He contributed greatly to the growth and success of many organizations, including CACI International Inc, where he was a steadfast supporter of our strategy. We deployed capital to acquire three strategic assets while also repurchasing $150 million of shares. As we've discussed many times, we undertook a strategy years ago to become a more focused and differentiated company that was positioned to drive long-term growth and shareholder value in any environment. The market trends you're increasingly seeing and hearing about today: speed, efficiency, lethality, software-based capabilities, modernization.

We are a leader in the use of software and investing ahead of customer need to develop and deliver high-value capabilities faster, more efficiently, and with greater flexibility. CACI today delivers differentiated software-defined, commercially developed, and commercially sold technology to multiple customers who demand best-in-class capabilities. It is one of the first successful rapid-fielding mid-tier acquisitions for the Army because of CACI's ability to rapidly prototype and deliver a cutting-edge solution in record time. The recent ceiling increase to $500 million supports the Army's decision to deploy our technology as the primary SIGINT EW system for all brigade combat teams.

Second, our software-defined counter-UAS technology is addressing the increased demand for protection against drones. We're also seeing increasing demand for our technology in support of U.S. Next, enterprise software modernization is another area where CACI is both well-aligned to the administration's priorities and where we have demonstrated clear industry leadership. Turning to the macro environment, we continue to see healthy customer demand and a strong pipeline of opportunities in our markets.

What went well
  • CACI closed fiscal 2025 with a strong fourth quarter, delivering Q4 revenue of $2.3 billion (13% year-over-year growth, 5.3% organic) and adjusted diluted EPS of $8.40, up 27% from a year ago.
  • For the full year, the company grew revenue nearly 16% on an underlying basis (10% organic) to $8.6 billion, expanded EBITDA margin 80 basis points to 11.2%, and generated $442 million of free cash flow, a 16% increase in free cash flow per share.
  • CACI won $10 billion of contract awards for a 1.1x book-to-bill, ending with backlog of more than $31 billion, roughly three and a half years of revenue.
  • The company highlighted strong positioning in well-funded national security priorities such as electromagnetic spectrum (TLS LAN Pack), counter-UAS, enterprise software modernization, and space optical terminals, aided by reconciliation funding in the One Big Beautiful Bill Act.
  • Fiscal 2026 guidance calls for nearly 8% revenue growth at the midpoint, EBITDA margin in the mid-11% range, and free cash flow per share growth of over 60%.
  • A favorable IRS R&D tax credit audit resolution delivered a $28 million benefit in the quarter, and management expressed high confidence in achieving its three-year financial targets.
What went wrong
  • The company did not receive an expected $40 million tax refund tied to prior-year tax method changes during fiscal 2025 due to delays from the extended IRS audit negotiations, now expected in the second half of fiscal 2026.
  • Space optical terminal production was slower than anticipated because of supply chain and manufacturing issues, though management characterized this as an execution ramp rather than an underlying technology problem.
  • Azure-related billing terms on legacy contracts remain a modest headwind to DSO, impacting it by about four days.
  • DOGE-driven program and task order cancellations reduced revenue, though management framed the impact as limited.

Guidance Changes

MetricPeriodCurrent guidance
RevenueFY2026$9.2B-$9.4B (6.6%-8.9% growth) (growth of nearly 8% at midpoint)
EBITDA marginFY2026mid-11% range (+30 bps at midpoint)
Adjusted net incomeFY2026$605M-$625M
Adjusted diluted EPSFY2026$27.13-$28.03
Free cash flowFY2026at least $710M
Free cash flow per shareFY2026$31.84 (growth of more than 60%)

Performance Breakdown

MetricYoYNote
Q4 revenue +13% (5.3% organic) strong customer demand for differentiated technology and expertise
Q4 adjusted diluted EPS +27% greater operating income, lower tax provision, and lower share count more than offset higher interest expense
FY2025 revenue +16% underlying (10% organic) faster ramp-up of awards, stronger on-contract growth, and successful recompete defense
FY2025 EBITDA margin +80 bps to 11.2% exceptional execution and portfolio positioning
FY2025 adjusted diluted EPS +26% to $26.48 operating execution and lower tax provision, despite $54M higher interest expense
FY2025 free cash flow +16% per share to $442M strong profitability and cash collections

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Software-defined / mission technology positioning—Central growth driver; management says CACI is already aligned to government's shift toward speed, software and lethality and does not need to transformUp
Reconciliation funding (One Big Beautiful Bill Act)—Over $150B for defense ($25B Golden Dome) and ~$170B for border security viewed as favorable for CACI's 90% national security revenue baseUp
Award environment / contracting officer reductionsdiscussed last couple of quartersModest impacts; some award decisions taking longer, but tighter procurement bandwidth could extend existing CACI workStable
Pipeline and book-to-bill—$16B of bids under evaluation (80% new business), another $11B to submit over two quarters; 1.1x trailing book-to-billUp
Federal civilian exposurestrategic shift began in 2019Only ~5% of revenue in broader federal civilian space; intentional pivot toward defense/intel insulates from cost-efficiency actionsStable

Q&A Summary

How much of the $16B submitted-bid pipeline (80% new business) is new programs versus takeaways from incumbents?
The majority is new work to CACI and well over half is new-customer work; management does not view itself as a traditional government services company and focuses on differentiated value bids rather than aggressive takeaways. The pipeline supports the FY2026 and three-year growth plans.
The ITAS ceiling was reduced by about $700M (from $5.7B to $5.0B) — any price reduction, margin or backlog impact?
No impact at all. ITAS is a 10-year program, CACI originally booked only $2B of total contract value, and the remaining $5B ceiling still allows up to 150% growth; there are no debooks, no backlog adjustments, and no change to revenue, margin, or three-year targets.
If the budget passes faster than a continuing resolution assumption, could CACI reach the top end of organic growth guidance?
Yes; a shorter CR and faster, steady funding is one of about ten factors that drives results toward the high end, while a full-year CR pushes toward the low end. With 92% of FY2026 ahead, management is comfortable supporting the range.
What is the update on space optical terminals given Golden Dome demand?
Demand is strong and CACI's terminals are the most mature, fully U.S.-designed and manufactured; the company is on tranches zero, one, and two with terminals on tranche three and was selected for phase two of the enterprise space terminal program. Production has been slower than wanted due to supply chain and manufacturing issues, not technology, but is improving while investing less and delivering more.
What drives the acceleration in organic growth in the second half of FY2026?
Continued ramp on major programs including Focus Fox, Beagle, and ITAS, plus the anniversarying of the Azure and Applied Insight comparisons in the first half.
Given positive developments since the three-year targets, should cumulative free cash flow be closer to $1.8B than the prior $1.6B marker?
Management is not formally updating the three-year targets but acknowledged several positive developments (e.g., Section 174) that one would reasonably expect to improve results; it is increasingly confident in delivering the targets and cautioned against inferring any slowdown in 2027.

More on Caci International Inc /De/

Reported 2025-08-07 · figures from the Caci International Inc /De/ Q4 2025 earnings call.

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