CACI Accelerates Revenue Growth as Margins Widen
The government contractor projected fiscal 2027 free cash flow of at least $900 million.
CACI International (CACI) posted a 17.6% increase in fourth-quarter revenue to $2.709 billion, as growth accelerated from 8.5% in the prior quarter and 5.7% two quarters earlier.
The national-security technology company’s organic growth accelerated to 11.6% from 6.8% in the third quarter, even as the March acquisition of ARKA added scale and shifted the business mix. Operating income rose 31.7% to $272.2 million, outpacing revenue growth and lifting operating margin to about 10.0% from about 9.0%.
The acquisition’s financing costs weighed on earnings. Net income slipped 0.7% to $156.8 million and diluted earnings fell 1.3% to $7.05 a share as interest expense climbed 57.7% and the tax provision increased. Adjusted earnings rose 6.1% to $8.91 a share.
Technology revenue drove the expansion, rising 23.7% to $1.659 billion and accounting for 61.2% of quarterly revenue, up from 58.2% a year earlier. Expertise revenue increased 9.1%, reducing its share of the mix to 38.8% from 41.8%. EBITDA rose 33.5% to $353.1 million, while its margin widened to 13.0% from 11.5% and improved from 12.3% in the prior quarter.
Cash generation strengthened alongside margins. Fourth-quarter free cash flow rose 67.4% to $232.9 million, accelerating from 17.8% growth in the third quarter. For the full year, free cash flow increased 66.2% to $735.4 million, helped by higher net income, tax-payment timing and working-capital management.
Demand measures were mixed. Quarterly contract awards fell 37.7% to $1.644 billion and declined sequentially, though full-year awards increased 6.3% to $10.245 billion. Total backlog edged up 1.9% to $32.0 billion, while funded backlog climbed 28.6% to $5.4 billion, a sharper increase than the 7.3% growth recorded two quarters earlier.
CACI’s fiscal 2027 guidance calls for revenue of $10.65 billion to $10.85 billion, adjusted earnings of $32.96 to $33.86 a share and free cash flow of at least $900 million. The outlook points to further cash growth as CACI absorbs ARKA’s financing and amortization burden, which lifted quarterly interest expense to $72.1 million and intangible amortization to $55.3 million.