CACI’s third-quarter results were met with a strong positive market reaction, as the company’s revenue and non-GAAP earnings per share exceeded Wall Street expectations. Management attributed the quarter’s outperformance to robust demand for its technology-driven solutions in national security, especially in areas such as counter-drone (Counter-UAS) and electronic warfare. CEO John Mengucci highlighted the company’s ability to win significant new business, noting a record backlog and the successful ramp-up of new and recompete awards. “Our first quarter performance gives us increased confidence in achieving both our full year guidance and our 3-year financial targets,” Mengucci said.
Is now the time to buy CACI? Find out in our full research report (it’s free for active Edge members).
CACI (CACI) Q3 CY2025 Highlights:
- Revenue: $2.29 billion vs analyst estimates of $2.26 billion (11.2% year-on-year growth, 1% beat)
- Adjusted EPS: $6.85 vs analyst estimates of $6.18 (10.9% beat)
- Adjusted EBITDA: $268.6 million vs analyst estimates of $245.2 million (11.7% margin, 9.5% beat)
- The company reconfirmed its revenue guidance for the full year of $9.3 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $27.58 at the midpoint
- Operating Margin: 9.3%, in line with the same quarter last year
- Backlog: $33.9 billion at quarter end, up 4.6% year on year
- Market Capitalization: $12.59 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From CACI’s Q3 Earnings Call
- Colin Canfield (Cantor Fitzgerald) asked about the outlook for defense budgets and the impact of reconciliation funding. CEO John Mengucci explained that CACI’s focus on enduring national security priorities and a large addressable market provides resilience amid budget debates.
- Scott Mikus (Melius Research) questioned how CACI is responding to evolving drone threats like fiberoptic-controlled drones. Mengucci described the adaptability of the Merlin system and the company’s long-standing expertise in software-based counter-drone solutions.
- Gavin Parsons (UBS) inquired about the sustainability of strong bookings and whether the pipeline supports continued momentum. Management acknowledged the lumpiness of awards but noted a healthy pipeline and strong trailing 12-month book-to-bill.
- Seth Seifman (JPMorgan) asked about the impact of the government shutdown on revenue and collections. CFO Jeffrey MacLauchlan said disruptions were minor and expected to be recovered over the year, with guidance ranges designed to absorb modest delays.
- Jonathan Siegmann (Stifel) sought clarification on the technology margin mix and whether the quarter’s margin gains reflect a structural trend. MacLauchlan indicated that while some elements are sustainable, the margin profile will vary by technology mix and delivery timing.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be watching (1) the pace of new contract awards and backlog growth, especially in software-defined and counter-drone technologies; (2) the impact of evolving government funding dynamics, including the use of reconciliation funds for defense and homeland security initiatives; and (3) execution on digital modernization and agile software programs. Progress in expanding international sales and adapting to procurement changes will also be key milestones.
CACI currently trades at $572.49, up from $519.86 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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