CACI - Earnings call transcript Q2 2025

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International Fiscal 2025 Second Quarter Conference Call. Today's call is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to George Price, Senior Vice President, Investor Relations. Please go ahead, sir.

George Price

morning, good and Krista, everyone. Thanks, Senior I'm for of Relations President International. George Price, CACI Investor Vice Thank us for you joining this morning.

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

call. Our incorporated safe part any of in this statement this included -- as exhibit and any is should this be of harbor transcript

out in isolation prepared as performance I presentation financial in GAAP. to our accordance non-GAAP of for also will or considered These discussion like should be with measures measures. point that a substitute not include would

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

John Mengucci

Jeff With Financial to this good our Thanks, us for updated joining well fiscal our 'XX results second Thank Officer. quarter fiscal guidance. you and morning, year is as Chief everyone. morning 'XX George, MacLauchlan, discuss our as me

please. Slide X,

Our a XX.X% of and on quarter great results growth second to XX.X%, quarter flow. EBITDA margin solid represent our year. revenue way another strong cash of We delivered free

represents awards, trailing X.Xx. of In book-to-bill won which a billion addition, $X.X we XX-month of

our backlog. in our business but clearly seen As awards XX-month be of the book-to-bill, we've can timing, due continued lumpy many strength pipeline can said to our quarterly our times be and trailing before,

the a award to which during quarter, Navy I'll years. for the also over next with work increment on X received closing, a award acquired just the significant we million contract sea the that new as Summit, mention prior $XXX Azure

the value both integrations included And are to and in that from a we're awards and of acquisition. was our that both Summit our Applied backlog already number, I'm and award of very are well. is the reflected great Azure is While businesses Insight in seeing performing example reported track, this pleased not it on report

our on continued raising Jeff Based financial 'XX details are see fiscal our will in the and and we guidance, provide momentum business, we our more performance shortly.

first Investor the to are ability deliver behind FY half on and out of financial laid Day. With confident X-year targets 'XX the well our our us, recent we on at track in we

In free value. positioned be shareholder growth continue addition, share long-term drive and well to to we flow per and cash

Slide please. X,

company, environment, about national conditions, Healthy administration of we DoD, continue see dangerous serve, to security be and conditions X be those support a XX% streams by are the place. and continuing areas Looking the macro a world increased the the revenue the company and its we incoming to community that generates key at in true: we Security. Department funding difficult that spending of by the in challenges the the to these Homeland intelligence demand solving markets of Against a signals most

enduring any critical, we see focus continue the as priorities, administration. national addressing focused We under security on are which to

Slide X, please.

spending software ineffective reductions to of accountability efficiency of a of stated and address focus of environment, government DOGE through increasing with reform. requirements the networks new Next, one get on key national and the rapidly the budget less improving to including across the officials, information methods regarding a federal new been in and regulatory while investors DOGE. interoperability, and reducing wasteful or workforce, for more the financial the changing reducing there's government size others the mission initiatives, of security significant of a requiring number by the government has technology attention paid media, lot Department administration's Efficiency, elected objectives, Government modernizing or

continue As ahead in more CACI, and and we at the in in exactly been Day, need to is to this and successful our of and strategy be customer faster, high-value we develop flexibility. have deliver software environment. use capabilities efficiently with be At investing of our discussed greater to detail Investor purpose-built, leader the

We delivering have that development commercial-based an mission exceptional using critical of enterprise open solutions design We systems. track dev scale utilizing advantage software our and do and Agile applications record of ops software networks by modernizing stack and processes interoperable lower more burden critical reliable, cost. architectures. that operator more This that technology discussed. information the that AI-driven delivering faster deliver CACI is things is drives at just Today, more with I exactly efficient and more effective, reduce more secure, and models more take

So give few a significant you let examples. me

Slide X, please.

First, when the X scale programs largest portfolio well the software enterprise as we others sizes. includes of talk federal development software government various applications, our many Agile as about in modernizing

results, Our Agile have releases track at cost. of more demonstrated software, modernized programs record delivering and faster a pace lower with impressive higher quality a at

and applications, Customs DHS a software ever perform with continuous against border to program tempo of modernization enabling operational agents a requirements. high at Protection involves BEAGLE Border changing Our

fund and CACI on data Day, allowed met at exceeded of are which and their quality, data On to analysts and missions. now as execute initiatives, of efficiency which globe, we transparency additional and of NASA have we program, XX/X And our customers our bringing same not velocity, to well. thousands modernization they this objectives, which program, as ramping national is visualization with programs forward NCAP it technology growth we move our schedule. also the that software security up drives then across or they for tens updating -- is the demands only daily are These use have multi-source Investor to discussed to classifying meet intelligence networks,

spaces networks, on of is in development across federal to X delivery critical and Moving CACI modernization the government. programs the

achieved. these are how awarded regularly are is We contracts we changing network modernization because

intervention. more replacing are extensible more less outdated and -- costly, infrastructure cost because are networks software-defined modern time that require legacy over We they lower with secure, human

to the user for CSFC, classifying, and ubiquitous that the secure or solutions access. a the multi-classification delivering network device, ensure to also We commercial endpoint access has are cabinet from

