CACI International Inc Q3 FY25 Earnings Conference Call April 24, 2025 EXPERTISE and TECHNOLOGY 1 | CACI Proprietary Information EXPERTISE and TECHNOLOGY for National Security for National Security Forward-looking statements There are statements made herein that do not address historical facts and, therefore, could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to risk factors that could cause actua ...

Financial Data and Key Metrics Changes - CACI reported revenue growth of 12% for Q3 2025, with total revenue reaching $2.2 billion, of which 5.6% was organic growth [9][32] - EBITDA margin improved to 11.7%, reflecting a year-over-year increase of 40 basis points [32] - Free cash flow for the quarter was $188 million, showing strong sequential and year-over-year increases [35][40] - Adjusted diluted earnings per share increased by 9% year-over-year to $6.23 [33] Business Line Data and Key Metrics Changes - The company won $2.5 billion in awards during the quarter, resulting in a book-to-bill ratio of 1.2 times for the quarter and 1.5 times on a trailing twelve-month basis [9][42] - The backlog increased by 10% year-over-year to $31 billion, representing nearly four years of annual revenue [42] Market Data and Key Metrics Changes - CACI continues to see strong demand signals from customers, driven by geopolitical realities and a supportive funding environment for national security spending [12][17] - The company has a pipeline of $17 billion in bids under evaluation, with nearly 80% being for new business [44] Company Strategy and Development Direction - CACI's strategy focuses on software-defined capabilities, aligning with the new administration's priorities for national security [13][18] - The company is positioned to benefit from increased defense budgets and bipartisan support for national security initiatives [30][80] - CACI has raised its fiscal year 2025 guidance for revenue, adjusted EPS, and free cash flow due to strong business performance [10][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving three-year financial targets and highlighted a constructive funding environment with healthy budgets [11][30] - The company anticipates continued demand for its services, particularly in areas like electronic warfare and border security [88][92] Other Important Information - CACI initiated an open market share repurchase program, buying back 436,000 shares at an average price of about $344 per share [35][36] - The company has completed 12 acquisitions since FY21, demonstrating a flexible and opportunistic capital deployment approach [36][37] Q&A Session Summary Question: How has contract growth trended since the change in administration? - Management noted no significant slowdown in on-contract growth and highlighted a strong level of RFPs being responded to [54][56] Question: How much revenue is already in the backlog for FY '26? - Management indicated that no single program accounts for more than 5% of revenue and described FY '26 as a moderate recompete year [57][58] Question: What are the implications of the DOD memo about insourcing or updating acquisition for tech? - Management sees the executive orders as a net positive for CACI, aligning with their software-defined capabilities strategy [61][64] Question: Can you discuss the budget cadence and outlay mechanics? - Management emphasized the positive impact of the full-year continuing resolution, allowing for new starts and greater funding flexibility [75][80] Question: What specific areas of incremental funding represent the biggest opportunities? - Management highlighted electronic warfare, border security, and DOD IT modernization as key areas for future growth [88][92] Question: How is the integration process going for the Azure Summit acquisition? - Management reported that the integration is progressing well, enhancing capabilities and aligning with customer needs [113][114]

