CACI International CACI reported fourth-quarter fiscal 2026 adjusted earnings of $8.91 per share, which beat the Zacks Consensus Estimate of $7.26 by 22.7%. Adjusted EPS increased 6.1% year over year. However, GAAP diluted EPS declined 1.3% to $7.05, as higher operating income was offset by increased interest expense related to the ARKA acquisition and a higher tax provision.
Quarterly revenues increased 17.6% year over year to $2.71 billion, surpassing the Zacks Consensus Estimate by 0.36%. Organic revenue growth was 11.6%, while revenues also increased 15.2% sequentially.
CACI's Q4 and FY26 Performance in Details
During the quarter, contract awards totaled $1.6 billion, with approximately 40% representing new business. Total backlog increased 1.9% year over year to $32 billion, while funded backlog rose 28.6% to $5.4 billion, providing solid revenue visibility.
Profitability improved meaningfully during the quarter. EBITDA margin expanded to 13%, up 150 basis points year over year, supported by stronger execution, favorable business mix and a small gain from a U.K. divestiture. EBITDA increased 33.5% year over year to $353.1 million, while income from operations climbed 31.7% to $272.2 million.
Management highlighted several notable contract wins during the quarter, including deployment of its SkyValor counter-drone system for the Department of War, a technology modernization contract with the Department of Veterans Affairs worth up to $308 million, classified national security awards exceeding $236 million, and multiple defense modernization and cloud transformation programs.
For fiscal 2026, revenues increased 10.9% to $9.57 billion, driven by 7.2% organic growth. Adjusted EPS rose 12.7% to $29.83, while EBITDA margin expanded to 12.3%. Annual contract awards totaled $10.2 billion, resulting in a 1.1x book-to-bill ratio.
CACI's Balance Sheet & Cash Flow
CACI continued to generate strong cash flows during the quarter. Net cash provided by operating activities, excluding MARPA, increased 67.4% year over year to $279.7 million, while free cash flow rose 67.4% to $232.9 million, supported by disciplined working capital management. Days sales outstanding improved to 55 days from 56 days a year earlier.
The company expects leverage to decline more rapidly than previously anticipated. Pro forma net leverage stood at approximately 3.7x following the ARKA acquisition, and management now expects leverage to return to the low-3x range by June 2027, one quarter earlier than previously projected, supported by consistent cash generation.
CACI Initiates FY27 Guidance
For fiscal 2027, CACI expects revenues between $10.65 billion and $10.85 billion, suggesting growth of 11.3-13.4%, including 6.1-8.2% organic growth. Adjusted net income is projected in the range of $735-$755 million, while adjusted EPS is expected between $32.96 and $33.86.
The company projects an EBITDA margin in the high-12% range and expects free cash flow of at least $900 million, supported by continued revenue growth, margin expansion and efficient working capital management. Capital expenditures are expected to be approximately $115 million, while net interest expense is projected at roughly $288 million.
Zacks Rank and Stocks to Consider
At present, CACI carries Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Lumentum LITE, Applied Materials AMAT and Analog Devices ADI, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Lumentum have surged 123% year to date. The Zacks Consensus Estimate for LITE’s fiscal 2026 earnings is pegged at $8.19 per share, up by 5 cents over the past 30 days, indicating an increase of 297.6% year over year.
Shares of Applied Materials have jumped 107.9% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $12.14 per share, up by 3 cents over the past 30 days, indicating a rise of 28.9% year over year.
Analog Devices shares have surged 39.2% year to date. The Zacks Consensus Estimate for ADI’s fiscal 2026 earnings is pegged at $12.42 per share, up by 10 cents over the past 30 days, indicating an increase of 33.9% year over year.
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CACI International, Inc. (CACI): Free Stock Analysis Report
Analog Devices, Inc. (ADI): Free Stock Analysis Report
Applied Materials, Inc. (AMAT): Free Stock Analysis Report
Lumentum Holdings Inc. (LITE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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