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01/11 12:27
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reflects a positive sentiment with strong financial performance, strategic partnerships, and growth opportunities. The Q&A section reveals management's confidence in addressing national security priorities and adapting to market changes. Despite some vague responses, the strong backlog, growth in key areas, and minimal impact from the government shutdown suggest a positive outlook. The company's strategic partnerships with major tech companies and expansion in international markets further bolster this sentiment.
Free Cash Flow $143 million, driven by revenue growth of 11%.
Revenue Nearly $2.3 billion, representing 11.2% year-over-year growth, of which 5.5% was organic.
EBITDA Margin 11.7%, a year-over-year increase of 120 basis points, driven primarily by strong program execution, timing of some higher-margin software-defined technology deliveries, and overall mix.
Adjusted Diluted Earnings Per Share $6.85, 16% higher than a year ago, driven by greater operating income along with a lower share count, which more than offset higher interest expense and a higher income tax provision.
Days Sales Outstanding (DSO) 56 days, contributing to strong cash generation from working capital management.
Book-to-Bill Ratio 2.2x for the quarter and 1.3x on a trailing 12-month basis, reflecting strong performance in the marketplace.
Backlog $34 billion, a 4% increase from a year ago, representing nearly 4 years of annual revenue. Funded backlog grew nearly 26% year-over-year, partly driven by customers preparing essential programs for the government shutdown.
Merlin Counter-UAS System: Developed to address escalating drone threats with advanced detection and defeat capabilities, including low collateral damage and a detection range of up to 75 kilometers. Demonstrated superior performance in government-sponsored tests.
Remote Modular Terminal (RMT): A broadband counter-satellite electronic warfare system leveraging existing Counter-UAS software to enhance counter-space capabilities. Received initial production order from U.S. Space Force.
International Expansion: Secured follow-on orders from the Canadian government for manpack and vehicle-mounted Counter-UAS systems, reflecting growing global demand for these technologies.
Revenue Growth: Achieved $2.3 billion in revenue for Q1 FY26, an 11.2% year-over-year increase, with 5.5% organic growth.
Contract Awards: Won $5 billion in contract awards, with over half being new business, resulting in a book-to-bill ratio of 2.2x for the quarter.
Free Cash Flow: Generated $143 million in free cash flow, driven by strong profitability and working capital management.
Focus on National Security: Positioned to benefit from U.S. government priorities, including modernization and border security for DHS and intelligence programs for DoD.
Investment in AI and Agile Development: Expanded use of AI tools to enhance agile software development processes, ensuring scalability and efficiency in addressing national security priorities.
Government Shutdown: The federal government is operating under a shutdown, which could pose risks to operations. However, the company has mitigated this risk by focusing on national security work that is funded and deemed essential.
Competitive Pressures in Counter-UAS: The escalating global drone threats and increasing incursions have intensified competition in the Counter-UAS market. CACI's Merlin system has shown strong performance, but the company must continue to innovate to maintain its competitive edge.
Economic and Funding Uncertainties: While the company sees good demand signals and a healthy funding environment for national security priorities, economic uncertainties and potential changes in government funding priorities could impact future operations.
Supply Chain and Operational Risks: The company is heavily reliant on timely execution and delivery of its software-defined technologies and modernization programs. Any disruptions in supply chain or operational inefficiencies could adversely affect performance.
Regulatory and Compliance Risks: CACI operates in a highly regulated environment, and any changes in regulations or failure to comply with existing ones could impact its operations and financials.
Recompete and New Business Risks: Although the company has a strong track record in winning recompetes and securing new business, there is always a risk of losing key contracts to competitors, which could impact revenue.
Revenue Expectations: Reaffirmed fiscal year 2026 revenue guidance of $9.2 billion to $9.4 billion.
EBITDA Margin: Expected to remain in the mid-11% range for fiscal year 2026, with Q2 margin projected at about 11%.
Adjusted Net Income: Guidance for fiscal year 2026 remains between $605 million and $625 million.
Free Cash Flow: Projected to be at least $710 million for fiscal year 2026.
Book-to-Bill Ratio: First quarter book-to-bill ratio of 2.2x and trailing 12-month book-to-bill ratio of 1.3x, indicating strong market performance.
Backlog: Record backlog of $34 billion, representing nearly 4 years of annual revenue, with funded backlog growing nearly 26% year-over-year.
Pipeline: $6 billion of bids under evaluation, with 80% for new business, and $13 billion in bids expected to be submitted over the next two quarters, with 75% for new business.
Market Trends and Demand: Strong demand signals from customers, particularly in national security priorities, modernization, and border security. Reconciliation funds expected to benefit programs like BEAGLE and Golden Dome.
Strategic Investments: Continued investment in AI tools to enhance agile software development processes and innovation in commercial software development tools to address national security priorities.
The selected topic was not discussed during the call.
The earnings call summary reflects a positive sentiment with strong financial performance, strategic partnerships, and growth opportunities. The Q&A section reveals management's confidence in addressing national security priorities and adapting to market changes. Despite some vague responses, the strong backlog, growth in key areas, and minimal impact from the government shutdown suggest a positive outlook. The company's strategic partnerships with major tech companies and expansion in international markets further bolster this sentiment.
The earnings call reveals strong financial performance, strategic partnerships with major companies, and a robust film slate, all contributing to a positive outlook. The Q&A section highlights increased demand and growth opportunities, particularly in international markets. While there are concerns about Q4 margins and the lack of specific plans for market share gains, the overall sentiment is optimistic, supported by strong guidance and new partnerships. This suggests a likely positive stock price movement over the next two weeks.
The earnings call summary presents a mixed picture. While there are positive aspects like strong relationships with anime studios, confidence in future growth, and strong operating leverage, there are also concerns such as potential pricing pressures and unclear management responses. The lack of decisive positive or negative factors suggests a neutral stock price movement.
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