CACI International (NYSE:CACI) executives addressed recent share price volatility, the company’s approach to artificial intelligence, and demand trends across its technology-focused national security portfolio during a TD Cowen investor discussion featuring President and CEO John Mengucci and CFO Jeff.
Management downplays stock volatility, reiterates long-term focus
Asked about market and stock volatility, Mengucci said the company remains focused on long-term growth and characterized the recent move as a function of CACI being “compared against companies that we share very little alike with.” He described CACI as a “government services company” by classification, but emphasized that the business is run as a “free cash flow per share growth company,” with a focus on driving top- and bottom-line performance to increase free cash flow.
AI seen as a tailwind, not a threat
He also cited opportunities to apply AI in areas such as processing space-based and airborne imagery, where he said only about 7% of collected data gets reviewed. According to Mengucci, AI and related tools such as computer vision can help pre-process data so customers can extract more value without hiring “thousands and thousands of people.”
On software development, Mengucci said CACI builds specialized software for federal missions using commercial practices and agile development, rather than delivering a license-based software model. He argued that “software doesn’t equal software,” and said CACI’s differentiation comes from combining rapid development processes with deep mission knowledge and access to classified environments that many commercial providers cannot replicate.
Competition and electronic warfare growth
In discussing competitive dynamics, Mengucci said CACI often competes against traditional aerospace and defense primes and other technology-oriented firms, depending on the mission, and that the company “very, very rarely” encounters the firms it is typically compared with in the government services peer set. Jeff echoed that view, saying the company rarely meets its traditional comparables in the marketplace.
Mengucci described electronic warfare (EW) broadly as non-kinetic operations in the electromagnetic spectrum, including areas often associated with cyber and signals collection. He said CACI has grown to about $2 billion of EW today from “just about zero” starting in 2019, and characterized the business as generating “fantastic margins.” He attributed part of the economics to delivering “a lot of this as a commercial item,” which he said aligns with the administration’s direction.
Business development approach and procurement reform
Mengucci said the company revamped its business development and financial management processes as it pivoted toward technology delivery. He summarized the approach as “we bid less to win more,” arguing that limiting bid volume enables higher-quality submissions and better win rates. He also said the company works programs years ahead of formal solicitations, invests its own money to demonstrate capabilities, and focuses on customer intimacy and shaping requirements.
On the impact of DOGE-related scrutiny and broader procurement reform, Mengucci said CACI saw minimal disruption, citing less than $5 million to $7 million of work affected across a $9 billion revenue base, which he framed as evidence that the company does not rely heavily on consulting or “selling people.”
Both executives highlighted alternative acquisition pathways, particularly Other Transaction Authorities (OTAs), as well-suited to CACI’s model. Jeff said the company has seen 2.5 times the number of OTAs in the last two years compared with the prior five and noted roughly 40 active OTAs. Mengucci shared an example in EW where, after approaching a customer during a longer prime contractor development effort, CACI entered an OTA and, six months later, the effort moved into what he described as a $500 million production program—emphasizing speed from concept to fielded capability.
ARKA acquisition and FY guidance commentary
Mengucci discussed the ARKA acquisition as filling a gap in CACI’s space market capabilities. He noted CACI’s existing work in optical terminals and space optics for moving data via optics rather than radio frequency, and said ARKA brings experience in EO/IR and space-based radar supporting GEOINT collection missions. He also said ARKA has brought “agentic AI” into ground-side processing with authority to operate in mission environments, which he believes can be extended across CACI’s portfolio by combining GEOINT with signals intelligence capabilities.
Mengucci said the company completed the deal without including cost or revenue synergies in its framing and described ARKA as strengthening relationships with commercial and traditional satellite primes. He characterized the deal as accretive to EBITDA margin and growth rate “right away,” and said it is EPS accretive or neutral in the first year and accretive in the first full year.
On near-term financials, Jeff said management remains comfortable with the guidance provided on the company’s second-quarter call, including revenue for the next quarter of roughly $2.3 billion and the broader full-year outlook, and said the company remains bullish on its three-year investor day targets. Addressing a sequential fourth-quarter step-up implied by guidance, he cited timing of EW technology deliveries and program ramps, including NCAPS and ITAS, along with early reconciliation funding. He also noted that a JTMS protest the company prevailed in is starting to accelerate in the third quarter and continuing into the fourth.
Regarding the bookings environment following a government disruption, Jeff said revenue was “relatively unaffected” and cash flow recovered quickly as payment offices reopened, but awards activity has been slower to restart. He said “awaiting awards” was relatively flat, while the expected submission pipeline over the next 180 days showed a pronounced step-up. He emphasized the company is not “hand-to-mouth,” citing four years of backlog and an average duration for recently booked contracts approaching six years, adding that “awards are lumpy” and timing within a quarter matters less given the long duration of programs.
About CACI International (NYSE:CACI)
CACI International Inc is a leading provider of information solutions and services to the U.S. federal government, with a primary focus on defense, intelligence, homeland security and federal civilian agencies. The company delivers advanced technology and domain expertise to support mission-critical operations, offering capabilities in areas such as data analytics, cyber security, network integration, enterprise IT modernization and logistics support. By integrating software, hardware and professional services, CACI helps clients enhance situational awareness, improve decision making and maintain critical infrastructure resilience.
Founded in 1962 and headquartered in Arlington, Virginia, CACI has evolved from a small consulting operation into a global enterprise.
