CACI International Inc

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International Fiscal 2024 Second Quarter Conference Call. Today's call is being recorded. At this time, all lines are in a listen-only mode. Later, we will announce the opportunity for questions and instructions will be given at that time. If you should need any assistance during this call, please press star zero and someone will help. At this time, I would like to turn the conference call over to George Price, Senior Vice President, Investor Relations. Please go ahead.

Thanks, Sarah, and good morning, everyone. I'm George Price, Senior Vice President of Investor Relations for CACI International. Thank you for joining us this morning. We are providing presentation slides, so let's move to slide two. There will be statements in this call that do not address historical fact and as such constitute forward-looking statements under current law. These statements reflect our views of today and are subject to important factors that could cause 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 Mangucci, President and Chief Executive Officer of CACI International. John.

Thanks, George, and good morning, everyone. Thank you for joining us to discuss our second quarter fiscal year 24 results. With me this morning is Jeff McLaughlin, our Chief Financial Officer. Let's turn to slide four, please. In the second quarter, we delivered 11% organic revenue growth, EBITDA consistent with Q1, and solid free cash flow. In addition, we won $2.2 billion of contract awards, which represents a 1.2 times book to bill for both the quarter and on a trailing 12-month basis. More than half of our awards were for new work to CECI, and we continue to have strong re-compete performance as well. Looking forward, we see the second half of fiscal year 24 playing out stronger than we originally expected. And as a result, we are raising our full year guidance. Jeff will provide the financial details shortly. Overall, our performance continues to be well aligned with our value creation model, which focuses on long-term growth and free cash flow per share. Slide five, please. I'm pleased to say that we are seeing growth ahead of plan. across many of our new business wins, including our ITAS award with the Air Force, Spectral with the Navy, and our Intel and Cyber award with the NSA. This performance is reflected in our increased fiscal 24 guidance, but we expect these programs to support continued growth, healthy profitability, and increasing free cash flow per share in the future. We continue to win in the market by providing differentiated capabilities, investing ahead of need, and leveraging our strong past performance. And our business development organization is executing at an impressive level in winning new work and re-competes, as well as sustaining a strong pipeline of new opportunities. The execution of our strategy is currently delivering results. Just a few years ago, our focus was to win one new strategic billion-dollar-plus award each year. Last year, we won three, including our largest ever by far. This year, we've already won one. and we have a strong pipeline of additional opportunities, including several greater than $1 billion in total value. I'm also pleased with our strong track record of re-compete wins this year, which is critical to maintaining the foundation off which we will grow. We win our re-competes through strong execution, industry-leading talent, and delivering innovation well beyond the initial award. Slide six, please. One area of our continued success is IT modernization. This is an area of enduring demand driven by the need to modernize our secure network and secure networks, develop software at scale, and migrate workloads to the cloud. During the second quarter, we won two additional network modernization contracts solidifying our presence across the DoD following our DIA win last quarter. The Archon technology we acquired as part of ID Technologies was critical in securing this work. RCON's software-enabled end-user technology allows out-of-the-box commercial devices to securely access classified networks from any location. The combination of RCON's technology and our existing capabilities and past performance is differentiating CACI in the market. CACI continues to demonstrate industry leadership in digital application modernization and cloud migration. We are seeing customers accelerate their adoption of cloud, both in classified and unclassified environments. Our recently announced strategic collaboration agreement with Amazon Web Services was the first in the federal space and places us at the forefront of the next wave of migrating applications to the cloud. Our partnership with a technology leader like AWS enables us to deliver high value to our customers. And finally, Agile software development is increasingly a must-have capability in the market. GACI continues to lead the industry in Agile software development at scale, executing the two largest Agile programs in the federal government. One of the largest Agile programs is Beagle, with U.S. Customs and Border Protection, which has seen increased demand given heightened activity at the southern border. We see a number of additional agile opportunities in our pipeline. Slide seven, please. In the electromagnetic spectrum, we continue to execute our software-defined strategy, invest ahead of need, and demonstrate differentiated capabilities to enable our customers to dominate this critical domain. With the expanding global threat environment, we are seeing firsthand every day how the rapid pace of change in technology and our adversaries capabilities necessitates a faster and more flexible response. For the Navy, this critical need is precisely what Spectral is addressing. While a traditional hardware model cannot readily adapt to these changes, our software-defined technology with open architectures allows us to deliver with the necessary agility, speed, and flexibility. It allows us to build for today's threats and easily adapt as threats change. We continue to see demand across all domains in areas of signals intelligence and electronic warfare. As we mentioned last quarter, the Army was evaluating some of our SIG and EW technology for a program to enable dismounted soldiers to quickly detect, identify, geolocate, and defeat signals of interest. We're pleased to say that evaluation went extremely well, and we currently expect to receive an order in the second half of fiscal year 24. Excuse me. In addition, we are also seeing increasing interest in our software-defined counter UAS capabilities from the U.S. as well as from our allies. I'd also like to highlight our successful re-compete win supporting the Trojan Family Assistance for the Army, work CACI has supported for over 20 years. Similar to SPECTRAL, on Trojan we will utilize software-defined technology with open architectures to deliver the speed and adaptability necessary to address evolving global threats and enable the Army's multi-domain operations. Slide eight, please. In photonics, we continue to see healthy demand, capture market share, and deliver innovation with our optical communications technologies. In our bespoke photonics business, we are demonstrating unprecedented achievements. Currently, our deep space optical communications technology is connected and transmitting data to Earth from a distance equivalent to the orbit of Mars, the farthest ever demonstration of optical communications. In addition, the ALUMA laser communication system was recently launched to the International Space Station with CACI laser communication hardware on board, and the system has successfully communicated from the ISS to an Earth-based ground station. This technology and innovation is also being driven into the lower cost, higher volume, low swap terminals we are building and delivering below Earth orbit. With higher order volumes coming sooner than we expected, we have accelerated R&D investments through our P&L for both our technology and our capability to produce in volume. These investments will help underpin future growth, profitability, and increasing cash flow. Slide nine, please. Turning to the macro environment, We continue to monitor the government fiscal year 24 budget process closely. Despite the ongoing deliberations in Congress, it remains clear that investment spending for national security and modernization needs to continue. Customer demand remains high. Funding remains healthy. We continue to see good levels of RFPs, awards, and customer activity. I continue to be very pleased with our strategic positioning in enduring and well-funded areas of need, as evidenced by our strong awards and robust pipelines. Flight 10, please. In summary, our first half performance was in line with our expectations, and we're raising our fiscal year 24 guidance to reflect stronger momentum in the second half. We are successfully executing our strategy of investing ahead of need, developing differentiated capabilities, bidding on fewer and larger opportunities, and delivering superior performance to our customers. As a result, we continue to win in the marketplace. and our strong performance positions us to deploy capital in a flexible and opportunistic manner to drive long-term free cash flow per share and shareholder value. With that, turn the call over to Jeff.