CACI's Q1 Revenue Jumps 11% on Strong Defense, Intelligence Demand

TL;DR

**CACI's revenue and operating cash flow are surging, but watch that ballooning interest expense – it's eating into their bottom line.**

AI Summary

CACI International Inc reported robust financial performance for the three months ended September 30, 2025, with revenues increasing by 11.2% to $2.288 billion from $2.057 billion in the prior year period. Net income also saw a modest rise of 3.8% to $124.8 million, up from $120.2 million. Diluted earnings per share grew to $5.63 from $5.33. The company's operating income improved significantly, reaching $212.3 million compared to $179.8 million in the same quarter last year. A key strategic move was the acquisition of Azure Summit Technology for approximately $1.309 billion in October 2024, contributing to a substantial increase in intangible assets and goodwill. Interest expense more than doubled to $46.2 million from $24.0 million, impacting net income growth. The company's remaining performance obligations stood at $13.1 billion as of September 30, 2025, indicating strong future revenue visibility. Cash provided by operating activities surged to $171.1 million from $34.7 million, reflecting improved operational efficiency.

Why It Matters

CACI's strong revenue growth, particularly in the Department of Defense and Intelligence Community sectors, signals robust government spending on national security, benefiting investors in the defense contracting space. The significant increase in cash from operations to $171.1 million demonstrates improved financial health and operational efficiency, which could lead to increased shareholder returns through future investments or buybacks. However, the doubling of interest expense to $46.2 million highlights the rising cost of capital, a critical factor for investors to monitor, especially given the company's substantial long-term debt of $2.709 billion. This competitive landscape, marked by strategic acquisitions like Azure Summit Technology, suggests CACI is actively positioning itself for continued market leadership in specialized technology and expertise services.

Risk Assessment

Risk Level: medium — The company faces a medium risk level primarily due to its increased interest expense and substantial long-term debt. Interest expense more than doubled to $46.173 million for the three months ended September 30, 2025, from $23.970 million in the prior year, indicating higher borrowing costs. Additionally, long-term debt, net of current portion, remains significant at $2.709 billion as of September 30, 2025, which could strain financial flexibility in a rising interest rate environment.

Analyst Insight

Investors should consider CACI's strong operational performance and future revenue visibility from its $13.1 billion in remaining performance obligations. However, they should closely monitor the impact of rising interest rates on the company's substantial debt load and its effect on net income. Evaluate CACI's ability to manage its debt and integrate recent acquisitions like Azure Summit Technology to sustain growth and profitability.

Financial Highlights

revenue

$2.288B

operating Margin

9.3%

total Assets

$8.705B

total Debt

$2.777B

net Income

$124.8M

eps

$5.63

cash Position

$133.0M

revenue Growth

+11.2%

Key Numbers

• $2.288B — Revenues (Increased by 11.2% from $2.057 billion in Q1 2024)
• $124.8M — Net income (Increased by 3.8% from $120.2 million in Q1 2024)
• $5.63 — Diluted earnings per share (Increased from $5.33 in Q1 2024)
• $212.3M — Income from operations (Increased from $179.8 million in Q1 2024)
• $46.2M — Interest expense and other, net (Increased from $24.0 million in Q1 2024)
• $1.309B — Azure Summit Technology acquisition cost (Purchase consideration, net of cash acquired)
• $13.1B — Remaining performance obligations (As of September 30, 2025, indicating future revenue)
• $171.1M — Net cash provided by operating activities (Increased from $34.7 million in Q1 2024)
• $2.709B — Long-term debt, net of current portion (As of September 30, 2025)
• $36.0M — Amortization expense related to intangible assets (Increased from $18.0 million in Q1 2024)

Key Players & Entities

• CACI International Inc (company) — registrant
• Azure Summit Technology, LLC (company) — acquired business
• Identity E2E Limited (company) — acquired business
• MUFG Bank, Ltd. (company) — purchaser in MARPA
• Department of Defense (regulator) — primary customer
• Intelligence Community (regulator) — primary customer
• SEC (regulator) — regulatory body
• FASB (regulator) — accounting standards setter
• Bloomberg (company) — publisher
• New York Stock Exchange (regulator) — exchange where CACI is registered

