CACI - Earnings call transcript Q2 2021

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Operator

Good morning and welcome to the CACI International Second Quarter Fiscal Year 2021 Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please also note, today's event is being recorded. I would now like to turn the conference over to Dan Leckburg, Senior Vice President of Investor Relations. Please go ahead, sir.

Dan Leckburg

Raphael. Thanks, everyone. morning, good And Dan Leckburg, CACI, this Investor for President Senior I thank Vice and us of you Relations I'm for morning. joining

slide statements be as providing let's historical factors that our Those facts, are that slides, differ views today are could such, filings. our number law. address the to X. to constitute These as and forward-looking reflect of We bottom to anticipated. do not are Company's actual There press current are the materially in statements at important presentation will and this from under night's call move so release, factors subject listed results SEC last described cause of and statements in

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

To Let's Executive up International. to CACI Officer please. and here open Mengucci, X, slide morning, of our discussion Chief John? is John turn this President

John Mengucci

the us And me President results of everyone. you Dan. Officer, to Bradford, Greg Tom Limited, Financial fiscal UK. and morning Thank Thanks, Mutryn, quarter CACI discuss joining are and for morning, second this joining our With from us good XXXX guidance. our who's Chief

slide to X, turn Let's please.

leadership them, with be of Jack was half firm and national this Jack greatly. wisdom, Before which He and want of with continue recognition century, in mentor, will the outstanding Chairman, we all work on greatest ever joined in company's a and I let's among CACI in into $X I teacher, from all a and character. billion his intellect, that Like integrity X,XXX day of successes, be deeply Company. valuable company our his behalf [indiscernible]. the culture that and I to to and our and of for Jack services a for technology as it. doubt needs World's helping leader, London. ethics and security do. our ethics, professional success to his would and a experience to us, Executive as be character Dr. XXXX example Jack our start, we With nearly want good and to act revenue, but leader, of always CACI's remembered to a good many chief to Admired grew Jack our visionary us. passing author and do the X people. is admired CACI all small will acknowledge customers as country's of architecting friend, that, Most XX,XXX of support for will Fortune There country, in vigilant guides employees us and legacy please. no miss Slide I get Under

over X% fiscal cash delivered compared by than and by more net year We results, and growth, significant quarter again second profitability our grew share and to Turning a income flow. per ago. 'XX earnings revenue to we XX%

technology to expansion. the double-digit margin In on strong our business, we side of driving see addition, growth continued

temporary environment, nature. improved cost this COVID Our profitability we the as latter in in benefited the or from mix one-time well continued as program efficiencies as view

are, competitors. book examples and our level previous million a above the growth to times work, awards X.X and only XX-month operating recompete cybersecurity These quarter. with what important A Slide $XXX of not flow basis. This strong previous of cash million of include previously includes contract recompete with number This few and X.X contract is million. typically by of won bill seasonally free of signals wins, mission supporting on represents missions. awards, of cash existing the healthy NSA, we $XXX please. quarter a for $XXX in six it awards $X.X billion generated intelligence trailing light a We Lastly, but X, times flow run technology a performed work a rates. adds a

our relationships, of expanded a support community, program which scope contract. we innovations the and the scope to [ph] performance numerous deliver to on also additional chain margins expand modernization elements were include web-based cloud initiatives. deploy IT to SAP Force and enterprise great with business on able provides cyber also technology HANA which contract We supply customer migration, to work NOSC And Air and network AFCENT higher supports

X won expertise example from work Navy please. CACI of engineering the our Navy's acquisition. Engineering military representing leverages mission sales, long also supporting to our expertise another of foreign history that providing the growth. the expands business yet future Slide and We Systems program and strategic This driving to M&A is Navy new our

of As are need to address ahead critical our nation's CACI, and we can customer we've we at before, investing customers most discussed our ensure priorities.

