CACI International Inc

Ladies and gentlemen, thank you for standing by. Welcome to the CACI International Third 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 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, Jeanne. 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 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 third quarter fiscal year 2026 results, as well as our updated fiscal 2026 guidance. With me this morning is Jeff McLaughlin, our Chief Financial Officer. Let's move to slide four, please. Before turning to our results, I want to start by reminding everyone that CACI is a fundamentally different company than it was 10 or even five years ago. This evolution is a result of a clear and consistent strategy, intentional leadership, and disciplined execution over many years. It did not happen by accident. The key elements of our strategy are, first, we operate in seven markets where we possess decades of deep mission knowledge. We know and understand what our customers need. Second, we focus on enduring priorities. We are a national security company that targets narrow, deep funding streams. Third, we're a software-defined technology leader. We differentiate ourselves by using software to address critical needs with the speed, agility, and efficiency our customers demand. Fourth, we invest ahead of customer need to show the art of the possible without waiting for requirements. And fifth, we deploy capital in a flexible and opportunistic manner to create value for our customers and our shareholders. Executing this strategy has enabled us to expand our portfolio, increase free cash flow per share, and generate additional shareholder value. Slide five, please. Turning to our third quarter results, we delivered another quarter of outstanding performance on our way to another exceptional year. Revenue for the quarter was $2.4 billion, up 8.5% year over year. We also generated a strong EBITDA margin of 12.3% and robust free cash flow of $221 million. In addition, we won $2.2 billion of awards, which represents a book to bill 0.9 times for the quarter, and 1.2 times on a trailing 12-month basis. These awards were driven by our exceptionally strong re-compete performance, an important indicator of customer confidence, and a key enabler of long-term growth. While award activity improved in the quarter, it has not yet fully recovered from the multiple government shutdowns and acquisition organization changes. As we said before, quarterly awards can be lumpy, but we continue to have excellent visibility a strong pipeline and see a very constructive macro environment. Our results continue to reinforce the CCI is differentiated and well positioned. With that said, we're raising our fiscal 26 revenue and EBITDA margin guidance driven by the addition of ARCA and the strength of our organic margin performance. Slide six, please. On that note, let's discuss our recent acquisition in a bit more detail. During the third quarter, we closed the acquisition of ARCA, a leading technology company focused on national security missions in the space domain. ARCA brings exquisite space-based imaging sensor technology with high technical barriers to entry, agentic AI-based ground processing software, and deep customer relationships built over decades of strong performance. ARCA is a powerful addition to CACI. We now have sensors deployed across all domains. We can provide multi-source actionable intelligence and bring operationalized agentic AI capabilities to classify customers across the national security apparatus. In fact, we already have agentic AI efforts underway with our shared customer footprint, and we see significant additional cross-selling opportunities. ARCA positions us for opportunities including Golden Dome, Indo Paycom support, future ground architecture, and space superiority missions. To fully leverage our combined capabilities, we have integrated ARCA and CECI's existing base portfolio under leadership of ARCA's former CEO. ARCA exemplifies the type of acquisition that investors should want us to make. Wide competitive moat, unique capabilities and technology, exceptional execution history, and strong financial performance and all in one of the most strategically important domains in national security. It's our flexible and opportunistic capital deployment strategy in action, positioning CACI to drive long-term growth in free cash flow per share and additional shareholder value. Slide seven, please. CACI is a national security company. That focus continues to be a powerful differentiator in the marketplace. We have more than 1,400 people embedded in mission spaces across all combatant commands performing planning, intelligence analysis, cyber, and operational support. We are involved in every operational headline you read, as well as the many operations you will never read about. This proximity to mission gives us an advantage that is hard to replicate. We understand the mission. and the threats because we see them every day. This creates a feedback loop that sharpens our business development, strengthens our reputation for execution, and informs on decision making, allowing us to confidently invest ahead of customer need. These are meaningful discriminators that create competitive advantage and help drive our financial performance. For example, CCI recently received multi-year extensions on several contracts. in critical mission-focused areas as a direct result of our exceptional delivery. Slide 8, please. Our strategic investments, informed by the mission proximity I just described, have positioned CECI as a leader in software-defined technology and key warfighting domains that are receiving significant attention and funding from our customers. And these investments also demonstrate a repeatable strategy that would drive future growth and shareholder value. A great example is our Spectral program, where we are developing the next generation of shipboard signals intelligence and electronic warfare capabilities for the Navy's surface combatant ships. We initially invested ahead of customer need to show them the art of the possible and to demonstrate our differentiated solution during the bid phase. Now we are actively investing ahead of need during execution to accelerate delivery of capabilities to the field, a key ask of the current administration. During the quarter, the program continued to progress as we achieved milestone C, marking the start of Spectral's low-rate initial production and deployment phase. This was a defining step towards ramping up the program and delivering this critical EW technology to the fleet. And because Spectral is built using software-defined technology with open architectures, Another key administration priority, we see significant additional opportunities across the Department of War and internationally. Another example is in counter UAS, where we are seeing accelerating demand, increasing orders, and a growing pipeline driven by Merlin, our commercially sold counter UAS system. Merlin leverages nearly two decades of our counter UAS investments and work across the Department of War to deliver a system that sees further, detects more, provides more critical decision-making time and delivers more effective low-to-no collateral damage capabilities than any other available system. Merlin is a software-defined system that can be rapidly updated and provides a nearly unlimited magazine of economically sustainable non-kinetic effects, including unique cellular detection and defeat capabilities. From concept to deployment in under a year, We are not only providing the Department of War with the capabilities they are asking for, but we are also delivering them at the speed demanded. We are improving this in real time with the Merlin system that our customers deployed on the southern border. A final example is our strong positioning for Golden Dome. CCIs have been investing in, developing, and building many of the capabilities this mission requires across many critical layers. First are our counter UAS systems. Defending the homeland is not just about ballistic or hypersonic threats. It's also increasingly about threats from unmanned aircraft systems. CCI's technology is ideally suited for this mission, where extended detection range provides critical time for decision-making, and low to no collateral damage effects are critically important for mission success. Second are our exquisite left-of-launch capabilities. These include sensitive cyber activities as well as our worldwide set of embedded sensors, which can detect and defeat threats before they are deployed. And third is our space-based sensing. ARCA significantly expands our capabilities in the space domain, including technologies such as hyperspectral imaging for missile detection. Spectral, MERLIN, and Golden Dome are three significant proof points of how CACI creates value for our customers and our shareholders. They demonstrate where we identified an enduring need early, invested well ahead of award, and had established differentiated positions through years of disciplined execution and continued innovation. Slide nine, please. Turning to the macro environment, we continue to see constructive budgets and demand signals. While the government fiscal year 27 budget is still evolving, the proposed spending looks very positive in many key areas for CDCI, including electronic warfare and counter UAS, space, especially classified space and counter space programs, C5ISR, and IT modernization, including AI and the digital backbone. We are in the right markets that are aligned to enduring, well-funded priorities, and we're providing the right capabilities to address our national security customers' most pressing needs. And with that, I'll turn the call over to Jeff.