CACI - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen thank you for standing by. Welcome to the CACI International Third Quarter FY2021 Conference Call. Today’s event is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Dan Leckburg, Senior Vice President of Investor Relations for CACI International. Please go ahead.

Dan Leckburg

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

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

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

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

John Mengucci

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

Slide please. to X, turn Let's

and income XX% profitability strong to flow. Turning by again, to we, per We X%, our a third XX%, quarter and compared cash growth, net ago. revenue results, well delivering share fiscal performed year ‘XX grew by by earnings

expansion. revenue, our to growth technology key a driver double margin digit continued also deliver We of in

the fixed COVID program profitability, was cash our drove operations core We of strong flow continued about environment. again, a year-over-year from margin cost mix efficiencies operations. addition In benefited cash operational strong and flow. increase, the EBIT technology performance, adjusted increasing strong This our third rest and only generated in free to our price from the

times X.X book-to-bill Slide times and contract for $X.X XX-month X.X awards, billion of we representing on of won a please. the Lastly, basis. the trailing quarter X,

differentiation, are drive our nation's shareholder for ahead CACI need trends market competitive This value we we've customers our solve the heightened strategy IT investing future and And of generate our key improved Broadly two their and enhance global investments. profitability ensure our speaking, before and in execute our provide our environment value. to to growth missions, we high to technology both As with to monitorization strengths. discussed are technology need core play threat the most driving critical enables priorities. customers

few our investments demonstrate and software successes, recent value software Let a everything the me of or that highlight defined lead strategy. with

Border It's and border. the our CACI technology deep, customer mobile to First, at a of and deployed us software to challenges Protection leader speed capabilities. in customers’ and We in this Agile our did increase needs immigration saw efficiency BEAGLE users. why to scale agile enable when delivery few southern without selected to not they simply team enables which developed a development, That at to the possible weeks as arise. better CACI quarter, mission-critical address rapidly this handle only is Customs is applications

projects in discuss to all computer AI ago, is or put, span CACI and vision. but referred computer full-motion video. AI, leverages capabilities identify to Second, capabilities in capability Simply vision as I'd quarters intelligence one AI. investment, These imagery and objects few track incorporating I business. of type particular Recall over to artificial like a our of was has area the across XXX discussed AI

win of highly CACI accurate the and capabilities. investments CACI the capabilities, like other outputs, most our the award creating, with data, the future contracts implement raw like CACI set. information. a competition, Geospatial-Intelligence During It's further modernization delivering us intellectual property evaluation value national available allow tangible, opportunities across publicly all the number in positioning successful broad customer in to CACI, that and AI National AI, and and capabilities provided Agency our and a a including vision, was AI result technologies research security in Government are five-year reliable customers third us please. technology. and just X, Slide same advancing competitive $XXX million marketplace. these military CACI video, and a proven, quarter, conducted deployed companies. services These to competitors assess formal our of differentiate computer differentiating integrate lab missions and the cutting-edge imagery, for At to mission company further

a we program. and step million share opportunistic strategy. in executed flexible deployment capital a is During the next more accelerated This repurchase quarter $XXX the

to an strategy our M&A going view to of said, differentiators. and deployment forward. our is our capital proven approach as That believe M&A continue important We to integrate strategic of being just one strategic use element capital ability our and M&A

are strength, This to of balance the financial emphasize capital deployment us long-term and deliver want to reflects committed our cashflow, fronts. the to optionality in overall deploy shareholder value. based plans I growth on on long-term approach ways, of be to please. company. not X, ‘and’ capital that on flexible to provide flexibility ‘or’ number strong healthy ongoing basis, an the opportunities commitment and evaluating strategy. Slide an Our a an to the greatest we sheet all multiple opportunistic with It's shareholders

environment, and for we spending, Turning defense our There’s national stated optimistic. very and very market priorities bipartisan security remained with new support administration aligned well the the to capabilities.

year. released, top not proposal of $XXX a defense aggregate from spending XXXX year released fiscal for detailed line X% billion, budget up almost the current the government a has While government been proposal yet has administration fiscal

be to Our priorities expand grow the faster and flow. to this margins X, our please. cash generate And offerings continue be funded. addressable confidence align continue able will than that will us to that we Slide strong gives to market,

expect to are guidance, at we margins. market fiscal the we see the line, our deployment delays, navigating than and but Moreover, addressable to organic year, shareholder reinforces focus highlights OCONUS this COVID-related of creating now growth. growth ahead delays tasking higher growing slightly Putting net factors. of COVID both from which midpoint well EPS still increase revenue Looking expected guidance impacts guidance, continue on than lower our challenges, line X% growth said, our bottom relentless approximately at income and prior and all other our our of expanding we value. delivering to of the remainder together, dedication and top That our

pressing to strong Our operating while needs. deliver continues addressing customers’ most our organization performance

me over to ever on of call financial Tom strength confident than the that, provide performance details our to We are more about let outlook. our Tom? strategy. and With the

Tom Mutryn

you, X. John, Slide Please Thank and turn everyone. number good morning, to

We Our of to generated of third representing quarter overall accompanied growth margin revenue growth, quarter inorganic was expansion. $X.X billion growth of X.X%, another excellent X.X%.

pre-tax performance This last the reduced up margin core both Indirect the expansion. of our to around medical, control temporary performance is travel technology improve well basis with and XX.X% year, related billion from Our The the COVID. margin contract, adding ago. ongoing fixed costs XX% as factors remaining revenue margins. EBITDA contributing than growth. XX and we strong commitment benefited than in that Similar driven our to which Overall, from the operating points consistent XXX quarter last from prior is is slightly COVID of million, of with efficiencies year. delivering activities two higher operating as other lower quarters, business expense our was positive Adjusted quarter expand despite quarter grew of and remains improvement performance. of environment. with income the basis basis year of are XXX expansion than ago points represents $XX the price Net reduced XX% operational in to expenses in year-over-year EBITDA benefit year under another $XXX a which strong more was by points margins. profit This was quarter, costs is