changing our well, and dynamically security signals designed national to is rapidly avoid and Spectral program with warfare. developing delivering Next, CACI Navy's address for Spectral over software is of -- threats to requirements. be great to system using updated and systems continues example next-generation rapidly applying open progress weapon a the that architectures can lock, vendor intelligence the electronic mission-critical is and year technology dictate. as

having stays to the station versus port. return So ship on to

because the adjacent from type work With -- and deliver program the taking capabilities theater, the that Spectral good that And in performance, our the providers. differentiated fight out speed is ever-evolving exactly approach -- other at are of the of we Navy will of threats

the IT with as Air ahead program of enterprise Service deliver a efficiency Force government. execute continue our On to as increasing and known the EITaaS, for we expectations

both This nearly be currently of the the later XXX,XXX having Force fully next-generation space time, management is both first airman guardians force, the and Air to IT Air and force deployed program service entirety modern system services. XXX,XXX and in Force supporting For support to across provide support base this place nearly will globally personnel year.

of by support providing Importantly, delivered IT the from direct thousands efficiencies roles. more will transition and guardians to to airman war-fighting EITaaS enable

successful I want by financial audits our highlight Finally, agencies. enabling work to government

only and X system and this of Corps, X financial financial X audit Initiative first Agency ERP a system. the in the military its improved first program, are and United agencies how Our a branch the received ever across DoD system X arm CACI clean audited as clean management have by on service, by of This supported of DoD rating U.S. the supported more single system, accountability Defense or that agency transparency the in we clean on the the DoD. And service received States provides to is CACI implemented and audits the going a notably, utilize even forward. work annually, audit. the Marine X receive financial utilizing the a drive DAI, Today, agencies is can its the and year

on the Executing continue enhances examples with it this well our past of to customers, strengthens credibility administration. of with differentiation all growth importantly, new and very work. performance builds align these ability win on to like objectives that drives and these programs contract And new our

how federal civilian have to goals, likely perform bunch beyond reform more a is And DOGE and exposure we efficiency-based of regulatory minimal to the technology of reductions. align where and lead against we government, to side these also

showed agencies, which we surveillance X, other only a differentiator as is on fact, Chart of In X% to federal from comes our our relative revenue material total peers.

A&D Slide in XX-plus unmatched of the growth financial structured free flow in the speed and world, our financial best software the X, innovation please. and and execution, critical administration. agility services all under processes disciplined the missions of the our and a old value and outlook a and of strategy company primes, result of to that we X-year and industry. track In has share providers year performance, through security performance commercial any record long-term -- focus of mission within share government per the drive national summary, of our combined and under ability strong The confidence have competition, our and cash knowledge understands the and qualities

Jeff. With I'll over to that, call turn the

Jeffrey MacLauchlan

we Thank you, of representing Slide underlying John, or second on was growth $X.X generated to XX.X% as an turn billion, basis. and good X. growth X.X% revenue Organic morning, In XX.X% reported. the everyone. quarter, Please

consistent expectation, EBITDA quarter largely Second outlook prior basis represents second of items third expectations. increase driven the I'm was second the into to be margin a quarter quarter items, -- lower and year-over-year expected our those though remains some pushed as mix as mid-XXs timing-related margin, some These Executing into quarter. margin margin EBITDA XXX purchases deliveries year been primarily technology our well due in our software-defined in to would pulled timing. offset XX.X% above sorry, with unchanged. of third timing-related full EBITDA came which EBITDA our quarter points, business margin by material are have excluding forward margin

income XX% share a were operating per earnings diluted offset interest tax of $X.XX than higher year and expense income higher Greater Adjusted ago. more than a provision. higher

Second working $XX million, quarter capital. for Days million. the sales Free profitability, operating flow flow, accounts XX our or cash higher strong purchase by receivable quarter was $XX were cash days. facility offset DSO, was second outstanding, reflecting excluding

XX, Slide please.

quarter on Summit. to net and pro forma a Second X.Xx Applied the EBITDA Insight debt Azure was XX-month following trailing acquisitions of basis

a we've deploy and drive with manner like business in run in the flexible long-term cash flow We position opportunistic previously value. range. to -- share remain Xx free to and per growth capital X.X discussed, to to we'd shareholder leverage As in the

raised to Investor a Azure business reflect Summit guidance that Insight. then our the acquisition. as Recall we increased our please. acquisition the again in fiscal 'XX fiscal first our the November X guidance organic at the Applied XX, Day of 'XX result of We greater and of quarter closing Slide momentum

raising X our momentum again in guidance between be XX% With total organic an the our all pleased billion, to 'XX growth to see of We're be continued revenue $X.XX to basis, points and XX% we due which acquisitions. represents business, includes we're from guidance. billion underlying growth to raising This of fiscal $X.XX stronger on growth. the

