CACI International (CACI) 1 Nov 182019 Q1 Earnings call transcript

Company Profile

Participants

Dan Leckburg	CACI International, Inc.
Kenneth Asbury	CACI International, Inc.
Thomas A. Mutryn	CACI International, Inc.
John S. Mengucci	CACI International, Inc.
Edward S. Caso	Wells Fargo Securities LLC
Krishna Sinha	Vertical Research Partners LLC
Cai von Rumohr	Cowen & Co. LLC
Sheila Kahyaoglu	Jefferies LLC
Jon Raviv	Citigroup Global Markets, Inc.
Joseph William DeNardi	Stifel, Nicolaus & Co., Inc.
Tobey Sommer	SunTrust Robinson Humphrey, Inc.
Joseph A. Vafi	Loop Capital Markets LLC
Josh Ward Sullivan	Seaport Global Securities LLC

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International First Quarter Fiscal Year of 2019 Earnings Conference Call. Today's call is being recorded. At this time, all lines are in a listen-only mode. Later, we will announce the opportunity for questions and instructions will be given at that time. would Senior turn Relations Vice International. I to conference for time, Leckburg, Dan President this like the to over CACI At of Investor go Please sir. ahead,

Dan Leckburg

Vice everyone. you, and International you the Dan Thank good on appreciate Investor morning us this and Leckburg, for Andrea, we Senior call President joining CACI of Relations I'm morning.

our practice, are presentation providing we is As slides.

important listed that historical will please, to oral release disclosures So, and, and anticipated and materially of and be to factors on constitute differ differ Exchange earnings let's under our written statements move forward-looking address that at to views last are about current those statements to filings. our evening's of do actual this as results such, materially results. law. anticipate subject we company's call Slide the results that today from from and the facts Securities reflect commentary. Commission There not bottom are as could could X cause statements are and actual our Factors cause in described our These

on will Harbor non-GAAP measures. call. exhibit performance to considered be Safe These as substitute out prepared like or measures I'd a included presentation of as this any for of measures is statement incorporated also and should accordance this our that should not point include part of GAAP. discussion Our today be transcript non-GAAP with financial in isolation in

International. discussion To please. Executive our X, this here CACI Slide open and to Asbury, Ken? turn Chief is morning Let's Officer of Ken President

Kenneth Asbury

this and Chief and the Limited, per for Bradford, Officer; our quarter Mutryn, Greg in released raised Thank Slide CACI to XXXX Last UK. good Operating Mengucci, Dan, quarter for you, everyone. fiscal and U.S. fiscal who our first results. morning earnings President joining turn share. Financial XXXX our decks delivered from the our your year. John record discuss and Operations; the for Tom Chief thank us earnings year we is Gray, full X Well, are net Officer; first DeEtte of Please you year With of We me to joining us income earning please. guidance President to evening, morning revenue,

contract We new business awards, awards will CACI, cover that for nearly billion of that of large XX% including $X.X also with to in minutes. few solution won several John a

lower Our increase a to net operational and tax guidance strong performance income reflects rate.

results am shareholder deliver ability confidence amount start quarter our and most to discretionary bipartisan and fiscal expectations passage Turn strategy cover the in pleased growth, excellent Slide provide bills. X, and an a value. our They the the organic of I very of XXXX, by two to spending. our government's forward looking CACI's and with expansion revenue First margin please. to recent significant reinforce appropriation support passed

in am I confident investing our infrastructure. intelligence and warfighting, national as modernization well addressable continue in The current capabilities, a industry. and our market. systems in as reflect of government's the law. three appropriated into Veterans be over includes In rest for $X.X quarters current fact, trillion amount Department That and positive result the government was Defense, quite that to backdrop, priorities homeland commitment within and us And nearly a to with Military long-term the fiscal of prospects year a construction the is This of Affairs. for security to as signed already our of appropriations security

CACI. the to Turn of X aligns well please. very capabilities All of Slide this with

invest providing members. to continue in benefits, our We're and additional capabilities. We for talent certification training team and

Tom? details and be and customers quality technologies of our leveraged the Tom With emerging across efforts call our quarter pursuing we for over that in addressable I'll for can are turn focused that, contracts to on add bids solutions capability priority the differentiate remains deployment, future to work. financials. R&D Our our that M&A gaps capital new and for companies fill our market. first are

Thomas A. Mutryn

you, good slide everyone. X. and Yes. turn Ken to Please morning, Thank

billion, than was million growth XX% revenue with meaningful performance and as for greater quarter cost Pre-tax at driven timing-related first the $X.X Our last growth, program quarter. X.X $XX was up X.X%, % income by or controls, and as seventh the quarter year, strong organic three organic acquired consecutive organic growth well items.

accounting quarter a year this due adoption the annual to in of revenue our standard. years First, our realized fees we percentage in new of prior greater award than the recognition of first

lower price $XX the otherwise periods. profitability. million fixed to expense for related created Second, quarter income to profit third, anticipated pre-tax first driver the certain than reductions X realized around associated by The a up actual items with difference award tax added three the income is which vest million, which by larger $XX with These the the between in in in was at we contributed Net and estimates latter driven parts. lower And date quarter XX%, by stock the factors earlier accounting quarter and been around at benefits would tax have accounting corresponding to rate. changes rate product sales largest to that subsequent increased The contract please. realized deduction. the occurred expense compensation. of related in date Slide a first tax

the at than at million $XX of $X $XXX This stock vesting in date deductions prices compared vesting. were range planned. September, range in resulted to the awards those in tax For grant our greater