In addition than operating performance, to we planned. tax we from greater benefited materially credit strong R&D the

two the earnings slightly income expected in corresponding please. making to a clarity up net due higher are $X than to attention and additional with associated was investors. material, accelerated share are important provide which and I and share income. to transparency we lower were to XX%, to disclosures third financial Cash earnings million Slide As XX, outstanding our metrics repurchase. want in investors. expense shares to ourselves due new average tax than in per Diluted our a your quarter fewer increase net draw result, both

our operations, excluding such, As release, facility including we less as our we cash are from which cash AR capital flow free define expenditures. now in earnings

adjusted addition, amortization adjusted the associated disclosing of we net diluted effected with acquisitions. earnings share, have In income intangible impact exclude started which tax and per

plan evaluate to we And disclosures to these non-cash and And for our XXXX. fiscal tangible these provide M&A our Our our for year absolutely investors easier expense. drives material, make please. guidance to and performance peers. program in we XX, believe relative Slide it that both metrics beginning amortization

quarter excluding AR growth, million, $XX margin reflective cash cash million, EBITDA was expansion excluding of XX to with XX-month Third million. closed net our the $XXX at working quarter from operating CapEx revenue facility, of $XXX flow, four days management, our debt third AR and was free capital adjusted DSO less times. effective our at down days last trailing was We facility X.X year. flow

we mentioned, mid-March, outstanding representing around share repurchase X% $XXX in John shares. million executed As of a

value this for ASR strategy, was and our shareholders. flexible our allocation of create a context great the Within to believe opportunistic opportunity capital we

leverage we the to to Slide the XX, capital includes while the at the capacity continue undertake and a Our within leverage have and additional end quarter incremental with debt M&A maintaining of please. reasonable significant ASR associated range. execute returns

the results – carryback recognized current guidance, by other tax prior the and with tax by the two tax XXXX This losses By tax in expect benefit statutory in off tax realize year losses me fiscal back savings various tax in This selections, the expense those over a in benefit impacts. tax FYXXXX we cash will a to have regulations. we finalized Act enabled making next quarter. provisions third the lower tax is are periods Turning to expenses, This period, to shift tax let million comparable to able in benefit recently in start fourth net CARES higher rates. of including years. in $XX few discussing the

approximately and billion. $X.XXX in the the expected fourth this, offset impacting the expect Despite $X.X net outlook quarter revenue operating cost we to taxes income recaptured years effect margins in due cost States planned. restrictions, slower to revenue our fourth year second, taxes amount fiscal tax and to emphasize impact net lower X% revenue fourth updated government Slide in the few at midpoint people reducing fiscal include of revenue, to COVID the able made are just our in EBITDA, deploy million flow of to by impact of to lower and that higher contracts ahead benefits the and back impact increase point state revenue strong state of And savings tasking. of are, John addressable cash portion in approximately and and points. I be are current quarter. the the revenue FY by quarter guidance. by equates by will factors key that the travel Getting revenue our the the orders, our the basis deployment And paid of of This million. be this least be of outside $XX than we revenue taxes payment year XXX to inability will our the This XXXX, fourth million $XX and as growth. future of organic between our lowering quarter. guidance is we of And $XX million $XXX and XXXX processing million net had First, our Two growth now maintaining what XXXX guidance, both year to again, please. $XX billion will recovery XXXX EBITDA cash the due from cash million United And lowering at growth plus income plus EBITDA our market in mentioned. delays has with second, well years. $XX next at tax over These our first, fiscal from we collections. expect XX, the We third earlier,

and previously lower program the the indirect on side, expected tax cost R&D reflect On quarter to credits we net than guidance raising we've delivery materially program expenses, price fixed performance, detailed income strong I lower higher fourth the already. benefit discussed, are large tax

from additional margin full-year midpoint the reduction result We ASR $X.X and benefits, expect updated full-year X% a the interest now As XXXX to of share The FY XX% be number on of a reflected XXXX please. our rate and tax about margin other at expect XX, underlying we and is XX.X%. COVID-related adjusted in X%. effective reported to EBITDA of our XXXX normalized, are expense about and FY million the underlying our between tax guidance. normalized FY also point, the Slide This for reasonable, basis. a our is commitment margin this of in of for expansion. fulfills And margin think business XXXX tracking factors in annual FY to after a

Turning to remain forward indicators, our our strong. prospects

For remaining fiscal in recompeted XXXX, we of have year immaterial business amount our an guidance. new

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

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

John Mengucci

Tom. you, Thank

Let's please. a XX, to we opportunistically with go of performance deploy advantage equity We're between third margin flow. disconnect Slide We and quarter delivered growth, cash valuation. year-to-date capital strong and and And our expansion, performance. pleased taking very

All our generate of value. deliver a relentless shareholder on represents this commitments focus to performance long-term and

our people to with Our of technology believe national priorities. each commitment margin immensely is time Fortune shareholders, and And other which World's deliver XXth customers, day. and shareholder this. magazine and their is our our purposely continue and It The we was strategy Admired each aligned character They Most selected because as I'm differentiated critical value. culture and good business and to cash, foundational of to expansion, capabilities every embrace our innovation, is success. also for modernization growth, will our proud and a Company. our CACI the to of security

expansion, Top prospects selected looking let's and for XXXX the was deployment. flow, growth, And Top value as capital to opportunistic CACI Workplace excited a robust Company delivering our addition, be through Energage. In open margin With is and by questions. about Technology Aly, forward. CACI continue call that, I cash

Operator

[Operator question Robert Suisse. today with Instructions] will from Credit Spingarn first Our come

Robert Spingarn

morning. good Hi,

John Mengucci

morning, Good Rob.

