations. As of August 2, 2024, the estimated total backlog was $22,899 million, consisting of $4,237 million in funded backlog and $18,662 million in negotiated unfunded backlog. The company secured net bookings worth approximately $1.2 billion during the three months ended August 2, 2024. The revenue mix by contract type for the three months ended August 2, 2024, was as follows:

Contract Type	Defense and Intelligence (%)	Civilian (%)	Total SAIC (%)
Cost reimbursement	77	5	61
Time and materials	11	66	23
Firm-fixed price	12	29	16

Developing innovative technologies in the Innovation Factory

SAIC's Innovation Factory focuses on developing cutting-edge technologies to enhance its service offerings. The company invests significantly in research and development, with an adjusted EBITDA of $170 million for the three months ended August 2, 2024. The adjusted EBITDA as a percentage of revenues was 9.4%. This investment supports various initiatives, including:

• Artificial intelligence and machine learning
• Cloud computing platforms
• Advanced data analytics capabilities

Science Applications International Corporation (SAIC) - Business Model: Key Resources

Skilled workforce of approximately 24,000 employees

SAIC employs a skilled workforce of approximately 24,000 employees as of 2024. This workforce is critical in delivering technical services and solutions to government and commercial clients, particularly in the defense and intelligence sectors. The company's ability to attract, retain, and develop talent significantly contributes to its competitive advantage in providing specialized services.

Strong reputation in defense and intelligence sectors

SAIC has established a strong reputation within the defense and intelligence sectors, driven by long-term contracts with key government agencies. In the three months ended August 2, 2024, SAIC generated revenues of $1.415 billion from defense and intelligence, reflecting a 2% increase from the same period in the previous year. This reputation is further supported by the company's extensive experience and expertise in delivering mission-critical solutions, which positions it favorably for future contract opportunities.

Advanced technology infrastructure for service delivery

SAIC's advanced technology infrastructure is vital for efficient service delivery. The company invests significantly in technology to enhance its capabilities in areas such as cloud computing, cybersecurity, and data analytics. As of August 2, 2024, SAIC reported total revenues of $1.818 billion for the quarter, with a focus on leveraging technology to optimize service offerings. The investment in technology infrastructure not only supports current operations but also enables the company to adapt to evolving client needs and market trends.

Key Resource	Details	Impact on Business
Skilled Workforce	Approximately 24,000 employees	Enhances service delivery and client satisfaction
Reputation	Strong presence in defense and intelligence sectors	Facilitates contract awards and client trust
Technology Infrastructure	Investment in cloud, cybersecurity, and analytics	Improves operational efficiency and service capabilities

Science Applications International Corporation (SAIC) - Business Model: Value Propositions

Trusted partner for mission-critical government projects

SAIC has established itself as a trusted partner for mission-critical projects, primarily serving the U.S. government. As of August 2, 2024, approximately 98% of SAIC's revenues were derived from contracts with the government . The company operates under a significant backlog of contracts, with a total backlog valued at $22.9 billion, comprising $4.2 billion in funded backlog and $18.7 billion in negotiated unfunded backlog . This extensive backlog enables SAIC to maintain a steady revenue stream and reinforces its position as a reliable contractor in high-stakes environments.

Comprehensive service offerings across the IT lifecycle

SAIC provides a comprehensive array of services that span the entire IT lifecycle, including:

• IT modernization
• Digital engineering
• Cybersecurity solutions
• Mission systems support
• Training and simulation services

For the three months ended August 2, 2024, SAIC reported revenues of $1.818 billion, reflecting a 2% increase compared to the previous year . The company focuses on integrating emerging technologies to enhance operational efficiency and security for its clients, which positions it as a leader in providing tailored solutions to complex challenges faced by government agencies.

Contract Type	Defense and Intelligence	Civilian	Total SAIC
Cost Reimbursement	77%	5%	61%
Time and Materials	11%	66%	23%
Firm-Fixed Price	12%	29%	16%

This table illustrates the breakdown of revenues by contract type, highlighting SAIC's reliance on cost reimbursement contracts, particularly in the Defense and Intelligence segment, which accounted for 77% of total revenues . This structure allows SAIC to adapt to changing customer needs while managing costs effectively.

Focused on innovation and digital transformation solutions

SAIC's commitment to innovation and digital transformation is evident through its dedicated Innovation Factory. This initiative aims to develop superior enterprise-class solutions that align with customer requirements and accelerate digital transformation efforts . The Innovation Factory encompasses teams that specialize in:

• Artificial Intelligence
• Application development
• Network services
• Cloud platforms
• Cybersecurity

As of August 2, 2024, the company's operating income stood at $134 million, with an operating income margin of 7.4% . This financial performance underscores the effectiveness of SAIC's innovative approach in addressing the evolving needs of its government clients.

