CACI International Inc

Thanks, Vandeep, 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 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 violence. 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 first quarter fiscal year 25 results, as well as our updated fiscal 25 guidance. With me this morning is Jeff McLaughlin, our Chief Financial Officer. Let's go to slide four, please. Our first quarter results represent a great start to fiscal 25. We delivered revenue growth of 11%, EBITDA margin of 10.5%, and solid free cash flow. In addition, we won over $3.3 billion of awards, which represents a 1.6 times book to bill for the quarter and 1.8 times on a trailing 12 months basis. First quarter awards were a strong follow-up to our record Q4, and nearly 75% of our awards this quarter were for new work to CACI. During the quarter, we also executed purchase agreements for two strategic acquisitions, Azure Summit Technology and Applied Insight. Azure Summit remains on track to close during our second quarter, while Applied Insight closed earlier this month. Both our strong first quarter organic performance and the addition of Applied Insight enables us to raise our FY25 guidance. And Jeff will provide the financial details shortly. CACI continues to be well-positioned to drive long-term growth and free cash flow per share and shareholder value thanks to our exceptional business development function, our strong execution, our strategy of investing ahead of need, and our flexible and opportunistic capital deployment. Slide five, please. Our $3.3 billion of awards represents another strong quarter of business development performance. Let me briefly highlight a couple of the wins this quarter. We were awarded two separate contracts with the U.S. Navy to provide engineering expertise and technology that focused on accelerating the implementation of new capabilities to the warfighter. First, a five-year task order valued at up to $805 million with Naval X, the innovation arm of the Navy and U.S. Marine Corps to support the development and deployment of new technologies in areas such as artificial intelligence, command and control, and cyber across their platforms and sensors. Second, a five-year task loader, valued at up to $314 million with the Naval Undersea Warfare Center to support fleet readiness, accelerate implementation of new technology, and enhance cyber resiliency for undersea warfare systems. Slide six, please. Our strong track record of awards is driven by our strategy to address critical and enduring national security priorities, invest ahead of need in differentiated capabilities, bid less and win more, and focus on larger, longer duration programs. Equally important to the long-term success of our business is superior execution after those contracts are won. Strong execution builds a track record of past performance, which together with the other elements of our strategy, creates sustainable differentiation and enduring competitive advantage. Let me share a few examples of just how CACI is consistently executing at scale on our large programs. First, the Army's integrated personnel and pay system, which is referred to as IPS Army, is the largest and most complex PeopleSoft implementation in history. Since going live, the system has had over 1 million distinct users and supports more than 140,000 users per day. IPS Army, for the first time, provides online integrated HR capabilities across the entire Army, and is recognized as the model Agile program within the service. Next, our Enterprise IT as a Service program with the Air Force, known as ITAS, continues to scale. Our new IT service management system has been seamlessly deployed to replace their old system, and we are now supporting over 400,000 users, exceeding the contract milestone by nearly 60%, and tracking to over 600,000 users by the end of this calendar year. And most importantly, customer feedback has been extremely positive on the value, the speed, and the responsiveness that we are delivering. In addition, we've met all milestones on our recent network modernization awards, including DIA, ECS3, Army CIPR Mod, and Army GEN Mod. CCI is designing and deploying faster, more secure, software-defined networks that not only enhance efficiency and reduce cyber vulnerabilities, but are also critical enablers of customer priorities like JADC2 and AI. And finally, we recently began ramping up and executing on our NASA NCAPS contract. With this work underway, CCI is now executing the three largest agile software development programs in the U.S. government. We continue to see a healthy pipeline of additional opportunities as the government increasingly adopts agile methodologies. Slide seven, please. I'm also pleased with the increasing demand we're seeing for our software-defined RF technology. CACI has the right capabilities to meet our customers' critical needs in the current geopolitical environment today because we began to invest ahead of need over a decade ago. First, our spectral program for the Navy has successfully completed the design phase and is shifted to development and integration. This is a major milestone on a program critical to our country's national security strategy. The Navy's goal is to bring enhanced capabilities to the fleet faster, and CACI is making that possible. Next, on our TLS MANPAC program for the Army, we will begin deliveries against the previously announced $100 million IDIQ this quarter. As a reminder, the TLS MANPAC system allows disrounded soldiers to conduct signals detection, direction finding, and electronic attack while on the move. CACI's technology enables the Army to dominate the electromagnetic spectrum, an increasingly critical domain on today's battlefield, and one where the U.S. is still in the early stages of modernization and investment. Our technology can also address counter-UAS threats, a capability that was not previously available at the individual soldier level. We expect additional orders in FY25 as these critical capabilities are in high demand by our customers. Through our strategy of focusing on differentiated software-defined technology, we are delivering speed and agility to our customers to address their most critical missions and increasingly setting CCI apart from a wide range of competitors. Slide 8, please. We continue to execute our flexible and opportunistic capital deployment strategy, where we evaluate M&A, share repurchases, debt repayment, and other actions based on the dynamics we see at the time. Our M&A program focuses on filling gaps in our capabilities, our customer presence, and past performance. And on this front, we recently announced two fantastic acquisitions. First, in September, we announced a definitive agreement to purchase Azure Summit. Azure Summit is a provider of innovative, high-performance RF technology and engineering focused on the electromagnetic spectrum. Strategically, they add established and complementary technology and expand our customer presence. Financially, Azure Summit will be accretive to CACI EBITDA margin, adjusted EPS, and free cash flow per share in the first year. And they have strong cultural alignment with CACI and bring an exceptionally talented workforce. In addition, in earlier this month, we completed the acquisition of Applied Insight, a company that fills gaps by enhancing our capabilities and customer presence around cloud migration and AI, particularly in the intelligence community. Applied Insight utilizes repeatable tools and technology that enable faster, more efficient cloud migration, particularly within classified cloud environments. They also have several existing contracts with intelligence community customers to provide AI and machine learning technology development. And financially, they are similarly creative to CACI in the first year, like Azure Summit. Slide nine, please. We continue to monitor the government fiscal year 25 budget process closely. As with most years, government fiscal year 25 began under a continuing resolution which lasts through December 20th. We prepared it for a number of scenarios, most of which we believe are addressed within our guidance range. We typically do not see a material impact from CRs, though they can sometimes influence the quarter-to-quarter timing of shorter cycle revenue like our software-defined technology deliveries. We continue to see customer demand being driven by geopolitical dynamics, the elevated global threat environment, and the pacing capabilities of our adversaries. National security remains bipartisan, and budgets are healthy with an upward bias. CCI is well positioned in areas of enduring demand with deep, resilient funding streams. With that, I'll turn the call over to Jeff.

