CACI International Inc. — Form 10-Q Summary
Reporting period: Quarter and nine months ended March 31, 2024 (CACI fiscal 2024 third quarter). The filing is unaudited. The request metadata labels the period “2023 Q3,” but the filing itself reports fiscal 2024 Q3.
Business context and financial performance
CACI provides expertise and technology to government customers, primarily U.S. federal agencies. About 74% of revenue comes from defense-related customers, including the Intelligence Community.
| Metric | Three months ended March 31, 2024 | Change year over year | Nine months ended March 31, 2024 | Change year over year |
|---|---|---|---|---|
| Revenue | $1.937 billion | +11.1% | $5.622 billion | +12.4% |
| Operating income | $181.3 million | +16.9% | $452.0 million | +7.9% |
| Net income | $115.4 million | +14.5% | $285.3 million | +3.0% |
| Diluted EPS | $5.13 | Up from $4.33 | $12.63 | Up from $11.76 |
| Operating margin | 9.4% | Up from 8.9% | 8.0% | Down from 8.4% |
Revenue growth was attributed mainly to new awards and expansion on existing programs. Nine-month DoD revenue rose 17.1%; federal civilian revenue was nearly flat, down 0.1%. Direct costs increased faster than revenue over the nine-month period, while indirect costs and selling expenses fell as a share of revenue, which management attributed to cost efficiencies. Interest expense and other, net rose 35.3% for the nine months, primarily due to higher interest rates and higher debt balances. Effective tax rates were 24.9% for the quarter and 23.2% year to date, compared with 23.4% and 22.8% in the comparable periods.
Cash flow, liquidity, and debt
- Nine-month operating cash flow was $340.1 million, up from $236.0 million. Management cited higher MARPA cash proceeds and lower CARES Act payroll-tax and income-tax payments; higher receivables and days sales outstanding partly offset the increase.
- Investing cash outflow was $120.7 million, including $81.6 million of net acquisition payments. Financing cash outflow was $175.6 million, including $158.4 million of common-stock repurchases.
- Cash was $159.2 million at March 31, 2024, versus $115.8 million at June 30, 2023. Current assets were $1.394 billion and current liabilities $1.085 billion.
- Long-term debt, including current portion, was $1.692 billion, compared with $1.696 billion at June 30, 2023. The company had $550 million drawn on its $1.975 billion revolver and $1.148 billion outstanding on its term loan. The reported effective interest rate, including swaps, was 4.83%.
- Debt is floating-rate, with $1.1 billion of floating-to-fixed interest-rate swaps. The company was in compliance with credit-facility covenants. A 1-percentage-point interest-rate change would have changed nine-month interest expense by approximately $5.8 million.
- Management expects cash on hand, internally generated funds, and available borrowings to meet operating, capital, debt-service, repurchase, and working-capital needs over the next 12 months.
Backlog, outlook, and notable items
- Backlog was $28.6 billion, up 13.0% from $25.3 billion a year earlier; $3.2 billion was funded. Remaining performance obligations were $9.7 billion, with approximately 46% expected to be recognized as revenue over the next 12 months and 67% over the next 24 months. Backlog includes unexercised options and is not assurance of future revenue.
- No specific revenue or earnings guidance is provided in the supplied filing text. Management described the market and budget environment as constructive, citing defense and national-security priorities, while noting appropriations uncertainty, continuing-resolution effects, and potential shutdown risks.
- Fiscal 2024 domestic R&D tax amortization requirements are expected to reduce operating cash flow by $75.3 million. Management noted that Congressional action could alter the provision but is uncertain.
- The company completed two acquisitions during fiscal 2024, with approximately $67.2 million and $25.2 million of consideration, net of cash acquired. Purchase-price allocations remained preliminary.
- Aggregate contract estimate changes increased pretax income by $7.5 million for the quarter and $24.5 million year to date.
- The Al Shimari litigation jury trial commenced April 15, 2024. Plaintiffs previously estimated compensatory damages of $6.0–$9.0 million and punitive damages of $23.5–$64.0 million. CACI says it is vigorously defending the proceedings and believes the lawsuits are without merit. The Abbass case remains stayed pending the Al Shimari appeal outcome. Management does not expect ordinary-course legal matters or government contract audits to have a material effect.
- Federal budget caps and the timing of appropriations, contract protests and award delays, competition for cleared personnel, contract performance, government audits, interest rates, and acquisition integration are among the disclosed risks. The company reported no material changes to the risk factors in its latest Form 10-K.
Important facts for investors to verify
- Confirm the applicable period: the filing covers fiscal 2024 Q3, not 2023 Q3.
- Track conversion of the $28.6 billion backlog and $9.7 billion remaining performance obligations into funded work and recognized revenue.
- Assess cash generation excluding timing effects from receivable sales, tax payments, and working-capital movements.
- Monitor floating-rate debt, swap coverage, covenant compliance, and the $75.3 million expected R&D tax-related cash-flow impact.
- Follow the Al Shimari trial and any resulting developments in the stayed Abbass case.
- Review acquisition integration and final purchase-price allocations, as well as any changes in federal appropriations or contract awards.