sheet will higher was the as DSO we favorable a bring us months recent in accounting life the on final have tax to operating analyzing contract. we the Beginning due We Days we the and the to treatment transitioned the Turn to at relief compensation. as ended days, collections. normalized award confident for well activities $XX to balance which over outstanding Slide July, and Another new as trailing levels revenue AR adopted the excludes cumulative Engineering both cash the to million to of of fees flow disaster X. the with acquisition Navy executive the of deferral ASC normal are account. are for the Services and was still associated number bonus fluctuations quarter sales transaction during credits, of back related on normal debt are generated and EBITDA of $X year. tax that taxes sales-tied two of policies, activity due times. than with with of building $X X.X quarter net recognition We X. million changes associated foreign at closing XX XXX, Systems was we we XX income deductions by of July transition lower standard Center. in And legislations. insurance benefit And determination corporate-owned life DSO expense collection was The significant Shared the the of tax million the The the impact driven

by In line to results each affected item under was Form Slide how reporting new the XX-Q XX, in our financial addition new please. statement our standard. we standard, will the disclose

earnings that complicated this comparisons. million, taxes. guidance from and first help expect is our provided income reform comparison the year. XXXX FY was by and legislation. of recent To with we release to in performance a XXXX end, assuming tax GAAP XXXX FY The the effect for just the FY table full-year lower rest the earnings we performance is Ken the million $XXX As of coming an are expectations quarter and Midpoint mentioned, income the strong income for rest our raising per be between fiscal to now $XXX $X midpoint, We $XX million. net million to share the operating have XXXX better around with net is given increase and from year net legislation which in to of

in $XXX [$XXX recognized FY four. net one. the comparing earlier (sic) our earnings Let benefits, to nature. were year With Adjusting but two quarter would mind John lastly, least at one-time of two to the million highlights. which (XX:XX). fiscal second, of are the remainder better we expectations note And to flow through we be $XX a me items were $XX for keep which these of provides in in when items the here's be disclosed underlying million] And operating period picture two year. quarters XXXX, remainder year operational million last normally of increasing which in growth provide that, pre-tax cash same million items, to XXXX, of I noted In tax the realized in

John S. Mengucci

Tom. Thanks,

our Revenue growth quarter. slide and Let's acquired wins, extremely to please. to XX, first performance business plus-ups programs driven new I'm with ability deliver team's by such pleased go was the strong revenue. in existing to operational

also As strong. very drivers all ability expected CACI's first pre-tax revenue contributed acquisition deliver levels and accelerate was culture of Systems Tom Engineering operational to And mentioned, team's several excellence to Program business we were efficiently. reflects our These profit. of the into performance quarter. Navy as and profit our able of the

during billion new $X.X won to of Turning business to with CACI. record awards. contract about We quarter, XX% that a the

billion, year three $XX time total rate. greater Our and at backlog revenue current our years of XX.X% run at than stands this amounts almost now to last

addition, contract orders XX.X% out in last contract backlog its as very saw billion manner, fiscal greater the In government increased this than $X.X our robust we placed closed of on strong which year funded nearly a dollars, they year. with funding time timely by

we million $XXX a with we commanders the contract Army highlighted to solutions-based and $XXX integrating In developing access market and call. TROJAN provide technical Transportation signals million contract giving market, Mission the force battlespace systems During Army for joint initial that systems And and intelligence IT In several areas collection contract dissemination, Army that awareness. market, Command real-time. our award intelligence received the support quarter, near we during $XXX and in tools in Security with with awards to our again upgrade solutions Administration. platforms, U.S. the million information STRONG includes large a intelligence into enterprise a won better and guidance

missions. awarded award enterprise of to upgrade TSA's during integrate plans. and and important our market, the current favor support great give last logistics platforms September our And The cybersecurity awards current business. will protested We in customers' for with environment and quarter. resolved June systems This single reflect optimizing and innovate programs TSA's to in in health and into win field I million strengthening engineer a $XXX CACI integrate contract winning team technology during we're system. to our helping cloud. recompete and legacy support migration credit the recompete defense health These enduring to medical additional our be infrastructure, was to quarter, our to a the support of and will large a our new both in IT posture, the IT future ability

opened in Our Shared performing which Center nicely. very July Services is

acquired technical realizing in of have already our the Engineering integration and The been was capabilities. rapid Systems are into back recently We center initiatives people cost business. invested savings Navy also that integral

and deliveries Speaking about fully this mission contract similar integrated It commitment to several awards. during fantastic cultural and no business quarter, a that recompete acquisition, with XX the is match a new won quality. please. the organization disruption with customer has Slide and to

As to Ken noted, area we warfare capabilities offerings. are where architecture space, continue in open differentiate to CACI's disrupt high-end technologies. we solutions current to developing the in invest electronic is One

and as Exploitation signals This allows developers out intelligence, transforming XX, speed of they Specifically, in adversarial customers end around to RF line ability the we ever the to quickly, with a to lethality an refine new ARES, so electronic have getting fast threats manner Because identified. saw warfare technologies techniques System users Slide which build in developed fully develop directly approach requests quicker before. signal a open against how increased change is signals please. our Advanced than an capabilities delivering convergence agile we with cyber. field, to more need that is the called and are architecture customer as

and stands Looking new. XX% composition Revenue are at X% fiscal our business, the indicators XXXX, recompete remainder at X% existing year forward healthy. of

strong, submitted new pending of over opportunities Our billion for business with are to of $X.X at pipeline those CACI. with award bids XX%

those to than $XX We call I'll again the another that, With to Ken. quarters, over back more of next for new with expect over two turn business. the submit billion XX%

Kenneth Asbury

appreciate John thank and Well, I you, comments this your Tom. morning.

