CACI INTERNATIONAL CLA 2026 Q4 Earnings Call

Good morning, everyone. I'm George Price, Senior Vice President of Investor Relations for CACI International. Thank you for joining us this morning. We're providing presentation slides. Let's move to slide two, please. There will be statements in this call that do not address historical fact. As such, constitute forward-looking statements under current law. These statements reflect our views as of today and are subject to important factors that could cause our actual results to differ materially from anticipated. Those factors are listed at the bottom of last night's press release and are described in the company's SEC filings. Our safe harbor statement is included on this exhibit and should be incorporated as part of any transcript of this call. I would also like to point out that our presentation will include discussion of non-GAAP financial measures.

These should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. Let's turn to slide three, please. To open our discussion this morning, here's John Mengucci, President and Chief Executive Officer of CACI International.

John. Thanks, George. Good morning, everyone.

Thank you for joining us to discuss our fourth quarter and fiscal year 2026 results, as well as our fiscal 2027 guidance. With me this morning is Jeff MacLauchlan, our Chief Financial Officer. Slide four, please. Before getting to our results, I want to start by reminding everyone of the technology-first national security company CACI has become. The key elements of the strategy that produced these results. First, we utilize our deep mission knowledge in the markets we serve to truly understand what our customers need. We focus on enduring national security priorities with narrow, deep funding streams. We deliver software-defined technology to address critical needs with the speed, agility, and efficiency our customers demand. We invest ahead of customer need. We deploy capital in a flexible and opportunistic manner to create value for our customers and our shareholders.

Our financial results in fiscal 2026 are the latest evidence that our strategy is working. Slide five, please. Our strong fourth quarter performance capped another exceptional year, which we exceeded all of our expectations. For full year fiscal 2026, we delivered revenue growth of 11%, EBITDA margin of 12.3%, and free cash flow of $735 million. We also won more than $10 billion in contract awards, representing a book-to-bill of 1.1 times. These results demonstrate the earnings power, cash generation potential, and durability of the company we have built. Our focus on national security priorities, differentiated capabilities, and long-duration work enables us to grow and execute even in slower war environments. Slide six, please. Let me highlight several fiscal 2026 accomplishments that demonstrate the successful execution of our strategy, many of which are drivers of growth in fiscal 2027.

First, our electronic warfare business is helping customers dominate the electromagnetic spectrum, a critical enabler of modern warfare. Our Spectral program achieved Milestone C, is moving into Low-Rate Initial Production with deployment to begin in the second half of fiscal 2027. This milestone also positions us for additional opportunities across the Department of Defense and International. Our SkyValor counter-UAS system was selected by the Department of Defense to help strengthen homeland defense on the southern border. Just last week, we received a separate $500 million award for the Domestic Shield program. We invested ahead of need in SkyValor, moving from concept to deployment in 12 months, and we are seeing strong demand and expanding backlog for this and other counter-UAS offerings. We expanded our tactical EW footprint with initial orders from the Air Force, which provides for future Department of Defense growth.

These fiscal 2026 EW accomplishments are also great examples of the repeatable growth engine we've built. Mission knowledge informs investment produces differentiated technology, and disciplined delivery generates customer value and contributes to increasing financial returns. Next, our space business is benefiting from surging customer demand in this critical and increasingly contested domain. We completed the integration of ARKA, combining its sensing and AI-enabled analytics with CACI's existing technology and customer presence to create a leader in delivering actionable multi-source intelligence. We were recently notified of an award to help the U.S. Space Force defend against adversarial threats, our first award leveraging the combined strengths of CACI and ARKA. We won a significant classified counterspace program that combines adaptable software with our purpose-built mission hardware. Like Spectral was in EW, this is a statement win for CACI in counterspace, winning against traditional large defense primes.

