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CACI International (CACI) Tops Q2 Earnings, Misses on Revenues

·4 min read

CACI International CACI reported better-than-anticipated bottom-line results for second-quarter fiscal 2021 (ended Dec 31, 2020). Quarterly earnings came in at $4.18 per share, beating the Zacks Consensus Estimate of $3.57. The earnings figure also jumped 34.4% year over year.

Revenues came in at $1.47 billion in the fiscal second quarter, up 5.2% from the year-ago quarter’s figure. This upside can be primarily attributed to new business wins, acquired contracts and on-contract growth. The company registered organic revenue growth of 4.3% in the fiscal second quarter. However, the top-line figure missed the consensus mark of $1.50 billion.

Quarter Details

Contract awards in the reported quarter were worth $2.1 billion. Revenues from contract awards do not include ceiling values of multi-award, indefinite-delivery, indefinite-quantity contracts.

Total backlog, as of Dec 31, 2020, was $22.4 billion, 10% higher than the prior-year quarter’s level. Funded backlog at the end of December 2020 was $2.9 billion, up 3%.

CACI International, Inc. Price, Consensus and EPS Surprise

CACI International, Inc. Price, Consensus and EPS Surprise
CACI International, Inc. Price, Consensus and EPS Surprise

CACI International, Inc. price-consensus-eps-surprise-chart | CACI International, Inc. Quote

In terms of customer mix, the Department of Defense contributed 68.9% to total revenues in the reported quarter. Federal Civilian Agencies contributed 26.6%, while Commercial and other customers accounted for 4.5% of revenues.

Revenues generated as a prime contractor and a subcontractor accounted for 90.4% and 9.6% of total revenues, respectively.

In terms of contract type, cost-plus-fee type contracts contributed 57.5%, fixed-price contracts contributed 30%, and time and material type contracts contributed 12.5% to total revenues.

Margins

Operating income for the fiscal second quarter came in at $141.5 million, up 28.5% from the year-earlier quarter figure. This upswing resulted from higher revenues, favorable fixed price contract performance, strong operating performance, and lower indirect costs. Operating income margin expanded 170 basis points (bps) to 9.6%.

Adjusted EBITDA for the fiscal second quarter climbed 23.9% year over year to $174.6 million. Adjusted EBITDA margin of 11.9% advanced 180 bps.

Balance Sheet and Cash Flow

At the end of the fiscal second quarter, CACI International had cash and cash equivalents of $102.1 million compared with the previous quarter’s $124.9 million.

Total long-term (net of current portion) debt was $1.37 billion.

During the first half of fiscal 2021, the company generated cash flow of $382.3 million from operational activities.

Guidance

CACI International has reiterated its outlook for fiscal 2021. Revenues are still projected at $6.05-$6.25 billion. Earnings per share continue to be estimated between $14.47 and $15.25.

The company reaffirmed the net income guidance of $372-$392 million. Moreover, net cash provided by operating activities is still estimated to be at least $600 million.

The company continues to anticipate solid organic revenue growth and continued margin expansion throughout 2021.

Zacks Rank and Other Key Picks

CACI currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the broader technology sector include Shopify SHOP, Micron MU and NetApp NTAP, all flaunting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Shopify, Micron and NetApp is currently pegged at 32.5%, 12.7% and 11.9%, respectively.

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