our encouraged long-term. Let's both near all turn by In and I'm closing, XX prospects, to please. Slide

investing areas of key are We growth. in

fixed and winning our addressable a solution We with market are contracts. focus price business across on

delivering and deploying capital we shareholder are quality bottom The levels We line with driving accelerate working cash on our to and Our significant M&A. focused is of remain operations long-term and strategy organization value. is generate profitability. growth that is through

With innovation Before I that, talent, to incredibly I'd the outstanding. Thank open questions, of open all. say employees. call is am up how Their to our we for like for our up commitment customers let's proud questions. call and the Andrea, you,

Operator

to now session. limit will the We one begin follow-up. and question-and-answer Please one yourself question

roster. we Edward time, Wells At If ahead. assemble Caso Please the questions, you And come momentarily may have from our further to this our first re-enter will question go will Fargo. of you pause queue. question

Edward S. Caso

sort on about the seems you the on the X% think morning of for over organic sort and bogie here. rising. like what you've talk market? talked number that, are? the Can the you following market what is a Good growth, is, to And the great trend trends congrats Yeah. market, do higher see but it I of X%

now the actually it? is So that you you're above Are in or organic? market think you Thank line X%-ish with do you.

Kenneth Asbury

This you Thank Yes. laid the is our we money thought X.X%. baseline FY market of into saw five-year look out was the elements for about the we the market, XXXX, beginning When addressable flowing question. Ken. at our we to the way of X% addressable

of FY nature XXXX on roughly the by we're line we of above XXXX line a that. -- the that saw addressable as We given going into money we way just rising see basis. item X% that the head into and item sort market a in roughly we're So

we're think looking I So good there.

are there that We've Over of come growth pretty of to believe into money fresh a long-term enduring accelerate turn procurements. opportunity. contract lot procurement will in on solid seen A the that. think of I fast this opportunities lot organizations. into new I sort and has time, and

that, continue So the normally did rates first how quarter we have in what we fact, spectrum to take I about a end our higher talk we I in one capture were, all by of over about higher that first at in were That's XX% of And will our point. for capture expectations if We the rates and quarter. the the of indicators for the levels higher to actually end of XX% work organic of we growth. that that pursue. drive

You point, but growth. see one know organic trend continue additional we could that's if that we

Edward S. Caso

Okay.

Thomas A. Mutryn

cash relevant were expecting I was And misspeaking. to I I add $XXX believe talking a million flow, in the we -- flow, I question. When is operating is let operating to the which script. that just not misspoke just $XXX of million me point number your about said cash correct

Edward S. Caso

you. Thank

Kenneth Asbury

welcome. You're

Operator

Sinha go question Our comes Please next of from Krishna Research Vertical ahead. Partners.

Krishna Sinha

talk what spread next growing about cadence first Tom, Can Thanks. products some to mentioned quarters. months, product your the prospect product the the is forward for months sales I in near-term outlook, into business, Hi. say some XX think be out were that just that sales expecting and XX overall business? the you in to pulled quarter you were you over the more

Thomas A. Mutryn

Yes. Thank you.

from becoming Just but definitionally kind to that commentary allow important over me this. part to product more John, our John turn sales are of profit perspective, more business an has lumpy. of a on It's

John S. Mengucci

sure. Yes,

which, with The think we deliver, years solutions specifically of business really Today, we've discuss now why was what focused is Kris, it EW, the about is and products and SkyTracker requirements growing. community in actually intelligence cyber. our doing for of speaking we're on to special SIGINT Most delivered only more today specific is customer. when But our the this like. work us offerings would and for So, we some seeing customers tough products the product we're we that intel are product. SkyTracker about something, are and units to our our that been are really derivative

of product my we're our our looking field, mentioned, of acquisition the fixed What you very and become one for offerings there, investment of the companies have end did a willingness those solutions. pearl customers CACI and very their spectrum of As the and and for presence will such rapid and would customers year today talked are thesis the of select that prepared who three booth at that you number SixX. to for we're we solutions the our haven't proud have do picking started listened to and the the needs. string are and of signatures change a to five that address remarks really delivery up most seen smaller both agility, future. deliveries change, last software back, We've be invest cycle but AFCEA events strong type threat we capabilities. end exquisite there coming has in we CACI doing investments, the wide as different the Between in our for difficult quarter, of years first those at had AUSA last frankly that over That looking definable, companies about, speed customers that about sure in they years technology of when price, of our CACI within were lot been we've

those see we're the and would XX the the the we customers months. the and and how years that for that ways earnings our and would making grow those to well revenue our over As out of Army and looking shareholders. over we products number Navy as were the from bolster are certain investing been faster, one will extremely for five getting expect solutions to the field Both of last the roll-out, that proud we've support that of up companies,

Kenneth Asbury

Yes, is Krishna, this Ken.

up ticket the is well. as think I a bit

determinations people more favorable a how which As capabilities but largely of much tools. use that this at buying were has been makes of the hands which And were certain some you enabled. law, have about developed. explore of using these services a John now laws lot that environment use creates it they to products our the because needed necessarily governing to There passed been be – for into of not haven't far these their in point, main customers special mentioned, the

was be there used of a a provided of recent kinds tools these the to Defense reauthorization domestic a the for to level. Department then authorities And on of the lot more great gave of activities. NDAA capabilities bill, us defend passing FAA So, in deal

period it things part But time. grow over of of required see could in business that a them to expect us get really hands that them. our people of help to we So, use those the

Krishna Sinha

down budget get did that $XXX cut about shrinking, in -- you on what defense too. you're Administration billion. that's time, a terms Administration you to the then an the cut has policy can the you environment? come come We and about what talk about your budget And Can they should that in to hearing in ability up did would but out of preliminary the billion to Okay. talk earlier budget think defense be this with comments maybe environment some year down budget come the Trump about now bring agreement $XXX positions in Trump a grow should