FAQ

Risk Factors

• Increased Interest Expense [medium — financial]: Interest expense more than doubled to $46.2 million for the three months ended September 30, 2025, from $24.0 million in the prior year period. This significant increase negatively impacted net income growth, despite revenue and operating income improvements.
• Acquisition Integration and Debt [medium — financial]: The acquisition of Azure Summit Technology for $1.309 billion in October 2024 has increased intangible assets and goodwill. While strategic, such large acquisitions can introduce integration risks and potentially increase financial leverage if financed significantly by debt.
• Amortization Expense Growth [medium — operational]: Amortization expense related to intangible assets rose to $36.0 million from $18.0 million year-over-year. This increase is directly linked to the recent acquisition and will continue to impact profitability until the acquired intangibles are fully amortized.
• Dependence on Government Contracts [high — market]: As a significant government contractor, CACI is subject to the complexities of government procurement processes, budget allocations, and potential shifts in government spending priorities. Changes in these areas can materially affect future revenues and profitability.
• Compliance and Cybersecurity [high — regulatory]: Operating in the defense and intelligence sectors requires strict adherence to numerous government regulations and cybersecurity standards. Non-compliance or data breaches could lead to significant penalties, reputational damage, and loss of contracts.

Industry Context

CACI operates in the competitive government contracting sector, particularly serving defense, intelligence, and federal civilian agencies. The industry is characterized by long-term contracts, complex procurement cycles, and a strong emphasis on technological innovation and cybersecurity. Trends include increasing demand for digital transformation, cloud computing, data analytics, and artificial intelligence solutions within government operations.

Regulatory Implications

As a major government contractor, CACI faces stringent regulatory oversight, including compliance with federal acquisition regulations (FAR) and cybersecurity mandates. Changes in government spending priorities, contract award processes, and data security requirements can significantly impact operations and profitability. Maintaining compliance is critical to avoid penalties and retain contracts.

What Investors Should Do

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Key Dates

• 2025-09-30: End of Q1 Fiscal Year 2025 — Reporting period for the 10-Q, showing strong revenue growth and improved operating income, but also increased interest expenses.
• 2024-10-01: Acquisition of Azure Summit Technology — Major strategic acquisition impacting goodwill, intangible assets, and future operational capacity, with a cost of $1.309 billion.

Glossary

Remaining Performance Obligations (RPO)

The total value of contracted work that has not yet been performed or revenue recognized. It represents future revenue that is expected to be recognized. (CACI's RPO of $13.1 billion indicates strong future revenue visibility and backlog.)

Goodwill

An intangible asset that arises when one company acquires another for a price greater than the fair market value of its net assets. It represents brand reputation, customer loyalty, etc. (Goodwill increased significantly due to the Azure Summit Technology acquisition, impacting the balance sheet.)

Intangible Assets, net

Non-physical assets that have value, such as patents, copyrights, and customer lists. 'Net' means accumulated amortization has been deducted. (These assets also increased due to the acquisition, and related amortization expense has risen.)

Operating Lease Right-of-Use Assets

Assets recognized under accounting standards for leases, representing the right to use an asset for a specified period. (These assets and their corresponding liabilities have grown, reflecting CACI's leasing activities.)

Cash provided by operating activities

The net amount of cash generated from a company's normal business operations over a period. (A surge to $171.1 million indicates improved operational efficiency and cash generation.)

Year-Over-Year Comparison

Compared to the prior year period, CACI demonstrated robust top-line growth with revenues increasing by 11.2% to $2.288 billion. Operating income also saw a substantial improvement. However, net income growth was more modest at 3.8% due to a more than doubling of interest expenses, from $24.0 million to $46.2 million. Amortization expenses also increased significantly, reflecting recent strategic acquisitions. Despite these headwinds, cash flow from operations surged dramatically, indicating improved underlying business performance.

Key Financial Figures

• $0.10 — rnational Inc's common stock, par value $0.10 per share. CACI INTERNATIONAL INC P

Filing Documents

• caci-20250930.htm (10-Q) — 812KB
• caci-20250930xex311.htm (EX-31.1) — 9KB
• caci-20250930xex312.htm (EX-31.2) — 10KB
• caci-20250930xex321.htm (EX-32.1) — 4KB
• caci-20250930xex322.htm (EX-32.2) — 4KB
• 0000016058-25-000087.txt ( ) — 5240KB
• caci-20250930.xsd (EX-101.SCH) — 35KB
• caci-20250930_cal.xml (EX-101.CAL) — 62KB
• caci-20250930_def.xml (EX-101.DEF) — 129KB
• caci-20250930_lab.xml (EX-101.LAB) — 483KB
• caci-20250930_pre.xml (EX-101.PRE) — 318KB
• caci-20250930_htm.xml (XML) — 695KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) Condensed Consolidated Statements of Operations 3 Condensed Consolidated Statements of Comprehensive Income 4 Condensed Consolidated Balance Sheets 5 Condensed Consolidated Statements of Cash Flows 6 Condensed Consolidated Statements of Shareholders' Equity 7 Notes to Condensed Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 19 Item 4.