We you QX given at continue to margin expect more low timing the 'XX the weighted items what I with in our XX% EBITDA just we half Investor range, consistent [ EBITDA discussed. ] communicated expect to to to margin be fiscal in second And be versus we to the Day. QX

our [ share, with per about at attendant And As an revenue flow This rate XX% between $XX.XX of with million. in also free to interest guidance tax increasing yields finally, and a million. and EPS 'XX increase increasing cash representing lower our growth $XXX year. to our between income we're compared adjusted least FY $XXX and million of result net be adjusted expense, a effective to combined guidance to $XXX outlook, higher we're last XX% reduced $XX.XX ]

cash share. have said to 'XX we our flow in share As free creation metric, growth as ultimate the now per free before, XX% implies we see and per guidance value cash FY X% flow

XX, please. Slide

to forward reflects book-to-bill XX ratio trailing our of the months strong indicators, X.Xx in marketplace. performance Turning

good from revenue. strength $XX backlog business. into billion Our under our long-term X annual the metrics These XX% of of provide year ago just a of visibility increased years and represents

operational XX% come the -- coming and approximately underpins from expect performance from business. For revenue confidence on and existing our 'XX, programs reflects metrics repeats fiscal year Progress these updated X% now year. our in expectations X% from with in approximately to strong of we our our new about recompetes

under pipeline, we billion $XX are XX% significant of to our business under strong This around and proposal increase sometimes RFP evaluation of which performance development terms of sequential new our the CACI. bids for in reflects evaluation, submission bids lumpy of and timing decisions. In award have issuance, business

in of XX% of over consistent demand basis, continued bids reflecting with expect in billion key Expected next around areas We submit X focus. are a quarters being for healthy $XX submissions that to business. the our another on sequential new

quarter of priorities our value. customers enduring continue we We're summary, win healthy per supports focus critical seeing high-value growth, share on delivered national security execute results. shareholder cash as In flow from another free demand strong and long-term work we that they to and and additional increasing

And back the with John. call that, I'll to over turn

John Mengucci

Thank you, Jeff.

Let's had cash great delivering first fiscal growth, XX, a go of flow. and In expanding Slide 'XX, summary, solid to strong we've please. profitability half

As a result we our our guidance. 'XX fiscal raising performance, once again are of year

on work continue We commitments executing outlined in financial at executing delivering Day the our our November. Investor to to high-value our confidence we our winning and in successfully shareholders. high X-year targets have our strategy, and We're financial customers for

to they is enables about world and can that national the through have combination the how capabilities differently and strategy Our It differentiated customers And us possible. addressed and think is many are of and our ahead be CACI implemented deliberately we going to technology. invest uniquely where over to years. of something our priorities critical the drives security for need show positions us strategy expertise refined

truly excited company our is headed. are We where about

for To thank and is is I do shareholders, by CACI. and of every team, nation. proud our innovation case, each employees' you for commitment. our through our what to Thank our CACI of day talent want driven support to our always continued And on As company success am for the you. and I you their your the everyone

open let's questions. for Krista, With call the that,

Operator

Your Instructions] comes Research. from question Scott with Mikus Melius first [Operator

Scott Mikus

high-level John, quick I you've industry. been question just in the to take your a want experience

the the government CEO process efficient. Harris the So ] of DOGE acquisition letter wrote [ make to recommendations Ultra more a for to with

to So And you recommendations be the administration. if what would they I'm and make a you just curious with were if to incoming had why? meeting them,

John Mengucci

Look, high level, thanks. at or that things there'd X a Yes, Scott, X be would share. I

do within to missions. DoD drive the to funding requisite infrastructure the I easy It's working. IT off, federal first the that that both specific looking really networks. what X their difficult agree modernization community. those things those work those to point those need we with not started need It's the shortcomings Many their also think But off folks to DoD across the networks trying am certain I of but and accelerate and and of which government why intelligence future more we're understand and networks, to today's I them, users. ones. customers only the of infrastructure simultaneously first mission, their the IT modernize in need, programs at is to involved for are but for

different a the a investigate outside the U.S. leader Continental is with, I'd to the fact and and do that from come that priorities. need required than that law threat could singular ask Counter-UAS we enforcement more be the I have bring shores. to the that frankly, regulatory would or our to focus on protect them the in different Homeland sooner U.S. very also on to DoD, DHS side strategy together already national

we've are. occurred the we nation. New of at believe that in to looked to are who what Authorities those I difference and make make that understanding drones this all Jersey world threats difference. on parts around and a probably want I they other hysteria And granted think of will a truly

industry. to spend training like the a from already And I'd some look putting have was government reduce continuously protest, or strictly on on to have we acquisition and they time I rampant officials flag in today record sharing blemish of in last, processes elements lessons world. test near lot think than another out a practices. like contracting rather We're is view the there's do to which doing learned government maybe in it at the federal follow that Look, protesting money an that acquisition the

revenue low-hanging we community think I trained, in something the rampant own acquisition talked think this lot and the for that that their And the years. because of done protect doing not work program but acquisition protest of because better fruit. that cuts for are people would down lose good nation. this within forever, is We form I continuing be XX [indiscernible] If frankly, some that to of frankly, get focus sole about reform very can on shop. marketplace and habit needs purpose us a of a a people to they that's

for Scott, thanks, that. So

Scott Mikus

And in maybe to some Has markets. Okay. the quick then up valuations valuation well, until that Jeff, shown maybe for or a you, John least there's changed improve? for were that question derating stocks at I been as pipeline thinking a guess, contractor about or valuations cause selling wait in companies government the M&A public in

