What are your observations on the booking environment, given that submits are building but not converting to the pipeline, and how is the funded backlog performing?

CACI maintains excellent visibility and a strong pipeline, with a constructive macro forecast. The total backlog is nearly $34 billion (up 7% YoY), funded backlog is up 19% YoY, and the trailing 12-month book-to-bill is 1.2x. Award activity is lumpy due to short-term government factors, but contract administration (funding, payments) remains robust. “So funding trends, customer demand and a potential $1.5 trillion GFY '27 budget, which includes reconciliation funding, that definitely continues to support what we're looking at going forward.”

With guidance implying accelerated growth in Q4, can this exit growth rate be sustained into next year?

Growth is expected to accelerate in Q4 as planned, but it's important to view the business on a full-year basis due to rhythmic buying patterns. The Q4 exit rate should not be directly extended into FY27. CACI remains comfortable with its 3-year targets, indicating continued growth momentum. “But I would encourage you to not think about that as an exit rate for the year.”

Why is the Q4 sequential ramp expected, and what are your broad perspectives on the fiscal '27 budget request and its potential benefits for CACI?

The Q4 ramp is driven by bimodal growth rates in large agile software programs (EITaaS, NCAPS, TMS) and heavier buying patterns from certain customer communities. The FY27 budget request appears very positive for CACI's key areas, including EW, Counter-UAS, space, C5ISR, and IT modernization, with funds flowing to strategic priorities. “So the real answer is it's a portfolio. And while mix sometimes feels like a handy explanation, there really are 3 or 4 substantive conditions that are in play here and they come together from time to time with the outcomes that we try to suggest to you to expect.”

CACI

CACI (CACI) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q3 FY26)· Information Technology· Apr 23, 2026

Source: earnings call transcript

Executive summary

CACI Q3 FY26 — Strong Performance Driven by ARKA Acquisition and Organic Growth

CACI delivered strong Q3 FY26 results, marked by significant revenue growth and margin expansion, largely driven by the strategic acquisition of ARKA and solid organic performance. The company continues its evolution as a software-defined technology leader focused on national security, leveraging mission proximity and disciplined capital deployment to drive long-term shareholder value despite a lumpy award environment. Management raised full-year revenue and EBITDA margin guidance, reaffirming free cash flow targets.

Highlights

Revenue for the quarter was $2.4 billion, up 8.5% year-over-year.
EBITDA margin of 12.3%, representing a year-over-year increase of 60 basis points.
Robust free cash flow of $221 million.
Trailing 12-month book-to-bill of 1.2x.
Total backlog of $33.4 billion, up 6% year-over-year, and funded backlog up 19% year-over-year.
ARKA acquisition closed, contributing $150 million to FY26 revenue guidance and enhancing margin performance.

Concerns

Book-to-bill of 0.9x for the quarter, indicating awards were below revenue recognized.
Award activity has not yet fully recovered from multiple government shutdowns and organizational changes.
Modest disruption from the ongoing DHS shutdown.
$17 million of ARKA transaction costs absorbed in Q3 EBITDA.
Higher interest expense of $11 million related to ARKA.
Approximately $50 million of transaction costs, interest expense, and increased capital expenditures absorbed in free cash flow.

Guidance & targets

Category	Target	Timeline	Confidence
Fiscal Year 2026 Revenue	$9.5 billion to $9.6 billion high materiality	FY26	High
Fiscal Year 2026 EBITDA Margin	11.8% to 11.9% high materiality	FY26	High
Fiscal Year 2026 Adjusted Net Income	$615 million and $630 million medium materiality	FY26	High
Fiscal Year 2026 Adjusted EPS	$27.70 and $28.38 per share high materiality	FY26	High
Fiscal Year 2026 Free Cash Flow	at least $725 million high materiality	FY26	High
Leverage Ratio	low 3s medium materiality	Within 6 quarters	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Civil Business Experienced solid growth, with principal drivers including the NASA NCAPs ramp, despite modest DHS headwinds.	—	7%	—	—

CACI operating KPIs by quarter

CACI operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Mar 2026 Q3 FY26	Jun 2026 Q4 FY26	Change vs prior quarter
Employees	27K As is always the case, our success is driven by our now 27,000 employees who are ever vigilant and expanding the elements of national security. Source: earnings call transcript	27K As is always the case, our success is driven by our 27,000 employees who are ever vigilant in expanding our limits of national security. Source: earnings call transcript	0%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Book-to-bill ratio 0.9x Q3 FY26

Book-to-bill ratio, trailing 12-month 1.2x Q3 FY26

Weighted average duration of awards just over 6 years Q3 FY26

Total backlog $33.4 billion Q3 FY26

6% YoY increase

Includes ARKA's contribution of $835 million.

Funded backlog Increased 19% Q3 FY26

19% YoY increase

Includes ARKA's contribution of $422 million. Healthy organic growth even when normalizing for ARKA.

ARKA noncompetitive franchise programs $2 billion Q3 FY26

Expected to recognize revenue over time, but do not yet meet regulatory criteria to be added to backlog.

Product announcements

Product	Type	Timeline	Details
Spectral Program	milestone	Q3 FY26
Merlin Counter-UAS System	expansion	Q3 FY26

Deals & partnerships

ARKA Acquisition of a leading technology company focused on national security missions in the space domain.

ARKA brings exclusive space-based imaging sensor technology, agentic AI-based ground processing software, and deep customer relationships. It has been integrated with CACI's existing space portfolio under ARKA's former CEO. Positions CACI for opportunities including Golden Dome, IndoPaycom support, future ground architecture, and space superiority missions.