Kenneth Asbury

Well, -- I think the that's question, for and recent thanks comments the really most good one. a

on about. the in to Either think the Defense can I year, year, speculative, happen about going billion, over much about have we're to was to I'm budget tailing the now where it a haircut. and four think the XXXX, side I civilian He's that's of – billion the to both $XXX market, of so than of real in to what O&M on we ago and beginning what neighborhood, cycle done, more one. There that happened what we still about us $XXX things steady-state short-term you XXXX two we but not think side talking quarters talk desire for some of we're impact But stretched believe, have wait it Shanahan of that they're capability think talking and it about the seen Tom it's get doing, order we're more billion, at. was and we'll working result where was not I as would through as the I've years December. of Deputy side happens if FY of the sides I – XXXX. off I that's readiness I we're XXXX could right heard us, difficult of a healthy business. profile. I This We'll looking on and strong XXXX $XXX I to may RDT&E organic plus a budget that's see. billion, see time, know think would at very agreement of to ends billion, a a get But years. OCO. that see But and $XXX development, on We In don't $XXX it happens have sort a suggest like see is And POM as XXXX, as submission. an longer. our earlier, billion to we'll but halfway it of between added the know the sort agreement growth to that for was we're it, we things a and an have $XXX returned coming review is up Where the way, seven the talking just out defense. DoD submission, $XXX tell the get there's be of to where going billion a world, as Secretary up. of come I that a last for ledger budget it is in near was we've healthy three going Congress. of investment all forward. In enabling had have mentioned proposals mission

Krishna Sinha

great. you. That's Thank

Kenneth Asbury

You bet.

Operator

question ahead. Our Co. von & Cai of Rumohr Please from next go Cowen comes

Cai von Rumohr

you good quarter. Yes. much very and Thank

and push heard of into particularly funding quarter. – flush strong a the this very then of a we've in the about some what to issue the year, basically next the services normally because of we're at which the ability strong the some usually budget they was have But September is you have. that quarter kind that year the don't and So have end agencies

market? the color on us you. So, of you're maybe what general sort and seeing quarter tone this the give Thank first for some of December

Kenneth Asbury

is more strong the we We award that regular being. of into Bipartisan of in of the to and because industry. the general, that quarter, across sort know another Thus came very were already we've a the see I that It full to one accounts September to in a months heard be some and awards. we've see for Well first the we way not saw appropriation a of be we're side, won scheduled Cai, flow out. far, think things on think nice Act the the least XXXX, from entirely able more pushed seen, It where I let's since but Budget CR. to – had under we lateness the got the set at year quarter, do how plays couple time, DoD certain December in we just remains go to

We are under for it. of pieces a CR other

has so, December they our And that of able that We're right an or things X, But are with effect deal whether now, kinds we're whether with to happy won. remains to happy work by we've the that that out the seen. be have flow. ability won to

we've XX% FY I've added I think point to so CACI, data it, XXXX. trend mentioned got I but the one from continues, we've base hope new of that beginning contract about

Cai von Rumohr

in in above kind expect And you quarter, XX-year bit up sales little below is of to average, X.X? the was to historical from pick a awards Do below your its, the the quarter, actually the the your December Thanks. in September quarter to funding your funding think, sales line, but to I little were average. well XX-year, a sales

John S. Mengucci

nothing revenue as revenue evidenced backlog. by is two that very would funding, the impact a any strong think through don't funded there we our I increase and rates. see way quarter the full mean, four the out Yes, we first look more it quarter changes. quarter, our has I large in I mean, in incremental budgets There's funded growth is than Cai, what at this funding John.

Cai von Rumohr

much. very you Thank Okay.

John S. Mengucci

You bet.

Operator

next Kahyaoglu Our from Jefferies. Please go comes Sheila of question ahead.

Sheila Kahyaoglu

morning Good guys. nice and quarter

Kenneth Asbury

Thank you, Sheila.

Thomas A. Mutryn

Thanks.

Sheila Kahyaoglu

percentage what the yet for at new in the given the strong is I think we win, to larger recompete is book revenue can of the if of remind revenues still there contracts? about and from rates, was order proportion win impact wondering backlog percentage and a What XXXX moment? how us profitability you and is

Thomas A. Mutryn

execute – the were at Yes. to believe area strong, another which That aligned, back market the managed a fully, were us were as has awards QX. Sheila, aligned, got mentioned it we're very more awards of XX% we for for We've relate be or guess market year, recompete XX%. was FY can given were for gone existing we ready and new amount to I'll mix being revenue in from we XXXX at XXXX and revenue started to equivalent on. at business, look but X% so our or business civil. of it He less that we fully If still I the of that that our look When point bottom-line, is FY XX% we our our awards our less go when new by won I of means to our fed, the DOD whether grow in type, XX% of guess what XX% how it's I or that the function area. fed mentioned services a Ken solutions. award for is won profitability, or

So, professional types when of of risk those at we lower look with higher margins services have, of business that come the of both contracts mix we than to that engagements. some tend

with look mix and the well out, both XX at the in level positioned and hit type of between set, FY growth awards a and XXXX. comfortable the I So, points over profile basis if very very QX to awards, strong XX points to customer performance basis our of bottom-line very those numbers profit going of

Sheila Kahyaoglu

one solution that? on you provide are there? some there elaborate then customer for mentioned. just for competing the Thank Is you few, more could you who a that if ARES with on a color. Just And maybe color? the Great. Can you you

John S. Mengucci

our some probably when out too There's it today, say Okay. won't cost-plus development. competitive as Navy those, most that. in looking larger But well side, special that are systems folks there the Navy. forces suffices so ARES modernize large-scale there much we product, of Yes. that the have procurements the to that the X-year Army as on X-year is field that are to to out to time X-year see of today, are the and focused on On up so the come on deliveries I some to larger there at