Jeffrey MacLauchlan

we The further dampened set you'll This the has transaction most ways know, Yes. actively a and sort that. even in particular election We certainly its rating. take We've you of down, ultimately. think is and acquisitions, seen as this have just It's of look our And of is that little -- multiples I at trend we already. of that. Scott. if recent the example recent and moderation we've valuations found most before talked this certainly, our advantage own pipeline, review that kind about Every But recent bit. see some of phenomenon dynamics. you kind have the almost seen to of complexion

John Mengucci

and strategy to add, growth. also did are you just fantastic We how opportunistic. and to capital long-term going I'd at as future, today flexible our Scott, in X we I want that remain look drive at look acquisitions the M&A deployment

other share capital debt. be buybacks at focus that frankly, whether can I we M&A get to on we because target ways down our or of that be our or of into reloaded -- couple as delevering leverage we're to deployment, quarters continuing want range to we're so look buy going driving So next the

your questions. thanks for So

Operator

with of Arment the question Peter comes next from Your Baird. line

Peter Arment

if someone getting the John, of there's deploying national do space of technology bloated or result. so that? kind Nice we there, in security like an start around your How or to view a civilian either workforce. become -- for within the potential side think DOGE of of that about lot you work? just that question, seeing CACI talk opportunity the in terms the a of kind a outsourced more does -- software spirit And they be reductions being

John Mengucci

what days it back Yes. going I Peter, couldn't of goals, it when they of brought the frankly play it us I all of and us contractors very me right? the federal of sell point. was most know offices that money. acts, first look that how Look, untouchable couldn't Let's of in some and initial number saves of did into took sequestration, these workforce with sequestration our was all the it federal where of because to sort reduce government doing out. to work of think was at quick sort And immediately the

don't But take remove opportunity that any they what's additional staff drive growth. believe us track going my sort I connection that able as -- it's that, office mission to an do mandate an effect. additional inside returned have understanding in some I reduced. to to is they time of mind, to easy take -- be it's tied will to that are for

every Look, day. we get --

contracts long. Our only so last

about to We the today. we deliver opened of for recompete We at time are reasons. I federal do any government. expertise believe multitude that open the in for a just

the not more intel folks the up. with only assumptions, call as bringing in more day can of to we has We're government folks end DoD the that believe folks. we done lot on federal area, the I of we move time the there or work government in, to the well. Peter, but whether eduction. and with are more technology yes, And that side deliver at on a areas, other get AI Every they less solution, an whether become another those can free So make

Peter Arment

really quick remind where you Is potential what then I there. any -- of like you be Jeff. appreciate before you And target the all for kind a us the want repurchases? you're leverage is can color. It just one seems to well resume positioned

Jeffrey MacLauchlan

we're We We to X.Xx. in flexible Xx, like less, to ended to top X.X the have We've the at ability range but the that little range. Yes. we said where quarter now and at just are opportunistic. now a be be and we beside a

now. are, a options So we us but we'd levered bit we have less of like be to little open range a than to right

Operator

Bank from with of question next Your Mora America. the line Perez Mariana comes of

Mariana Perez Mora

and Thank introduction for the that showing your impact how DOGE portfolio you is.

those appetite like to So like question you towards more and on be this related -- civilian? a it's focused think actually would be CACI's added agencies? of appetite actually your efficiencies is type all team to How expand like into initiative in civilian go type opportunities? that. like to do a will DOGE of management of financial those like a What Is able what's

John Mengucci

Mariana. remarks, Yes, a about those areas. Look, actually Thanks. prepared number we of talked in my

show as I And government to I in fully election, the the think so been make driving and need look also customer more they they they art long -- moves marketplace forward. long towards the decisions before could of modernizing mean of the talking that right, as DOGE, networks, customer possible, as we're about modernization, company more that today. that invested IT look the better before we've

they parts do but these to learns impact, of as I the doing, of government all best do I will of in together is that across don't the agencies, day, at government willingness other for of to happen actually this more that, the the government the I more about as think the DOGE what is the impact can think and quote understood the today DOGE are what so solution areas want less, that more their end nation. all work to for want is

a BEAGLE already development development. because talk We driving cost-effective DevSecOps work that say about more software a we're much Agile much Agile dollar an we're added for wasn't because the we're them in in less. sides And that We is we all ours. federal have scope it and software win why gets that is company able so of look to because it. more appetite superpower with you that customer at for changer. much game manner. can contract saving so into And that to on additional are original every our government is that the get do pushed software That's both to

So today. we're position fantastic in a

proud company on lot who pay these number to taken I'm new challenge back, A just this are women of fruits And men not beginning that have the of company. and of off. a this ideas and of their are to really years

Mariana Perez Mora

one about for if is to contracts, -- see Following investor like were There the more fixed what the you appetite cost XX% could more like are you. under like plus. been contracts of about and contracts? What like of commercial type of challenges to terms both like has cost-plus your and concerns terms, government were on if like mean for opportunities like price focus commercial

