It has been about a month since the last earnings report for CACI International (CACI). Shares have lost about 9.8% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is CACI International due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
CACI International Q2 Earnings Beat Estimates, Revenues Miss
CACI reported mixed second-quarter fiscal 2026 results, wherein the bottom line surpassed the Zacks Consensus Estimate, while the top line lagged the same.
CACI International reported second-quarter non-GAAP earnings of $6.81 per share, which beat the Zacks Consensus Estimate by 6.26%. The bottom line increased 14.5% on a year-over-year basis, primarily driven by higher revenues and efficient cost management.
In the second quarter, CACI reported revenues of $2.22 billion, which increased 5.7% from the prior-year quarter, primarily driven by 4.5% organic growth. However, the top line missed the consensus mark by 2.15 %.
In the second quarter of fiscal 2026, contract awards totaled $1.4 billion, with approximately 70% for new business. Awards exclude ceiling values of multi-award, indefinite delivery and indefinite quantity contracts.
The total backlog as of Dec. 31, 2025, was $32.8 billion, up 3.8% from $31.8 billion reported a year ago. The funded backlog was $4.4 billion, up 7.3% from $4.1 billion reported a year ago. Our estimates for the total backlog and funded backlog were pegged at $34.3 billion and $4.8 billion, respectively.
CACI’s Q2 Details
In terms of the customer mix, the Department of Defense contributed 51.8% to total revenues in the reported quarter. Intelligence Community made up for 24.3%, Federal Civilian Agencies accounted for 19.8%, and Commercial and other customers accounted for 4.1%. Revenues from the Department of Defense, Intelligence Community, Federal Civilian Agencies, and Commercial and Other customers increased 3%, 2.1%, 19.9% and 3.4%, respectively.
The Prime Contractor and Subcontractor accounted for 90.5% and 9.5% of total revenues, respectively. Revenues from the Prime Contractor soared 7.9%, while Subcontractor revenues plunged 11.4%.
In terms of contract type, cost-plus-fee-type, fixed-price, and time and material-type contracts contributed 59%, 26.9% and 14.1%, respectively, to total revenues. Revenues from cost-plus-fee-type and time-and-materials contracts grew 5.6% and 21.5%, respectively. However, sales from the fixed-price type contracts declined 0.8%.
Expertise and Technology accounted for 41.6% and 58.4% of total revenues, respectively. Revenues from Expertise declined 0.2%, while those from the Technology segment soared 10.4%.
The operating income for the quarter amounted to $206.5 million, up 13.9% year over year. The operating margin expanded 70 basis points (bps) to 9.3%. Adjusted EBITDA increased 12.8% year over year to $262.6 million, while the adjusted EBITDA margin expanded 70 bps to 11.8%.
CACI’s Balance Sheet & Cash Flow
As of Dec. 31, 2025, CACI had cash and cash equivalents of $423 million compared with the previous quarter’s $133 million.
The total long-term (net of the current portion) debt was $2.92 billion, up from $2.71 billion as of Sept. 30, 2025.
In the second quarter, the company generated operating cash flow (excluding mini-automatic radar plotting aid or MARPA) and free cash flow of $154.2 million and $138.2 million, respectively. In the first half of fiscal 2026, it generated operating cash flow (excluding MARPA) and free cash flow of $314.2 million and $281.1 million, respectively.
CACI Raises Fiscal 2026 Guidance
CACI International raised its guidance for fiscal 2026. For fiscal 2026, CACI now anticipates revenues between $9.3 billion and $9.5 billion, up from the previous range of $9.2-$9.4 billion.
Adjusted net income for fiscal 2026 is now projected in the band of $630-$645 million, up from the earlier guidance of $605-$625 million. The company now estimates non-GAAP earnings per share in the range of $28.25-$28.92, up from the previous projection of $27.13-$28.03.
Free cash flow is anticipated to be at least $725 million in fiscal 2026, up from the earlier guidance of at least $710 million.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, CACI International has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, CACI International has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CACI International, Inc. (CACI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
