CACI International Inc Q4 FY25 Earnings Conference Call August 7, 2025 EXPERTISE and TECHNOLOGY 1 | CACI Proprietary Information EXPERTISE and TECHNOLOGY for National Security for National Security Forward-looking statements 2 | CACI Proprietary Information On today's call John Mengucci President and Chief Executive Officer Jeff MacLauchlan Chief Financial Officer and Treasurer 3 | CACI Proprietary Information Honoring the Legacy of Mike Daniels There are statements made herein that do not address historica ...

Core Viewpoint - The article discusses the bureaucratic rigidity of the Tang Dynasty as exemplified by the story of Li Shande, who faced overwhelming challenges in delivering lychees to the emperor, highlighting the pitfalls of top-down decision-making without practical feasibility [6][8][10]. Group 1: Bureaucratic Challenges - The decision-making process in the Tang Dynasty was often disconnected from reality, driven by the whims of powerful leaders without consideration for feasibility or data [9][10]. - Middle management became a "black hole," transferring pressure downwards without providing necessary resources or support, leading to organizational paralysis [10][11]. - The bureaucratic system, designed for stability and efficiency, became a hindrance when faced with new challenges, resulting in significant internal inefficiencies [11][12]. Group 2: Agile Entrepreneurship - Li Shande transitioned from a bureaucratic role to an entrepreneurial mindset, forming a cross-functional team to tackle the lychee delivery challenge [16][21]. - He employed an agile approach, conducting rapid experiments and iterations to find viable solutions, embodying the principle of "minimum viable product" [22][23]. - This shift from a rigid structure to a more flexible, trust-based team dynamic allowed for innovative problem-solving in a constrained environment [16][22]. Group 3: The Aftermath of Success - Despite successfully delivering the lychees, Li Shande received no recognition or reward, illustrating the indifference of the ruling class to individual contributions [26][27]. - His survival after the project was not due to merit but rather a random act of mercy from the emperor, highlighting the chaotic nature of the bureaucratic system [28][29]. - Ultimately, Li Shande's fate serves as a microcosm of the larger decline of the Tang Dynasty, where individual efforts were overshadowed by systemic failures [31][32].

Group 1 - The article discusses the challenges faced by project managers in bureaucratic systems, using the historical example of Li Shande in the Tang Dynasty, who was tasked with delivering lychees to the emperor under impossible conditions [6][10][41] - It highlights the disconnect between high-level decision-makers and the practical realities of project execution, emphasizing that decisions often stem from personal whims rather than data-driven analysis [12][13][19] - The narrative illustrates how middle management can become a "black hole," transferring pressure downwards without providing necessary resources or support, leading to organizational inefficiency [17][18][21] Group 2 - The article emphasizes the importance of adaptability and innovation in overcoming bureaucratic obstacles, as demonstrated by Li Shande's shift towards an entrepreneurial mindset to solve the lychee delivery problem [23][25][28] - It describes how Li Shande formed a cross-functional team to tackle the project, embodying principles of agile development and iterative testing to find solutions [26][36][37] - The narrative concludes with the notion that success in such a rigid system is often not recognized or rewarded, as seen in Li Shande's experience after successfully delivering the lychees [40][44][56]

Group 1: Organizational Change Demand - The current demand for organizational change among companies is driven by the need to survive and develop in an economic downturn, emphasizing a "lighter and more agile" state [1] - The concept of organizational change is characterized by extreme front-line pressure, project-based operations, and performance-driven management [1] Group 2: Project Economy - The rise of the project economy is evidenced by the increasing share of projects in Germany's GDP, which reached 41% in 2019 [2] - Only 35% of global projects are deemed successful, indicating significant waste of resources, time, and opportunities [2] Group 3: Shift from Operations to Projects - Traditional operational organizations are seen as rigid, while project-based organizations are linked to long-term value and organic growth [3] - Companies are increasingly shifting to project-based work to seek breakthroughs, as traditional roles hinder innovation [3] Group 4: Conditions for Project Value - For projects to generate business value, they require adequate resources and supportive policies [4] Group 5: Organizational Structure and Resource Allocation - Many companies' projects are under-resourced, lacking the necessary support from middle and back-office functions, which remain bureaucratic [5] - Successful companies are restructuring to empower middle-office functions and deploy business partners to frontline operations [6] Group 6: Incentivizing Project Contributions - The shift towards project roles raises questions about compensation, necessitating a new incentive structure based on contribution rather than traditional salary models [8][9] - The complexity of compensation in project-based organizations requires innovative approaches to ensure fair distribution of rewards [9] Group 7: Project Management Evolution - Traditional project management methods are outdated, focusing too much on standardization and process rather than results [11] - Agile development has emerged as a more effective project management approach, emphasizing customer engagement and iterative progress [12][13] Group 8: Organizational Transformation Challenges - Many companies claim to have adopted project-based structures, but their understanding often differs from the true essence of project management [10] - Successful organizational change requires top-level commitment and careful planning, rather than just enthusiasm from project managers [13]

Investment Rating - The report emphasizes the necessity for organizations to adopt modern software development practices to remain competitive in a rapidly changing business environment [4][10]. Core Insights - Modern software development is undergoing profound transformation, requiring organizations to embrace new practices that meet the demands for speed, agility, and innovation in the evolving business landscape [11][54]. - The integration of generative AI into software development processes significantly enhances developer satisfaction and productivity, allowing them to focus on meaningful work [10][20]. - The report identifies four interconnected pillars essential for modern software development: speed and agility, visibility through testing and observability, AI-driven automation, and embedded security and governance [10][21]. Summary by Sections Section 1: Speed and Agility - Organizations must accelerate software delivery while ensuring their development processes can adapt to increasing demands for code, infrastructure, and testing [9][36]. - The use of low-code and no-code platforms democratizes software development, enabling "citizen developers" to create applications quickly without extensive coding knowledge [23][36]. Section 2: Visibility and Observability - Effective monitoring and troubleshooting capabilities are crucial as systems become more complex and distributed [30][31]. - Organizations need to adopt a modern observability approach to investigate root causes of issues and ensure successful operation in production environments [30][31]. Section 3: AI-Driven Automation - AI and machine learning are revolutionizing software development by enhancing code generation, testing, and deployment processes [20][21]. - AI tools can suggest code completions, generate test cases, and predict areas in code that are likely to contain errors, thus improving overall software quality [21][22]. Section 4: Embedded Security and Governance - As development speeds increase, security and governance must be integrated into every stage of the development process [21][24]. - Organizations face challenges in monitoring an expanding attack surface and must implement robust data governance measures to ensure compliance and security [25][26]. Section 5: Organizational Change and Culture - Successful adoption of modern software engineering practices requires management support and a cultural shift within organizations [45][46]. - Balancing innovation with security is essential, as organizations leverage AI and automation while maintaining compliance and safety [46][47]. Section 6: Future Outlook - The report concludes that organizations capable of effectively leveraging modern software engineering practices will thrive in a fast-paced, ever-changing environment [53][54].