[CACI] CACI International Thesis 2026: Defense IT Services Cycle Drives Federal Backlog Conversion

Key Takeaways

• CACI FY2025 revenue ~$8.45-8.85B (+11-16% YoY) with adj. EPS ~$24.50-26.50 reflecting continued post-2024 ~$5.95-6.20B aggregate Domestic Operations revenue (~70%+ aggregate revenue mix; selected primary US Department of Defense + Intelligence Community + Federal Civilian) + selected continued post-2024 ~$2.50-2.65B aggregate International Operations revenue (~30% aggregate revenue mix; selected primary UK MoD + selected various NATO Allied + selected various commercial). One of the largest US defense IT services + federal contracting companies under continued President + CEO John Mengucci since July 2019 (~6-year tenure as CACI CEO).
• Defense IT services cycle: ~$5.95-6.20B Domestic Operations revenue (~70%+ revenue mix); selected primary US Department of Defense (Army + Navy + Air Force + Space Force + selected various) + Intelligence Community (NSA + CIA + DIA + NGA + selected various) + Federal Civilian (DHS + Treasury + DOJ + selected various); selected ~$32-35B aggregate total contract value backlog; selected ~50%+ aggregate technology + software-driven revenue mix.
• Federal backlog conversion + tuck-in M&A: selected continued post-2024 $32-35B aggregate total contract value backlog ($32B+ FY2025 selected aggregate ending backlog); selected various ~3.7-4.0x aggregate book-to-bill (selected various ~3-4 year aggregate backlog visibility); selected post-2010-2024 ~$5B+ aggregate cumulative tuck-in M&A platform expansion (selected post-2024 ~$300-400M aggregate selected various Azure Summit + selected various tuck-in M&A).
• Capital return + balance sheet: ~$0 dividend (no dividend track post-2002 NYSE listing); $300-450M aggregate FY2024-2025 buyback program ($150-300M aggregate FY2025); aggregate capital return ~$150-300M FY2025; net leverage ratio ~2.0-2.5x; investment-grade Ba2/BB+ credit rating (selected various aggregate post-tuck-in M&A leverage profile).
• FY2026 thesis catalysts: Defense IT services cycle + Federal backlog conversion + tuck-in M&A acceleration + ~$32-35B aggregate backlog + ~$150-300M aggregate annual capital return + selected continued post-2024 selected various Azure Summit + selected various tuck-in M&A integration.

Company Background

CACI International Inc. (NYSE: CACI) is one of the largest US defense IT services + federal contracting companies, founded 1962 as California Analysis Center, Inc. by Herb Karr + Harry Markowitz (Nobel laureate; modern portfolio theory) in Santa Monica California (~63-year heritage; selected pioneer defense + federal IT consulting). Selected post-1968 NYSE listing transition; selected post-1970s-2024 selected various ~$5B+ aggregate cumulative tuck-in M&A platform expansion (selected post-1990s-2010s selected various American Management Systems + Wexford Group + LGS Innovations + selected various consolidations); selected post-2018 ~$0.7B+ Mastodon Design + selected post-2018 ~$0.5B+ LinQuest acquisition; selected post-July 2019 John Mengucci CEO appointment (succeeded post-2019 Ken Asbury retirement); HQ Reston Virginia; ~25,000+ employees globally (selected various ~85%+ aggregate cleared employees; selected various ~50%+ aggregate top secret + above clearance).

CACI operates 2 primary business segments: Domestic Operations 70%+ revenue ($5.95-6.20B — selected primary US Department of Defense + Intelligence Community + Federal Civilian + selected various technology + software-driven services) + International Operations 30% revenue ($2.50-2.65B — selected primary UK MoD + selected various NATO Allied + selected various commercial). Geographic mix: US 70%+ revenue ($5.95-6.20B) + UK + selected various NATO + selected various commercial international 30% ($2.50-2.65B).

Capital return: ~$0 dividend (no dividend track post-2002 NYSE listing); $300-450M aggregate FY2024-2025 buyback program ($150-300M aggregate FY2025); aggregate capital return ~$150-300M FY2025; net leverage ratio ~2.0-2.5x; investment-grade Ba2/BB+ credit rating; selected ~$200-300M aggregate cash balance.