– faster agility, If comments is made you more ARES looking delivery our can customers earlier about. our software back for relate what that is are I path, all a the to what That's definable.

also believe unique have EW our out algorithms in that smaller are We there companies there area. strongly war the that some can fighters that help

deliver, a and other So in. immediately ARES solutions in those we that can we platform bring where can plug is

as So X-month and lot of develop signals, field of rapidly X-month we're a new go attack have instead algorithms those. well the in companies, a to bringing a platform regard able ship in tomorrow's Navy can to do upgrade small to the as to where ourself,

So, pull type We'll a and have we'll of it's and manner. those a of some market real look competitive in source deliverable. sole the down to shape breakthrough to try front-leading procurements continually

Sheila Kahyaoglu

Thank you. Great.

John S. Mengucci

Thanks. Thanks for the question.

Operator

comes go Jon of next Please from Our question ahead. Citi. Raviv

Jon Raviv

morning, good everyone. Hey,

Kenneth Asbury

Good morning, Jon.

Jon Raviv

could the you target update on XXXX. EBITDA just FY margin Tom, for us

higher sustainable obviously you bit about think better time. sort over forward? your to then upside talked X.X% thinking low had know, talked double-digit that. than that I X.X%, And just of how about previously talk going you've but Ken, guidance implies to a I is

Thomas A. Mutryn

Yeah.

several the kind I'll we off start you. spoke with key of events XXXX, I outlook. to one-time times. some had different short-term Thank year about Okay. Last which

was of EBITDA margin goal normalized XX points the excess terms in in our basis margin. FY to XXXX And the XX so of basis was in X.X% points for mind, that. And

range. bottom higher So slightly end increasing XXXX, top which the particular expect of end, the we would range without in FY that our margins. guidance hit increase to imply did We

of kind to those of around points the basis improvements. basis XX be range, XX to consistent should in we points X.X% kind X.X% So, with

Kenneth Asbury

out ourselves be a on profitable it Tom business time we probably our kind Jon. we on We're if really us this points, every math. us of – still and we things position talk is it but what the incrementally at we're margins, line percentage business be drives gone lot job is the really think long-term how to manage strategy and to But and of quality the EBITDA business is, I do points are it looked We top of growth. is not that commitment The But, that about can that itself. of higher line. important chose to are starting each basis years number growth a is What's driving organically, things. Yes, you high withering of going you few depended a on that a to margin services of know, XX take this, far deliver top-line the a drive have of there – here more putting is double-digits. is saw both from to the to could is there. to will predictable to get able we We -- get One horizon it the XX John XX%. on that the can truth mid the see to how time bottom basis and I of there. deliver show point, in work to aspiring basis get do looks at discriminating I away and in just we that and

we don't market things want that is, growth except all a what with about but some haven't market bottom the want and line. X% number the it bottom is I adoption point plus sacrifice number, across activities of and such And talking point of huge that feeding addressable at So the lower growth to part line. X% happens and that addressable do in just talked the to all visualization is John which is XX-basis growth about a of our also a things XX-basis to to gaining top-line as outpace above top-line still analytics while, and tool

Jon Raviv

-- we follow-up, when just of as I let's a money going Thank around kind asked we've much lot is it. you. having But system, obviously about through just like visibility seems the have that's a Krishna there you that budget, larger based as do the noise take well. so it think then far there's of know And industry so time far? Because calendar had on exceptionally what you actually an on well how done has perspective, from budgets talk the XXXX gone

system, the how sort that have we for much runway takes flow of long what's So your how sense goodness there? through to

Kenneth Asbury

Yes.

of So, tend inflection declining kind a up to in years Defense. the national the years. back five the emerge is to national at begin of that looking into environment our talking in great then shifted and change and of at to which to has power from entirety not all the Those points what history, we're Those decide chunk seven When the Department year, to identification find almost you we a that I about to sudden, a counterterrorism last talking emerge but need cycles of second competition. the moment, you're X.X to where mode posture you – ourselves behind, from a budget, and it past, when in budget years our for policy. and maybe about of a defense security

leadership from of capability things other But external so, when three looked palpable and being play the don't need is budgets near-term I at a are we addressable that real And understand rhetoric play our of is Department market that these behind up. and certain concern said, the services we and maybe what part joint know out, of and kinds the folks how understand two are in I political. of on – to very external communities Defense and we in that an of the really the nations the is catch activity the fact there intelligence all the using

out position play we'll a that see will think think the than continue existential We for rather one. a have FY weaker but a a see the maybe we thing, quite not bipartisan there politically I is this would to right some pointer, the think budget than the time. to Department things place XXXX and don't I of and are is Defense more cycle was it's dangerous bipartisan contrived of less, point agreement. real sort become threat And we I has I historically. as you been also this it's in world for recognition for how that a and but

John S. Mengucci

new or at also a that markets out security the our they're our delays additional wins any of specific, . another how Hey, that the getting to I funding see of more time solving in in programs is Jon, the solutions putting – some our right orders We CACI money indicator back add didn't quickly and of based on on that's issues. the right any we're national QX on and more to just coming scope Ken, the with might funding to right lot us

Jon Raviv

your Thanks perspective. for everyone

John S. Mengucci

Welcome.