John Mengucci

do a cost we we plus, down appetite guess, Yes. of we a versus outcome just fixed us, more versus sort see firm of cost have That down. element lot government positive of buying anytime is this Thanks. positiveness off, -- contracting appetite price risk, pays that first inputs. okay? The ways for for haven't a go Look, is price to. there's is an There's fixed a versus Again, I to large a price for the an and and of comes that. couple

anybody I who something doing engineering you're amazing and take know for time, firm fixed-price If the an arrangement. don't feat, would a first it's

majority the fixed is company. of well this our businesses is But us delivered to everybody, known. of mean software-defined technology price our remind to commercial I by firm I have

of outcome-based last where X much have behind you of us, end do for trade we contracting, very nice margin a years, the at So then art part our upfront, the an least can we've a experience where the investment the that's technology. item been of possible we been, know, as share we and sell and That's lot that for solution software-driven all increases. with as

Jeff, anything to add? So

Jeffrey MacLauchlan

government build one primes John's providers. you I traditional I'd and I'm John's of of one think, the -- of the profiles to the where competitors back talks services on and point, slides about last referring I he commercial of the would Mariana, --

business things contracting We ourselves have of of the positioned each approach, most providers here think have we is in -- put to of an inflection those deliberately types are have X and extent that the the and qualities that taken spot. important and and to very to there point we of sort model ourselves most squarely relevant that

So straddling. we like that's a already the to state Thanks. of transition feel sort we're that a we're in of extent divide that here,

Operator

Your JPMorgan. comes next Seifman of from line question with Seth the

Unknown Analyst

Rocco grow are is the CACI management some company battlefield type communications, including CUAS, and of Seth. about where companies those despite gives recently This of on invested the for the ability What startup has confidence areas, areas competition? investing. in network, the in these to new

John Mengucci

Yes. is forces think great. [ things. you everybody And Look, pencil their It new actually confidence I sharp. ] learn keep to

customers are for. that, a delivering been expertise what our a said asking having Now we've doing the technology of and just lot you not that it's mentioned for long And time.

[ The half the high-level example, I okay? couple of this a customer's a them. And don't is mission, of X/X give ] understanding other actually

when router may get call it center didn't not of place. call is, connect call going thousand go go Our work. radio into. don't why. why to a missions know the It request -- your a works. what be has WiFi that the We but to commercial to has don't not In to today, bandwidth don't have every to get you wireless serve, providers a every I percentage reasons don't give There's my I call an and excuse how it's through something a also and we squawks nobody has me out used. to bad get center And know really inherently work have to we

of our space, and companies I being other a So in said, great. there's think a lot lot that's

drones drones, not from are is key the through just nation ones. simple side, find What's outside ones, [ X levels all of able of just state U.S. to not CONUS X On of ones there this the plastic large Counter-UAS ] within cheap really the nation the levels to being commercial ones.

software what all look So defined because to down, things appetite even true. you drives because going take the But as larger next click all my at of is when change. hear threat's continuously we it the I these

So we X based to the instances, that's this on code folks, devices are where It of are to technology globe. theory software-based and around hours. updated has based in It's all some going that last for to software. premise get on to is our going this deliver always to be as this

of mission part the very, tactical very the is different. So

understand, But understanding potentially of a have to fast new to X means quality entrants conflicts. the we software, -- problems. hand as But taking ways to to a competitors, means what's very we partnerships. look high hold it the I protection types think at the best pace again, It like of develop other I as go position we workforce at the how new change Jeff new going is because into understanding U.S. different mentioned, with

Unknown Analyst

Okay. risk Then of revenue view customers also from That federal at revenue X% the that do that civilian from your Or view? insulated other makes in you sense. those? is

Jeffrey MacLauchlan

that to it focus. little a that, bit which there there may that Well, as remain we NASA, a still priorities. in because be X But We a developing with is exposure. some think X of sort we we less see have seems mean about be things I area the that point varies. probably that for are identify that being instance, that's of sense

less We so. DOJ there maybe think have work I that some

your that to the the So own I that we portfolio think -- opinion people the be. form you useful where it thought it as for people to is about examine of risks But may answer to be piece varies. able was

Operator

with question of Fargo. line next Wells Akers the Matt from comes Your

Unknown Analyst

in sitting Matt. for [indiscernible] is This

margins, So will a obviously, just second bit in terms the EBITDA half. things in step of the up

will of factors us confidence So recognizing related? there, be in that through I timing that the some gives some walk can guess, you just what step-up of you

Jeffrey MacLauchlan

probably if then up, you'll and of The in tick itself manifest second you expect margin should in to in item will I the our take for strongest reduction for a quarter the quarter margin slight the we saw the mix the the year see sequential margin that And think X. -- that the probably reduction the and quarter, fourth in quarter, referred Yes. XX.X% to from in a our slight XX.X%. guidance you third I

for as to increases flat about margin then both third you fourth contraction revenue quarter. it. sequentially way think kind being in in a that's and think quarter But the the I in ought about So right you the in slight of to probably think and

Unknown Analyst

and early Okay. are any some you sense. leverage? pipeline, on But M&A And kind the of can how Obviously, particularly you then things sub-Xx you're on progressing now Makes the Azure deals. just in insight Applied just of that end? appetite give us discussion. the then what gave right back Summit now, Insight takeaways terms just is on your on that And to more