Together with our U.S. Space Force RMT program, this new win positions us as a leader in next-generation counterspace technology, which is a significant opportunity for future growth. We also advanced to phase 3 of the U.S. Space Force's Enterprise Space Terminal program, reinforcing our leadership in delivering resilient, mission-ready communications across all orbits. EST is the optical communications terminal expected to be proliferated across multiple orbits as part of the U.S. Space Force's Space Data Network. We provide a critical technology that supported NASA's historic Artemis II mission, positioning CACI for additional growth opportunities, supporting both manned and unmanned spaceflight. In our digital and network technology business, we are delivering enterprise-scale technology and network deployments to secure the digital backbone for national security. We are ramping up the Joint Transportation Management System modernization program for U.S.

USTRANSCOM, replacing fragmented logistics and financial systems with an integrated solution in partnership with SAP and AWS. We are partnering with Oracle to deliver an integrated HR shared service solution to the Office of Personnel Management that will support 2 million users across 96 federal agencies. We are modernizing critical national security networks to improve cyber resiliency, efficiency, and mission performance through our base infrastructure modernization awards with the United States Air Force and ongoing programs for the United States Army and Defense Intelligence Agency. Our mission-aligned operational support business is also central to our technology-first model. More than 1,400 CACI employees are embedded across combatant commands globally, providing intelligence analysis, mission planning, and operation support every day. They're involved in every operational headline you read, as well as the many operations you will never read about.

Their proximity to the mission gives us differentiated insight into customer needs, informs where we invest, and helps us deliver relevant technology faster. Finally, across our entire business, we continue to advance the use of AI to deliver better outcomes to our customers faster. We are leveraging AI tools across our full software development life cycle to reduce development time, improve quality, increase the amount of capability we deliver, and strengthen program profitability. Importantly, where we deliver savings to our customers, we are consistently seeing them deploy these savings back to CACI to address additional mission priorities. We are also extending ARKA-developed Agentic AI solutions to additional national security missions where the speed of processing and analyzing massive amounts of sensitive data is critical. This approach, using AI to enhance both how we work and the outcomes we deliver to our customers, creates measurable value and competitive differentiation.

These results prove that AI is a multiplier aligned with our strategy and is actively scaling our technology portfolio and growing our business. Slide seven, please. As we scale this technology-first business, we are also strengthening our leadership team in several areas that are central to our next phase of growth. During the past few months, we have added significant executive leadership in key areas of our business. First, Dr. Dave Young, who's joined CACI as our Chief Operating Officer. Dave has recently led a $7 billion national security space business at Lockheed Martin and will lead cross-business initiatives to drive engineering excellence, program performance, and growth. Next, Tom Kirkland rejoined CACI to lead our electronic warfare business. Tom most recently served as president of Targeting and Sensor Systems at L3Harris, and is also a combat veteran of the United States Army.

Tom will be responsible for the growth and delivery of technology and support across all EW customers and programs. Next, Chris Monoski joins CACI as our EVP of Manufacturing, a critical function as we scale the production and delivery of technology across the company. Chris brings nearly three decades of experience in manufacturing and supply chain management, most recently as VP of Operations for L3Harris. We also combined our existing space capabilities with those of ARKA under Andreas Nonnenmacher. Andreas is the former CEO of ARKA and a proven leader of technology businesses in the national security space domain. These executives add the operational experience that will enable CACI to convert growing customer demand into even stronger revenue growth, profitability, and free cash flow. Slide eight, please. We continue to see strong customer budgets and demand signals across our markets.

Our total addressable market exceeds $300 billion, our portfolio is concentrated on enduring, well-funded national security priorities to give us significant room to grow without depending on top-line budget expansion. Customers are also moving to acquire our technology faster through non-traditional procurement methods, including CSOs, OTAs, and FAR Part 12 commercial acquisitions. This shift plays directly to CACI's model of investing ahead of needs and delivering adaptable, mission-focused technology quickly. We anticipated this change and have been executing our commercial delivery strategy for years, demonstrated by the fact that our OTA award value in fiscal 2026 was more than double the values of fiscal 2024 and fiscal 2025 combined. Our differentiated capabilities and strong past performance position us to win new business, expand existing programs, and successfully defend recompetes.