Financial Data and Key Metrics Changes - CACI reported revenue growth of 12% for Q3 2025, with total revenue reaching $2.2 billion, of which 5.6% was organic growth [9][32] - EBITDA margin improved to 11.7%, reflecting a year-over-year increase of 40 basis points [32] - Free cash flow for the quarter was $188 million, showing strong sequential and year-over-year increases [35][40] - Adjusted diluted earnings per share increased by 9% year-over-year to $6.23 [33] Business Line Data and Key Metrics Changes - The company won $2.5 billion in awards during the quarter, resulting in a book-to-bill ratio of 1.2 times for the quarter and 1.5 times on a trailing twelve-month basis [9][42] - The backlog increased by 10% year-over-year to $31 billion, representing nearly four years of annual revenue [42] Market Data and Key Metrics Changes - Demand signals from customers remain strong, driven by geopolitical realities and a supportive funding environment for national security spending [12][17] - The company has seen a constructive funding environment with healthy budgets and an upward bias in national security spending [12][17] Company Strategy and Development Direction - CACI's strategy focuses on software-defined capabilities, aligning with the new administration's priorities for national security [13][14] - The company is positioned to benefit from increased defense budgets and bipartisan support for national security initiatives [30][39] - CACI continues to invest ahead of customer needs, which has proven to be a successful strategy in winning contracts [29][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving three-year financial targets and driving long-term growth and shareholder value [10][30] - The macro environment is seen as favorable, with expectations of continued demand for national security solutions [12][30] - Management noted that while there may be some slower decision-making, the overall business performance remains strong [9][12] Other Important Information - CACI initiated an open market share repurchase program, buying back 436,000 shares at an average price of approximately $344 per share [35][36] - The company raised its fiscal year 2025 guidance for revenue, adjusted EPS, and free cash flow due to strong business performance [38][40] Q&A Session Summary Question: How has contract growth trended since the change in administration? - Management indicated no slowdown in on-contract growth measures and noted a strong level of RFPs being responded to [54][56] Question: How much revenue is already in the backlog for FY '26? - Management stated that no single program accounts for more than 5% of revenue and that the backlog is building well [57][58] Question: What are the implications of the DOD memo about insourcing or updating acquisition for tech? - Management sees the executive orders as a net positive for CACI, aligning with their software-defined capabilities strategy [61][64] Question: Can you discuss the budget cadence and outlay mechanics? - Management highlighted that the full-year continuing resolution allows for new starts and provides good visibility for national security spending [75][80] Question: What specific areas of incremental funding represent the biggest opportunities? - Management identified electronic warfare, border security, and DOD IT modernization as key areas for future growth [88][92] Question: Can you provide an update on the development and ramp of production for your optical communications business? - Management confirmed they are on track to deliver six times the volume of optical communications terminals compared to FY 2024 [96][98] Question: How is CACI positioned regarding the ongoing GSA review? - Management stated they are not part of the top 10 contractors but have been proactive in discussions about cost savings and agile development [140][144]

CACI International Inc. (CACI) reported overwhelming results for the third quarter of fiscal 2025, wherein the top and bottom lines surpassed the Zacks Consensus Estimate and marked significant year-over-year improvements. CACI reported third-quarter non-GAAP earnings of $6.23 per share, which beat the Zacks Consensus Estimate by 12.7%. The bottom line increased 8.5% on a year-over-year basis, primarily driven by higher revenues, partially offset by increased costs and higher interest expenses. CACI surpass ...