faster and also lowers by is characteristics, radio communications has or to Our technology at and well in can forefront and on power for over CACI's range critical of intellectual execute millions laser of half future systems XXX frequency probability distances rates developing space is an hundreds data their able defeat with laser and opportunities. demand miles programs. dramatically drive positions laser up customers CACI for technology increasingly in to property, of growth contested wide domain. generate lower and a communications a shareholder In value. enhance CACI large high times the the of to dozen space technology. customer space receive deploying developing than CACI aligns our is which our size, weight technology currently detection transmit the communication Laser space systems. which communication adversary traditional to domain, missions next the of value is competitive the communication generation long Laser differentiation

positioning successes please. on and used near-term important demonstrated Slide missions These technology space space-based domain. technologies continue Our communications believe long-term growth to also this areas critical can be us applications, in X initiatives. communications for we laser are for will secure terrestrial be well

threat we As market, support a very new especially and of bipartisan addressable environment, sentiment. large invest we optimistic. context their defense that for fully heightened administration priorities. $XXX be security funded, over visibility our our broad key in There has look the remain XXXX global now and billion, the spending, year and for continues in is echoed national growing fiscal to customers to that providing Government at

see that defense engineering cyber, into further we business a Looking number benefit, budget, health including specific will counter-UAS, our of Navy work. our the areas of and

details. few a you give me Let

includes increase includes that for capabilities funding special DoD-wide operations forces. First, the counter-UAS procurement the budget

the cyber mission was We including also includes our X-MADIS for opportunities our AVT defeat swarms. The fielding creating in in for and technology benefit Health critical our up medical which systems. Operations, of counter-UAS deployed in RDT&E for potential also worst will is opportunities HALO the continue These Assessment mission some during hospitals for capability funding or days to of work increases Health program, CORIAN increases It for increase an see budget 'XX Army create CACI. Cyber fiscal on for our government next mentioned COVID-XX year invest The increase our army Army theater funding of ground funding funding I early Defense also field funding crisis. counter-UAS important business. increases the for an Lite HALO, our record the work will increased system. to RDT&E country. government customer in to set increase our for areas the systems, hit technology, pandemic preparedness a our This the just to Command,

the a Finally, multi-billion dollar programs. budget Engineering which shipbuilding Systems our plus up funding, benefit in Navy will includes naval

to budget priorities to a models cyber, confidence financial result that well initiatives, ability call due our of We to gives cyber disbursed priorities and and COVID-XX, events. including be in as flexibility, high environment. have We've and Tom positioned nearly that, over long budget performance. other margins I'll With on to grow how our years. through in addition provide over also we history IT turn believe Tom? as to resilient, been to This, be over this more any aligned next cycles must to broader in the technology, company's several funded to purposely continued modernization our us business recent the to as details defensive continue many be operating differentiate speed expand market the

Tom Mutryn

Yeah. Thank Please John. And you, turn everyone. morning, number good to X. slide

restrictions excellent travel of $X.X slightly The with second Section quarter we to deliver We CARES another a growth representing million the had Our continued our was chain growth the and quarter and margins. COVID half. $XX within of overall on higher than some X.X% half we saw simultaneous revenue deployments, organic expected, delaying million billing we latter, to generated but estimates. as XX in higher quarter increase first X.X% full-year We additional in deliveries. growth profitability in $XXX second realize a product to our impact disruptions to than-expected of overseas XX billion, of Act supply expect commitments. remains and related

For million, was about the quarter, the resulting less growth. revenue in $XX impact COVID about X%

was almost of XX%, you of the expertise enterprise As revenue second some are year, while with grew revenue last know, awards. we quarter driven and essentially year's enterprise disclosing by technology. revenue technology flat, last Compared technology by

