CACI International (CACI) sees 9.8% dip post earnings report, can it bounce back?

CACI International (CACI) has experienced a decline of 9.8% since its last earnings report, which was about a month ago. This decrease has underperformed compared to the S&P 500. The big question on investors’ minds now is whether this downward trajectory will continue leading up to the next earnings release, or if CACI International is poised for a rebound. To gain a better understanding of this situation, let’s first take a look back at the latest earnings report.

In the second quarter of fiscal 2026, CACI reported mixed results. While their bottom line exceeded the Zacks Consensus Estimate with non-GAAP earnings of $6.81 per share, a 6.26% beat, the top line fell short by 2.15%. Despite beating earnings estimates, CACI International’s revenues of $2.22 billion only represented a 5.7% increase from the previous year, primarily driven by a 4.5% organic growth rate.

During the second quarter, contract awards amounted to $1.4 billion, with about 70% coming from new business. The total backlog as of December 31, 2025, stood at $32.8 billion, reflecting a 3.8% increase from the previous year. The funded backlog was reported at $4.4 billion, up 7.3% year-over-year. CACI’s estimates for total backlog and funded backlog were slightly lower at $34.3 billion and $4.8 billion, respectively.

Breaking down the revenue sources, the Department of Defense contributed the most, accounting for 51.8% of total revenues in the reported quarter. The Intelligence Community stood at 24.3%, Federal Civilian Agencies at 19.8%, and Commercial and other customers at 4.1%. The shift in revenues from different sectors was notable, with the Department of Defense, Intelligence Community, Federal Civilian Agencies, and Commercial and Other customers seeing varying changes in revenue growth.

Looking at the different contract types, cost-plus-fee-type contracts comprised 59% of total revenues, followed by fixed-price (26.9%), and time and material-type contracts (14.1%). Notably, revenues from cost-plus-fee and time-and-materials contracts increased, while those from fixed-price contracts saw a decline. Additionally, revenues from Expertise and Technology segments experienced different trends, with Expertise declining slightly while Technology segment revenues surged.

In terms of financials, CACI’s operating income for the quarter was $206.5 million, up by 13.9% year-over-year, with an expanded operating margin of 9.3%. Adjusted EBITDA increased by 12.8% to $262.6 million, with an adjusted EBITDA margin expansion of 70 basis points to 11.8%.

Taking a look at the balance sheet, CACI had cash and cash equivalents of $423 million as of December 31, 2025, compared to $133 million in the previous quarter. The total long-term debt increased to $2.92 billion from $2.71 billion as of September 30, 2025. Moreover, in the second quarter, the company generated operating cash flow and free cash flow of $154.2 million and $138.2 million, respectively.

Encouragingly, CACI International increased its guidance for fiscal 2026, with revenue expectations now in the range of $9.3 billion to $9.5 billion, which is up from the previous estimate of $9.2-$9.4 billion. Adjusted net income projections for fiscal 2026 were also raised to $630-$645 million. Overall, there are positive signs of growth and improvement for CACI as it moves forward in the fiscal year.