Thank you, John. Good morning, everyone. Please turn to slide 10. In the first quarter, we generated revenue of nearly $2.1 billion, representing 11.2% growth, of which 9.9% was organic. The balance was generated by the three acquisitions that we made in our fiscal 24. First quarter EBITDA margins of 10.5% represent a year-over-year increase of 110 basis points, which was driven primarily by business mix and timing. Adjusted diluted earnings per share of $5.93 were 36% higher than a year ago. Greater operating income, along with lower interest expense and a lower share count, more than offset a higher income tax provision. First quarter operating cash flow, excluding our accounts receivable purchase facility, was $61 million, reflecting strong profitability and cash collections, partially offset by some of the working capital factors we discussed last quarter. Day sales outstanding, or DSO, of 47 days was a slight uptick from Q4's record low as we continued to efficiently manage working capital. Free cash flow of $49 million for the quarter was in line with our expectations. Slide 11, please. As John discussed, subsequent to the conclusion of the first quarter, we closed on the applied insight acquisition, and we remain on track to close Azure Summit during the quarter as we previously indicated. Our pro forma leverage following the completion of both transactions will be 3.2 times. As we've demonstrated in the past, the healthy long-term cash flow characteristics of our business allow us to quickly delever to our target range. This means that, as always, we remain well-positioned to continue deploying capital in a flexible and opportunistic manner to drive long-term growth in free cash flow per share and shareholder value. Slide 12, please. We're pleased to be raising our Fiscal 25 guidance. This increase is due to the ongoing momentum of our organic business, as well as the recently completed acquisition of Applied Insight. We're raising our revenue guidance to be between $8.1 and $8.3 billion. $75 million of this increase is driven by the organic performance of the business, while the balance is from the inclusion of Applied Insight. This represents growth of 8.6% to 11.3% on an underlying basis. In addition, we now expect fiscal 25 EBITDA margin to be toward the upper end of the high tens range we previously communicated, driven by the strength of the organic business, increased visibility of some of our software-defined technology sales, and the inclusion of applied insight. As a result of our updated revenue and EBITDA margin outlook, we're also increasing our FY25 adjusted net income guidance accordingly. to be between $515 million and $535 million with an intended increase in adjusted EPS to be between $2289 and $2378 per share. And finally, we're increasing our free cash flow guidance to at least $435 million due to higher organic growth as well as the income contribution of applied insight that have increased interest expense. Please note that additional details of our updated guidance have been included in our presentation to assist you with your modeling. Additionally, as previously mentioned, Azure Summit will be included in our guidance during our normal cadence once it has closed. We continue to work through the customary closing process and remain confident it will occur during the second quarter, most likely sooner rather than later. Slide 13, please. Turning to forward indicators, our trailing 12 months book to bill ratio of 1.8 times reflects strong performance in the marketplace. Our record backlog of $32.4 billion increased over 21% from a year ago and represents just under four years of annual revenue. These metrics provide good long-term visibility into the strength of our business. For fiscal 25, we now expect approximately 89% of our revenue to come from existing programs, with approximately 8% coming from re-competes and just over 3% from new business. Progress on these metrics reflects our successful business development and operational performance and yields increased confidence in our expectations for the year. In terms of our pipeline, We have $4 billion of bids under evaluation, around 80% of which are for new business CACI. We expect to submit another $13 billion in bids over the next two quarters, with over 70% of that being for new business. In summary, we delivered outstanding first quarter results and deployed capital in a flexible and opportunistic manner to bring additive capabilities and customer presence to CACI. We continue to win and execute high-value, enduring work that supports long-term growth, increased free cash flow per share, and additional shareholder value. And with that, I'll turn the call back over to John.