CACI International Inc -CL A (NYSE:CACI) delivered a mixed financial performance for its fiscal second quarter, with earnings surpassing expectations while revenue fell short. The national security and IT services provider also raised its full-year guidance, signaling confidence in its ongoing operations and strategic direction.
Quarterly Performance vs. Estimates
The company reported revenue of $2.22 billion for the quarter ended December 31, 2025, representing a 5.7% year-over-year increase driven by 4.5% organic growth. However, this figure came in below analyst consensus estimates of approximately $2.31 billion. On the profitability front, CACI outperformed. Its adjusted diluted earnings per share (EPS) of $6.81 exceeded the average analyst estimate of $6.57.
The divergence between top-line and bottom-line results can be attributed to several factors highlighted in the earnings release:
- Strong Operational Leverage: Income from operations grew 13.9% year-over-year to $206.5 million, significantly outpacing revenue growth, indicating improved operational efficiency.
- Share Repurchases: The company noted that growth in per-share earnings was driven in part by share repurchases made during the prior fiscal year, which reduced the share count.
- Robust Cash Generation: A standout metric was free cash flow, which more than doubled year-over-year to $138.2 million, driven by higher net income and effective working capital management.
Market Reaction and Price Action
Following the earnings release, CACI's stock showed positive momentum in after-hours trading, rising approximately 0.6%. This initial reaction suggests investors are focusing on the earnings beat, raised guidance, and strong cash flow, potentially viewing the revenue miss as less critical given the company's government contracting business where backlog is a key indicator. The stock has also seen gains over the past month, up roughly 13.6%, indicating positive sentiment leading into the report.
Raised Full-Year Guidance
Management expressed confidence by raising its fiscal 2026 outlook across all key metrics. The new guidance midpoint for revenue is $9.4 billion, which aligns closely with the current analyst consensus estimate of $9.56 billion. More notably, the company raised its adjusted EPS guidance to a range of $28.25 to $28.92, with a midpoint of $28.59. This compares favorably to the analyst EPS consensus of approximately $28.80 for the full year. The company also increased its free cash flow guidance to "at least $725 million."
Strategic and Operational Highlights
The earnings release underscored several strategic initiatives and contract wins that support future growth:
- Healthy Backlog: Total backlog increased 3.1% to $32.8 billion, with funded backlog—the portion more likely to convert to revenue in the near term—up 7.3% to $4.4 billion.
- Major Contract Awards: The company was named an awardee on the Missile Defense Agency's SHIELD contract, which has a massive $151 billion ceiling, and received its first production order for Remote Modular Terminals for a Department of Defense customer.
- Pending Acquisition: CACI has entered into a definitive agreement to acquire ARKA Group L.P. for $2.6 billion in cash, a move aimed at strengthening its technology portfolio in the space domain. This transaction is not included in the raised fiscal 2026 guidance.
Looking Ahead
For the next quarter, analysts are currently estimating revenue of approximately $2.39 billion and EPS of around $7.34. CACI's updated full-year guidance suggests a steady trajectory, with the raised EPS forecast being a primary point of investor optimism. The company's performance continues to be underpinned by its focus on high-priority national security areas like electronic warfare, space, and agile software development.
For a detailed look at CACI's historical earnings, future estimates, and analyst projections, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any securities. Investing carries risks, including the potential loss of principal.