Core Insights - CACI International reported $2.17 billion in revenue for the quarter ended March 2025, marking an 11.9% year-over-year increase and a surprise of +1.75% over the Zacks Consensus Estimate of $2.13 billion [1] - The EPS for the same period was $6.23, compared to $5.74 a year ago, resulting in a surprise of +12.66% over the consensus estimate of $5.53 [1] Revenue Performance - Total revenue organic growth year-over-year was 5.6%, exceeding the average estimate of 2.9% based on two analysts [4] - Revenue from the Department of Defense reached $1.65 billion, surpassing the average estimate of $1.56 billion, representing a +13.8% year-over-year change [4] - Revenue from Federal Civilian Agencies was $431.45 million, compared to the estimated $414.13 million, reflecting a +13.2% change year-over-year [4] - Revenue from Technology expertise was $1.19 billion, matching the average estimate and showing a +17% year-over-year increase [4] - Revenue from Expertise was $973.04 million, exceeding the estimated $941.51 million, with a +6.1% change compared to the previous year [4] - Revenue from Commercial and other sources was $83.32 million, falling short of the estimated $158.26 million, indicating a -19.9% year-over-year decline [4] Stock Performance - CACI International's shares returned +13.4% over the past month, contrasting with the Zacks S&P 500 composite's -6.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - CACI International reported quarterly earnings of $6.23 per share, exceeding the Zacks Consensus Estimate of $5.53 per share, and up from $5.74 per share a year ago, representing an earnings surprise of 12.66% [1] - The company posted revenues of $2.17 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.75%, and an increase from $1.94 billion year-over-year [2] - CACI has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Stock Movement and Outlook - CACI shares have increased approximately 4.6% since the beginning of the year, contrasting with a -10.1% decline in the S&P 500 [3] - The future performance of CACI's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $6.90 on revenues of $2.33 billion, and for the current fiscal year, it is $23.94 on revenues of $8.62 billion [7] Industry Context - The Computer - Services industry, to which CACI belongs, is currently ranked in the top 27% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Revenues for the third quarter of fiscal year 2025 were $2.2 billion, representing an 11.8% increase year-over-year[1]. - Net income was $111.9 million, with diluted EPS of $5.00, reflecting a 2.5% decrease compared to the previous year[1][4]. - Adjusted net income increased to $139.3 million, with adjusted diluted EPS of $6.23, up 8.5% year-over-year[1][4]. - EBITDA for the quarter was $253.5 million, with an EBITDA margin of 11.7%, up 40 basis points year-over-year[1][4]. - Total revenue for the three months ended March 31, 2025, was $2,166,982, representing an 11.8% increase from $1,937,456 in the same period of 2024[31]. - Prime contractor revenue increased by 12.3% to $1,955,753 for the three months ended March 31, 2025, compared to $1,741,777 in the prior year[31]. - Adjusted net income for the three months ended March 31, 2025, was $139,336, an 8.0% increase from $129,026 in the same period of 2024[37]. - EBITDA for the three months ended March 31, 2025, was $253,505, reflecting a 16.3% increase from $217,971 in the same period of 2024[40]. - Total revenue for the nine months ended March 31, 2025, was $6,323,680, a 12.5% increase from $5,621,537 in the same period of 2024[33]. Guidance and Expectations - Fiscal year 2025 revenue guidance was raised to $8.55 billion - $8.65 billion, up from the prior guidance of $8.45 billion - $8.65 billion[1][11]. - Free cash flow guidance for fiscal year 2025 was increased to at least $465 million, up from at least $450 million[1][12]. - The company expects adjusted net income guidance for FY25 to be between $543 million and $557 million[37]. Contract Awards and Backlog - Contract awards totaled $2.5 billion, with over 60% attributed to new business, resulting in a book-to-bill ratio of 1.2x[1][7]. - Total backlog as of March 31, 2025, was $31.4 billion, a 9.8% increase from $28.6 billion a year ago[1][7]. - Funded backlog increased by 31.3% to $4.2 billion compared to $3.2 billion the previous year[1][7]. - Contract awards for the three months ended March 31, 2025, decreased by 29.4% to $2,473,753 from $3,503,358 in the same period of 2024[35]. - CACI was awarded a seven-year task order valued at up to $434 million for digital financial management solutions, highlighting ongoing market expansion efforts[1][8]. Income and Expenses - Net income for the nine months ended March 31, 2025, rose by 19.9% to $341,975 thousand, up from $285,267 thousand in the prior year[19]. - Operating income for the nine months ended March 31, 2025, increased by 23.4% to $557,508 thousand, compared to $451,958 thousand in the same period of 2024[19]. - The company reported a 63.1% increase in interest expense for the three months ended March 31, 2025, totaling $45,117 thousand, compared to $27,668 thousand in the prior year[19]. - Basic earnings per share decreased by 2.9% to $5.02 for the three months ended March 31, 2025, compared to $5.17 in the same period last year[19]. Assets and Liabilities - Total assets increased to $8,580,078 thousand as of March 31, 2025, compared to $6,796,101 thousand as of June 30, 2024[21]. - The company’s total liabilities increased to $4,875,632 thousand as of March 31, 2025, from $3,277,894 thousand as of June 30, 2024[21]. - Cash and cash equivalents at the end of the period were $223,897 thousand, up from $159,226 thousand a year earlier[23]. - Capital expenditures for the nine months ended March 31, 2025, were $37,640 thousand, slightly down from $41,091 thousand in the same period last year[23]. Revenue Sources - The Department of Defense accounted for 76.3% of total revenues in the three months ended March 31, 2025, generating $1,652,206 thousand, a 13.8% increase from $1,452,264 thousand in the same period last year[25]. - Technology revenue for the three months ended March 31, 2025, increased by 17.0% to $1,193,945 from $1,020,501 in the same period of 2024[33].