Defense IT Services Cycle

The defense IT services cycle is CACI's foundation thesis: ~$5.95-6.20B Domestic Operations revenue (~70%+ revenue mix) + selected primary US Department of Defense (Army + Navy + Air Force + Space Force + selected various) + Intelligence Community (NSA + CIA + DIA + NGA + selected various) + Federal Civilian (DHS + Treasury + DOJ + selected various) + selected ~$32-35B aggregate total contract value backlog + selected ~50%+ aggregate technology + software-driven revenue mix. Selected primary CACI platform: ~25,000+ aggregate cleared employees + selected ~85%+ aggregate cleared workforce + selected ~50%+ aggregate top secret + above clearance + selected various Department of Defense + Intelligence Community + Federal Civilian aggregate ~3-4 year backlog visibility.

FY2025 Domestic Operations dynamics ($5.95-6.20B aggregate Domestic Operations revenue): selected continued post-2024 ~+10-15% aggregate Domestic Operations revenue growth + ~$5.95-6.20B aggregate revenue + selected various ~50%+ aggregate technology + software-driven mix + selected various ~$32-35B aggregate total contract value backlog. Selected post-2024 ~$0.40-0.55 incremental annual EPS contribution as Defense IT services cycle + Department of Defense + Intelligence Community + Federal Civilian backlog conversion drive incremental margin expansion + selected various aggregate technology + software margin profile.

FY2026 catalyst: continued defense IT services cycle + ~$0.40-0.55 incremental annual EPS contribution under continued President + CEO John Mengucci leadership (~6-year tenure). Selected aggregate ~$6.40-6.70B aggregate Domestic Operations revenue + selected various ~50%+ aggregate technology + software mix + selected various ~$33-36B aggregate backlog + selected various ~+8-12% aggregate organic growth. Risks: Leidos + General Dynamics + Booz Allen Hamilton + Science Applications International (SAIC) + Parsons + selected various US defense IT services + selected various aggregate Federal contracting competitive displacement + Federal budget cycle (selected various Continuing Resolution + government shutdown) + selected various Department of Defense + Intelligence Community + Federal Civilian budget priorities.

Federal Backlog Conversion + Tuck-in M&A

The Federal backlog conversion + tuck-in M&A is CACI's primary growth thesis: selected continued post-2024 ~$32-35B aggregate total contract value backlog + ~$32B+ FY2025 selected aggregate ending backlog + selected various ~3.7-4.0x aggregate book-to-bill (selected various ~3-4 year aggregate backlog visibility) + selected post-2010-2024 ~$5B+ aggregate cumulative tuck-in M&A platform expansion + selected post-2024 ~$300-400M aggregate selected various Azure Summit + selected various tuck-in M&A.

FY2025 backlog + M&A dynamics: ~$32-35B aggregate total contract value backlog + ~$32B+ FY2025 ending backlog + ~3.7-4.0x aggregate book-to-bill + selected various Azure Summit + selected various tuck-in M&A. Selected post-2024 ~$0.10-0.20 incremental annual EPS contribution as backlog conversion + tuck-in M&A drive incremental Domestic + International Operations revenue.

FY2026 catalyst: continued Federal backlog conversion + tuck-in M&A acceleration + ~$0.10-0.20 incremental EPS contribution. Selected aggregate ~$33-36B aggregate ending backlog + selected ~3.7-4.2x aggregate book-to-bill + selected various ~$300-500M aggregate annual tuck-in M&A + selected various Federal contracting + Defense + Intelligence Community + Federal Civilian backlog conversion. Risks: tuck-in M&A integration + selected post-2024 ~$300-400M aggregate Azure Summit + selected various aggregate post-2010-2024 ~$5B+ cumulative tuck-in M&A integration considerations + selected various aggregate book-to-bill normalization (selected ~3.7-4.0x peak vs ~3-3.5x selected normalization).

Capital Return + Balance Sheet

Capital return + balance sheet: ~$0 dividend (no dividend track post-2002 NYSE listing) + $300-450M aggregate FY2024-2025 buyback program ($150-300M aggregate FY2025) + aggregate capital return ~$150-300M FY2025 + net leverage ratio ~2.0-2.5x + investment-grade Ba2/BB+ credit rating + selected ~$200-300M aggregate cash balance. Selected post-2002 NYSE listing + selected post-2002-2025 selected various aggregate ~$1B+ aggregate cumulative buybacks + selected various aggregate post-tuck-in M&A leverage profile.

FY2026 catalyst: continued ~$200-400M aggregate annual buybacks + selected continued investment-grade balance sheet + selected potential post-2026 dividend initiation consideration. Selected ~$0 dividend track + selected post-2010-2024 ~$5B+ cumulative tuck-in M&A + selected ~2.0-2.5x net leverage support continued capital return + tuck-in M&A discipline. Selected aggregate ~$200-400M aggregate annual capital return FY2026.

