Yahoo Finance CACI International Inc (CACI) (Q3 2024) Earnings Call Transcript Highlights: Robust Growth and ...
Revenue Growth: 11% increase, with contributions from both expertise and technology programs.
EBITDA Margin: 11.3%, showing significant expansion from the previous year.
Free Cash Flow: $102 million, indicating healthy performance.
Book-to-Bill Ratio: 1.8x for the quarter and 1.5x on a trailing 12 months basis.
Full Year Guidance: Raised due to strong performance.
Third Quarter Awards: $3.5 billion, with about half for new work.
Backlog: Record $28.6 billion, nearly 4 years of annualized revenue.
Adjusted Diluted EPS: $5.74, up 17% from the previous year.
Operating Cash Flow: $114 million, excluding accounts receivable purchase facility.
Revenue Guidance for FY '24: Raised to between $7.5 billion and $7.6 billion.
Adjusted Net Income Guidance for FY '24: Increased to between $455 million and $465 million.
Free Cash Flow Guidance for FY '24: Maintained at at least $420 million.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: What were the drivers of CACI's impressive awards in the quarter? Did the bidding trend shift? And how is CACI thinking about bidding on future awards? Also, should we be thinking about that the strong bookings will drive another strong revenue year in fiscal year '25 above the long-term growth rate mentioned earlier? Or is there more lag in these awards? A: John S. Mengucci, President, CEO & Director of CACI International, highlighted the company's culture and strong business development team as key drivers of their impressive awards. He emphasized the company's strategic focus on investing ahead of customer needs and developing differentiated capabilities. Mengucci also mentioned the company's approach to bidding, which involves focusing on long-term growth and aligning closely with customer needs. Regarding fiscal year '25, he suggested that while they are not yet ready to discuss specifics, the strong bookings are indicative of continued growth, although the exact impact on fiscal year '25 will depend on various factors.
Q: How should we think about the long-term growth rate for CACI's business? A: John S. Mengucci described CACI as a reliable mid-single-digit growth company over the long term. He emphasized the company's focus on margins and free cash flow per share, which are influenced by their strategic focus on near-peer and counterterrorism missions, network modernization, and electromagnetic spectrum technologies. Mengucci expressed confidence in the company's strategic direction and its ability to maintain solid growth.
Q: Can you discuss the progress of installations across the Navy surface fleet for the Spectral program? A: John S. Mengucci explained that the Spectral program is currently in the design phase, with plans to develop and deliver products by the end of the calendar year. He mentioned that the program aims to provide a minimally viable product to the Navy's surface fleet and that full ramp-up is expected to start showing in fiscal year '25. Mengucci highlighted the program's open architecture and software adaptability, which are crucial for responding to evolving threats.
Q: Regarding the growth in the Civil business this quarter, what has driven the acceleration now that the comps from the background screening contract have rolled off? A: John S. Mengucci clarified that the growth in the Civil business is broad-based and not attributable to any specific program or strategy shift. He mentioned that the reclassification of the DCSA program and the ramp-down of older contracts like the TSA impacted the business segment's performance. Mengucci emphasized that the company's strategic focus remains consistent across its business segments.
Q: What is CACI's involvement in the JADC2 program, and how does it relate to your broader strategy? A: John S. Mengucci confirmed CACI's involvement in the JADC2 program, noting that the company is engaged at a foundational level, contributing to various aspects of the program through its technology solutions. He discussed CACI's role in integrating sensor data and enhancing connectivity across defense platforms, which aligns with the company's focus on electromagnetic spectrum technologies and network modernization.
Q: How is CACI managing its capital deployment, particularly in light of recent acquisitions and the availability of headroom in the current share repurchase program? A: Jeffrey D. MacLauchlan, Executive VP, CFO, & Treasurer, and John S. Mengucci discussed CACI's flexible and opportunistic approach to capital deployment. MacLauchlan highlighted the company's recent share repurchases and acquisitions, emphasizing ongoing evaluations of opportunities. Mengucci added that the company assesses a range of factors, including M&A opportunities and market conditions, to make strategic capital deployment decisions that benefit shareholders in the short and long term.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.