some XX% and COVID-related XX technology and as was in fixed EBITDA the efficiencies of opportunities of And Indirect our which We the cost in around year important XX.X%, were in million for and additional the pre-tax we benefits customers to mission year XXX growth basis our contributor activities Adjusted costs investing helping growing from income margin our or lower profitable we John our quarter last That in quarter materially of expertise profit growth basis discussed $XXX.X a across $XX an quarter, to one-time driving drive our as This represents year, price And margin per of expense. in more enterprise quarter areas please. technology the in we've Slide while technology medical significant performance. Similar is Both mentioned, around a As opportunities faster controlling travel line numerous drove X before, from of see all million technology growth. view points lower did increased temporary and continue share. COVID delivery of across second margin of higher we which and nature. margin, increase our earnings the ago. more saw than and with expenses expansion. helped environment. diluted business. and as are on we in said, market. [indiscernible]. last us are see points our contracts of to Net addressable last was

capital at working AR our the at management. We flow. XX The flow representing revenue XX-month XX $XXX expansion reflective facility AR times. the DSO operating million under to quarter Act year, our effective adjusted excluding collection days cash debt cash a margin X please. second was in the EBITDA million, our payments was the quarter growth, tax quarter CARES and of and payroll net deferral contributed last facility, trailing down $XX from operating in Second with excluding DSO decade. employer cash to close our of days to lowest Slide closed X.X around

We year are guidance. 'XX our fiscal reaffirming

Our absence was what of lower have the growth COVID. first the in been would half it than in

revenue We full-year growth midpoint. organic our at in full-year consistent about expect at half, with with X% second growth accelerated the the guidance

contracts associated goodness with normal quarter margins expense medical, EBITDA and travel and expenses. already higher the half I non-recurring first other to due the First in were price second than fixed the mentioned

full-year We at please. XX.X% expect continue margin EBITDA to XX midpoint. the our Slide be to

Turning to forward strong. indicators, our prospects remain

and come business. from existing XX% to 'XX, revenue year X% our X% we now fiscal recompetes programs, from from new For expect of

quarters, cash XX% of billion billion strong delivered And XX% business business for next $X.X flow. submitted of for In another two of of growth, CACI. exceptional the we evaluation, expect submit over over have over another new that We and with to quarter for that CACI. to expansion under we bids new closing, $XX with margin

John. call the we remain With confident our generate Our over value. and long-term to to team shareholder that, execute I'll to ability back well turn in continues

John Mengucci

Thank Tom. you,

and nice our of year, well half robust with generating COVID. Let's delivered its cash of while go revenue, growing delivering the please. dealing to and a XX performing first commitments, very on The Slide flow. impacts We organization expanding effectively fiscal margins is

and work technology marketplace. to innovative that CACI continuing are win in differentiates We the new develop

for our and success innovation talent, honored is perform to of call CACI's proud this open Rocco, people is employees' Our let's long-term of and continued customers' the and our result each unprecedented of character I'm of force and times strong of missions With each it. how I to and the heart the the work executing alongside innovation our in driving every culture CACI's success, our performance these at not commitment in questions. to am of that, you. strategy. day

Operator

Instructions]. from [Operator comes ahead. first go Citi. question Thank with you, sir. Today's Jon Raviv Please

Jonathan Raviv

Hi, morning. good and thank you

John Mengucci

Good morning, Jon.

Jonathan Raviv

Jack as on condolences well. And

John Mengucci

Thanks, Jon.

Jonathan Raviv

Of strategy. question on M&A course, John. A

might good this on if but there? might guys any strategy some and you've and especially So, on getting in the there get kind look a rejected recently. done sort M&A of What's have just a So, recently. be guys -- that shifting? your folks the is deals? concepts, somewhere You around mid-sized I a deals. what job big, scale I you And What's is market of sort smaller historically, historically of with it's talked towards quite about and really there expansion you lot look changes you know that of and in any the perspective the middle perspective how your drive have lost risk then, bigger you guys

John Mengucci

Yeah. Jon, thanks.

reiterate So, remains for our mentioned, M&A number Jon. one look, I'll priority capital you We've experience, a of that lot as got deployment.

public to our of value. long-term use And use capital. belief we company, drive that is supports shareholder a that As the best M&A our then,

