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CACI INTERNATIONAL INC /DE/ (CACI)·Q3 2025 Earnings Summary

Executive Summary

  • CACI delivered another strong quarter: revenue $2.17B (+11.8% YoY), adjusted diluted EPS $6.23 (+8.5% YoY), EBITDA margin 11.7% (+40 bps YoY), and free cash flow $187.9M, with book-to-bill 1.2x and total backlog $31.4B (+9.8% YoY) .
  • Results beat Wall Street: revenue $2.17B vs. $2.13B consensus* and adjusted/primary EPS $6.23 vs. $5.60 consensus*; management raised FY25 revenue, adjusted EPS, and FCF guidance (low-end raised) .
  • Margin outperformance was aided by timing of software-defined technology deliveries pulled into Q3; management still guides Q4 EBITDA margin in the low 11% range, consistent with FY view .
  • Capital deployment remained active: 436K shares repurchased (~$150M) at ~$344 average, with ~$187M remaining authorization; net debt/EBITDA ~2.9x pro forma after two acquisitions .
  • Strategic catalysts: accelerating software-defined programs (TLS Manpack, Navy Spectral), EW/counter‑UAS demand, border security software momentum, and a record $17B pipeline under evaluation .

What Went Well and What Went Wrong

  • What Went Well

    • Double-digit top-line growth (+11.8% YoY) with 5.6% organic, and EBITDA margin expansion to 11.7% (+40 bps YoY); adjusted EPS rose to $6.23 (+8.5% YoY) .
    • Robust cash generation (OCF ex-MARPA $204.2M; FCF $187.9M) and awards momentum ($2.5B; 1.2x book-to-bill), driving backlog to $31.4B (+9.8% YoY) and funded backlog to $4.2B (+31.3% YoY) .
    • Management tone constructive; CEO: “we are again able to raise our fiscal year 2025 guidance… and remain well positioned to provide long-term value” . CFO: FY25 FCF/share growth implied at 22% and 97% of FY25 revenue from existing programs .

  • What Went Wrong

    • GAAP diluted EPS fell 2.5% YoY to $5.00 on higher intangible amortization, interest expense, and tax; interest expense rose to $45.1M (+63% YoY) following acquisitions and higher rates .
    • DSO rose to 55 days (ex-MARPA), up 5 days YoY; management cited mild administrative slowdowns (invoice approvals, funding mods) but characterized disruptions as manageable .
    • Quarterly contract awards down vs. prior-year period ($2.50B vs. $3.50B; -28.7%), reflecting lumpiness; management noted timing variability and emphasized not “living hand to mouth” on awards .

Financial Results

MetricQ3 FY2024Q2 FY2025Q3 FY2025
Revenue ($USD Billions)$1.94 $2.10 $2.17
Diluted EPS (GAAP) ($)$5.13 $4.88 $5.00
Adjusted Diluted EPS ($)$5.74 $5.95 $6.23
EBITDA ($USD Millions)$218.0 $232.9 $253.5
EBITDA Margin (%)11.3% 11.1% 11.7%
Free Cash Flow ($USD Millions)$101.9 $66.1 $187.9
DSO (days)50 53 55

Actual vs. S&P Global Consensus (Q3 FY2025)

MetricActualConsensusSurprise
Revenue ($USD Billions)$2.1670 $2.1303*+$0.0367B (≈+1.7%)*
EPS (Primary/Adjusted) ($)$6.23 $5.60*+$0.63 (≈+11.3%)*
  • Asterisk indicates values retrieved from S&P Global (Capital IQ) consensus estimates.*

Segment Breakdown (Revenue)

SegmentQ3 FY2024 ($M, %)Q3 FY2025 ($M, %)
Expertise$916.96 (47.3%) $973.04 (44.9%)
Technology$1,020.50 (52.7%) $1,193.95 (55.1%)
Total$1,937.46 (100%) $2,166.98 (100%)

Key Operating KPIs

KPIQ3 FY2024Q3 FY2025
Contract Awards ($B)$3.50 $2.50 (2.496)
Book-to-Bill (quarter)—1.2x
Book-to-Bill (TTM)—1.5x
Total Backlog ($B)$28.6 $31.4
Funded Backlog ($B)$3.2 $4.2
Net Debt / TTM EBITDA—~2.9x (pro forma)

Guidance Changes

MetricPeriodPrevious Guidance (1/22/25)Current Guidance (4/23/25)Change
Revenue ($B)FY2025$8.45 – $8.65 $8.55 – $8.65 Raised low end by $0.10B
Adjusted Net Income ($M)FY2025$537 – $557 $543 – $557 Raised low end by $6M
Adjusted Diluted EPS ($)FY2025$23.87 – $24.76 $24.24 – $24.87 Raised low end by $0.37
Diluted Weighted Avg Shares (M)FY202522.5 22.4 Slightly lower
Free Cash Flow ($M)FY2025≥$450 ≥$465 Raised by $15M

