CACI International Inc Q3 FY2026 earnings call

• CACI is a different company than before with a clear strategy operating in seven markets, focusing on enduring priorities, being a software-defined technology leader, investing ahead of customer need, and flexible capital deployment. • Third quarter results: Strong performance with $2.4 billion revenue, 12.3% EBITDA margin, $221 million free cash flow, and $2.2 billion awards. • Acquisition of ARCA: Brings space-based imaging sensor tech, agentic AI-based ground processing software, and deep customer relationships. Integrated with existing base portfolio. • National security focus: Proximity to mission gives advantage, involved in various operations, recent multi-year contract extensions. • Strategic investments: Spectral program for Navy's surface combatant ships, Merlin counter UAS system, strong positioning for Golden Dome with counter UAS, left-of-launch, and space-based sensing capabilities. • Macro environment: Constructive budgets and demand signals, right markets aligned to priorities.

Revenue for the third quarter was $2.4 billion, up 8.5% year over year. EBITDA margin was 12.3%. Won $2.2 billion of awards. Revenue contribution details: Organic growth was 6.8%. ARCA acquisition added to the portfolio. Backlog: Total backlog of $33.4 billion increased 6% year-over-year, funded backlog increased 19% over the same period. ARCA has another $2 billion of non-competitive franchise programs.

• Increased fiscal 26 revenue guidance to between $9.5 and $9.6 billion (10.1% to 11.3% growth, including ~3.5 points from acquisitions like ARCA). • Increased fiscal 26 EBITDA margin to 11.8% to 11.9% range, including impact of ~$22 million transaction costs. • Updated FY26 adjusted net income guidance between $615 and $630 million, adjusted EPS between $27.70 and $28.38 per share. • Reaffirmed free cash flow guidance of at least $725 million, 65% growth in free cash flow per share over FY25. • Third quarter book to bill 0.9 times, trailing 12-month book to bill 1.2 times. Trailing 12-month weighted average duration of awards over six years. Pipeline: More than $4 billion of bids under evaluation, expect to submit another $22 billion in bids over next two quarters with over 75% new business.

Q: Just with ARCA, can you scale how big your space exposure is today?

A: Definitely gotten larger, greater than a billion dollars worth of total business with future growth.

Q: On margins, with added ARCA, any framework on margin differences?

A: Not providing much specificity now, but addition of technology franchises leads to margin expansion, some lumpiness in margin.

Q: On booking environment, submits building but not converting to pipeline?

A: Continue to see excellent visibility, strong pipeline, constructive macro forecast. Awards are lumpy.

Q: Guidance implies growth accelerates in 4Q, early thoughts on exit rate into next year?

A: Growth accelerating in 4Q, business managed to year, strong second half and fourth quarter, but not extending into 27 as closing 26.

Q: Why Q4 sequential ramp, anything one time with contracts?

A: Programs have bimodal growth rate, customer communities heavier buyers in fourth quarter, early stages of activities driving future growth.

Q: How should we think about ARCA impacting margins forwards?

A: ARCA contribution in fourth quarter aligned with expectations, organic business mix softer in quarter.

Q: What type of directed energy capability does ARCA bring?

A: Portion of directed energy, new capability for CACI, more to come in quarters to come.

Q: On counter UAS, experience in war and impact on opportunities?

A: Already in government inventory, providing to armed services, active in international sales, strong market with increasing demand.

Q: On civil business, solid growth, what are drivers?

A: Modest DHS headwinds but NASA NCAPS ramp.

Q: Broader defense budget, extent programs benefit from base vs reconciliation?

A: Majority in base budget, reconciliation funding in Golden Dome, border security, etc.

Q: NASA and civil budget, puts and takes?

A: Successfully ramping NASA NCAPS program, driving cost savings, aligned with space business.

Q: Outlook for scalability of technologies like Spectral across customers and budget cycles?

A: Scalable, systems have bipartisan support, can scale forward with software capability.

Q: Combine ARCA and legacy CACI space portfolio for customer solutions?

A: Revenue synergies on ground processing, optical communication terminals, more to come.

Q: Large multi-year contracts in FY27?

A: Have multi-billion dollar jobs rumbling, some expected to be awarded in FY27, future re-competes extended