CACI lifts FY27 outlook after Q1 beat

CACI International (CACI) raised its full-year fiscal 2027 guidance after posting a profitable first quarter marked by margin expansion. The company now expects revenue between $10.7 billion and $10.9 billion and adjusted diluted earnings per share in a range of $33.18 to $34.08. Adjusted net income guidance has been increased to $740 million to $760 million, while the forecast for free cash flow of at least $900 million remains unchanged. Management continues to target an EBITDA margin in the high-12% range for the full year and anticipates stronger organic growth and margin performance in the second half of the fiscal year than in the first half.

The updated outlook follows a modest upward revision from prior guidance ranges for revenue, adjusted net income and adjusted EPS. Additional guidance parameters include expected depreciation and amortization of about $325 million, net interest expense of roughly $288 million, an effective tax rate of 23% to 24%, and approximately 22.3 million diluted shares outstanding. The company indicated that 94% of fiscal 2027 revenue is expected to come from existing business, with only 3% in recompete and 3% from new business opportunities.

In the first quarter of fiscal 2027, CACI reported adjusted earnings per share of $7.66, exceeding profit forecasts, on revenue of $2.47 billion.

Profitability improved notably, with EBITDA rising 22.4% to $328.8 million and EBITDA margin expanding to 13.3%. This represented an increase from the prior year’s margin and was attributed to strong program execution and a favorable mix of higher-margin work. Free cash flow for the quarter totaled roughly $133 million, reflecting typical first-quarter working capital outflows, and the company reiterated its view that cash generation should support its full-year target.

CACI’s first-quarter contract awards totaled $4.8 billion, resulting in a book-to-bill ratio of 2.0 times and an average contract duration of nearly four and a half years. About 61% of these awards came from new business, with the remainder from existing programs. Total backlog stood at $34 billion, while funded backlog grew nearly 15% year over year to $6.2 billion, underscoring multi-year revenue visibility.

The company expects 94% of fiscal 2027 revenue to be derived from existing business, the highest level in seven years at this stage of the fiscal year. Only 3% of revenue is tied to contracts up for recompete, where CACI reports maintaining a high win rate, and 3% is associated with new business from what management describes as a quality pipeline. The mix of fixed-price work has increased to a low-to-mid-30s percentage of revenue, with management indicating comfort in accepting fixed-price contracts when technical risks are well understood.

Following the earnings release and guidance increase, CACI shares rose 2.99% in premarket trading to $642, compared with a prior close of $623.38. The stock traded near the upper end of its 52-week range of $434.70 to $683.50. The move reflected investor focus on the earnings beat, improved outlook and strong backlog, despite revenue coming in slightly below some expectations.

By customer segment, Department of War revenue increased 14.8% to $1.35 billion, representing nearly 55% of total quarterly revenue. Intelligence community revenue grew 2.6% to $612 million, while federal civilian revenue declined 3.7% to $396.4 million. Management also pointed to contract wins across unmanned systems, maritime capabilities and other defense and national security programs as contributors to its awards and backlog position.