Operator

comes question Our of Joseph go from next ahead. Please Stifel. DeNardi

Joseph William DeNardi

morning business is or mentioned at everybody. if valuation is Ken, overlap? Yes. number you one that one deployment I'm of you can you. terms from M&A priority talk being what point, more Good has commentary number there in what for, maybe capital capital held the Just a deployment specific is this it you looking about wondering any just standpoint. priority Thank primarily, back just you're there. the

Kenneth Asbury

You I anything us bet, held don't think Joe. back. has

made a year if couple already contract. of this three, I include maybe think, or having you acquisitions

So, tell have and I we're very discriminating you very we will process. a active

some before. getting described new market areas of to a that of way win -- customers before, one ability we acquisitions or exquisite strengthen was our market into either business John also of acquiring we've when went to based-strategy, As of and as a use we skills to part is how our describing building, we and went each the pursue

to strategic we went strategy point than CSRA, I from to compelling we business another we out very, But have had, that to both wonderful enterprise that well that will cost some fit of broad make It looked not a after that like felt took models away. decent the in view, it of it are combination higher our a have when sure But with as we make plus. very our mission was profitability a it stable the things went thing building have now of our be that. -- a was we variety us disciplined. We generated very we much they return, transformational And of technology out, backed couple neat of of lot from we the a we We as When but developing, an that sense. had actually to to they look financial that also had of very we're saw premise. going thing. a bites capability, because financially at, point

sales And we never that going so, buy I sake. you for will sales tell were to

strategies fulfill and that go but execute could we're as without on things into we make specifics, our better speak, market able until tell And active you. We being say. won't know all that's will and I we you to

Joseph William DeNardi

democratic-controlled house, up. goes to budget. one And just what as rid that's spending concern sequestration looks like FY but a maybe a likelihood helpful. there's Yes, the in Obviously, on of little XXXX, another of of the then bit getting with

impact spending, could terms wondering longer of term resolution but business, on between So, flattening if about the maybe you those the two of I'm just your sequestration? a tradeoff in of a

Kenneth Asbury

current billion numbers, $XXX to from estimates billion. go raw we in Well, could $XXX of

if talking an DoD use billion. XXXX, just budget $XXX caps Let's as I example, the come we're in think about back

Congress smart can between and there works it holding House defensive capabilities. thing a because the and is about allies be without that either years through of single we've into that party a of instead protected. we've the know, we And the every There that's combination XX it, it change for to sure been that's reclaim intelligence obviously United may been possible. it Senate for of -- So to at House to at invest side speculative. really which and States is on one urgency our are But, humongous optimistic people entirety in getting are a that change the this to that have of the certain industry. politics that perspective be don't simple of country I the in think our order I needs know what one and going don't overwhelm is the from better I'm is even the different just change more party to make is that all. strength safe

than I think will that simple partisan more politics. be important

Joseph William DeNardi

you. Thank

Kenneth Asbury

welcome You're

Operator

Tobey next Our from Please go SunTrust. Sommer of question comes ahead.

Tobey Sommer

Thanks. based your on sit relative in years right years? to Where to in company, emphasize be you to work. Thanks. the serve estimates five of and be the compare five that or contrast of could to market figures couple I it now solutions and hope percentage you think wanted And years? is move you the where kind and work things to do with where with three your a in if of those kind might get fixed where you and you more that perspective of

John S. Mengucci

Yes. Tobey, thanks.

where I provide, XX asks little we saw and a provide that and call, tried SEC and when commercial when in did So and given civil we growth around our XXXX at we're the believe, guidance because, of we like sort to price, it that. clouds that plus us transparency markets, fixed Tobey, look fed frankly, we more to DoD measures cost

enterprise our did IT. call, in was talk and systems services area. systems about then, we logistics area, our And we readiness guidance intelligence market, During reconnaissance retail and weeks the surveillance and our business and our market, couple said intelligence our next

systems everything talk how electronic, come do bit systems and area, to a do into markets. government that looked help how goes those the mobile consistently In and refreshes, domain, services supply them So the our those type majority we ways at chain targets think whether with the the intelligence area, analysts, targets, systems, we our our how action. up data courses in quarter, awards and the find percentage cyber a awards In which I four we on If think of within intel first clearly. revenue our folks large and we turn areas. little from they're about those threats. intelligence Business in and the pay, of personnel, for they're on find came IT fixed, what do knowledge the of we mitigate whether whether enterprise then into knowledge EW customers they're

but managed one the looking and in. played find by look investments plan, at mostly be growth not increase, margins those space And ourselves back would long-term the we're type expect with far, solutions is for state, you So, to in and accident in look only at strategy as timeframe what us. Ken where from done, help. you systems in that's needs a the the actually we has Products will all Tom programs, growth, long-play If area, our and But August continually in the to come given the by like of early we earlier shared we've out. services nation area. that this if some question, we to larger so quarter going but we at acquisitions intel

it's cost in customer that, mix all, are program fixed quarter-to-quarter, macro It's usually at four the plus tie the this type. the programs uptick on. the an also those changed needs and where because to But So, the price Tobey, so although I'd the that government or came we're level, where nation focused the is majority to spending money, of markets, that and changes from it's and really end their improve. of also

Tobey Sommer

Thanks the for also all ambitions for market you to that bigger – color. think do I solutions the as are probably growth. to opposed than quickly interested your follow-up guess, understand growth, the company's how know, I'm which is a I for growing Thank market as you.

Kenneth Asbury

Yes.

