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CACI International (CACI) Q1 Earnings Beat, Sales Up Y/Y

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CACI International (CACI - Free Report) reported first-quarter fiscal 2022 results, wherein earnings beat the Zacks Consensus Estimate while revenues matched the same.

The company reported non-GAAP earnings of $4.24 per share beating the Zacks Consensus Estimate of $4.01 per share. The bottom line improved 2.4% from the year-ago quarter’s figure of $4.14 per share.

This upsurge in earnings was primarily driven by a reduced number of shares outstanding. Reduction in shares outstanding can be attributed to the stock buyback worth $500 million under the accelerated share repurchase program announced in March this year.

In the first quarter of 2022, CACI reported revenues of $1.49 billion, in line with the Zacks Consensus Estimate. The top line increased 2.2% from the prior-year quarter. Organic revenues grew 2% on a year-over-year basis.

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

Quarterly Details

Contract awards during the fourth quarter totaled $2.4 billion, with approximately 50% for the new business to CACI. The figure increased 33.3% on a year-over-year basis. Revenues from contract awards exclude ceiling values of multi-award, indefinite-delivery, indefinite-quantity contracts.

CACI ended the quarter with a backlog of $23.9 billion, up 9% on a year-over-year basis. As of Sep 30, 2021, the funded backlog increased 3% to $3.5 billion.

In terms of customer mix, the Department of Defense contributed 67.1% to total revenues in the reported quarter. Federal Civilian Agencies made up 27.7%, while Commercial and other customers accounted for 5.2% of revenues.

Revenues generated as a prime contractor and a subcontractor accounted for 90% and 10% of total revenues, respectively.

In terms of contract type, cost-plus-fee type contracts, fixed-price contracts, and time and material type contracts contributed 60%, 27.3% and 12.7% to total revenues, respectively.

Revenues generated as ‘Expertise’ and ‘Technology’ accounted for 47.2% and 52.8% of total revenues, respectively.

Operating Details

Operating income for the quarter totaled $127 million, down 5.5% year over year. Operating margin contracted 70 basis points (bps) to 8.5%. The company cited abnormally high profit margin in the prior-year quarter as the main reason behind this decline. The downside was due to the pandemic-led lower medical expenses and delivery costs under the fixed price program last year.

Adjusted EBITDA fell 2.7% year over year to $160.9 million. Adjusted EBITDA margin of 10.8% declined 50 bps.

Balance Sheet & Cash Flow

As of Sep 30, 2021, CACI had cash and cash equivalents of $104.4 million compared with the previous quarter’s $88 million. Total long-term (net of current portion) debt was $1.65 billion, down from $1.69 billion as of Jun 30, 2021.

The company generated an operating cash flow (excluding MARPA) of $174.5 million during the first quarter, indicating a slump of 9.5% from the year-ago quarter. The decline was due to higher deferred payroll taxes in the year-ago quarter under the CARES Act.

Free cash flow was $164.3 million during the quarter under review.

Fiscal 2022 Guidance

For fiscal 2022, CACI projects revenues between $6.20 billion and $6.40 billion. Adjusted earnings are forecast to be $18-$18.83 per share.

The company expects a fiscal 2022 net income of $430-450 million. Additionally, free cash flow is estimated to be at least $720 million.

It continues to anticipate solid organic revenue growth and continued margin expansion throughout 2022.

Zacks Rank & Other Key Picks

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

Some other top-ranked stocks in the broader computer and technology sector are Salesforce (CRM - Free Report) , HP Inc. (HPQ - Free Report) and Infineon Technologies (IFNNY - Free Report) , all sporting 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 rates for Salesforce, HP and Infineon are currently pegged at 16.8%, 12.7% and 33.0%, respectively.

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