Rarely growing think have like differentiator longer-term we're that areas already more actually will that differentiates just use gaps in bought can areas ever and to we that we capabilities why looking call technologists is strategic that do go development that our very win we of model I'm have, drive in in, always already in at can something a capabilities we technology we the have looks us different relationships need at the what business company looking a have. there business this It's and this already buying across and what for and than more we're company I and in. customer our something growth. M&A and sector has to scale. so exquisite we we strong already continually out team capabilities across the

measure So, to -- revenue and capability it's term scale, when hear I that a already that's have. a in each me, I dollars

and bulk absolute is. first, our that's We are and to going always priority customer what relationships capability

not our will So, strategy change.

place we has that me that's single a say where from. have come that times. gaps, find look that here You a has with heard a all we capability we the you or size. that whether When many fill Strategy is how whether fill with capabilities, we at company company multiple

around shied never We've doing that we've deals. size away that larger are away to words the customer that they them. us. deals. relationships So, those shied never large from of and doing not smaller and company from really with It's But to us, capability revenue bring small brings

color. little a provides that hopefully, more So,

Jonathan Raviv

Yeah, I know. Thanks, John.

is it's remember little maybe So, an should because -- would se. there recall a confusion just large you or acquisition say per not just that mean scale play is we does all a

John Mengucci

but long-term multiple provides criteria that's gaps. Does short, of yeah, Look, asset, by larger Is meet talk not that. an more strategic help us a for they government jumping that create first? honestly to can into that acquisition scalet something our work. it Jon, Thanks, it we I that people doing funding fast hear just would love about us Second. when us Yeah. will then We're claim streams get that going win to fills value?

rate. win great a have We

billion acquisition. we handles day swiftly, on integration whether X,XXX or bidding one move long-term process can less if We and fills with determine then, million, that We've is on course, have asset here. any employees, that And simply, employees once whether we of or been it, machine size more. of so it's business $X it's a that a something strategy great X $X development winning our forward that

those so Jon, So, much questions. thanks for

Jonathan Raviv

you. Thank

Operator

J.P. Seth today go Please next And ahead. with our comes question from Seifman Morgan.

Ben Arnstein

morning, and everyone. hoping your on about could the little on earlier. talking of Hey, years ahead how had good revenue color Ben the you're right in I business space This Yeah, how for the opportunity is now you kind more Seth. that meaningful a investments do that I was the making? guess based in opportunity us you think is been space on bit for about you give

John Mengucci

Ben, Yeah. thanks.

really, when code talk that's domain. we're about So, advanced And the is talking about what for we space, technology. space

com space prepared for systems laser that opportunities dozen half focused Some the on like. remarks we a of communication currently about of billion. now developing We've laser programs and pipeline estimate right my $X.X a been about and at

that to items from So that comes previously investing this we advanced LGS. need some looking of technology just capabilities markets shows at of go A us the by those ahead power And here. the to couple of us. where of areas untappable acquisition need, were of after clearly,

You of spacecraft. for communications the would have transmitter laser Psyche recent delivery seen our a

Our remember Orion know Americans was spacecraft high first to definition grainy I laser really when market to about involved decide beam return land some component the This technology this of grayscale part is moon communications in differentiated, have a you. on the when which images differentiated We've very is us don't product. which watching the of going technology and to get There from bit a little driven. I got moon. the for highly technologically key the flicker another to we time. very is photos. is of

comes technology, $XX to advanced today on about all million $XX of to basis. is doing maybe this business Ben, from annual an million we're us LGS. So,

ago, during of different simple we to should opportunities. guess downturns we're to As and to sequestration. about compare all when should and that And really assess it just reflect had back I we were we we discussion years mentioned, very budget discussion pipeline company than this previous a the be nice I I'll -- five a faced

actually nature executing And the but It's and it high that think what's of we've to of me, and budget And above a we our the brings end fight not that ever-increasing there. professional weight that's critical our above and able top or cash beyond crucial. and free only it's technology. shareholder strategy to at there. drives flow We been either margins long-term And low-end services we play value well most expertise are to far growth, are ever-increasing shareholders a line out the company.