Robert Spingarn

M&A to talked administration organic ask you we've how versus and a on about Just organic this the that just new have – the and based basis wanted you under go-forward that supplement does you budget growth. look cause we And on bit the strategic little of M&A think growth technology insight pipeline John I expertise, about how currently and today? might accelerate to growth to

John Mengucci

that Okay, Rob. for Well, question. first thank of all, you

know last pricing there we the want three very expertise as would be was able top-line Let's framework growth as the at how are has mind, that coming talk don't little and a call some as than could technology, four doubt do and understood in as enterprise growth it's there. in And price, see is pretty of those doubt across expertise, foundational you you for commodity, XXXX and I we muted. a really, the been I give differentiate. at and mission I continue try qualitative our we – years, Checking well nor well pressures really to see the tough a on on going see be mean, the us. comments much on there there level bottom-line look to very to expertise company we of to expertise differentiation a to all but other no a guess And a levels FY I differentiate how to few about I'll side company. enterprise enterprise about least well. to bit face over level,

moving there. nice the forward, budget dollars. $XXX work at look what's There's of understanding good I lot some a there's under in if the of So, billion

requirements. levels I customers think to critical it spending gives continue for our a nice investing in

think as of I at field much in budget and respectable expertise bullets the side, a in very than favor. And on I'm bits our There are on a speed hard just about that the are And priorities favor. budget reading their the technology stated technology on of hardware. is not strong and they bytes positive much much on side. focus it, bombs the software, very portions side, So,

we On September head commitment the from have withdraw sort of Afghanistan into by XX. expertise, this to mission to administration's

near lot budget of There's moving would lot a that you are I'd Afghanistan goes. dates focused as the there's that a threats So, potential imagine, lot of lot will are actually on peer from of different dangerous still a windows. is counter pullout an to operating our to. say place, of beyond of we a folks also a and there where very terrorism and

about me asked gaps. You

more and Anything data is that We I it where mission down We're very on But I pulling it strategy sets together are talking prepared we FYXXXX software about got enterprise a analytics, comfortable I from. the I intelligence We've where we to would like capabilities we company our a have applications remarks We're the companies spent so tech area. cyber in planning related customer our mentioned to in now. got wanted strategically our combined. move I around in portfolio. agency, area, go credentials, five the feel I if five Rob we've thoughts AI strong cloud we some the today. time in to that come double during based prior, the markets. the next agile strong mean, I to re-review it. tech much be, and like as my any credentials,

M&A to next. we focus want head pure a of, not that's to So, were we where if do

We're and that differentiator I our in and a around there's out look, it, company, think that's sector are we of outside last of properties Yes, coming frankly. properties think some highly acquisitive market properties nice M&A But reasonable a strategic part there's market. folks in to [indiscernible]. there. a against do was the your number

We about is I deployment future do to continue talking his M&A Lewis outstanding at as capital as look to capital we and of forward. an going one move And those team our Mike mentioned, deployment job. options be

Robert Spingarn

helpful. very That's Okay.

for thank it Just little to? quickly next contract that strong contract you've Thank fixed year? this Tom, on of that or a relates been John. that could about price does what bit talk year, renewal you, into – the just Quickly you extended really And recognizing this you. profit

Tom Mutryn

Yes, thanks, Rob.

we're that a the sensitivity to on we outside want piece signal reasons For not of do profitability customer to work. getting particular

going price It contract. have circumspect environment to to profitability. COVID able fixed We're somewhat in expenses, been. is we're lower as be materially a at we So, higher execute the driving

As go the way, to tempo restrictions more COVID particular customer to expect with normal contract. we revert that operating a

stressing years, the keep is been short-lived. expect of lower work but and albeit piece we continue of a most for levels, lower the respectable, to on that benefit outsized still it at a profitability we So, But than that number of work is piece had profitability realizing. we likely we've

Operator

Our Goldman Gavin next from with Sachs. Parsons question will come

Gavin Parsons

Hey, good morning.

John Mengucci

Good morning Gavin.

Gavin Parsons

to is how Thanks. reversing? the I from next presumably state the the the given you'll quarter, but a that's the the quarter pace have large can I XXX tailwind which There's in next Guys, think midpoint above wanted X% what fourth do or to about heading year, growth, the year, fourth just into I of ask slowdown. of and year. this basis you points into impact. kind X% adding think, of not grow whether you implied Obviously, what about pace of growth COVID more disruption you at, or But than COVID tax drives think

John Mengucci

an at of something team this But is here, you FYXXXX. very FYXXXX, Thanks. parts question taxes looking moving point I'll the your of Yes, done stated at I'm of There's give a estimate part as well. and savings. and job you of right. we're look lot look very, Gavin, sure And outstanding not quarter had in areas Tom other his a third John.

how margin there growth revenue sets growth deliver numbers look expansion sorry, are FYXXXX think I extremely is distraction lot differentiated we FYXXXX, lot look of we're at the for delivering proud that of an growth, me across major same generation, at out a up look, to margin other I which expansion of And is strategy is So, I organic delivering and This us cashflow major awful accelerates distinction, that and important and there. time. of print we're performance. expansion, to – extremely shareholder value. If at margin commitment our awful A to here. is entities we're uniquely plus our

expand impact tactically, headwind. on into we So top I margins, heading would an materially had COVID line But also our has note, growth. continue even to that

it's growth, me a blip and creation to value long-term shareholder short-term trend. COVID, margin, So, a in cashflow

of we're targeting we and addressable what continue the from next on we an grow is strategy we year, our I number have laid that look, qualitative since don't guess Gavin. above So, But to statement quality important what exact table. have, a and we market

options margins We across the exact shareholder greatest long-term. the to the expect continue this performance cashflow, to we're number continue time, value. to which generate we're compounding long any expand committed deploy to we at long-term new same And of of amount over

that many, addressable going our ability above to you So, are our increasing to me on the hear say times. margins. delivering to continue ever We're grow confident highly market of many at commitments probably

Gavin Parsons

that's future does this that years net you'll Okay, you Brad $XX tailwind, a million on mean $XXX $XX the just million. million to clarify cashflow, in year get headwind And ask becoming I before that back helpful.

