Revenue Growth
Third-quarter revenue of $2.4 billion, up 8.5% year-over-year, with organic growth of 6.8%.
Caci International
· CACI
April 22nd, 2026
Summary
- Earnings Call Date:
- 2026-04-22
- Change Since:
- -9.80%
- Next Earnings Date:
- 2026-08-12
Earnings Call Sentiment
PositiveThe call emphasized strong operational and financial performance: double-digit organic revenue growth acceleration, expanding margins, robust free cash flow, backlog and funded backlog growth, and strategic enhancement of capabilities via the ARKA acquisition (notably in space and agentic AI). Management acknowledged near-term headwinds including a still-lumpy award cadence due to government shutdowns, acquisition-related costs and elevated leverage post-ARKA, but provided raised full-year guidance and a clear plan to deleverage. On balance the positive growth, margin expansion, cash generation, long-duration backlog, and strategic acquisition outweigh the highlighted short-term challenges.
Company Guidance
CACI raised its fiscal 2026 guidance to revenue of $9.5–$9.6 billion (total growth 10.1–11.3%, including ~3.5 points from acquisitions and roughly $150 million from ARKA), EBITDA margin of 11.8–11.9% (incorporating about $22 million of transaction costs), adjusted net income of $615–$630 million (reflecting roughly $60 million pre‑tax transaction costs and higher interest), adjusted EPS of $27.70–$28.38 (up 5–7%), and reiterated free cash flow of at least $725 million (despite nearly $50 million of transaction/financing costs and higher CapEx); management expects FY2026 revenue to be ~98% from existing programs (1% recompetes, 1% new). For context, Q3 results included revenue of $2.4 billion (up 8.5% YoY, 6.8% organic), EBITDA margin 12.3%, adjusted EPS $7.27 (up 17%), free cash flow $221 million, $2.2 billion of awards (Q book‑to‑bill 0.9x, TTM 1.2x), total backlog $33.4 billion (+6% YoY) and funded backlog +19% YoY (ARKA added $835M total/$422M funded plus ~$2B of noncompetitive programs), pro‑forma leverage 4.2x net debt/TTM EBITDA with a target to return to the low‑threes within six quarters, and DSO of 55 days.
Margin and Profitability Expansion
Q3 EBITDA margin of 12.3%, an increase of 60 basis points year-over-year; adjusted diluted EPS of $7.27, up 17% versus prior year.
Strong Free Cash Flow
Generated $221 million of free cash flow in Q3; reaffirmed FY2026 free cash flow guidance of at least $725 million, implying 65% growth in free cash flow per share over FY2025.
Backlog and Funded Backlog Growth
Total backlog of $33.4 billion, up 6% year-over-year; funded backlog increased 19% year-over-year. Trailing twelve-month weighted average award duration just over six years.
Strategic ARKA Acquisition
Closed ARKA acquisition, adding space-based imaging sensors, agentic AI ground processing and other space capabilities; ARKA contributed ~$835 million to total backlog and ~$422 million to funded backlog, plus ~$2 billion of noncompetitive franchise programs.
Raised FY2026 Guidance
Updated revenue guidance to $9.5–$9.6 billion (total growth 10.1%–11.3%, including ~3.5 points from acquisitions) and increased EBITDA margin guidance to 11.8%–11.9%; adjusted net income guidance of $615–$630 million and adjusted EPS of $27.70–$28.38 (growth 5%–7%).
Strong Win and Pipeline Activity
Won $2.2 billion of awards in Q3; trailing twelve-month book-to-bill of 1.2x. More than $4 billion of bids under evaluation (80% new business) and plans to submit ~ $22 billion of bids over the next two quarters (75% new business).
Program and Technical Milestones
SPECTRAL achieved Milestone C and entered low-rate initial production (LRIP); Merlin counter-UAS system deployed operationally (e.g., southern border) and seeing accelerating demand and international activity.
Leverage Deleveraging Plan
Pro forma leverage of 4.2x net debt to TTM EBITDA after the acquisition, with expectation to return to the low threes within six quarters based on strong cash flow.
Operator
Ladies and gentlemen, thank you for standing by. Welcome to the CACI International Inc Third Quarter Fiscal Year 2026 Earnings Conference Call. Today’s call is being recorded. Later, we will announce the opportunity for questions and instructions will be given at that time. If you should need assistance during this call, please press 0 and someone will help you. At this time, I would like to turn the conference call over to George A. Price, Senior Vice President of Investor Relations for CACI International Inc. Please go ahead, sir.
George A. Price
Thanks, Jeanne. Good morning, everyone. I am George A. Price, Senior Vice President of Investor Relations for CACI International Inc. Thank you for joining us this morning. We are providing presentation slides, so let us move to Slide 2. There will be statements in this call that do not address historical fact, and as such constitute forward-looking statements under current law. These statements reflect our views as of today and are subject to important factors that could cause our actual results to differ materially from anticipated.
Those factors are listed at the bottom of last night’s press release and are described in the company’s SEC filings. Our Safe Harbor statement is included on this exhibit and should be incorporated as part of any transcript of this call. I would also like to point out that our presentation will include discussion of non-GAAP financial measures. These should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. Let us turn to Slide 3, please. To open our discuss...
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