Science Applications International Corporation (SAIC) - Business Model: Customer Relationships

Long-term contracts with government clients

Science Applications International Corporation (SAIC) primarily generates its revenue through long-term contracts with the U.S. government, which accounted for approximately 98% of total revenues for the six months ended August 2, 2024 . The company reported a total revenue of $3.665 billion for the six months ended August 2, 2024, compared to $3.812 billion for the same period in the prior year. The following table summarizes the disaggregated revenues by customer type for the six months ended August 2, 2024:

Customer Type	Defense and Intelligence (in millions)	Civilian (in millions)	Total (in millions)
Department of Defense	$1,924	$2	$1,926
Intelligence and other federal government agencies	$913	$745	$1,658
Commercial, state and local governments and international	$14	$67	$81
Total	$2,851	$814	$3,665

Engagement through regular updates and performance reviews

SAIC emphasizes ongoing engagement with its government clients through regular updates and performance reviews. This approach is critical in maintaining transparency and ensuring alignment with client expectations. The company has a robust backlog of projects, estimated at $22.899 billion as of August 2, 2024, which includes both funded and unfunded contracts . The performance review process helps in identifying areas for improvement and in fostering long-term relationships with clients, ultimately leading to repeat business.

Building trust through successful project execution

Successful execution of projects has been a cornerstone of SAIC's business model, fostering trust among its clients. The company reported net bookings of approximately $3.8 billion for the six months ended August 2, 2024 . This trust is reflected in the company's ability to secure long-term contracts, as evidenced by their funded backlog of $4.237 billion . The following table illustrates the breakdown of the company's revenue by contract type for the six months ended August 2, 2024:

Contract Type	Defense and Intelligence (in millions)	Civilian (in millions)	Total (in millions)
Cost reimbursement	$2,219	$41	$2,260
Time and materials	$311	$532	$843
Firm-fixed price	$321	$241	$562
Total	$2,851	$814	$3,665

Science Applications International Corporation (SAIC) - Business Model: Channels

Direct sales to government agencies

SAIC generates approximately 98% of its revenues from contracts with the U.S. government, including subcontracts. As of August 2, 2024, total revenues from the Department of Defense amounted to $1.926 billion for the six months ended, while revenues from intelligence and other federal government agencies totaled $1.658 billion.

Customer Type	Three Months Ended August 2, 2024 (in millions)	Six Months Ended August 2, 2024 (in millions)
Department of Defense	$950	$1,926
Intelligence and Other Federal Agencies	$824	$1,658
Commercial, State and Local Governments	$44	$81
Total Revenues	$1,818	$3,665

Online platforms for service information

SAIC utilizes its website and online portals as essential channels for disseminating service information and engaging with potential clients. The company leverages its digital presence to enhance visibility and provide detailed descriptions of its offerings across various sectors, including cyber security and digital modernization.

As of August 2024, SAIC's adjusted EBITDA was $336 million for the six months ended, reflecting the financial health and operational efficiency derived from improved online engagement and service delivery platforms.

Industry events and conferences for networking

SAIC actively participates in various industry events and conferences to strengthen its networking opportunities and enhance its visibility in the government contracting space. These events serve as platforms for showcasing SAIC's capabilities and establishing connections with key decision-makers in government and defense sectors.

Event Type	Frequency	Purpose
Defense Conferences	Annual	Showcase capabilities and establish government connections
Cyber Security Forums	Quarterly	Engage with industry leaders and potential clients
Technology Expositions	Bi-Annual	Promote innovations and gather market insights

Science Applications International Corporation (SAIC) - Business Model: Customer Segments

U.S. government departments and agencies

Science Applications International Corporation (SAIC) generates approximately 98% of its revenues from contracts with the U.S. government. As of August 2, 2024, SAIC's revenue breakdown includes:

Customer Type	Q2 2024 Revenue (in millions)	Q2 2023 Revenue (in millions)
Department of Defense	$950	$919
Intelligence and other federal government agencies	$824	$828
Total Government Revenue	$1,818	$1,784

The U.S. government is a critical customer for SAIC, as the company’s contracts often involve complex, mission-critical services that leverage its technical expertise and longstanding relationships with government entities.

Defense and intelligence sectors

SAIC has a significant focus on the defense and intelligence sectors, which accounted for approximately 78% of its total revenues. The company serves various clients within these sectors, including:

• Department of Defense
• Intelligence Community
• Other federal agencies focused on national security

In Q2 2024, the disaggregated revenue figures indicate strong performance in these sectors:

Segment	Q2 2024 Revenue (in millions)	Q2 2023 Revenue (in millions)
Defense and Intelligence	$1,415	$1,389

The growth in this segment reflects the increasing demand for advanced technologies and services that enhance national security.

Civilian markets including state and local governments

SAIC also serves civilian markets, which includes state and local governments. This segment accounts for a smaller portion of its revenue, with total civilian revenue of $403 million in Q2 2024.