Tom Mutryn

will Yes. the correct. years, XXXX. when next three XXXX And be that I future is over years, XXXX, and That say

that clear to as particular deferred payroll FYXXXX also that will provide year. last benefits So tax in for you have we in two Act. repay guidance And be which operating had in with the non-linearly, remind we’ll of cashflow the more years we associated CARES I some August we the

Gavin Parsons

to cash there of we Then, normal point XX.X% a the well. like free there think margin? Is should level That is free a EBITDA point Okay, base my perfect. ex-COVID flow that cash the flow, question, context the starting was as as for off? grow starting

Tom Mutryn

tax, tax. plus $XX million. Gavin million, the offset a payroll million reasonable million which the of number less $XXX able would the $XX to $XXX year, be is We're this

terms would line. kickoff So, a of good think XXX-ish I in

Gavin Parsons

Okay, very much. you thank

Operator

Cowen. next von with from Rumohr Cai question Our comes

Cai von Rumohr

much. you Thank Yes. very

So, quarters John of slow you over, OCONUS peers delays you various Two are you revenues the and couple talked issues. your refresh of last parts. these continuing, give the us in have to kind percent of do just change administration your mentioned or of see of of over terms And look you OCONUS. Could couple down, starting abate secondly, for what related? quarters? in next are they are an us what update, could you we One, the

John Mengucci

cover Yes, the and piece SX a we first. I’ll on to XX talking based OCONUS on Cai, but were let pass-through revenue, work wasn't, war-related OCONUS. were were our much to talk about work those XX% XX% how anywhere me how annual were little were years efforts numbers much bit around of we And about It had. that COVID. we where doing ago at

We annual revenue of those have our tied been of to tracking OCONUS is about some X% measures.

been kind So, XXX,XXX that out a a explains the some had I’ll of were. we’ve kind were that we company Afghanistan rolling become company that of of high one, of also our versus that work down to right? large X,XXX. about tell the in we’ve for time, I is troops mean, really measuring XXXX, stick you OCONUS

things the we expected see general densification looking is not really revenue, at to we to of rest But, at we reopened of starting were in the spike We due the facilities look have and these fully Tom some of move spike couple sat the saw look the percent look another at down and that of an FYXXXX. level signs this believe saw concerns. in that's COVID, if headwind as not FYXXXX, when the March. rest If that around end improving. overwhelming we I, of we of the at So, of we one January, at to team I forward

continues sideline. resources, So, that to mentioned remain on put Tom us. pressure deployed

We’re restrictions. travel to due to different unable

transport it, use have We have processing. deployment military for we to military use to

slowed. things don't back. of we're come And All an greatly area that's where those now expect greatly, have at point a been to we

in to XX. still slowness by presence, in in September general tie withdraw we've taskings, the And which Afghanistan commitment past. we the from then you If in mentioned see the

both direct are impacts here. still COVID So, indirect and

as out, free of lessen. customers because forward, Looking to back as to in will pressures that work, functional up. continues to I that's vaccination going program our that those do believe tasking lessen begin see pressures the firmly roll to I going more those the we're areas to come believe

very expect and nice taskings we out recently, we June come those to that but come out they've just In fact, of couple last out just saw come a now.

So, I up are do going things pick Cai. believe to

think abate. And forward at will growth margins. we record of see continuing we very I increasing much ever to are looking COVID topline our all

Cai von Rumohr

up being requests, may administration that a a extent reflect, does start to anticipation not cautious the at has the what of COVID, little FYXXXX slowdown To feel factor? so And the budget? they customers because a much DoD been much loosen bit, more of democratic now X.X% but that because in of tasking, just tighter a and looking we're a like

John Mengucci

still There a we where understand at a the the is a It's a threats looking towards look of lot lot where and are. where I XG. still still that's as they new There procurement And bombs Army I we're for spend, understand more really. customers not around There and mean, a to very sit, XX kind balanced cyber increases versus well-balanced budget. Counter-UAS. funding priorities, build at network IT modernization lot And RDT&E of to is EW, bits outs, of where that and the pertains can bipartisan from that a is bullets. of increase bytes of at Cai and least couple very level, strong of of we're not, that company at percent. GF course, going a high support. does talk like they believe it around head military

think has I away. there's that counter-terrorism. it know mission we're folks that does Russia continuing positive think actually CT understand that of administration is, who around, I in it gone is and I'm or hope I China, mean out very area is Afghanistan near want focused that Cai the debate I the peer pulling on not now, this to one that

going to our there's situational going on going at be those well keen are to to providing keep to pull have technology areas. those find, It's out, Okay. – offerings. we make that And awareness we certain, very ways just things that in we're when to are adept we

So overall, I do do on covered the of them some this a we'd peers, key that has Thanks, down believe down it's believe and areas high a at I counter-terrorism near on. budget see looking cover like Cai. mission and level very to at

Operator

will with JPMorgan. Seth come question next Our from Seifman

Seth Seifman

thanks good much. Hey, And very everyone. morning,

John Mengucci

morning, Good Seth.