Management added that Q4 EBITDA margin is expected to remain in the low 11% range after the Q3 timing benefit .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY25 and Q1 FY25)Current Period (Q3 FY25)Trend
Software-defined/Agile approachStrategy highlighted; Azure Summit and Applied Insight deals closed (Q2) . Strong organic growth and margin expansion (Q1/Q2) .SecDef memo mandating software acquisition pathway seen as validation; continued emphasis on software-defined capabilities across programs .Strengthening validation and alignment with DoD priorities
Budget/CR and fundingFY25 guidance raised in both Q1 and Q2; constructive funding backdrop implied .Full-year CR with new starts and flexibility; reconciliation bills signal multi-year defense/border funding; early support for $1T DoD FY26 .Visibility improving; supportive
DOGE/GSA reviewsNot a top-10 GSA target; limited exposure discussed [—].Minimal impact so far; estimated ~$1M impact across seven contracts under review .Manageable
EW/Spectral & TLS ManpackAzure Summit acquisition expands maritime/airborne RF capabilities (Q2) .TLS Manpack deliveries more than doubled; Spectral moving to next phase; Azure integration on track; capex efficiencies via Azure capacity .Execution advancing; synergy realized
Optical communications (OCT)—Targeting ≥6x FY24 OCT deliveries in 2025; 25 terminals operating in space; production ramp through June .Ramping production
Pipeline/BacklogQ1/Q2 backlog up double digits; awards lumpy (Q2 awards $1.17B) .$17B bids under evaluation (≈80% new business); TTM B2B 1.5x; Q4-to-date awards $1.3B noted .Robust pipeline; healthy B2B
Capital deploymentAnnounced/closed acquisitions; opportunistic deployment .Repurchased 436K shares (~$150M) at ~$344 avg; $187M left in authorization; net debt/EBITDA ~2.9x .Active, flexible

Management Commentary

  • Strategic alignment: “Given our strong execution and healthy pipeline metrics, we are raising our fiscal year ’25 guidance… and remain well positioned to provide long-term value” — John Mengucci, CEO .
  • Policy validation: “Sec Def’s directive is a clear validation of our strategy and the software-based approach we employ in everything we do” .
  • Cash flow focus: “We see free cash flow per share as the ultimate value creation metric… FY ’25 guidance now implies 22% growth” — Jeff MacLauchlan, CFO .
  • Program highlights: TLS Manpack deliveries have “more than doubled,” Spectral entering next phase with Azure synergy, and Archon gateway milestone on SIPRNet modernization .
  • Revenue visibility: “Entering the fourth quarter, more than 97% of our FY ’25 revenue is expected to come from existing programs” .

Q&A Highlights

  • Awards and timing: No material slowdown in awards; lumpiness acknowledged but reduced dependence on end‑of‑quarter wins .
  • DOGE/GSA exposure: Minimal; management estimates ~$1M impact and sees strategy as well aligned with efficiency initiatives .
  • OCT ramp: At least 6x FY24 optical terminal deliveries planned in 2025; 25 OCTs operating in space; production deliveries expected by end-April/May/June .
  • Administrative cadence: Slight delays in invoicing/funding mods (2–3 days now 4–5), but disruptions remain mild and manageable .
  • M&A: Pipeline monitored, but seller valuations reduce actionability near-term; remain opportunistic .

Estimates Context

  • Beat revenue and EPS: Revenue $2.167B vs. $2.130B consensus*; primary/adjusted EPS $6.23 vs. $5.60 consensus* for Q3 FY25, reflecting stronger operating income and share repurchases offsetting higher interest and taxes .
  • Implications: The beat, combined with raised FY25 guidance (revenue, adjusted EPS, FCF), likely supports estimate revisions higher for FY25 and potentially FY26 given a supportive budget backdrop and robust pipeline .
  • Asterisk indicates values retrieved from S&P Global (Capital IQ) consensus estimates.*

Key Takeaways for Investors

  • Quality beat with guidance raise: CACI delivered top- and bottom-line beats and raised FY25 revenue, adjusted EPS, and FCF, with Q3 margin outperformance driven in part by timing of software-defined deliveries; Q4 margins guided to low 11% supports sustainability .
  • Software-defined strategy validated by policy: SecDef’s software acquisition directive and DOGE efficiency focus align with CACI’s long-term investments and operating model .
  • Execution on national security priorities: Advancing TLS Manpack, Navy Spectral, SIPRNet modernization, and CBP/BEAGLE show traction in enduring mission areas (EW, cyber, border), positioning CACI well for expected incremental funding .
  • Strong forward indicators: TTM book‑to‑bill 1.5x, $31.4B backlog (~4 years of revenue), and $17B bids under evaluation (≈80% new) enhance visibility into FY25 and beyond .
  • Capital deployment lever: Repurchases (~$150M in Q3; 436K shares) and integration synergies (Azure) support FCF/share growth and margin/capex efficiency .
  • Watch items: Higher interest expense, DSO uptick, and YoY decline in quarterly awards highlight macro/administrative timing sensitivity; management views disruptions as manageable and non‑fundamental .
  • Near-term catalysts: Additional Q4 awards, OCT delivery milestones by June, Spectral upgrade phase, and potential budget reconciliation outcomes for defense/border security .

Footnote: Consensus figures marked with an asterisk (*) are values retrieved from S&P Global.