CACI International Inc. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This filing covers the quarterly period ended December 31, 2025 (Fiscal Q2 2026). CACI International Inc. 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 and International Operations.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Revenues | $2,220.1 million | $2,099.8 million | $4,507.7 million | $4,156.7 million |
| Net Income | $123.9 million | $109.9 million | $248.7 million | $230.1 million |
| Diluted EPS | $5.59 | $4.88 | $11.22 | $10.21 |
| Operating Income | $206.5 million | $181.3 million | $418.7 million | $361.1 million |
| Operating Margin | 9.3% | 8.6% | 9.3% | 8.7% |
| Cash from Operations (YTD) | $325.3 million (vs. $160.7 million YTD 2025) | |||
| Total Debt (Principal) | $2,992.5 million (as of Dec 31, 2025) | |||
| Cash & Equivalents | $423.0 million (as of Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Revenues increased 5.7% quarter-over-quarter and 8.4% year-to-date, driven by organic growth (4.5% Q/Q, 5.0% YTD) and new contract awards.
- Profitability: Net income rose 12.7% for the quarter and 8.1% YTD. Operating margins expanded due to cost efficiencies and favorable changes in estimates ($11.7 million benefit in Q2).
- Customer Mix: Federal civilian agency revenue grew significantly (19.9% Q/Q), while DoD and Intelligence Community revenue showed moderate growth (3.0% and 2.1% respectively).
- Interest Expense: Interest expense increased 33.9% YTD due to higher outstanding debt balances, partially offset by lower interest rates.
- Acquisitions: The company completed the acquisition of Azure Summit Technology (Oct 2024) and Applied Insight (Oct 2024). On December 19, 2025, CACI announced an agreement to acquire ARKA Group L.P. for approximately $2.6 billion, expected to close in FY2026.
Outlook, Risks, and Contingencies
- Backlog: Total backlog stands at $32.8 billion as of December 31, 2025, a 3.1% increase year-over-year. Funded backlog is $4.4 billion.
- Government Funding: The company notes a constructive budget environment with bipartisan support for defense spending. However, it highlights risks related to Continuing Resolutions (CRs) and government shutdowns, which recently occurred in October 2025 and were resolved in November 2025.
- Legal Proceedings: A significant contingency involves the Al Shimari lawsuit. A jury returned a $42 million judgment against CACI in November 2024. CACI has appealed, and the Court of Appeals heard oral arguments in September 2025. No amounts have been recognized in the financial statements.
- Market Risks: The company faces exposure to interest rate fluctuations on variable-rate debt (hedged via swaps for $900 million notional) and foreign currency exchange rates, though international contracts are typically negotiated in the currency of predominant expenses.
Investor Verification Checklist
- ARKA Acquisition: Verify the closing timeline and funding sources for the $2.6 billion ARKA Group acquisition announced in December 2025.
- Legal Exposure: Monitor the status of the Al Shimari appeal and potential financial impact of the $42 million judgment.
- Debt Structure: Review the amended credit facility terms and the impact of the new Term Loan B Facility on future interest expenses.
- Government Appropriations: Assess the impact of the "One Big Beautiful Bill Act" (OBBBA) and future Continuing Resolutions on contract start dates and revenue recognition.
- Working Capital: Analyze the significant increase in cash collections and the reduction in accounts receivable days, which drove the strong operating cash flow.