Seth Seifman

excess in kind you X% at when that's you or increase than talk are the that? wondering kind of growing segment a the was I that an of is about of about budget growing market, should underlying – looking budget that faster of think the in So, as market, we

John Mengucci

a will shape we're close at that And growth I in set so budget Yes, sort market FYXXXX. mean, how shred looking number. FYXXXX the look answering If have final starts not that track our we pretty floors, to high good the with along of our budget, that we up. and at what which that, sort that's skinny that at is a look just one. somewhere for you the will to that of FYXXXX know looking do to believe assumption addressable we all we level, started wise

Seth Seifman

exposure There troops follow-up, a fine only I the OCONUS around assume of put portion is if still so. X% to point world. is as different kind a on in just of deployed then is it And down to places a Afghanistan that. or

probably maximum of for in range of from that so. or XXX sort Afghanistan a could the be the headwinds basis we would CACI anticipate So,

Tom Mutryn

that That awful lot with you closer changes issues is is different very see there. of work. Yes, the revenue. of doing don't OCONUS no X% lot numbers Very, we from shared of are our It have funded, there, other true all material that any fully number. we a to I folks

of get we don't question that X% So, is I I'm would FYXXXX revenue to like. tell much that, too into inside own the what's you give in that going number the a tied for probably our protection of up of point to But Seth. Afghanistan. because not appreciate finer And going on much folks very our just of there have want of folks, I of on and efforts

Seth Seifman

guys. much, very you Thank

John Mengucci

You bet.

Operator

comes question Joe from with DeNardi next Our Stifel.

Unidentified Analyst

is in are This gentlemen. you? Joe. actually Hey, Rob How for

John Mengucci

great. Yes, Thanks. doing we’re

Unidentified Analyst

Good.

question could in just of sort So way. ask if different a M&A the I

the of environment, deployment And the between versus some Just that Thanks. M&A impacted headwind more about clarify you was space balance the just the the two was given the past volatility forward in between to and then we the assume business M&A? going think over it strategy, mostly in industry now versus months should where clear, it has buybacks? the capital pretty several way previously

John Mengucci

with deployment. potential welcome but capital issued investments, little talk our evaluation. – order's out way always Yes, we're doing a activities more talk the Yes, than to been believe remarks, And very there's look, that purposeful that honest, in don't there we things reduction when deployment, of I that they're more you're like of options, other Rob, the pay rather internal and and But then lot can capital be area. M&A mean, debt that attention all doing. capital table. continuous on you. we'd as what thank lot on a deployment differently hearing to we're there to I than when prepared no just a as M&A we’re is commitment repurchases, about comment that and willing And intended uses. world a that always I prioritize all of us awful heard everybody in options, say additional the my release was we about pertains else press in to in an that it to you very And to

strategic As going for to mentioned I a always earlier Rob's planning believe, in to, now. customer We're capability and semi-annual look gaps. sessions our we're I question,

because purely downplay just look that's a would more would signal I So But but company year-over to M&A just and quarter-to-quarter, never differentiator to want is of moves I I something us. I not forward, downplay as at want to what balance don't a -year. this

about and nice to word counter-terrorism two. word happens be. the else some and equity we're a as I key capital of combination whatever talked peer, deployment looking and forward, at near and out internal investments plan are key there there properties those debt in repurchases But our M&A going We're and to also reduction And there. valuations. consider going the our and So just I constantly like think

a doesn't So, repurchase share M&A. because we mean we an can't do do

across that than Tom. with dry enterprise drive times we growth our of X.X better to growing you leverage, addressable and growth going Tom, And we're are Now that? I to plenty market think entire we continually we're at this so have anything there always powder our increasing margins. to want add

Tom Mutryn

Rob. you, Thank

of process, attractively stock The are, We factor. a months our that like. mentioned the next pipeline, candidates three, says changing is facts rates attractive Are the we believe CACI and We continue we in interest The to thought hence key John acquisition John and priced? levels, the twelve ASR. as given influences evaluate it some six, debt valuation circumstances.

of with real-time we quite again, senses a makes a the is the do process drive sense continuous of definition ultimate we it what to that our making shareholders. So And evaluation seriously. value decision. That long-term the is that how continuous take is most

Unidentified Analyst

Thank you.

Tom Mutryn

Thanks.

Operator

question next from comes Our Raviv Citi. Jon with

Jon Raviv

still comment starved IRS, just end but that years, four a this current like require a there you John, last administration let's It’s still everyone. Is exposure referenced a the non-defense it, that the to for solutions big other, and things to non-defense, of kind seems growing of morning, perspective things focus high is defense be one complex number, big example. number. that have the modestly technology say been any good markets. of It's Hey, a the currently on future But or on lot over very budget. pitching. call

John Mengucci

modernization, time in in And work priority, IT about our same return COVID. used continuous government entire administration Yes, IT thing has very world. funding and excited overall look, technology look and thanks. it IT what Jon, do that very, not facility will of see in moving as The the likely to budgets taught maybe forward, is expertise we whose that is the the IT one to face Yes, all of most of further is cyber us COVID face we finally I'm the that only back in the come. not we dire of face need updates. that, modernization is the having the attacks, putting at the monies but is emblematic we this towards a from of

always save think DHS, program and we that So efficiencies improve to are their large budget, those we There way we're systems, systems looking with are technology desktop all support defense budget, manner. in customs in ways non-defense the legal border, although there. And capital and they plenty talk when customers software the there's The all we with human yes, of solution broader are at spending build-outs have have an enterprise and scale about our large built defense funding those. and find look, today. the financial job all of and we that agile

us whether So mission to enterprise on out or there's there the continue in area tech in for grow it's plenty the area. tech to

Jon Raviv

just of just pivot, know the onto And one European exposure, line. on Greg your a follow-up, quick but a I bit little is

of the your us behavior, emerged total Just the exposed going how corporation loyalty is point continent, what want that you programs, see to changes the period. this of kind much in say COVID of remind UK price trending forward? just And from customer the at how to business. Any I'd is they

John Mengucci

Yes.