Capital programs

Production facility in Melbourne underway

Benefit:Production of CAF and Spectral program systems

CapEx investments have been made to support the rolling out of both CAF and the Spectral program. Long lead item purchases were made ahead of Milestone C to accelerate delivery.

Merlin Counter-UAS production capabilities underway

Benefit:Ability to deliver Merlin systems

Scaling up production capabilities in Sterling and Melbourne to deliver Merlin systems, despite a tough supply chain for flat panel radars.

Risks & headwinds

Award activity slowdown Q3 FY26, ongoing

Q3 book-to-bill of 0.9x

Mitigation:Strong pipeline, excellent visibility, focus on recompete performance, and constructive macro environment. Government is funding programs and processing invoices despite award sluggishness.

Government shutdowns and organizational changes Q3 FY26, ongoing

Modest disruption from ongoing DHS shutdown; award activity not fully recovered.

Mitigation:Focus on enduring national security priorities with bipartisan support. Expectation that government will return to more timely award decisions.

Higher interest expense Q3 FY26, ongoing

$11 million related to ARKA in Q3

Mitigation:Offset by greater operating income and lower share count; strong cash flow characteristics support deleveraging to low 3s within 6 quarters.

Transaction costs Q3 FY26, FY26

$17 million in Q3 EBITDA; $22 million in FY26 EBITDA; ~$50 million impacting FY26 FCF

Mitigation:Part of the cost of strategic acquisitions like ARKA, which are accretive to growth and margins. Free cash flow guidance reaffirmed despite these costs.

Supply chain constraints Ongoing

Tough supply chain for flat panel radars for Merlin Counter-UAS system.

Mitigation:Differentiation through software capability of the system, allowing rapid updates and adaptability to new threats without solely relying on hardware changes.

What to watch in Q4 FY26

Award activity recovery

next quarter

Current not yet fully recovered from the multiple government shutdowns and acquisition organization changes

Target Improved conversion of bids to awards

Why it matters

Indicates government procurement efficiency and CACI's future revenue growth, impacting book-to-bill ratios and backlog expansion.

While award activity improved in the quarter, it has not yet fully recovered from the multiple government shutdowns and acquisition organization changes.

Find out whether CACI delivers this. Inve re-checks your case every morning.

Q&A highlights

How large is CACI's space exposure after the ARKA integration, and can you provide a framework for margin differences between technology and expertise segments, including any lumpiness?

The space business is now greater than $1 billion, with future growth expected from ARKA's $2 billion in noncompetitive franchise programs. Margin expansion is anticipated from technology franchises, but quarterly margins can be lumpy, with Q4 expected to be softer than Q3. Revenue from technology is not linear, as it's a delivery-based business.

“All in all, today, looking at the space, you're looking at greater than $1 billion worth was of total business, with future growth that we see coming forward when we get talking about fiscal year '27.”

asked by Jon Siegmann · answered by John Mengucci

2 min read 6 chapters

Detailed narrative

Strategic Evolution and Differentiators

CACI has strategically evolved over the past decade, focusing on 7 key markets with deep mission knowledge and enduring national security priorities. The company differentiates itself as a software-defined technology leader, investing ahead of customer needs and deploying capital opportunistically to expand its portfolio and drive free cash flow per share.

This approach enables competition against a broader set of players and positions CACI for long-term success in national security.

ARKA Acquisition Integration

The recent acquisition of ARKA, a national security-focused space technology company, significantly expands CACI's capabilities in the space domain. ARKA brings exclusive space-based imaging sensor technology, agentic AI-based ground processing software, and deep customer relationships. The integration of ARKA and CACI's existing space portfolio under ARKA's former CEO aims to leverage combined capabilities for opportunities like Golden Dome and future ground architectures, positioning CACI for long-term growth and increased free cash flow per share.

Spectral Program Progress

The spectral program, developing next-generation shipboard signals intelligence and electronic warfare for the Navy, achieved Milestone C. This marks the start of low-rate initial production and deployment, accelerating delivery of critical EW technology to the fleet. Built with software-defined, open architectures, the program is expected to offer significant additional opportunities across the Department of War and internationally, demonstrating CACI's ability to invest ahead of need and execute disciplined innovation.

Counter-UAS Leadership with Merlin

CACI is experiencing accelerating demand and increasing orders for its Counter-UAS system, Merlin. Leveraging nearly two decades of investment, Merlin provides advanced detection and defeat capabilities, including unique cellular detection. Its software-defined nature allows rapid updates, and it is currently deployed on the southern border, demonstrating speed and effectiveness in addressing critical national security needs.

The company is actively pursuing both domestic and international sales for this technology.

Constructive Macro Environment and Budget Outlook

Despite some short-term lumpiness in award activity due to government shutdowns, CACI sees a constructive macro environment with positive budget signals for FY27. Key areas like electronic warfare, Counter-UAS, space, C5ISR, and IT modernization (including AI) are well-funded and align with CACI's strategic focus.

The company believes these trends will drive future growth, with reconciliation funding also contributing to programs like Golden Dome and border security.

Capital Deployment and Deleveraging Strategy

CACI's flexible and opportunistic capital deployment strategy is exemplified by the ARKA acquisition, which is accretive to growth and margins. The company expects to return its pro forma leverage of 4.2x net debt to trailing 12-month EBITDA to the low 3s within six quarters.

This deleveraging plan is supported by strong cash flow generation and a proven track record of successfully integrating acquisitions and managing financial performance.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.