CACI International (CACI) Q1 Earnings Miss, Revenues Beat
CACI International CACI reported mixed first-quarter fiscal 2024 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same.
The national security-related IT solutions and services provider reported non-GAAP earnings of $4.36 per share, missing the Zacks Consensus Estimate of $4.52. However, the bottom line remained flat on a year-over-year basis as the benefits from higher operating income, lower taxes and share repurchases were fully offset by increased interest expenses.
In the first quarter of fiscal 2024, CACI reported revenues of $1.85 billion, surpassing the Zacks Consensus Estimate of $1.69 billion. The top line also increased 15.2% from the prior-year quarter, primarily driven by organic growth, which was boosted by roughly $100 million of higher-than-expected material purchases by the company’s customers.
CACI International, Inc. Price, Consensus and EPS Surprise
CACI International, Inc. price-consensus-eps-surprise-chart | CACI International, Inc. Quote
Quarterly Details
In the first quarter, contract awards totaled $3.1 billion, with approximately 50% for the new business. Revenues from contract awards excluded the ceiling value of multi-award, indefinite-delivery indefinite-quantity contracts.
CACI ended the quarter with a backlog of $26.7 billion, up 7% on a year-over-year basis. As of Sep 30, 2023, the funded backlog increased by 14% to $4.2 billion. Our estimates for the total backlog and the funded backlog were pegged at $26.5 billion and $3.6 billion, respectively.
In terms of the customer mix, the Department of Defense contributed 73.1% to total revenues in the reported quarter. Federal Civilian Agencies made up 22%, while Commercial and other customers accounted for 4.9% of revenues. Our estimates for the Department of Defense, Federal Civilian Agencies, and Commercial and Other customers’ contributions toward total revenues were pegged at 71.8%, 23% and 5.3%, respectively.
Revenues generated as a Prime Contractor and a Subcontractor accounted for 89.1% and 10.9% of the total revenues, respectively. Our model estimates suggested contributions from the Prime Contractor and the Subcontractor of 89.1% and 10.9%, respectively.
In terms of contract type, cost-plus-fee-type contracts, fixed-price contracts, and time and material-type contracts contributed 61.4%, 27.1% and 11.5%, respectively, to total revenues. Our model estimates suggested contributions from cost-plus-fee-type contracts, fixed-price contracts, and time and material-type contracts of 58.3%, 29.9% and 11.8%, respectively.
Revenues generated as Expertise and Technology accounted for 47.5% and 52.5% of the total revenues, respectively. Our estimates for Expertise and Technology contributions toward total revenues were pegged at 46.1% and 53.9%, respectively.
The operating income for the quarter amounted to $137.3 million, up 3.4% year over year. However, the operating margin contracted 90 basis points (bps) to 7.4%.
Adjusted EBITDA increased 2.5% year over year to $174.2 million. However, the adjusted EBITDA margin shrank by 120 bps to 9.4%.
Balance Sheet & Cash Flow
As of Sep 30, 2023, CACI had cash and cash equivalents of $125.5 million compared with the previous quarter’s $115.8 million. The total long-term (net of the current portion) debt was $1.74 billion, up from $1.65 billion as of Jun 30, 2023.
The company generated operating cash flow (excluding mini-automatic radar plotting aid or MARPA) of $93.3 million in the first quarter, down 34.8% from the year-ago quarter. Free cash flow was $79.3 million during the quarter under review.
Updated Fiscal 2024 Guidance
CACI has raised its guidance for fiscal 2024. The company now projects revenues between $7.2 billion and $7.4 billion, up from the earlier guidance range of $7-$7.2 billion. It now forecasts adjusted earnings per share between $19.38 and $20.48 compared with the previous expectations of $19.13-$20.22.
It now forecasts to generate a free cash flow of $410 million during fiscal 2024, up from the earlier anticipation of $400 million. However, CACI still expects fiscal 2024 adjusted net income in the range of $440-$465 million.
Zacks Rank and Stocks to Consider
Currently, CACI carries a Zacks Rank #3 (Hold). Shares of the company have returned 7.2% year to date.
Some better-ranked stocks from the broader technology sector are NVIDIA NVDA, Palo Alto Networks PANW and Dell Technologies DELL, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVDA’s third-quarter fiscal 2024 earnings has been revised by 2 cents northward to $3.34 per share in the past 30 days. For fiscal 2024, earnings estimates have increased by 7 cents to $10.74 in the past 30 days.
NVIDIA's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing the same on one occasion, the average surprise being 9.8%. Shares of NVDA have rallied 185.9% year to date.
The Zacks Consensus Estimate for PANW's first-quarter 2024 earnings has been revised upward by a penny to $1.16 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 4 cents to $5.34 per share in the past 60 days.
Palo Alto’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 22.19%. Shares of PANW have surged 75.4% year to date.
The Zacks Consensus Estimate for DELL's third-quarter 2024 earnings has been revised upward by 11 cents to $1.47 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 3 cents to $6.33 per share in the past 30 days.
Dell’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 39.52%. Shares of DELL have climbed 64.9% year to date.
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