Jon, X% still I'm would business to get faces I I'm things because that the before at UK the there, revenue. if X% looking what I'll UK able couple say done Greg absolutely the to correct But from very have is here. team is is there. profitable as I Greg's cost there outstanding Greg's be locked changes. them as is very, Greg, around slightly we're in of And Tom. But very off. is done overall add? you job. you heavily of want COVID. talking a is know of So Profit structure to and everybody's home. in just will Revenue anything Greg seeing working That an change doors, is his Everybody lot

Greg Bradford

and about UK. the over could, government and appreciate question enterprise. the I sell XX% of commercial. XX% mix a here, we business John, mixture And We're about and Yes, technology

business well months so, defensive has very despite intel. XX COVID, or government performed our especially now Our this past

withstanding have a with but now of shopping side all year. the revenue know commercial hammered been have been for We because as But three last quarter industries said, three, we closed pubs, centers, X%. on up leisure restaurants, is good last because retail, versus parts it's those quarter that little John we bit up work

nothing for the operation, to EBITDA but up, have got like significantly operations we're three. really income performance and our net through of We've savings. quarter about, our XX% We a really that's ourselves in COVID-related XX% pat and back last margin up strong almost on and

more of a starting will coming up to by UK are this we bit. June little open open it end be – so And it There's will to conduct and see of be starting talk, and out of starting more is business life and clients orders We're to normally, prepare we're lot our pretty commercial they're to open. increased much a there. to back seeing come

at look our on finishing the as business the grow looking year and at we to normal. off potential We fine So likely continuing growth and see we’re side XXXX. commercial government

John Mengucci

to add? Thanks, you Greg. Tom, want

Tom Mutryn

you, Revenue Thank levels of little higher material a Greg. with profitability. be X% clear, to of just bit Interesting. it's south

add UK we counterparts signal national is our a that in another now market. the defense counter-UAS, prosecute access some the in are devices, to with with of connectivity UK, will I technology. we're with we technology in some the that market where the comment other mind The in in potential And is a some years, made businesses acquisitions between doing, that to last few And we collection have UK. EOIR my nice devices mission exquisite for product the creating us

Jon Raviv

Thanks, John.

Operator

comes from next Securities. Our with Tobey Truist question Sommer

Tobey Sommer

willing at and such customers that can advantageous more the to years, solutions perspective. in you. look been change you've or Thank recent trends of that And the any the in to whether contracting seeing in seeing industry industries you profitability comment margin, of a other types been was wondering at if and environment may could as on I in impact from spending you be the administration. you’ve or not the

John Mengucci

million you attention the used much how what there call Yes, more maybe July, all than and a today, years Tobey, there'll needs take tactical draw it of we've out the saying, renewed and some this cost can to without doing. COVID use touch our analytics technology we large out rewrite but expertise And machine being of couple I is it's interest somewhere because there be Oklahoma transactional going would if savings internally, to couple was because where to of learning we a hey, role. know And we that we of of were some of be that things service can there's examples and if that customer's budget in I That of to things as of technology, a that us. sits our used between personal were city. center element use data some a those delivered. team we've create are policies lot $XX got thanks. talking expedited $XX three million there shared to And in more out annually hand more RPA. play do like solve for out a or now an AI about things. One

because for a times, So word, budget have to and to more technology the need joint for I use really no types budget, you under pressures, word if this I now centers to were in a build bring the different RFPs longer about of talk years. I about, once less many understand said many, I've can in people those environments M places. of you bad and of many think and number And number is looking how in op many,

like how going that's enterprise may over tech. we see three to looking some, change enterprise think come been to expertise RFPs more out years have five what next the I

wartime that tool. is critical bytes As But effort. and some do security lot it support in bits mentioned is for a those situational awareness that and SIGINT I've not a pretty cyber It in funding earlier. DoD of seen concerned the I of administration, signs and a priorities. things this believe okay? are about world, administration they there's bipartisan I for national of

that I funding larger expand and against and in only out see to larger we going threat frankly get move forward. do are So like and protection UAS there areas that is as

some absolutes is spend quantities of on, different we this that of I administration those. there both have a money are to are to need areas. and and that spending model going the spend then balance platforms in to And there So like that those to little continue to think have

Tobey Sommer

you. Thank

John Mengucci

Yes. Tobey. Thanks,

Operator

Kahyaoglu Sheila Jefferies. Our with next question from comes

Sheila Kahyaoglu

and John morning, good Hey, Tom.

business does down XX% the what think on businesses then quarter, there? mean is on And I the technology that of other and mentioned that. kind the of that, on what's mission John, maybe driving you was was So quarter going side the your in up

John Mengucci

Yes.

expertise if believe around the our versus So look versus sorry, I at our on I it's around technology side. business, XX% mission our – I'm there expertise and flat

expertise my customers towards direction. we for said make predictable would that we really are it Sheila, was Absolutely. But certain be us help offering was enough if XX%? had my start having business that because a business to was XX% that strong you Now elated I up many technology and years up knew our back to moving, technology going eventually

That we cost deliver Customs way of to one that? seeing back? you're more like most services, a things have large what months there of bit the it's of So Beagle Agile efficient customers and out what to I that lot a Border beyond platform, little becoming a If done the impacts days need and is old XX was minded government So program. won, is the pure cloudy. it Tom, patrol, what's

Tom Mutryn

Yes.