Core Viewpoint - CACI International is positioned well to continue its trend of beating earnings estimates, with a strong history of surprises in recent quarters [1][4]. Earnings Performance - For the most recent quarter, CACI reported earnings of $5.95 per share, exceeding the expected $5.17 per share, resulting in a surprise of 15.09% [2]. - In the previous quarter, the company reported $5.93 per share against an expectation of $5.08 per share, achieving a surprise of 16.73% [2]. Earnings Estimates and Predictions - Estimates for CACI International have been trending higher, supported by its history of earnings surprises [4]. - The company currently has an Earnings ESP of +0.20%, indicating a positive outlook from analysts regarding its earnings prospects [7]. - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a strong possibility of another earnings beat in the upcoming report [7]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [5]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [6].

Company Overview - CACI International (CACI) shares increased by 5.8% to close at $391.26, with notable trading volume compared to typical sessions, and a 4.8% gain over the past four weeks [1] - The company derives over 90% of its revenues from U.S. defense, intelligence, and homeland security agencies, providing revenue stability [2] Business Developments - Recent optimism is driven by CACI's new business wins and organic expansions, alongside the U.S. government's DOGE initiative aimed at modernizing government IT and networks, an area where CACI excels [2] Financial Performance Expectations - CACI is expected to report quarterly earnings of $5.50 per share, reflecting a year-over-year decline of 4.2%, while revenues are anticipated to reach $2.13 billion, marking a 10.1% increase from the previous year [3] - The consensus EPS estimate has been revised 1.8% higher in the last 30 days, indicating a positive trend that typically correlates with price appreciation [4] Industry Context - CACI operates within the Zacks Computer - Services industry, where another company, CSG Systems (CSGS), saw a 0.8% increase in its stock price, but has returned -5.1% over the past month [4]

Company Overview - CACI International (CACI) shares increased by 7.1% to $353.02 in the last trading session, following a period of 14.4% loss over the past four weeks [1] - The stock experienced higher-than-average trading volume during this upswing [1] Market Drivers - The increase in CACI's stock price is attributed to optimism regarding potential military spending increases in Europe, particularly with the European Union's upcoming "rearm Europe plan" [2] - The U.K. has announced plans to raise defense spending as a percentage of GDP in the coming years [2] Earnings Expectations - CACI is projected to report quarterly earnings of $5.63 per share, reflecting a year-over-year decline of 1.9% [3] - Expected revenues for the quarter are $2.15 billion, which represents an 11.1% increase compared to the same quarter last year [3] Earnings Estimate Revisions - The consensus EPS estimate for CACI has been revised down by 0.9% over the last 30 days [4] - A negative trend in earnings estimate revisions typically does not lead to price appreciation, indicating caution for future stock performance [4] Industry Context - CACI operates within the Zacks Computer - Services industry, where another company, Forian Inc. (FORA), saw a 2.9% decline in its stock price, with a -9.2% return over the past month [4] - Forian's consensus EPS estimate has remained unchanged at $0.02, representing a 50% decrease compared to the previous year [5]