I think – Tobey. this is Ken, you

world of doing. what depend view. is capabilities rate and they thing signal can if lot a mitigate whatever you it of Department understanding than from that talking than it to trains, collection, officials how get to could signal used new – hell their being need point you Defense, which that. a the for are we're using were. believe deliver They in those. going and got we be can do a to do world signal trucks going that they're that But They're an on of able to to all to that acquisition sort kind that the to planes, use doing what with because ever system acquisition that to you to XXXX.X able understanding they and listen the normal that that you in involves acquisition look solutions happen the about, of the faster that's don't faster think is signal at, words That again of is they does, of I

replete and Navy need the field. at being AUSA through look in now the as portable the put Army capability is compelling well. floor, do of looking one to and about we're able They RF so, they – That's in grow. be using of about development we're people them that kind So, to that rapid at to the the see to needs at and John that's OTAs almost showroom backpack continue was like going that. that to market analytical off we they of our need is I talked the systems. – to buy sitting things what and think can of urgent it talking right – about, part where It and X wanted had the and

Air certain kind buying to and a last where them week, prototypes other because still they it I that using get while, talked it, of needed I and will they to We where satellites rapid noted – needed about forget OTA the not was capabilities take than phenomenology. test it'll into was read Force space

where that solutions the of that's where think indicators to So going is forward be I headed. market

John S. Mengucci

ship, part they the placed to as tools point. a trying Hondo of the your the move leaders and want to you and if have side, like Geurts EW last know against a that the you XXXX Today, on the and requirement Army Army and case Yes, a system to the fast Tobey, Navy buy, threat, in are they handle on DoD is three-year to in delivery put his acquisition major to better Navy question, modification peers can they as are be the X.X-year working cycle. to what get acquisition that to a

delivery Mr. they're listen peers, and talking cycles. Geurts to his XX-hour about If you

insatiable up catching deliver that. Do community to have is So, products? to the and an I that Yes. acquisition think appetite we solutions

same also desire to get level of customer insatiable have who a We that them. has

are last and and having well-planned through I M&As, solutions agile to to having the company as outstanding, by – think quarters buy ink say, notch it's would not We how the outstanding over as and scale, by products nimble agile Ken gotten nimble we our as top look a around and can are defined have built folks, and we two the our systems I portfolio government those, coming that. is more mentioned. acquisition being the shape defined out

months, that So, months we next those within will, curves two believe cross. the XX to XX

Tobey Sommer

much. very you Thank

John S. Mengucci

You're welcome.

Operator

Capital. comes question from Vafi Please next go ahead. Loop Our of Joseph

Joseph A. Vafi

RFPs of RFPs that bids of the It ramp where morning. submitted that materially. in amount that is Is market, is you the to some in submit here in on from. coming casting, net going that a intend Good more mix Just product or maybe ramp a more bids broader function sounds to results. guys. renewals? you're Great perhaps color pretty Hey, the

John S. Mengucci

This Yes. John. Joe, is thanks.

I think bid been leadership bid Ken's bid and to, mentioned and less, has and as we've as more, win us larger. driving

clearly about move talk in an bids, see question, number because solutions less earlier mentioned time, the dollar we we of actually is support as on we'd the and in to reality, both we forward like when value, space. dollar us growth. So bottom-line of I such those markets. are have four they Over top more values that

our look XX% our recompete A Some awards, the is bids we recompetes managed our waiting The a X% and to company. have that's us. a four awards be of to They that, another show and in that only are of through indicator in six if take often. of And that about statistic data, as advantage of which are those we next types for less our where responsible for far awaiting list solutions. as bid. services contain in measure nice months, at you we've come recompete of the these or is think a programs –

business and next those that And poised towards to bottom-line So, those recompetes, percentage those funds very ones. very winning being of and to new means months well and it B&P growth, like recompetes more and on we're that four areas mentioned, far months. a the the drive going winning is markets we less we larger small spent six in I that forward in help top two most looking what nine fact have

Joseph A. Vafi

Great. headwind to Tom. tailwind or How top one Thanks line do the a quarter? the just And quick you a see for the then, in maybe lot.

Thomas A. Mutryn

kind year, the Yes. Thanks, a the big – business. we're as variables, And into it's of the Joe, in new gets

is there's things less can those and major is unknowns. true for if We kind our the and X% we not bit more there's And as are labor, sub of of win variables. and On-contract profitability down to and revenue, in to us, quite adds business of increasing work converse important growing always the our rates labor quicker to we're new that of start quota the or converting to a successful. kind protest CACI be we're kind and of successful programs, existing certainly kind extent approximately Then the slow unknown won executed. that have

As we take revenue the capabilities, upside potential capability customers potential and to have, quick reaction some would government position which that provide offerings ourselves to for profitability. to the there's looking -- have array we of solutions advantage the products for and upside of

Joseph A. Vafi

Tom. Thanks,

Thomas A. Mutryn

Sure.

Joseph A. Vafi

Thanks, everyone. Good results.

Kenneth Asbury

you, Thank Joe.

Operator

question of comes Josh next Please from Seaport ahead. Sullivan Our Global. go

Josh Ward Sullivan

good Hey, morning.

Kenneth Asbury

morning. Good

Josh Ward Sullivan

some spent You here whole of software. commentary time hear talking lot as response a importance about and the we from of industry agile a defense growing about

software do talked Given and point? visualization it competency analytics CACI, is a at you've exposure a and core capabilities frame about bit little total you of tools. ARES this How your

John S. Mengucci

some of just and engineers definable, our deep SixX finding does a in you business our doing a Josh, of data When take throughout customers. AI, software few system, exclusive in learning what we've I an to Digital what solutions taking across background. we're -- scene, bench engineering have geolocation software, doing is applying some a Signal intel very solutions. – algorithms X that bench large of and guess, software Austin we engineering us it's the that other makes delivering knowledge of device, background types and acquisition of would our is in direction we're and both internally that what look a machine other Processing sets really our all deep say electrical SixX, been at whether And and mentioned it's it's radio, Yes. both I a a markets. our those Ops in and A U.S. that our our

disruptor So, providing products those these almost that able types to firms differentiator traditional to to to to be anything frankly, have skill and defined a of software the today. we the depth which going is and, are sets be deliver solutions a

intel go devices on of not buy where need -- buy have new which not production and DoD our a to our out quite and don't that's as our so software having use can just need, things need. iPhone iPhone, time a I'd today on are say hours defined days, lay -- new less for and if have at us. missions devices can and we it long ICE customers app put if that's those more you we're by to by buy But word, Imagine mission-focused to many applications talking want our to time. applications, is as So world that add we you DHS customers a many, mobile a customers, about not every we to where once at you are this I years. what their disruptive definable, look look facilities, it and folks there customers your you and our by very who

and software skills So engineering here deep.

