CACI International Inc. 10-Q Summary
Business Context and Reporting Period
This filing is a Quarterly Report on Form 10-Q for CACI International Inc. for the quarterly period ended March 31, 2026. CACI is a leading provider of expertise and technology to U.S. government agencies (Defense, Intelligence, Federal Civilian) and international customers. The company operates in two segments: Domestic Operations and International Operations.
Key Financial Metrics
| Metric | Three Months Ended Mar 31, 2026 | Nine Months Ended Mar 31, 2026 |
|---|---|---|
| Revenues | $2,351.0 million | $6,858.7 million |
| Net Income | $130.4 million | $379.1 million |
| Diluted EPS | $5.88 | $17.11 |
| Operating Income | $228.9 million | $647.6 million |
| Operating Margin | 9.7% | 9.4% |
| Cash from Operations (9mo) | $508.4 million | |
| Total Debt (Principal) | $5,210.8 million | |
| Cash & Equivalents | $158.0 million | |
| Contract Backlog | $33.4 billion |
Material Changes vs. Prior Period
- Revenue Growth: Revenues increased 8.5% year-over-year for both the quarter and the nine-month period, driven by organic growth (6.8% and 5.6% respectively) and new contract awards.
- Profitability: Net income rose 16.6% for the quarter and 10.8% for the nine-month period. Operating income increased 16.6% and 16.2% respectively.
- Acquisitions: The company completed the acquisition of ARKA Group L.P. on March 9, 2026, for approximately $2.64 billion, significantly increasing goodwill and intangible assets. Smaller acquisitions included Datalynx Limited ($10.7 million).
- Debt Levels: Long-term debt increased substantially from $2.94 billion (June 30, 2025) to $5.21 billion (March 31, 2026) to finance the ARKA acquisition and other strategic investments. This included a new $800 million Term Loan B-2 and an additional $500 million in 2033 Notes.
- Interest Expense: Interest expense and other, net, increased 15.8% for the quarter and 26.7% for the nine-month period due to higher outstanding debt balances.
Outlook, Risks, and Management Commentary
- Budgetary Environment: Management notes a constructive budget environment with bipartisan support for defense and national security. The "One Big Beautiful Bill Act" (OBBBA) provided immediate funding for defense and border security. While a government shutdown occurred in October 2025, it was resolved, and full-year appropriations for the Department of Defense were passed in February 2026.
- Legal Proceedings: A significant legal risk remains regarding the Al Shimari lawsuit. On March 12, 2026, the U.S. Court of Appeals affirmed a $42 million judgment against CACI. The company plans to petition for rehearing and is awaiting a Supreme Court decision in a related case (Cisco Systems, Inc. v. Doe). No amounts have been recognized in the financial statements.
- Market Risks: Risks include reliance on U.S. government contracts, potential delays in appropriations, competition for cleared personnel, and interest rate fluctuations on variable-rate debt.
- Liquidity: The company maintains $1.07 billion of undrawn capacity under its revolving credit facility and believes existing cash and operating cash flows are sufficient to fund operations and debt service for the next 12 months.
Investor Verification Checklist
- Acquisition Integration: Verify the integration progress and revenue contribution of the $2.64 billion ARKA Group acquisition.
- Legal Exposure: Monitor the status of the Al Shimari appeal and the potential impact of the Supreme Court's decision in Cisco Systems, Inc. v. Doe on the $42 million judgment.
- Debt Servicing: Assess the impact of increased interest rates and higher debt principal on future interest expense and cash flow.
- Government Funding: Track the status of federal appropriations and potential impacts of Continuing Resolutions (CRs) or shutdowns on contract starts and revenue recognition.
- Backlog Conversion: Review the conversion rate of the $33.4 billion backlog into revenue, noting that $5.0 billion is currently funded.