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Looking back on government & technical consulting stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including UL Solutions and its peers.

The sector has historically benefitted from steady government spending on defense, infrastructure, and regulatory compliance, providing firms long-term contract stability. However, the Trump administration is showing more willingness than previous administrations to upend government spending and bloat. Whether or not defense budgets get cut, the rising demand for cybersecurity, AI-driven defense solutions, and sustainability consulting should benefit the sector for years, as agencies and enterprises seek expertise in navigating complex technology and regulations. Additionally, industrial automation and digital engineering are driving efficiency gains in infrastructure and technical consulting projects, which could help profit margins.

The 7 government & technical consulting stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady as they are up 3.1% on average since the latest earnings results.

Best Q3: UL Solutions

Founded in 1894 as a response to the growing dangers of electricity in American homes and businesses, UL Solutions provides testing, inspection, and certification services that help companies ensure their products meet safety, security, and sustainability standards.

UL Solutions reported revenues of $783 million, up 7.1% year on year. This print exceeded analysts’ expectations by 1.5%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and a decent beat of analysts’ revenue estimates.

The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $78.74.

SAIC

With over five decades of experience supporting national security missions, Science Applications International Corporation provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.

SAIC reported revenues of $1.87 billion, down 5.6% year on year, in line with analysts’ expectations. The business had a very strong quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.

SAIC scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 15.1% since reporting. It currently trades at $100.74.

Weakest Q3: ICF International

Operating at the intersection of policy, technology, and implementation for over five decades, ICF International provides professional consulting services and technology solutions to government agencies and commercial clients across energy, health, environment, and security sectors.

ICF International reported revenues of $465.4 million, down 10% year on year, falling short of analysts’ expectations by 3.9%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and EPS estimates.

ICF International delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is flat since the results and currently trades at $85.84.

Read our full analysis of ICF International’s results here.

Maximus

With nearly 50 years of experience translating public policy into operational programs that serve millions of citizens, Maximus provides operational services, clinical assessments, and technology solutions to government agencies in the U.S. and internationally.

Maximus reported revenues of $1.32 billion, flat year on year. This print missed analysts’ expectations by 1.7%. It was a slower quarter as it also recorded full-year revenue guidance missing analysts’ expectations significantly and a miss of analysts’ revenue estimates.

Maximus had the weakest full-year guidance update among its peers. The stock is up 12.2% since reporting and currently trades at $87.26.

Read our full, actionable report on Maximus here, it’s free for active Edge members.

Jacobs Solutions

With a workforce of approximately 45,000 professionals tackling complex challenges from water scarcity to cybersecurity, Jacobs Solutions provides engineering, consulting, and technical services focused on infrastructure, sustainability, and advanced technology solutions.

Jacobs Solutions reported revenues of $3.15 billion, up 6.6% year on year. This number beat analysts’ expectations by 0.7%. Aside from that, it was a slower quarter as it recorded a significant miss of analysts’ EPS estimates.

The stock is down 8.1% since reporting and currently trades at $133.30.

Read our full, actionable report on Jacobs Solutions here, it’s free for active Edge members.

What Happened?

Shares of government IT services provider Science Applications International Corporation jumped 16.6% in the afternoon session after the company reported third-quarter results that beat profit estimates and raised its full-year guidance. While revenue for the quarter was in line with Wall Street's expectations at $1.87 billion, it marked a 5.6% decrease year-over-year. However, investors focused on the company's strong profitability. SAIC posted adjusted earnings of $2.58 per share, significantly surpassing analyst estimates by over 20%. Adjusted EBITDA, a measure of core profitability, also came in 5% ahead of consensus at $185 million. Building on this strong performance, SAIC lifted its adjusted earnings per share forecast for the full year to a midpoint of $9.90.

The shares closed the day at $101.47, up 15.9% from previous close.

Is now the time to buy SAIC? Access our full analysis report here.

What Is The Market Telling Us

SAIC’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for SAIC and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 6 months ago when the stock dropped 13% on the news that the company announced weak first quarter 2025 (fiscal 2026) results which missed analysts' EPS estimates. The underwhelming result was due to sluggish revenue growth, which rose just 2% year on year, driven largely by volume increases in existing and new contracts, but weighed down by the completion of older contracts.Looking ahead, the company reaffirmed its full-year guidance for adjusted EPS and EBITDA, but both fell short of Wall Street estimates. Management pointed to strong bookings with a 1.3 book-to-bill ratio and high-profile wins like the U.S. Army contract, but those longer-term prospects likely didn't sway investors focused on profitability. Overall, it was a weak quarter.

SAIC is down 8.5% since the beginning of the year, and at $102.61 per share, it is trading 17.2% below its 52-week high of $123.91 from December 2024. Investors who bought $1,000 worth of SAIC’s shares 5 years ago would now be looking at an investment worth $1,049.

Government IT services provider Science Applications International Corporation met Wall Streets revenue expectations in Q3 CY2025, but sales fell by 5.6% year on year to $1.87 billion. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $7.3 billion at the midpoint. Its non-GAAP profit of $2.58 per share was 20.2% above analysts’ consensus estimates.

Is now the time to buy SAIC? Find out by accessing our full research report, it’s free for active Edge members.

SAIC (SAIC) Q3 CY2025 Highlights:

• Revenue: $1.87 billion vs analyst estimates of $1.87 billion (5.6% year-on-year decline, in line)
• Adjusted EPS: $2.58 vs analyst estimates of $2.15 (20.2% beat)
• Adjusted EBITDA: $185 million vs analyst estimates of $176.2 million (9.9% margin, 5% beat)
• The company slightly lifted its revenue guidance for the full year to $7.3 billion at the midpoint from $7.29 billion
• Management raised its full-year Adjusted EPS guidance to $9.90 at the midpoint, a 4.2% increase
• EBITDA guidance for the full year is $695 million at the midpoint, above analyst estimates of $683.1 million
• Operating Margin: 6.9%, down from 8.1% in the same quarter last year
• Free Cash Flow Margin: 7.2%, up from 0.5% in the same quarter last year
• Backlog: $23.79 billion at quarter end
• Market Capitalization: $4.03 billion

Company Overview

With over five decades of experience supporting national security missions, Science Applications International Corporation provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $7.35 billion in revenue over the past 12 months, SAIC is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because finding new avenues for growth becomes difficult when you already have a substantial market presence. For SAIC to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.

As you can see below, SAIC’s 1.3% annualized revenue growth over the last five years was sluggish. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. SAIC’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 2.1% annually.

This quarter, SAIC reported a rather uninspiring 5.6% year-on-year revenue decline to $1.87 billion of revenue, in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

SAIC’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 7.4% over the last five years. This profitability was paltry for a business services business and caused by its suboptimal cost structure.

Looking at the trend in its profitability, SAIC’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, SAIC generated an operating margin profit margin of 6.9%, down 1.2 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

SAIC’s EPS grew at a remarkable 11.5% compounded annual growth rate over the last five years, higher than its 1.3% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For SAIC, its two-year annual EPS growth of 12.2% is similar to its five-year trend, implying strong and stable earnings power.

In Q3, SAIC reported adjusted EPS of $2.58, down from $2.61 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects SAIC’s full-year EPS of $10.70 to shrink by 17.6%.

Key Takeaways from SAIC’s Q3 Results

It was good to see SAIC beat analysts’ EBITDA and EPS expectations this quarter. We were also glad its full-year EPS guidance outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 4.8% to $91.75 immediately following the results.

SAIC had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.