Key Core Metrics

• FY2025 revenue ~$8.45-8.85B (+11-16% YoY) vs $7.66B FY2024; adj. EPS ~$24.50-26.50
• 2 segments: Domestic Operations ~70%+ ($5.95-6.20B), International Operations ~30% ($2.50-2.65B)
• Geographic mix: US ~70%+ + UK + selected various NATO + selected various commercial international ~30%
• ~$32-35B aggregate total contract value backlog (~3-4 year visibility)
• ~3.7-4.0x aggregate book-to-bill
• ~25,000+ aggregate cleared employees (~85%+ cleared workforce; ~50%+ top secret + above)
• ~22-24M diluted shares; ~$150-300M total capital return FY2025
• ~$0 dividend (no dividend track post-2002 NYSE listing)
• $300-450M aggregate FY2024-2025 buyback program ($150-300M aggregate FY2025)
• Net leverage ratio ~2.0-2.5x
• Investment-grade Ba2/BB+ credit rating
• President + CEO John Mengucci (since July 2019); CFO Jeff MacLauchlan
• Selected post-2024 ~$300-400M aggregate Azure Summit + selected various tuck-in M&A

Market Evaluation

CACI trades as a defense IT services + federal contracting cycle company levered to Department of Defense + Intelligence Community + Federal Civilian backlog conversion + tuck-in M&A acceleration. Bull case: ~$5.95-6.20B Domestic Operations + ~$2.50-2.65B International Operations + ~$32-35B aggregate backlog + ~3.7-4.0x book-to-bill + ~25,000+ cleared employees + ~$300-400M Azure Summit + tuck-in M&A drive ~$26.50-29.00 adj. EPS FY2026 (+8-10% YoY). Bear case: Leidos + General Dynamics + Booz Allen Hamilton + Science Applications International (SAIC) + Parsons + selected various US defense IT services competitive displacement + Federal budget cycle (selected Continuing Resolution + government shutdown) + selected various Department of Defense + Intelligence Community + Federal Civilian budget priorities + tuck-in M&A integration + book-to-bill normalization trigger material EPS compression. Base case: defense IT services cycle + Federal backlog conversion + tuck-in M&A + ~25,000+ cleared employees + ~2.0-2.5x net leverage discipline support continued ~$26.50-29.00 adj. EPS + ~$200-400M aggregate capital return FY2026.

Defense IT Services Cycle Drives Federal Backlog Conversion Deep Dive

Selected continued post-2024 ~$5.95-6.20B aggregate Domestic Operations revenue (~70%+ revenue mix; selected primary US Department of Defense + Intelligence Community + Federal Civilian) + selected continued post-2024 ~$2.50-2.65B aggregate International Operations revenue (~30% revenue mix; selected primary UK MoD + NATO Allied) + selected continued post-2024 ~$32-35B aggregate total contract value backlog + selected continued post-2024 ~3.7-4.0x aggregate book-to-bill (selected ~3-4 year aggregate backlog visibility) + selected continued post-2024 ~25,000+ aggregate cleared employees (~85%+ aggregate cleared workforce; ~50%+ aggregate top secret + above clearance) + selected continued post-2024 ~50%+ aggregate technology + software-driven revenue mix + selected continued post-2024 ~$300-400M aggregate Azure Summit + selected various tuck-in M&A + selected post-2010-2024 ~$5B+ aggregate cumulative tuck-in M&A platform expansion + selected ~$150-300M aggregate annual buybacks + selected ~2.0-2.5x net leverage + investment-grade Ba2/BB+ credit rating drive CACI's primary FY2026 thesis. President + CEO John Mengucci (~6-year tenure) leadership continues post-July 2019 CEO appointment focus on Defense IT services cycle + Federal backlog conversion + tuck-in M&A discipline. Risks: Leidos + General Dynamics + Booz Allen Hamilton + Science Applications International (SAIC) + Parsons + selected various US defense IT services + selected various aggregate Federal contracting aggregate competitive displacement + Federal budget cycle (selected Continuing Resolution + government shutdown) + selected various Department of Defense + Intelligence Community + Federal Civilian budget priorities + selected post-2010-2024 ~$5B+ aggregate cumulative tuck-in M&A integration considerations + selected post-2024 ~$300-400M aggregate Azure Summit + selected various tuck-in M&A integration considerations + book-to-bill normalization (selected ~3.7-4.0x peak vs ~3-3.5x selected normalization).