Caci International Inc /De/ Q1 2026 results
Snapshot
Caci International Inc /De/ reported $2.29B of revenue in Q1 2026, up 11.2% year over year, with diluted EPS of $5.63 and an operating margin of 9.3%.
- Revenue
- $2.29B
- YoY growth
- +11.2%
- Diluted EPS
- $5.63
- Operating margin
- 9.3%
What management said
- •We delivered free cash flow of $143 million, driven by revenue growth of 11%, and an EBITDA margin of 11.7%.
- •We also continued our excellent track record of winning recompetes and securing sole source extensions.
- •Our first quarter performance gives us increased confidence in achieving both our full-year guidance, which we are reaffirming, and our three-year financial targets.
- •Looking beyond the shutdown, we continue to see enduring needs, good demand signals from our customers, and prospects for a healthy funding environment for national security priorities.
- •For DHS, the focus is likely to include modernization and border security, which we expect will benefit programs like Beagle and drive demand for our counter UAS technology.
- •First, in counter-UAS, escalating drone threats and increasing incursions globally are driving strong demand for our capabilities, including from our international partners.
- •In fact, during the first quarter, we received a follow-on order from the Canadian government for additional man-packed software-defined counter UAS systems.
- •RMT is a broadband counter-satellite electronic warfare system that leverages our existing counter-UAS software to provide our customers with enhanced counter-space capabilities.
- •Both TIGS and RMT are great examples of how we can leverage our differentiated software-defined technology and our strong past performance to help war fighters execute critical missions across the entire electromagnetic spectrum.
- •Given this reality and the administration's focus on modernization across the government, we continue to see good demand and a strong pipeline of network modernization opportunities.
- •For example, the Air Force recently awarded CACI task orders number two and number three on the base infrastructure modernization program, previously known as IPAS Wave Two.
- •Together, these task orders represent approximately $400 million of awards this quarter.
What went well
- •CACI delivered a strong fiscal Q1 2026 start with revenue of nearly $2.3 billion, up 11.2% year-over-year (5.5% organic), and an EBITDA margin of 11.7%, up 120 basis points from a year ago.
- •The company won $5 billion of contract awards, a book-to-bill of 2.2x for the quarter and 1.3x trailing 12 months, with over half of awards being new business and a weighted average award duration of more than six years.
- •Adjusted diluted EPS of $6.85 was 16% higher than a year ago, and free cash flow was $143 million driven by strong profitability and working capital management, with DSO of 56 days.
- •Record backlog reached $34 billion (up 4% year-over-year, nearly four years of revenue) and funded backlog grew nearly 26% year-over-year.
- •Major wins included the $1.6 billion JTMS award, $400 million of Air Force network modernization task orders, a $240 million TIGS counter-space award, and a second one-year Beagle contract extension.
- •Management reaffirmed full-year fiscal 2026 guidance and de-risked the second-half EBITDA margin step-up given the strong first quarter.
What went wrong
- •The federal government shutdown created slight cash collections disruption (collections roughly 10%-15% off) tied to staff availability for invoice approval, described as small but noticeable.
- •There were pockets of attenuated activity affecting revenue at a de minimis level (single-digit millions) that the company expects to recover during the year.
- •Management noted a slight uptick in the number of competitor protests in the marketplace.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Revenue | FY2026 | $9.2-$9.4 billion | $9.2-$9.4 billion | Reaffirmed |
| EBITDA margin | FY2026 | mid 11% range | mid 11% range | Reaffirmed |
| Adjusted net income | FY2026 | $605-$625 million | $605-$625 million | Reaffirmed |
| Free cash flow | FY2026 | at least $710 million | at least $710 million | Reaffirmed |
| EBITDA margin | Q2 FY2026 | — | about 11% | New |
| Revenue from existing programs | FY2026 | — | more than 92% (with <4% recompetes, 4% new business) | Recompete revenue improved from 11% prior quarter |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Revenue | +11.2% (5.5% organic) | Strong program execution and ramping new work |
| EBITDA margin | +120 bps to 11.7% | Strong program execution, timing of higher-margin software-defined technology deliveries, and overall mix |
| Adjusted diluted EPS | +16% to $6.85 | Greater operating income and lower share count, partly offset by higher interest expense and higher income tax provision |
| Funded backlog | +26% | Partly driven by customers preparing essential programs ahead of the government shutdown |
| Federal civilian agency sales | +17% | All organic, driven by DHS growth and ramping on NASA NCAPS |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Counter-UAS / electronic warfare | Ongoing investment ahead of need | Merlin system with 75km detection range, strong domestic and international demand, follow-on Canadian orders; EW portfolio generates about $2 billion of revenue annually | Growing |
| Government shutdown resilience | — | Most work funded and deemed essential; de minimis revenue impact expected to be made up within the year | Stable/managed |
| Counter-space | — | Increasing customer demand; $240 million TIGS award and initial Space Force RMT production order received | Growing |
| Reconciliation / Golden Dome funding | Previously discussed DOD areas | Early planning-stage indications; expected to benefit DHS border security/Beagle and DOD intelligence programs, none yet directly identified in Q1 results | Emerging |
| International / NATO demand | Sold to 5 countries | Expanded to 15 NATO countries with demand signals in 7 more; moving from FMS to direct commercial sales | Growing |
| Commercial buying / agile procurement | — | Doubled OTA work over two years; positioned for both FAR Part 12 commercial and FAR Part 15/CAS-compliant sales | Growing |
Q&A summary
What are early expectations for the FY2027 defense budget request given the step-down from reconciliation-plus-base funding?
Management declined to forecast top-line numbers but emphasized CACI is 90% focused on national security priorities with deep, bipartisan-supported funding streams; as a $9.3 billion company in a $280 billion addressable market with $34 billion backlog and ~six-year average contract duration, it expects to grow regardless of top-line budget movements.
How will counter-UAS, cyber, and EW contracts be awarded as the government adopts more agile procurement?
The government is buying differently, increasingly via OTAs and commercial-like purchase orders; CACI is both CAS-compliant and truly commercial, so it can be bought from a commercial price sheet by part number, which moves financials faster (e.g., POs received and turned around within a quarter). TLS Manpack moving from OTA to a program of record was cited.
Could the strong bookings quarter mean bookings take a breather, and does the math imply a high win rate?
Management said yes and potentially; winning $5 billion in Q1 (half of the prior full-year total) positions CACI well. The submitted-pipeline dip was offset by a higher expected-to-submit figure; it is unrealistic to expect that award pace to continue during a shutdown, but trailing 12-month book-to-bill of 1.3x and 26% funded-backlog growth bode well.
Does the shutdown present a risk to guidance, and how does the government deem work essential?
It leaves CACI better positioned with programs funded; cash collections may be 10%-15% off and revenue impact is single-digit millions, both expected to recover within the year. Most work is essential or recoverable, so the impact is de minimis and well within guidance even if the shutdown lingers.
Why were technology margins so strong, implying over 20% incremental margin, and any one-time benefits?
Technology margins were strong, driven by mix both across technology and expertise and within the technology segment; it did not change the full-year view and should be seen as de-risking the customary first-half to second-half margin step-up, which will be smaller this year.
What is the international opportunity given rising NATO defense budgets?
Ukraine raised global urgency, especially in electronic warfare; CACI expanded from 5 to 15 NATO countries with demand signals in 7 more. Initial focus was FMS on technologies with existing U.S. DOD sales, now moving to direct commercial sales, with next steps around licensing or co-production as European nations spend within their borders.