Jeffrey MacLauchlan

all touch maintain businesses sort -- them group with -- and targets bit John And we add with or regularly involved terms continue the years a add often want and a of pace. in personal for often to But an and and individuals. stay at we're monitor we've acquisition sort fact transaction. driven little sweet in this. operated Yes. spot own they in is our to the we regular and we probably several talked their to of have or priorities a will individual may want operated, cases some small potential founder of eventually that dialogues last They're plans for sellers, sellers to develop about before are that list a we in before by of maintain quarters and that specific owned owned by

and of around price. reaction and potential we the see opportunities flexible So pipeline capital terms of in say in we we're share when targets what deployment, the market along in the balancing opportunistic ripening with

So focus of opportunistically develop act forces. within time see range those to couple we're quarters -- that at ready sort be as on to the to well you as we John are mentioned, we've any targets given further the market here, but we of next over delevering going

John Mengucci

Yes.

Let's we also their as technology side. test to to us and see, to you unclassified able intelligence move with world an up so I'll we much the to modernization apps book move given as in that community They're cloud [indiscernible] to being about more develop doing unclass in and doing the manner, classified the those across applications Insight. can go they customers to bear talking start that then do a -- of on our of an bringing continue great They've job great purchase to cloud. more to business a Applied

for awful So us. lot they're folks. of a done great They've an bunch

are my they are $XXX the we seeing the already in synergies said quarter to helping business that With are pulled both fastest they and their acquisition another ours. of award. really tough integration. just is to full track This is on would They be Azure the prepared million or X, it where helping remarks, -- down businesses having a together. where tell we're

out, it's way velocity. seeing than on and sea is deliver the of their Spectral. into enabling just moving that ship, them watched act forward the goes incumbents to then with on We've They to are some go the then hits job. And increment this lay increment Spectral greater

talent, almost sure be and actually of across they've engineering the much programs than of both done the nimble software make we and with the that combining to different our months software earlier now getting to and had what show harbor meeting that those on XX side can features more planned. So even outstanding signals and all job Navy an we're fleet out to we to XX how

that and that business well of -- I is on the top they drove very going plan for financials, as case that right So was on our their mentioned, acquisition. are that integration

thanks So the for questions.

Operator

Truist comes question next line Tobey from of Your Sommer with the Securities.

Tobey Sommer

percentage your about part to services what days Uncle back the So maybe CACI prem of hybrid the on go industry? for that the in week working curious are means what government's a or I'm to to the be office remote Sam X on the employees mandate future? in

John Mengucci

Tobey, Yes, thanks.

to right. think So yesterday, limb and control, what because to I I here small focus if on going it go I'm can a on I was we released remember want

on expert national the not it. definitely I'm So

were mentioned, disclaimer. Federal So who with folks that came as the of a as providing number on tractors during sequestration, Look, materially. from I day-to-day down support

that back went X or you X You were. see see X what counts can years, the or if in actually -- employee you

revenue You came where also down. see

we company, don't skip versus know customers of strategic and home, government decisions statement, to that's level. We where it's the rates around the going many I G&A we what from But side, week corporate more look on work because don't a our Look, don't the to and choices. in classified the with going It's in know maintain making zero-based so a to like there's I different everything moved or okay? to We rates. overhead And every impact budgeting. and at different so ways. less is focus about workers have all the make support contractor day, federal do is or the end what we more tough our program in many that's driven remote to anyone at less. because need we

in to okay? for on confident while understand have. working pretty plays one, all than a remote But from first. It's I government security substantial of work, work people us, and and work very the did between during then first, location this way after working to on an work from there's policies we nation Tobey. hard sit the on the home facility. can COVID have I find going other that agreement that to or how our that, keep protected we think we're customer Probably Then share this we classified we'll other wait government a if end out. in that, So I'm itself and are

Tobey Sommer

of the X-year should where revenue be efficiency as the Where's What company? helpful. of that term? company's the a could go mantra on proportion upper That proportion And the the outcomes? of was priced on is bound

John Mengucci

work you add to is all our you we for are a and XX% company, can you technology probably I'd XX% remember, have a we will a we And another -- it's other services Because Look, company when right? work, XX% say were There switch. made is but a to is technology us I we and areas, word, would as specification different probably of says outcome-based. all say this take XX a of what outcome-based outcome-based -- statement can this need. XX% exactly very is small, that's

actually few very been a serve an are so The taken we're those type a which of our we're There providing to transition this And hour where government. at whether ground need. of labor the hour spend of long-term in on we're labor manner, the made, technology to on that transformed work building federal been R&D majority in individual of why instances we satellite is which customer that is up, invest doing a we delivering the why slot our that's stations, work has rest customers. basis have whether company ahead is part

on that XXX operation working bid purely are a to center. So we're not folks in network jobs left

outcome is see we've software-based to even bid on at have that We least work. that an before

that different has than Tobey. company, made So this Thanks, others, many transition.

Operator

comes the with TD question from Your Gautam of next Khanna line Cowen.