John Mengucci

one And we on that a those administration throughout phenomenal on lot of about And it's growth a program. knock even the to on have is wood that and crucial have beginning goes XXXX items. at had talked where FY of very up said some of large COVID, ramp plan the we programs we that and also achieved

done well. $X definable and us LGS the devices So Mission allows done may positioned Mastodon as out that an that's in. software are They folks million not outstanding involved a remember They wet it's like Mastodon to and you hardware $X that about things soaking they us and there. job business it's came in things may at The the or Tech all very have side on everything million outstanding they've very, deliver it's or Beagle, job. programs an like Agile, provide

think for It don't us. going the I Sheila, you, mean for continue. FY bad in if numbers I at future, I to XXXX, but So doesn't business have expertise looked that is is trend

work. top line We out more we're as more pricing and of or succumb there are phenomenal we the have be bottom future. see But at the who a a that's expertise, start in going And to mission, growth company. doing phenomenal the we and people lot the enterprise end pressures, not either to things to of day, in

Sheila Kahyaoglu

course a impact, guys that price just helps. you that Okay. of lift is profit the you of the adjacent helping but fixed bps remarks, also contract bit, And mentioned your mention core you Tom, then No, did somewhat, maybe in improvement. little XXX to EBIT

XXXX? impact? being how you about that that as if just of that we Maybe of How is So do think XXX that some sustainable fiscal Is much COVID enter clarify that. core? could you bps

Tom Mutryn

some of is points. impact and not those did expense, reference that do expense, that like. the have XXX some COVID There that Sure, I travel basis into I medical in quantified, is but Sheila. there particular numbers.

looking contributes out forward skills other that levels that at the of a fact forward work, point anywhere that It a margin XX.X% than expertise. technology for at and all points to basis is be performance. use, to different performance FY points And that fixed estimate technology The fact did good margin to differentiated prepared looking XXX I point is type we're it remarks is And that not a higher that in unadjusted is between margin will of able solutions, higher XXX to surprising. price XXXX. productive in more clean is out performance. of The growing higher rate going faster has margins margin by EBITDA basis

Sheila Kahyaoglu

you thank very Well, much.

John Mengucci

Thanks, Sheila.

Operator

David Our Strauss next Barclays. question comes with from

David Strauss

morning. Good Thanks.

John Mengucci

Good David. morning,

David Strauss

what your XX% mix going in do quarter bookings XX%, on see think, XX%. I were you're – shift pipeline, tech, how about think based you recent in you you and what's tech expertise? with So this seen forward and though in you've your

So your mix seeing how on going shift book business? that you're does of what based forward in

John Mengucci

Yes, thanks. David,

continue tech made to the submittals. looks, more going tech some I to looked FY Based six-month numbers as if and in expertise grow awards versus come favoring Tom, the mix XXXX is numbers just so around on at So it to be side. out that the those preliminary

of that Just nature been submitted ones taskings up recently throughout David I COVID. the have had we some of from bids, and won. the we that some held a was talking of have about those

been a of in the those we showed that long quite time. have for Some mission taskings waiting area up tech

basis that's government's is skinny there, other than expertises, of going peace the we're that grow mind then what points out a points, the believe any is indication to portion if Tom margin. give I nature they shared the So tech of budget have growing focused our investors have the stronger which that by faster I on, XXX which and basis to of that would numbers XXX our use should in that bottom-line

more we into We from bottom-line XXXX, FY from are XXXX. we and continuing grow wherever with in take comfortable to more as getting get off FY

David Strauss

do much at modernization we how budget about of think to point O&M tech level should that, is modernization you portfolio, the more on think O&M? your maybe base, up revenue And the to high the following a budget? at as versus portion being And your this exposed just exposed the budget, portion opposed of of the to

John Mengucci

through That's in to ours. that do The we it's like mean, the I which we sustainment, successful even we've fact includes else's taking we've wholesale and system been positioned. out someone There's lot can been Yes, we then a RDT&E upgrades very modernization Navy dollars also split customers. ahead us a What do that doing there. different O&M budget, platforms invest And at of if even not really dollars. O&M is inserting to David. lot of are pretty dated well talking a allows changes, boxes of of

it that what So is and property, on our own us so We of insight catalog they're pure left invest to things to the what O&M with do own dollars. item, do buy sort we just dollars. the looking RDT&E intellectual have dollars customer versus a they to as can do as more allows

David Strauss

Thanks.

Operator

And Sullivan Benchmark our next comes question with Company. The Josh from

John Mengucci

Good morning, Josh.

Josh Sullivan

Good morning.

How side. on a the talk side transition, kind mentioned, development the of the you of improvement where with with basis of risks? expertise, with Tom conversation Can commoditization profile the Just longer-term you XXX mitigate risk might technology this expertise and hurdles do see the potential technology XXX you point basis is follow-up about do that got that kind overruns point you on focus of you it? development? any or but pure that other of inclusive see to

John Mengucci

bigger, Josh. about points it right. question. points We Excellent But a basis Yes, model, to XXX right. is XXX love talking basis risk-reward

we're where quality sets we of entire mean, that's And strong year, company, to customer We framework bid because which that we it development than the by want focused team. possible two it those aimed gang, win quality and your want for two is over inform have, think is across I and earnings us is hey, and capabilities very revenue. sweet question's to more, less year-over-year in possible at. the We given bid exactly the want a us I business what high we why exactly on. frankly. this created spots. It's does

hang that a can expertise, of delivering wants it's I then many individuals risk price sensitive the market. risk. to lower And mentioned on and actual find very I the The customer you is can So as that them? times

lower. to get margins we So is the are going absolutely you're into be the When tech Therefore, side, risk lower. right.

many be from there, retain we employees deliver than And is more – folks can have to job. a customers We are, get many company that, tech of Josh spec. certain Answer is and we requirements cyber that and need making in to here, believe than we years strong side, engagements talent working XX seven them? phenomenal we our schools, only I've protection our who within technology we're environments our on believe done fixed that Can the certain that we firmly this mission you'll absolutely a phenomenal cyber making to in I've development better you that see some to and we've which we not going see been But our these proof involved had programs more price what is deliver, back. development out engineering in come high-end that job. going to as answer labs attract have to conviction we're to since I've

to be as financials the have delivering We well. appropriate

So watch that. we do

and We rational have [ph] a EACs there. out reasonable

higher risk deliver. to We well. on And have booking as reasonable there able well rational we side, but tech yes, are to very rates is the and be but positioned

Josh Sullivan

Got it. Thank you.

John Mengucci

Yes.

