CACI(US:CACI)2025-10-23 13:02Financial 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]