Science Applications International Corp (NYSE:SAIC) stock fell 1.43% (As on Dec 7, 11:32:16 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the third quarter of FY 22. Net bookings in the quarter were $1.4 billion for a book-to-bill of 0.7 times and results in a trailing twelve-month book-to-bill of 1.1 times. The company expects to generate positive organic revenue growth in FY23 and have the pipeline and business development opportunities to sustain this beyond FY23. The company expects adjusted EBITDA margins in FY23 to be in the high 8% range and expects to generate free cash flow growth in FY23 of approximately 10% from the mid-point of the updated FY22 cash guidance.

SAIC in the third quarter of FY 22 has reported the adjusted earnings per share of $1.85, beating the analysts’ estimates for the adjusted earnings per share of $1.45, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 4.4 percent to $1.9 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $1.87 billion. This is due to the ramp-up on new and existing contracts and the addition of Halfaker. Revenue results in the quarter were impacted by lower than planned materials sales, labor market tightness and a slower ramp in our supply chain business. Adjusted EBITDA dollars and margins were both ahead of plan due to continued strong execution and effective cost controls. Third quarter adjusted EBITDA was $171 million, a $7 million increase from the prior year. Adjusted EBITDA margin was 9% after adjusting for $12 million of acquisition and integration costs.

Additionally, third quarter free cash flow was $124 million and free cash flow year-to-date continues to track ahead of plan. During the third quarter, the company deployed $97 million of capital, including $63 million of share repurchases, $21 million of dividends and $3 million for acquisitions. In addition, the company continued to de-lever, making mandatory debt repayments and ending the quarter with a net leverage ratio of roughly 3.5 times.

SAIC expects full-year earnings in the range of $6.75 to $6.95 per share. SAIC now sees its 2022 fiscal year revenue to be in a range of $7.35 billion-to-$7.4 billion, with the lower end raised from $7.3 billion. The company has increased the guidance for adjusted EBITDA margins by 10 basis points to 9% to 9.1%. The company has increased free cash flow guidance by $20 million at the low-end to a range of $450 million to $470 million.