capital of always them, in work keep into to national our As allows really out great like cities us with another there, us able thousand to being says, the outside Ken direction. region, find that to move moving up to are we'd talent by this to of are have the continue great, able yes. different But demand we actually allows

So, and program as M&A of we've what partnerships us on hiring, our combination internal our done well or well-positioned. recruiting investments, a our as have very

Josh Ward Sullivan

through you of still Thank this operations at Are there capability some point? at answer running Okay. the Services or up detailed XXX% contracts follow ramp of percentage the the as a what on a for And there. your some Shared have form just there? you then Center, center is

John S. Mengucci

Services we're Yes. Shared Josh, Center. thanks. about the I talking guess if

initial an this we're means have is possible. of a about or support went something transactional transition been that processes Today, believe which programs City Shared company, all And mentioned, so contracts, are through we every what pains. about of the already Shared And the and it's startup of are one something. to X initial we our our last doing we want not In XXX from in turned functions... But any who Today, was Services we office Center. some outstanding. every First, that invested as challenges program last entire safe it's its hasn't of company driving Tom growing Shared being invoicing back capabilities. as really people that that work our on Center. as we're been frankly getting to Services been and building such over there there. Center where those say the quarter. December challenges. Services which through on-contract this if and opt to empty But work I that savings, had from a and providing, made of but fully I thank people transition purely some Since we're is without teams with finance, share the recruiting has collections, To XX% It's there may, the our the gets items to us nice with CACI, to think that at in Oklahoma of see everyone to some buy

Thomas A. Mutryn

Security processing.

John S. Mengucci

you, to direct we're not security programs. any center. really But, from direct, Tom of -- ...yes, are build this that our support our all great a doing Thank and work processing.

Josh Ward Sullivan

Okay. Thank you.

Operator

Sinha Krishna Partners. a Our Vertical Please go is from ahead. Research next question follow-up of

Krishna Sinha

Hi. the Thanks for taking follow-up.

want just talk strategy. about to I your So, broader

to have we've struggled the bigger? you've addressable get continue winning upper it Obviously, there not sole to or do driver. outlined customer make if something shop, of too there's that seen deals think limit to beast. you market the M&A there if is sort at mean, one how of you want you point as is get with the a bigger, large a XX that stop history. harder we or getting out guys pretty grow I'm I out mean, enough you're some I CACI you're we guys get as feel to I an says, or we sort that done mean, And that, there do and services is larger provider, out XX-plus clip, XX at figure to Thanks. enough when you the back you bigger, grow of to growth steady source big, can as all? want it in like a for You've can about that trying you a as feed the to there don't corporate follow-up if is get? pushes peers key they've go to, does a do to and that awards signal

Kenneth Asbury

that Well, an for don't question, the to you can I get. upper know the that size we Wow. boundary Krishna. thank there's

really opportunities do think are depends it on and strategy the I the to that. what

now is through that now looked continue that period loved gone but priority sense been ourselves transformational regard shifted. in been now. was position have I do it a market able for the things We've mean, XXXX shift, to the could quarters. our growth. of at organic XXXX a first it XXXX, the when Our I love other right and We've There that accelerate they going to we find might that to tough strategy. couple things our with I didn't we to have have transformational. picked, make seven

driven. always And strategy so, we're going be to

our than with homeland look a that and everything decision the is increased than machine machine more that Center been that defense point do faster think time, on it the the and of now processes people the things. about decisions we other human right Services and whole parts this never implications involves and the Whether could part of need Shared to has across in assess machine job, that's could tying those At that's to numbers, hands, be making. world. help biometrics really and able about some our we look content coinciding and sort ago. in we And and has caravan or where numbers. the that different we intelligence a they we do faster of loop, make of a a make analyzing I in time decision lot can our communities robotic and for and that's going lot – weapon the customers. And shiny situations business it tools systems do huge being is security spend to of see underpinning where about customers a object maybe the that to it interfacing object before. that automation making then these the And And going with the our this doing do talking before, the human one there a the in to us, relevant all the with it of they we value that is is I this of from process thing who at what that this were moment – a we're and something how coming ticking we more more let do for think we're unless shiny consistent is next already with of

we decide you're geo-locate that and little that to our go in you on need as to a defensive but be but you and in or of limit is the future, that's you a applying boat, now. in vehicle, position where whether the grow. something to then Sorry, one to being there signal human lot identify tie I identify know see a particular waxing poetically, automatically solutions thing to are don't that's plane, It's do then a can our could carrying we signal, intel of that offensive. what on what kinds things space, could we're able a and a to them you Those what ground signal capability you if an

Operator

question-and-answer to to back session. turn our concludes any would This for conference closing the I like Ken over Asbury remarks

Kenneth Asbury

the for available questions. on who And through webcast follow-up like of their onto you much thank through you very in call. day for logged and Thank concludes help week. Dan Well, thanks, that the rest know today We you have your thank are well. Thank participation and Tom Andrea. day, your Mutryn to would many And we the much for good call. and everybody so you the or for as CACI. a have This the so Leckburg calls our interest of

Operator

now conference attending for concluded. Thank The you presentation. has today's

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