What CACI International (CACI) Said on Its Q1 Earnings Call

Key Points

• CACI raised its fiscal 2027 outlook, increasing revenue guidance to $10.7 billion–$10.9 billion and adjusted diluted EPS guidance to $33.18–$34.08, following 8.2% first-quarter revenue growth and stronger margins.
• Strong contract awards drove a 2.0 book-to-bill ratio, $34 billion in total backlog and 15% year-over-year funded-backlog growth. Management expects 94% of fiscal-year revenue to come from existing programs.
• Demand remains robust for CACI’s technology-focused national-security offerings, including electronic warfare, counter-drone systems, space payloads, artificial intelligence and mission networks, while the company continues reducing leverage after its ARKA acquisition.

CACI International NYSE: CACI reported first-quarter fiscal 2027 revenue growth of 8.2% and raised its full-year revenue and earnings outlook, citing strong awards activity, expanding funded backlog and demand for its technology-focused national security offerings.

Revenue totaled $2.5 billion for the quarter, with organic growth of 2.1%, while adjusted diluted earnings per share increased 11.8% year over year to $7.66. EBITDA margin rose 160 basis points from the prior-year period to 13.3%, which Chief Financial Officer Jeff MacLauchlan attributed to program execution and a more favorable mix of higher-margin work.

The company generated $133 million in free cash flow during the quarter. MacLauchlan said the first quarter typically includes higher cash outflows and reaffirmed CACI’s fiscal-year free-cash-flow outlook of at least $900 million.

Guidance Raised as Backlog Expands

CACI raised its fiscal 2027 revenue guidance by $50 million to a range of $10.7 billion to $10.9 billion. It also increased adjusted net income guidance by $5 million to between $740 million and $760 million, resulting in adjusted diluted EPS guidance of $33.18 to $34.08.

The company reaffirmed its expectation for EBITDA margin in the high 12% range. MacLauchlan said CACI expects stronger organic growth and EBITDA margins in the second half than in the first half, although the expected margin increase is now more gradual following the strong first-quarter performance.

First-quarter awards totaled $4.8 billion, producing a book-to-bill ratio of 2 times. Total backlog reached $34 billion, while funded backlog increased 15% from a year earlier. The quarter marked the seventh time in the past eight quarters that funded backlog grew at a double-digit year-over-year rate.

MacLauchlan said CACI now expects 94% of fiscal 2027 revenue to come from existing programs, compared with 83% cited in the prior quarter. Recompetes and new business are each expected to account for 3% of revenue. The company had $4.7 billion of bids under evaluation, approximately 85% of which were for new work, and expects to submit another $14.7 billion in bids over the next two quarters.

Technology Demand Supports Awards Activity

President and Chief Executive Officer John Mengucci said CACI’s strategy centers on serving enduring national security priorities, applying mission knowledge to customer needs, investing ahead of demand and delivering software-defined technology.

Among the quarter’s awards, Mengucci highlighted the Apollo contract, under which CACI will support U.S. Central Command intelligence and information warfare missions, and SOFETOPS 2, a five-year follow-on contract supporting the Army’s Special Operations Command.

The company also cited demand for electronic warfare and counter-unmanned aircraft systems. Its $500 million Domestic Shield award from JIATF-401 included an initial funded task order, while Mengucci said the company is seeing demand from U.S. and international customers for its BEAM manpackable counter-UAS systems. CACI’s SkyValor system is designed to provide detection at ranges of up to 75 kilometers, according to the company.

In space, CACI said its ARKA business was selected by satellite intelligence provider Vantor to supply optical imaging payloads for the Pulse satellite fleet. The company expects to complete Space Development Agency Tranche 1 deliveries later in the calendar year and begin Tranche 2 work. CACI was also one of three companies selected for Phase III of the Space Force’s Enterprise Space Terminal program.

Mengucci said modernization demand remains healthy for mission networks and digital applications, including customer priorities involving artificial intelligence, border security and financial accountability. He said CACI is using AI-based software and agile delivery practices on programs including BEAGLE, ITAS and NASA NCAPS.

Manufacturing, ARKA and Capital Deployment

CACI has opened a 61,000-square-foot manufacturing center of excellence for defense electronics in Rochester, New York. The facility expands capacity to develop, test, assemble and deliver products including TLS Manpack and BEAM systems. Mengucci said the company also plans to open manufacturing centers focused on space and integrated systems.

The company continues to reduce leverage following its ARKA acquisition. Pro forma leverage was 3.5 times at the end of the first quarter, and CACI now expects to return to leverage in the low 3-times range in the March 2027 quarter, two quarters earlier than previously expected.

MacLauchlan said ARKA continues to perform in line with CACI’s full-year expectations. Some space-program activity, however, is now expected to produce revenue beyond the first 12 months following the acquisition’s closing date. He said this timing shift is distinct from the $50 million increase in CACI’s overall revenue guidance.

Management said fixed-price work represented 33% of revenue, up from 27%, with about half of that increase attributable to ARKA and the remainder driven by organic fixed-price activity. Mengucci said the company remains selective about fixed-price contracts and focuses on work where technical risk is understood.

Fiscal-Year Change and Funding Environment

CACI plans to transition to a calendar fiscal year beginning Jan. 1, 2027. The company said it will provide guidance for the new fiscal year when it reports December-quarter results in February. It also plans to host an investor day in early 2027 at its Melbourne, Florida, facilities, where it expects to discuss strategy, reporting changes and new three-year financial targets.

Mengucci said a continuing resolution was in place through Dec. 11 but maintained that such funding measures historically have not had a material effect on CACI due to its backlog, longer-duration awards and critical customer programs. He said awards activity has improved, though decision-making remains sluggish in some areas.

“Our large and growing backlog, strong customer demand signals, and ability to deliver give us confidence in our outlook,” Mengucci said.

About CACI International (NYSE:CACI)

CACI International Inc is a professional services and information technology company that provides mission-critical solutions to government customers, primarily in the United States. The company supports defense, intelligence, homeland security, and federal civilian agencies with expertise in areas such as enterprise IT, data analytics, artificial intelligence, cybersecurity, and software development.

CACI also delivers capabilities for command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR), electronic warfare, signals intelligence, and other national security missions.

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