Gautam Khanna

couple Any I contract DoD you and flag and of a quarters, given on was agencies. that the view any expect joined late. replaced apologize sort the I various at of the I award that? if officers you addressed just transition the adjudication slowdown little this. pace -- if curious well, like in over the the next administration get

John Mengucci

to I X their they they delay I and years. foresee major normal course those a train how uniform of in There today. promote every don't Look, how is right? leaders. just the X folks transition That's lot Gautam, the service, a the That's normal, But at point, might if employee. you're today back. a I'm government being this X distractions more of don't have of had than a distractions a lot idea. it federal of you sure months there's major that see

that Jeff, for our of the just see awards quarter, third we waiting are in through now, the I are process impact. anything? acquisition going Some any don't and those

Jeffrey MacLauchlan

that Yes. here not -- happens area I don't it's the probably particular work level also us. at any rotation. would I -- less I is as the affected level upper-level with mean that But the which administrative just would identified I an I agree for that. we've area obviously by add, with add

Gautam Khanna

any, tempo what have And just Israel, if sort CACI? Ukraine, to a if What [ impacts ] up the as follow-up, there's reduction in is, any of you.

John Mengucci

of said we've have people a learned we a also lot in don't A Russia-Ukraine said today. those either of we've that Look, Yes. conflicts of war. material we business learned. the But have lot amount that from

are We of but doesn't company. that and we outcome engaged supporting, are the drive this financial

We're these of stages. looking how looking how in outcome some tech manner to Eastern OEM we commercial NATO. at But would fly-by our a software-defined plan, being threats partners for international at, about that We're around looking we're fact to Europe, did spending say the already overall I FMS minimis. direct at our received. to the work it's early FY relatively 'XX are the We're drive we're delivering again, will delivering continue is business. expansion. talk But countries. What financial And different in will today, or in or sales de in

Operator

Jefferies. with question from comes next Kahyaoglu of the Sheila line Your

Sheila Kahyaoglu

you fiscal the if could QX to rate about closing product the next understand potential about seem Jeff, with. just maybe could Maybe QX. about think talk your does if start off to to imply you year around the in mark. XX% guys Exit as I commit you talk talked about we in that you start enter margins with. how off

Jeffrey MacLauchlan

Yes. Thank Sheila. you,

X we than last couple in margin in years, X. to If in developed will volume that to have X little we out And that some of a done X higher at the notice you look a of you or pattern try bit. work quarter having smooth have and

do is certain patterns our whose products solutions of the of quarter and artifact have buying acquire, is customers the type you fiscal acquire, of But margin that end they and weighted an the that. what see services to they year. we second Some in of

of end of terms generally the year in of volume. year fiscal margin heavier -- see will end the our and being being the you So

John Mengucci

only to me guess, that we've margin but one number arm model free And dials. not to And click still to that. And think on the see value of unnatural honorable one based day, those is short We've know upside at I our of It's to that, going do strategic. we're of you margin a We very creation share. potential saying going Let I the not quarters, cash be to been I not over up. is well us. flow share tactical to We're very per end going for term. It's investments. also long that the acts. been know

between work focused margins. continue flow per drive and for share our to keep these mix cash technology on free we'll and So to on that --

Sheila Kahyaoglu

it's into just Azure development talked heading another is mentioned provide you work the there just if and And Do 'XX? Great. ask think could bit, we could on I then one, that if guys revenues Spectral I an in you Q&A update little here how about And given follow-on. fiscal the going, how one maybe and you incremental this think as and as contributing. about a

John Mengucci

Yes. Good. you. well. Look, Thank is Spectral very going very,

of a water a there's have needs, of customer Paycom of there. [ funding picture of awful an sort that You lot ], lot that lot to has Indo open threats. a

So how does change priorities on program surface the this those play? We we to go And signals won were also through very the customer this to that fact the most. customer to is program. we we work the going and about need allowed the the velocity Spectral on to accuracy as focused worry ships and and the efficiency challenge

positive and lot those the -- RFP, a now a set viable movement in. product. original of are successfully was the feedback of award was time able lot were step it. got that the without signals really cost proof lot We single of the of in bring was demonstrated to of a a without first customer We and That minimally around And excitement we movement, quite by schedule made. the dramatically changed lot we've a

system. Spectral time, is towards be full the Spectral At enabling what sort calendar the which we Azure we're of the to looked ] heart We're is the delivery year layer will Spectral same ships upgrade really of on the system, the in preliminary working put are calling to want doing production large and groundwork those at a reference has 'XX, of article to Azure as [ the those brain and their for ships. and INKF but those we kits, infrastructure intended sort what down of a since us, joined lay in the

hardware which mod the the is, bottom line very million received, all well. your last surface we're is It's of The that drive we're we in firmly of as that together indicator of there's more a doing as did 'XX the look, is their solutions, acquisition, we beyond. take valuable we your We in best next within okay? product, very this growth to guessing the much is much working and And us part that that take what some $XXX their of now and share started favor very, Azure fleet. and and software the drive can together, Navy and programs why software together we the question, believe last

