CACI INTERNATIONAL INC /DE/ Q3 FY2025 earnings call

• John Mengucci highlighted that CACI's third quarter results were strong with revenue growth of 12%, EBITDA margin of 11.7%, and free cash flow of $188 million. The company won $2.5 billion of awards, with a book-to-bill of 1.2 times for the quarter and 1.5 times on a trailing twelve-month basis. • Discussed the macro environment with good demand signals in key focus areas, constructive funding environment, and alignment of strategy with new administration's priorities. • Highlighted key program successes: TLS Manpack technology with increased program of record ceiling and more systems delivered; Navy spectrum program progressing with upgrade of existing systems; Army CIPRAMOD modernizing the US Army's secure Internet protocol network; DAI program helping DOD agencies achieve clean financial audits; BEAGLE program for DHS with high software release volume; and MCAPS program at NASA increasing velocity and efficiency.

In the third quarter, CACI generated revenue of $2.2 billion, representing 11.8% reported growth (5.6% organic). Third-quarter EBITDA margin was 11.7%, and free cash flow was $188 million. However, there is no specific breakdown of financial performance by distinct product segments provided in the transcript.

• Raised fiscal year 2025 revenue guidance to a new range of $8.55 billion to $8.65 billion, reflecting stronger organic growth. • Expect fiscal 2025 EBITDA margin to be in the low 11% range. • Raised the low end of adjusted net income guidance to a range of $543 million to $557 million, with adjusted earnings per share between $24.24 and $24.87 per share. • Increased free cash flow guidance to be at least $465 million, driven by a reduction in CapEx forecast.

• Potential slower decision-making in the current environment which could impact award timelines. • DOGE reviews with minimal impacts thus far but continued monitoring needed. • Uncertainties related to the macro environment and how it may affect customer spending and contract execution.

Q: Quick question on contract growth since the change in administration. Just wondering how that trended since the change in administration. Are you finding any changes in customer behavior that maybe not spending to the ceiling on some of their contracts, or some of the task orders from IDIQs coming out more slowly than you would have anticipated?

A: John Mengucci stated that on-contract growth measures haven't seen a material slowdown, book-to-bill was strong in the third quarter, and level of RFPs responded to gives confidence in continuing awards and future growth.

Q: Hi. Good morning. Nice results. Wanted to ask sort of an industry question about the DOD memo about insourcing or updating acquisition for tech. I guess you mentioned you haven't seen any major negative impacts from DOGE. But just positively or negatively, how that could play out? Is that more of a short-term impact or a longer-term impact when those policies are put into practice?

A: John Mengucci said EOs related to industries are focused on spending efficiency and streamlining decision-making, which aligns with CACI's software-defined strategy. DOGE reviews have had minimal impact so far, and CACI is well-aligned with DOGE objectives in the long run.

Q: Maybe talk to the budget cadence contemplated in your investor day target. Not necessarily the top-line DOD budgets, or getting into FY '26 guidance by any stretch, but maybe just how you think about kind of the outlay mechanics and where expertise and technology are kind of more sensitized to. Typically, we think of expertise as more O&M and technology as more R&D.

A: John Mengucci discussed visibility in government fiscal year '25, bipartisan support for national security priorities, and how CACI's strategy is aligned with key national security priorities, with expertise and technology being part of both O&M and R&D cadences.