CACI International (NYSE:CACI) Conference December 02, 2025 10:30 AM ET Company ParticipantsJeff MacLauchlan - CFOConference Call ParticipantsNone - AnalystNoneAll right, great. Thank you everybody for joining us. For the CACI presentation at the UBS Industrials conference, we have Jeff MacLauchlan, the CFO at CACI. Jeff, thanks so much for joining.Jeff MacLauchlanThank you. My pleasure.I guess maybe just to kick off, like new administration. Been a lot of moving pieces. You guys seem to have or are navigat ...

Financial Data and Key Metrics Changes - The third quarter of 2025 marked the strongest performance in the past two years, with gross revenue reaching $2 million, of which 12% was derived from subscription-based sales, indicating a significant improvement in core fundamentals [3][4] - The shift towards recurring and integrated systems revenue is driving margin expansion and positioning the company for profitability [9] Business Line Data and Key Metrics Changes - The adoption of BolaWrap is increasing, with a reported 92% field success rate and zero reported deaths or serious injuries, showcasing its effectiveness compared to traditional tools like Tasers and pepper spray [5][6] - The company has expanded its product family to include Wrap Vision and Wrap Reality, enhancing its offerings beyond just hardware sales to a multi-year subscription model [8][9] Market Data and Key Metrics Changes - The U.S. law enforcement market consists of approximately 18,000 agencies and about 1 million officers, presenting a substantial opportunity for growth [10] - The counter-UAS market, which the company is targeting with its Merlin and Panda programs, is projected to exceed $15 billion globally by 2030 [10][11] Company Strategy and Development Direction - The company is transitioning from a device manufacturer to a provider of non-lethal response subscription solutions, focusing on training, policy alignment, and integrated systems [3][6] - The establishment of Wrap Federal aims to expand into defense and homeland security markets, aligning with federal procurement standards [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing adoption of non-lethal tools, driven by tighter policies and increasing demand for safer law enforcement practices [4][21] - The company is optimistic about its future capital needs and plans to approach capital markets for potential public secondary offerings [15] Other Important Information - The company opened a new manufacturing and training facility in Norton, Virginia, to support its Made in America production strategy and enhance R&D capabilities [12][13] - The focus on integrated training and policy discussions is seen as crucial for the successful deployment of non-lethal tools [34] Q&A Session Summary Question: Future capital needs and public secondary offerings - Management indicated that they see the potential to tap into capital markets and will continue to evaluate financial options [15] Question: Difference between non-lethal and less-lethal - The company clarified that its device is classified as non-lethal, distinguishing it from other less-lethal products in the market [16][17] Question: Confidence in adoption and movement away from other tools - Management cited documented deployment data showing significant adoption of BolaWrap, with usage outpacing traditional tools like Tasers [21][22] Question: Updates on the potential Chile deal - The company is actively engaging with Chile and anticipates real business opportunities in the near future [32][33] Question: Plans to obtain sales and sales force description - The company has ramped up its sales and marketing team significantly, indicating a strong push to capitalize on current market opportunities [45][46]