Jeffrey MacLauchlan

I mean it. that's covered Yes. Right. I think

us, integration our couple the initial for we validated opportunities -- around really are decision. the of case, here Spectral the [indiscernible] have see months a of wisdom of really our We work internally and of lot business

John Mengucci

And can in and that It vehicles on to can efficiency, used putting that a on the is Navy as surface in mind in of army kit well. on it modularity surface ships. it the era built we're be an ride platforms can ground this make ship, certain with on built it ride other It air. on

So we see a nice there. growth path

place that that is X where in these customers that. strategy market but place security we It's with grow of we strategy case how another also national get can we to together, proving step instead recent a most be this this come going is pieces our can from of and our and better, put we serve in here's

So you. Sheila, thank

Operator

Barclays. David Your line with next of from comes Strauss question the

Joshua Korn

Korn Josh for is on This David.

more than forward? buyback wanted appetite there And is going historically Just ask the pullback about in capital to any for deployment. given the stock, share

Jeffrey MacLauchlan

want flexible the term and the but leverage, again, delevering in. well [indiscernible] be at guys we've range the us here we time, committed to that said we've Yes. we But back the on Look, And on at Look, the remain question. that say going thanks remain to looking this for opportunistic. give about. option. to are we're being we're into always of near every get probably, down If you we focused same in tired hearing talked the

the So thanks for question.

Operator

question for DiPalma from Louie time with Blair. We question, that one have William comes and more

Louie Dipalma

detection, is you CACI, domestic CACI? in a the New that pursuing? for opportunities, do you provider or Jersey of something view the market -- Counter-UAS providers and You you're are the as leading viable Counter-UAS that mentioned you one Are leading incidents. that And

John Mengucci

Yes. Louie. Thanks,

call U.S. on on Yes, decades. we're in for we U.S. how So we this use What in going are CONUS. in reasons. internationally. you U.S. in the outside methods do U.S. the solutions is and those systems can inside is today, the what some I shared you have leading Counter-UAS There the focus of we're our singular of opinion, the systems inside earlier of that for almost to that the solve a areas X market provider need of things Counter-UAS been and a can't number the we've But for, use

the And that's can and have to We an the my almost take. a beginning have all comment we and to believe And with important people ourselves X,XXX that of like talking if that nation. community. all very getting had at the is -- some DOGE, my only minutes out that's the appropriate is why where CONUS I all a DoD, been actions Intel they the at. way in DoD, we're levels needs I the solution levels this I issue of the sets pose . But like press. been quicker, I one. threat senior absolute over see are sensors it ahead the that X we globe. more these to But incidents of we've

it we can we market much out growth a been is one at different all for always go we how we a customers. for that do are it's with yes, the the it. on A us. that and government it threat about aligned of the solve talk growth So day, lot and But don't of end very because

Louie Dipalma

that also any as Navy And would modernize relates platforms? that much Spectral that interest on John, I mentioned possible how take, to the think other like to the to And there other platforms. looking system use it is you work it it been would same and indicators has be of Navy

John Mengucci

to is share in close believe to things that differently we believe are I I do and that I Yes. problem how more the how Louie, problem. we time that solve and are today, endless, truly and new manner. a at problem but a be I going side, have it solving I'm your where ways at administration from question, anything folks will I'll appreciate on there same this looking this not to marketing another answer were funds do [indiscernible] solution spend not this

brain. be ships At that it quickly an great other being It automatically solution, this put of fender architecture out the there's So antenna number and a breaks other areas. end signal what's in nation number a and conditionings of comes ones into smart the zeroes machine -- it comes allows being day, businesses from through automatically and that goes integrated really will to [ a software signal ] is software-based language-driven these a into open and of across and AI an a provide it

We that build to I these about foreign important to mall. that kinetically That's can the to here's AI folks our signal -- and the X potential is brain. talk to use machine X AI I going certain folks X great ways or language-driven way this make harm, of mission. are you threat, do a find who nonkinetically. cheapest AI about when talk It's in It's blouse why more

have we the system. modularized yes, So

basis. and companies for on regular DevSecOps on development, everybody built have The which a looking exactly We Agile Spectral today. that what commercial do today it using development and is is

this trials have many other this Xx used out to and and brought DOE and we federal platform with call, the this and move And can have beginning As yes, those this there, areas. type moves government. every for purpose-built across we've discussions and in mentioned have -- within we and were now be next to demos solution of

the win, is job. And the we that have solution franchise this to provide combination nice a Azure shared when I instance, the quickly. Navy this deploy XX-year fact love we a what which of we in won folks So is really X- can this our we

So your for thank questions. you

Operator

for closing and remarks. now ladies the gentlemen, conference John And will Mengucci I to over turn

John Mengucci

you take and Jeff thank Price, and MacLauchlan the questions your and their follow-up available are Sullivan, know on additional will -- today's to listen participation. you call many help to Krista, thank George We have We'd webcast everyone to Thanks, for after additional. for that and like call. Jim today's of

call. And everybody, so families. please great have the your and day. and our a best out cold my Thank stay all you, to and of today healthy. This you concludes

Operator

now gentlemen, and may Ladies you disconnect.

CACI International (CACI) 23 Jan 252025 Q2 Earnings call transcript