Key aspects of SAIC's civilian market strategy involve providing services that focus on:

• Digital transformation
• Cybersecurity solutions
• Infrastructure modernization

The revenue breakdown for civilian markets as of Q2 2024 is as follows:

Customer Type	Q2 2024 Revenue (in millions)	Q2 2023 Revenue (in millions)
State and Local Governments	$34	$34
Commercial Clients	$10	$3
Total Civilian Revenue	$403	$395

The stable performance in civilian markets reflects SAIC's ability to adapt its offerings to meet the evolving needs of government agencies at various levels.

Science Applications International Corporation (SAIC) - Business Model: Cost Structure

Major costs from labor and subcontractor expenses

The cost structure of Science Applications International Corporation (SAIC) is significantly influenced by labor and subcontractor expenses. For the three months ended August 2, 2024, the labor-related cost of revenues accounted for 56% of total revenues in the Defense and Intelligence segment, while it represented 59% in the Civilian segment. This indicates a consistent reliance on internal labor for service delivery. In total, the labor-related cost of revenues for both segments was $1,056 million in the same period.

Subcontractor-related costs made up 30% of total revenues, with a total of $548 million allocated to subcontractors across both segments. The remaining costs were attributed to materials, which accounted for 14% of total revenues, equating to $252 million.

Cost Type	Defense and Intelligence (%)	Civilian (%)	Total ($ millions)
Labor-related costs	56%	59%	$1,056
Subcontractor-related costs	30%	33%	$548
Materials-related costs	14%	8%	$252

Investments in technology and infrastructure

SAIC's investment in technology and infrastructure is crucial for maintaining its competitive edge in the government services sector. The company allocates a portion of its budget towards technology upgrades, which are essential for delivering innovative solutions to customers. In fiscal 2024, the company reported capital expenditures of approximately $38 million, primarily directed towards enhancing its IT infrastructure and digital capabilities.

This investment is expected to bolster operational efficiency and improve service delivery, aligning with SAIC's strategy to leverage advanced technologies in its operations. The company’s commitment to technology is evident from its focus on research and development, which is part of its overall operational cost structure.

Administrative and compliance costs related to government contracts

Administrative and compliance costs are significant components of SAIC's cost structure, particularly due to the rigorous requirements associated with government contracts. For the three months ended August 2, 2024, the selling, general, and administrative expenses totaled $77 million, reflecting a decrease of 13% compared to the previous year.

These costs encompass various expenses, including compliance with federal regulations, reporting requirements, and overhead related to contract management. Given that a substantial portion of SAIC's revenue is derived from government contracts, maintaining compliance is critical, and thus, these costs are carefully managed to optimize profitability without compromising regulatory standards.

Cost Type	Amount ($ millions)	Percentage Change YoY
Selling, General & Administrative Expenses	$77	-13%
Capital Expenditures	$38	N/A

Science Applications International Corporation (SAIC) - Business Model: Revenue Streams

Revenue primarily from long-term government contracts

As of August 2, 2024, approximately 98% of SAIC's revenues were generated from contracts with the U.S. government, including subcontracts. The total revenue for the six months ended August 2, 2024, amounted to $3.665 billion, reflecting a decrease of 4% from $3.812 billion for the same period in the prior year.

Diverse contract types including cost reimbursement, time and materials, and firm-fixed price

SAIC employs various contract types, including:

• Cost Reimbursement: $2.260 billion for the six months ended August 2, 2024 (62% of total revenues)
• Time and Materials (T&M): $843 million for the six months ended August 2, 2024 (23% of total revenues)
• Firm-Fixed Price (FFP): $562 million for the six months ended August 2, 2024 (15% of total revenues)

The breakdown of revenues by contract type for the three months ended August 2, 2024, is as follows:

Contract Type	Defense and Intelligence (in millions)	Civilian (in millions)	Total (in millions)
Cost Reimbursement	$1,085	$20	$1,105
Time and Materials	$162	$264	$426
Firm-Fixed Price	$168	$119	$287
Total	$1,415	$403	$1,818

For the six months ended August 2, 2024, the total revenues by contract type were:

Contract Type	Defense and Intelligence (in millions)	Civilian (in millions)	Total (in millions)
Cost Reimbursement	$2,219	$41	$2,260
Time and Materials	$311	$532	$843
Firm-Fixed Price	$321	$241	$562
Total	$2,851	$814	$3,665

Potential growth from emerging sectors such as cyber and digital modernization

SAIC is positioned to capture growth opportunities in emerging sectors, particularly in cyber and digital modernization. The U.S. government has allocated increased funding in these areas, with the GFY 2025 budget indicating a 1% growth for defense budgets and the potential for additional funding through infrastructure and technology-related spending packages.

As of August 2, 2024, the estimated future annual amortization expense related to intangible assets is projected to be $836 million over the next five years. This suggests ongoing investments in capabilities that align with government spending priorities, particularly in high-demand areas like cybersecurity and digital transformation initiatives.