Financial Data and Key Metrics Changes - CACI reported revenue of nearly $2.3 billion, representing an 11.2% year-over-year growth, with 5.5% being organic growth [16] - EBITDA margin increased to 11.7%, a year-over-year increase of 120 basis points, driven by strong program execution and higher-margin software-defined technology deliveries [16] - Free cash flow for the quarter was $143 million, supported by strong profitability and effective working capital management [16][18] Business Line Data and Key Metrics Changes - The company won $5 billion in contract awards during the quarter, resulting in a book-to-bill ratio of 2.2 times for the quarter and 1.3 times on a trailing 12-month basis [5][18] - The funded backlog grew nearly 26% year-over-year, indicating strong demand and preparation for essential programs amid the government shutdown [20] - CACI's revenue from federal civilian agencies increased by 17% year-over-year, primarily driven by organic growth [44] Market Data and Key Metrics Changes - The macro environment remains resilient despite a federal government shutdown, with most of CACI's work funded and deemed essential [6][7] - The company anticipates that over 92% of its revenue for fiscal year 2026 will come from existing programs, with less than 4% from recompetes and new business [20] Company Strategy and Development Direction - CACI is focused on critical national security priorities, with a strategic portfolio that is 90% aligned with national security [29] - The company is investing in software-defined technology and agile software development processes to enhance efficiency and effectiveness in delivering solutions [12][14] - CACI aims to leverage its differentiated capabilities in counter-UAS, counter-space, and network modernization to capture growth opportunities [9][11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance and three-year financial targets, citing strong demand signals and a healthy funding environment for national security [5][23] - The company is well-positioned to navigate potential impacts from the government shutdown, with a significant backlog and essential work that is funded [61][62] - Management noted that the hiring environment remains strong, with a high volume of applicants and ongoing recruitment efforts [62] Other Important Information - CACI's record backlog of $34 billion represents nearly four years of annual revenue, reflecting strong performance in the marketplace [18][20] - The company is expanding its use of AI tools to enhance the speed and scalability of its agile software development processes [14] Q&A Session Summary Question: Expectations for FY2027 budget requests - Management indicated that bipartisan support for national security priorities suggests continued funding growth, despite potential concerns about budget cuts [29][30] Question: Changes in contracting approaches for counter-UAS and electronic warfare - Management noted a shift towards more agile contracting methods, with increased use of Other Transaction Authorities (OTAs) and commercial-like purchasing processes [32][33] Question: Impact of the government shutdown on business - Management acknowledged slight disruptions in cash collections and revenue but emphasized that these are manageable and will be made up over the year [91][62] Question: Competitive pricing environment - Management stated that pricing has not been a significant issue, as the company has focused on delivering value and higher margins through strategic investments [92][93] Question: Update on acquisition integration - Management confirmed that the integration of recent acquisitions is largely complete and meeting expectations, contributing positively to the company's strategic goals [97][98]

Financial Data and Key Metrics Changes - CACI reported revenue of nearly $2.3 billion, representing an 11.2% year-over-year growth, with 5.5% being organic growth [23] - EBITDA margin increased to 11.7%, a year-over-year increase of 120 basis points, driven by strong program execution and higher margin software deliveries [23] - Free cash flow for the quarter was $143 million, supported by strong profitability and effective working capital management [24] Business Line Data and Key Metrics Changes - The company won $5 billion in contract awards during the quarter, resulting in a book-to-bill ratio of 2.2x for the quarter and 1.3x on a trailing twelve-month basis [7] - Over half of the contract awards were for new business, indicating strong demand and successful business development efforts [7] - The revenue from intelligence community customers is now disclosed separately, aligning with the company's national security focus [23] Market Data and Key Metrics Changes - CACI's record backlog reached $34 billion, a 4% increase from the previous year, representing nearly four years of annual revenue [26] - Funded backlog grew nearly 26% year-over-year, reflecting customers preparing essential programs amid the government shutdown [26] Company Strategy and Development Direction - CACI is focused on critical national security priorities, with a strategic portfolio that is 90% aligned with national security [36] - The company is investing in software-defined technology and agile software development processes to enhance efficiency and effectiveness in delivering solutions [20][30] - CACI aims to leverage its differentiated capabilities in counter UAS, counter space, network modernization, and digital application modernization to drive growth [10][18] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance despite the federal government shutdown, citing the resilience of their business model [9][10] - The company anticipates continued demand for its services, particularly in areas like modernization and border security, as well as intelligence programs [9] - Management reaffirmed fiscal year 2026 guidance, expecting revenue between $9.2 billion and $9.4 billion, with an EBITDA margin in the mid-eleven percent range [25] Other Important Information - CACI's hiring environment remains strong, with a high volume of applicants and ongoing recruitment efforts despite the government shutdown [75] - The company is expanding its use of AI tools to enhance the speed and efficiency of its software development processes [20] Q&A Session Summary Question: Expectations for FY 2027 budget - Management highlighted that bipartisan support for national security priorities suggests continued funding growth, despite potential budget cuts [36] Question: Changes in contract awarding processes - Management noted a shift towards more agile purchasing methods, with increased use of Other Transaction Authorities (OTAs) [41][42] Question: Impact of government shutdown on business - Management acknowledged slight disruptions in cash collections and revenue but emphasized that these are manageable and expected to recover [105][106] Question: Price competition in the market - Management stated that they have not seen significant price competition affecting their bids, as they have positioned themselves away from price-based competition [108] Question: Update on acquisition integration - Management confirmed that the integration of recent acquisitions is largely complete and meeting expectations [113]