Controls and Procedures

Controls and Procedures 19 PART II: OTHER INFORMATION 20 Item 1.

Legal Proceedings

Legal Proceedings 20 Item 1A.

Risk Factors

Risk Factors 22 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 22 Item 3. Defaults Upon Senior Securities 22 Item 4. Mine Safety Disclosures 22 Item 5. Other Information 23 Item 6. Exhibits 23

Signatures

Signatures 24 2 PART I FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) CACI INTERNATIONAL INC CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended September 30, 2025 2024 Revenues $ 2,287,623 $ 2,056,889 Costs of revenues: Direct costs 1,547,194 1,414,424 Indirect costs and selling expenses 473,856 427,946 Depreciation and amortization 54,298 34,678 Total costs of revenues 2,075,348 1,877,048 Income from operations 212,275 179,841 Interest expense and other, net 46,173 23,970 Income before income taxes 166,102 155,871 Income taxes 41,292 35,694 Net income $ 124,810 $ 120,177 Basic earnings per share $ 5.67 $ 5.39 Diluted earnings per share $ 5.63 $ 5.33 Weighted average basic shares outstanding 21,994 22,304 Weighted average diluted shares outstanding 22,166 22,539 See Notes to Unaudited Condensed Consolidated Financial Statements 3 CACI INTERNATIONAL INC CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) Three Months Ended September 30, 2025 2024 Net income $ 124,810 $ 120,177 Other comprehensive (loss) income: Foreign currency translation adjustment ( 5,951 ) 16,170 Change in fair value of interest rate swap agreements, net of tax ( 1,688 ) ( 17,676 ) Total other comprehensive loss, net of tax ( 7,639 ) ( 1,506 ) Comprehensive income $ 117,171 $ 118,671 See Notes to Unaudited Condensed Consolidated Financial Statements 4 CACI INTERNATIONAL INC CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) September 30, 2025 June 30, 2025 ASSETS Current assets: Cash and cash equivalents $ 133,020 $ 106,181 Accounts receivable, net 1,419,012 1,405,441 Prepaid expenses and other current assets 302,807 268,323 Total current assets 1,854,839 1,779,945 Goodwill 5,018,687 5,021,805 Intangible assets, net 1,054,925 1,091,276 Property, plant, and equipment, net 205,712 212,035 Operating lease right-of-use assets 373,593 343,944 Supplemental retirement savings

Legal Proceedings

Legal Proceedings The Company is involved in various claims, lawsuits, and administrative proceedings arising in the normal course of business, none of which, based on current information, are expected to have a material adverse effect on the Company's financial position, results of operations or cash flows. On November 12, 2024, a jury reached a $ 42 million judgment against the Company in an ongoing civil suit alleging that the Company's employees had conspired with the U.S. military, which lead to acts of wrongdoings committed by the U.S. military against the plaintiffs. On November 25, 2024, the Company filed a motion for dismissal as a matter of law, enumerating numerous grounds. On January 10, 2025, the motion was denied, and the Company filed a notice of appeal to the U.S. Court of Appeals. The Court of Appeals established a briefing schedule, which concluded on July 25, 2025. The Court of Appeals heard oral argument on September 9, 2025. The Company is vigorously defending the proceedings and continues to believe that the plaintiffs' position is completely without merit. No amounts have been recognized in our condensed consolidated financial statements. Government Contracting Payments to the Company on cost-plus-fee and time-and-materials contracts are subject to adjustment upon audit by the Defense Contract Audit Agency (DCAA) and other government agencies that do not utilize DCAA's services. The DCAA has completed audits of the Company's annual incurred cost proposals through fiscal year 2023. The Company is still negotiating the results of prior years' audits with the respective cognizant contracting officers and believes its reserves for such are adequate. Adjustments that may result from these audits and the audits not yet started are not expected to have a material effect on the Company's financial position, results of operations, or cash flows. Additionally, the DCAA continually reviews the cost accounting and other practices of government contrac