So, thanks. Thanks for the question, Ben.

Ben Arnstein

Thanks.

Operator

Gavin go question Sachs. with next today Please comes our Goldman And ahead. from Parsons

Gavin Parsons

Hey. Good morning.

around right is, deficit defense new where conversation have and we whole to the cut go. do there the budget and budgets right the now administration the do out So, budget

seemed We've increase Taking spend. goes, businesses slightly headwinds. of debt proposed pointed a for IT prime into obviously, approach the where to large even moving the of TMS the lot you from kind guys to of to a their you and of with exited funding kind and question growth of you're have the faster Now, some expect the where IT support of some administration's seen traditionally might different hardware play. normally cyber that hardware areas in

So, think for you more in with the competing hardware, teaming is are opportunities? the pressure you but for support see And there more environment the market? any re-entering on them go-forward the of do IT, risk if or primes potential budget you

John Mengucci

Gavin, Thanks. Yeah.

parse to question. try me Let that

it's at whether those ship And viable had the is lot but defense $XXX platform think at fully of phenomenal that's solutions just government are products technology look, budget. platform billion So, technology, would level. capabilities, on that what's those a hardware, whether choices will of on we But the really of flattish lot expect aerospace packages now, look fighter, one it's budget been similar forward. the eyewatering safe and and on software that made. better assets be and and that to I Army years war first fiscal based those say a that overall all look Force a focused to companies mission off, Air level, is some those we've we large XXXX need to at 'XX year nothing as what got space spent companies. to or by platforms, write but spectacular I Where all funded the provide and usable I it's it's airborne, probably be than that a 'XX, probably whether budget, that based, have unique defense crucial, it's there whether Navy.

So, and the what counter-UAS. mission platform gets gets talking right? level. we're products, at That's between. level, of what sort the many us gets We're going to us anything missions. not cyber are about on we're RF in the defense there in the at There's a trying about And about offensive that's what package us but talking That's platforms talking that cyber and spectrum. both RF protect SIGINT monitoring out spectrum,

devices to any requires mission. that exquisite at time, be supporting of allow All software any solutions anywhere that

of So, our is more smaller form kind the package, mission angle products. factor on

Now, protecting protect trying about the business modernization. between right? you lot in networks. our do links cyber IT networks, to systems. the is could And be we're links of other, don't also and I think part one we're cyber other a two defensive When without larger That data

a overlaps. So, of work this lot

in I naval little procurement then think fantastic warfare that, ups, go safe program, around doing forward, we to a as electronic we increases Defense where and and spectrum bit of talk have systems it's plus course, about engineering. DoD-wide RF the everything our area, say navy we shipbuilding counter-UAS, in group a the Health

all us as side, the top growth, Gavin, as lot that budget where goes. modernization. the technology on line We're and package of allows that expansive IT a the more of well side, to not in right way mission expertise regardless So, the platform framework, DoD

Gavin Parsons

lot appreciate that I a insight. question. that involved whole No, was it. in Got there

number at and maybe year Looking of this half remarks, led the margins. can you called you out Tom of been. said the expand the margins a have you prepared to I in non-recurring margins, in believe to think benefits continue that front

to expansion So or points XX the XX had previously a basis of you've year framework. historically,

points So, a the point to it XX to and right should my question year that? for basis starting continue is, XXXX think is about as we XX

John Mengucci

Gavin, thanks. Yeah.

margins margins. little as top is the have company, to grows above I stressing a was answer one. that I'll addressable well. became market ever grow bit increasing I'll also CEO what I When our line continue we So, what Tom at that of talk would around

to said, our the target last will it's what if so you that or with of served years. someone It's our when Gavin, share learned, will right? and the margin, XX, get focus So, us you base XX work, I I lessons and X business you full that XX, it's is, the Because accept increasing margins. margins drive have to couple of us. a be for discussions with Which ever the more investment want I two, all. said do, should I on is to employee One leaders and investment the same and nice the same XX, drive well the we we of margins? have technology-differentiate, I how one, transparency; execute bidding, we day, whether technology always can looking everything to drives At anything more end and win. the Tom, we more we'll business work,

Tom Mutryn

Yeah.

