CACI International Inc

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International second quarter fiscal year 2026 earnings 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 you. At this time, I would like to turn the conference call over to George Price, Senior Vice President of Investor Relations for CACI International.

Please go ahead, sir. Thanks, Rob, and good morning, everyone. I'm George Price, Senior Vice President of Investor Relations for CACI International. Thanks for joining us this morning. We're 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 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 a 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 go 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. Good morning, everyone. Thank you for joining us to discuss our second quarter fiscal year 2026 results as well as our updated fiscal 2026 guidance. With me this morning is Jeff McLaughlin, our Chief Financial Officer. Slide four, please. I'd like to start the call by reiterating our strategy, why CCI is a company that no longer fits within traditional industry labels, and how we are expanding the limits of national security. You've heard us say many times that strategy is a place we come from. Our strategy defines where we are going, what we are building, and how we are executing with discipline and consistency. We serve seven markets where we possess decades of mission knowledge so we truly understand what our customers need. Within these markets, we focus on enduring national security priorities with narrow, deep funding streams. We differentiate ourselves by delivering cyber-defying technology to address critical needs with the speed, agility, and efficiency our customers' demand. We invest ahead of customer need to show them the art of the possible, exactly what the current administration is asking for. We've been doing this for years. The market is coming to where we already are. Through deliberate actions, informed investments, and flexible and opportunistic capital deployment, we have expanded our technology portfolio to nearly 60% of total revenue. Over the long term, we expect technology to continue to increase as a percentage of revenue and support margin expansion. I will share some additional information about two areas of our technology portfolio later in my remarks. Our results and accomplishments clearly demonstrate that CACI is not the company we were 10 years or even five years ago. We are continually too involved. It's why you see us competing and winning against a wider range of competitors, including defense primes, and defense tech companies. It's why we're delivering consistent financial performance despite a dynamic and sometimes uncertain environment. And it's why we are confident we will continue to drive long-term shareholder value. Slide five, please. Speaking of performance, our strong second quarter results are another example of the success of our strategy and execution. We delivered free cash flow of $138 million, which was driven by revenue growth of 6%, and events on a margin of 11.8%. We won $1.4 billion of awards, representing a book to build a .65 times for the quarter, 1.4 times for the first half, and 1.3 times on a trailing 12 month basis. As a result of our strong first half performance, increased visibility, and the continued momentum of the business, we are raising our fiscal 2026 guidance. Slide six, please. Within technology, We have built a leading position in electronic warfare, which alone represents about $2 billion in revenue. We have also established CACI as an industry leader in agile software development and software modernization, part of our enterprise technology portfolio. And we recently announced a fantastic acquisition, ARCA, which represents the latest step in our technology-driven portfolio evolution and the execution of our space market strategy. These are all areas of significant and enduring investment by our customers, which support long-term growth for CACI. I'll spend some time talking about EW and enterprise technology. Our software-defined capabilities and electronic warfare illustrate how our strategy and technology-driven evolution are driving our performance. It's a critical warfighting domain and an area where we position CACI as a leader by investing ahead of need and delivering differentiated software-defined technology. We've known for years that virtually everything with a power button emits a signal, and today we are seeing the significance of this in conflicts around the globe and how it's impacting our customers' priorities and their budgets. We have developed and deployed proven technology that allows warfighters to sense, identify, locate, and defeat these signals, whether through targeted non-kinetic effects or by tipping and cueing other systems for Connecticut ones. Our software-defined approach provides increased speed, flexibility, lethality, and the ability to adapt as threats evolve, exactly what's needed on the battlefields abroad and in defense of the homeland. We've won a number of programs of record with the Army and the Navy, rapidly developing, delivering, and fielding our EW technology. And based on that success, we see growing demand for other services, including the Air Force. An important benefit of our software-defined approach to EW is our ability to quickly adapt to new mission requirements, accelerate delivery of new capabilities, and sell commercially through alternative acquisition models such as OTAs. We've previously highlighted Merlin and RMT, our latest counter UIS and counter space systems, as two examples of this concept. And customers are responding positively to these proactive investments deploying a Merlin demo unit to the southern border, and placing the first production order for R&T. We've been saying for years that software would be the enabler of greater speed, agility, efficiency, and lethality, and we are proving it by rapidly addressing an expanding set of missions. This is a repeatable process. These successes are a clear validation of our strategy and differentiation, and they position us well for additional opportunities and growth in the coming years. Slide seven, please. Enterprise technology is another area where CECI is strategically positioned well ahead of market demand. The current administration has made modernization a clear priority to drive efficiency, transparency, and operational improvement, as well as enhanced security. We've been focused on this for many years investing in commercial agile software development methodologies and building differentiated capabilities that are driving measurable results and significant value for our customers. That's why we've won the three largest agile software development programs in the federal government. A great example is our work with Customs and Border Protection. We're not just modernizing software, we're delivering transformational efficiency. Nearly 200% increase in software releases over the last five years, like-for-like cost reduction, and exceptional software quality. We're also bringing new AI software capabilities to CBP to help secure our borders, including AI-based object tracking technology that we initially developed for the intelligence community. This cross-pollination of innovation is a direct result of our strategic focus and investment approach. Slide eight, please. We continue to see a constructive macro environment and good demand signals from our customers. While post-shutdown activity is still a bit uneven in the near term, our strategy has positioned CECI exceptionally well to outperform in this environment. As you know, 90% of our revenue comes from national security customers, and we are seeing reconciliation funds starting to flow to several areas of our business. As a result of our strong performance and continued business momentum, We are raising our fiscal year 2026 guidance. We now expect free cash flow of at least $725 million, revenue growth of nearly 8% to 10%, and EBITDA margin in the 11.7% to 11.8% range. Finally, looking at our three-year financial targets, we expect to exceed the $1.6 billion free cash flow target, even after normalizing for the benefit from the changes to R&D capitalization from the one big beautiful bill. As for our revenue and EBITDA margin targets, we are highly confident in our ability to hit the high end, if not exceed them. And I should note that none of our projections include any benefit from our plan acquisition of ARCA. With that, I'll turn the call over to Jeff. Thank you, John.