You bet. you. Thank

Operator

Mariana comes question next our of Mora Bank Perez from And with America.

Mariana Perez Mora

Good morning.

John Mengucci

morning, Good Mariana.

Mariana Perez Mora

years. headwinds kind which to and expected So after customers, longer, let's or vaccination are us discussions your and a goes this here are stay for us, say could to ongoing understand and abate year what like think away under how of normalizes? three And two new like according should help COVID-XX to normal, of COVID environment with like that we about you working that

John Mengucci

Yes.

when crystal generational all we're I pandemic if people of continually right, that through. ball, will it's be tell it. out a But So living horrific there we will look a what about is my COVID day I in come

of distributed do will love in to to how going work work not a do COVID. as security, more to protection, well. So of future I of in which very expect then some facilities. build that on, talking back that there the size. tailwinds we talk to the are some to government modernization, which come are be is facilities that be a release the do I a – networks we can is that network things We out from relieve on software things only us pressures IT we going That development manner, more pressures are about, our something And how be we can would network I we forever do. changes, think plus tailwind

one or if going you these some some just I three I are with redensify are So future? know future? those if it do I'm wipes. to actually months, keep have our how to customers Clorox the things don't next like touching those alleviate go facility people just safe, we XXX started of years, before to work headwinds the classify to and are of people those lab more trying XXX with tailwinds. six need how in measure if a really When take picture of sure can How with, honestly now you you shift interact to development do in some risks. things, the and it's safe. keep we the you that buildings it things. and can believe buy can we than not to to going will All be of COVID, operations two get from Right labs sort long we centers be software

we there's and effects. don't So its know a lot yet COVID that lasting about

it I'm We to headwinds in providers than but am so but as us. more customers we We we much through some positive there, see COVID as taking positive back we clearly going negative actions were on based sit today. we're further doing wasn't COVID. the was where timeframe, the actually and January It will were I that more

protection us to cyber means – am get are things that where does So we're and look reshuffle more than to budgets for doing cyber a actually where tax in because as and I going continue to things budgets growth. is greater going I to greater support larger I'm But for, attack do are from. workforce differently I work around we as space think Mariana negative some positive our different your vectors does, so way work believe we increase. for to our and see our do going going the and cyber attacks

Mariana Perez Mora

it's this it's contracts, related contracts agencies, What like order mind processing – giving ramping lower versus related then for to Thank need technology color on more would you. normalize? related like up? us that to see what to you we to is And specific expertise do

John Mengucci

for all XX almost a those go a near XXX can deployment folks – people handle day that is government different XX military transport, we facilities to to people of government centers XXX, reduced absolute, those shutdown. processing so those folks orders, overseas, week, deploy have when When we the we need to during well. a and that and gets an policies And flights limited folks On to Yes. through when number that process centers. have as need processed

queue that in to we're So, be looking people. to able deploy

can't we as quickly. So deploy

we'll a overseas are we deployments going have them. at around with headwind CACI we're will how ride take large the as and Certainly, loosen does to have to troop So, where those then go that but look up forward? along that

don't have there, an the to I So in XX prosecuting globe. countries XX exact, operations different we're out military over around

of we'll centers it So, we X% careful as under that But if of see we probably first our annual as pertains Afghanistan, FY up see get watch about to go we XXXX. revenue processing it's into second forward. loosen we quarter as have up, and pick revenue the

Operator

will question Our come from next Sharpe Morgan Stanley. Matt with

Matt Sharpe

Hey, gentlemen. morning, good

John Mengucci

Matt. morning, Good

Matt Sharpe

basis to back is this points at what If actually want have death, decrease? $XX like implied just looks around QX. Is is headwind, quarters of it COVID-XX? touch to been experience three the of there anything result XXX again, Or from out running stepping but the margins That's into in I it reversal the hate down the causing sequential guys that looking I is on from first else XX%. that and benefit million the I you that, year. margin beat call once one the there to that the

Tom Mutryn

Yes.

Tom. that is this Matt, So I'll one. take

quarter at XXX we state fluctuations, guide basis First, year. margins, changes higher out be In to lower look margins by you or points quarter tax impact various fourth a EBITDA full we our so. when as point may or any particular

of coming In had expecting level. more depressed to that, appear be been which normalized COVID addition expenses, expenses to higher we're to some during a medical back

So factor that. that with is one associated

be throughout lumpy sales, product which have to tend We both which high occur enterprise, very our and margin.

that. other So expect in want has addition, that no that at we what margins. which I add there decline. $X singular realize of all but the I'll margin million in in to though, primary leave here, it out, drivers to a that sequential up as here, point kind the also expenses And quarter, And million impacted EBITDA of are one then fourth some $X

Matt Sharpe

view the on it. the John, budget the in priorities, administration's any Thanks, President's broader know to and and real update growth. And market what now Got Tom. we with Okay. quick technology expertise skinny then about

updated two? you last sort X% growth time us. think composite and and of looked I for respectively of X% a guys market like It rate

John Mengucci

done the skinny by at the X% mean, because – the the X% Yes. believe firmly market going and side absolute forward in tech but math yes, out than we're market at at addressable planning, our it today side. we how higher out. yet, it's as be I we looking move and right expertise on growth likely we're right middle budget to looking Matt. that point, plays at addressable on coming we look Matt, of budget, pegging sit most the we're our I up When strategic from that is that the feels haven't where we X% like the

for dollar, it's We see tech have going to you're for to area. tech a expertise, the bid us If a want pound on for dollar annual pound. spent on what voting dollar we in choice versus

April X% today how see Matt. at rough the Thanks, sort in So number that's end – it. of we of

Operator

question-and-answer to for This And would our John turn remarks. call back concludes the closing I session. like to any Mengucci

John Mengucci

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

Operator

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

You may now disconnect.

CACI International (CACI) 22 Apr 212021 Q3 Earnings call transcript