Gavin, we In kind were in XX.X%. said margins the X.X%. of EBITDA This XXXX, year, be So, we're our call, last guiding repetitive. to as around I'll

significant period. a increase So, in a relatively short

we COVID have few So, This goodness associated of some terms year, we've associated we events. in those of some increases but driving last kind then with been one-time margin headwind kind the successful in years. had in margins, of with

And are each so, somewhat those other. offsetting

the into get sure broad FY are we use things make into as going to margin that to we'll So, keep 'XX, for baseline 'XX. Two in expansion we clear mind. FY appropriate what

market Both than of technology. technology in parts at Technology framework. growing, materially the is expertise disproportionately Our margins be expertise. growing but we're and higher should coming

from also cost margins. forward. going continue to will So, that is the drive to that secondly, efficiencies productive be to perspective ability margins we And productive continue to a to expect and should

And have so, be those yes, a margins to able to we path forward expect we deliver those. ever-increasing and

Operator

from you're ahead. mute. Perhaps line Thank your open. you. next Cowen comes Cai Rumohr von Hello. and Cai, Today's Please on question go is with Company.

Unidentified Analyst

Can you hello. hear Yes, guys me.

John Mengucci

Yeah.

Unidentified Analyst

is Dan This guys. quarter. Cai. Great Hey, for on

John Mengucci

you. Thank

Unidentified Analyst

could relationships wondering, Which even to was mentioned technologies look you you I agencies what relation you acquisition you which expand discuss look specific may may in? earlier. in particular, -- capabilities, to out customer So, via or fill or

John Mengucci

in warfare, thanks. root question, world. Dan, not the how anything more getting and I'll specific machine your in Yeah. clearly, but learning on electronic of the to get AI I'm sure the

electronic sooner like. defense like world, We have capabilities a easily as of see some but we to about and But we talking minded in we'd there's rather a later. call great about there, fill when that and look protected couple comms what truly as we cyber SIGINT talk in than just that can the we gaps networks at warfare

we growth. So, is anything is area material in that where there believe

of collection, AVT another at on technology, whatever picture an of was gives can the world kind of fighter on frankly, ELINT we're of acquisition whether pulled that most electronic those provide and that's IMINT, all control out the going what signals ELINT, whether are whether in how it's do imaging where the there. technologies that's that the example when full warfare we new at looking together systems, these we war battlefield, Our find, what's information looking age that command them

like last potentially quite and as area. federal across similar watch to And be the as United the to as domain. us long-term that building within mission question, protect consistently packages term to on space that space, question, from today we're to grow would looks to going lot is that of to States On areas. different We understand to capabilities many When But the Army somewhere that civilian in in allow broad more well where that clearly, That's people things in. earlier an some of and other stations lot funding spectrum a large We better house, say we're of DoD could nation then, States customer there like United do national is the spending use set, going that go. Army we're done is ground going are the work customer and budgets sets. world be and forward. a streams a there

So, expanse and of across looking then for entire warfare, space, technologies. need anything and customers electronic who RF those kinds the spectrum customer

Operator

would gentlemen, to question-and-answer Ladies John Mengucci the remarks. this and turn to back for over like any closing I session. concludes our conference

John Mengucci

have Chad, know follow-up Please families. you and many questions. participation. Dan a for the Price or available and you have my This thank healthy, for who on after and today's day. Mutryn, will great Thanks, your of to thank would listened webcast call. to dialed that help call. are like you everyone best call. their in We Tom and and to all Leckburg concludes our your today's George stay you, We Thank

Operator

presentation. sir. attending thank conference you, now concluded. you has for And The today's Thank

You may disconnect. now

CACI International (CACI) 28 Jan 212021 Q2 Earnings call transcript