CACI International (CACI Quick QuoteCACI - Free Report) reported second-quarter fiscal 2025 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.

CACI reported second-quarter fiscal 2025 non-GAAP earnings of $5.95 per share, which beat the Zacks Consensus Estimate by 15.1%. The bottom line increased 36.5% on a year-over-year basis, primarily driven by higher revenues and operating income, partially offset by higher tax provisions and interest expenses.

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In the second quarter of fiscal 2025, CACI reported revenues of $2.1 billion, which surpassed the consensus mark by 5.76%. The top line increased 14.5% from the prior-year quarter, primarily driven by 8.1% organic growth.

Buoyed by better-than-expected second-quarter performance, CACI raised its fiscal 2025 guidance. We expect that the company’s overwhelming quarterly performance, along with its upbeat outlook, will give a fresh boost to CACI stock, which is already outperforming the Computer - Services industry. In the past year, CACI shares have soared 36.9% compared with the industry’s return of 10.7%.

CACI’s Q2 Details

In the second quarter of fiscal 2025, contract awards totaled $1.17 billion, with roughly 45% for new business. Awards exclude ceiling values of multi-award, indefinite delivery, indefinite quantity contracts.

Total backlog as of Dec. 31, 2024, was $31.8 billion, up 18.2% from $26.9 billion reported a year ago. Funded backlog was $4.1 billion, up 10.8% from $3.7 billion reported a year ago. Our estimates for total backlog and funded backlog were pegged at $33.9 billion and $4.3 billion, respectively.

In terms of the customer mix, the Department of Defense contributed 75.1% to total revenues in the reported quarter. Federal Civilian Agencies made up 20.7%, while Commercial and other customers accounted for 4.2%. Our estimates for the Department of Defense, Federal Civilian Agencies, and Commercial and Other customers’ contributions toward total revenues were pegged at 74.7%, 20.6% and 4.7%, respectively.

The Prime Contractor and Subcontractor accounted for 88.7% and 11.3% of total revenues, respectively. Our model estimates for the Prime Contractor and Subcontractor’s contributions toward total revenues were pinned at 90% and 10%, respectively.

In terms of contract type, cost-plus-fee-type, fixed-price, and time and material-type contracts contributed 59.1%, 28.7% and 12.2%, respectively, to total revenues. Our model estimates for cost-plus-fee-type, fixed-price, and time and material-type contracts’ contributions toward total revenues were pegged at 61.4%, 25.7% and 12.9%, respectively.

Expertise and Technology accounted for 44.1% and 55.9% of total revenues, respectively. Our estimates for Expertise and Technology’s contributions toward total revenues were pegged at 46.6% and 53.4%, respectively.

The operating income for the quarter amounted to $181.3 million, up 36% year over year.  Moreover, the operating margin expanded 130 basis points (bps) to 8.6%.

Adjusted EBITDA increased 36.3% year over year to $233 million, while adjusted EBITDA margin expanded 180 bps to 11.1%.

CACI’s Balance Sheet & Cash Flow

As of Dec. 31, 2024, CACI had cash and cash equivalents of $175.7 million compared with the previous quarter’s $441 million.

The total long-term (net of the current portion) debt was $2.98 billion, up 69.3% from Sept. 30, 2024.

The company generated operating cash flow (excluding mini-automatic radar plotting aid or MARPA) of $76 million in the second quarter of fiscal 2025, down 8.7% from the year-ago quarter.

CACI Updates Fiscal 2025 Guidance

Buoyed by stronger-than-expected second-quarter performance, CACI raised its guidance for fiscal 2025. The company now anticipates revenues between $8.45 billion and $8.65 billion ($8.55 billion at midpoint), up from the earlier guidance of $8.37-$8.57 billion ($8.47 billion at midpoint). The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $8.51 billion, suggesting an increase of 11.1% year over year.

Adjusted net income for fiscal 2025 is projected in the band of $537-$557 million, up from the earlier guidance of $523-$543 million. The company now estimates non-GAAP earnings per share in the range of $23.87-$24.76, up from the previous guidance of $23.24-$24.13. The consensus mark for the bottom line is pinned at $23.92 per share, indicating a year-over-year increase of 13.63%.

Free cash flow is now anticipated to be $450 million compared with the previous guidance of $445 million.

Zacks Rank & Other Stocks to Consider

Currently, CACI carries a Zacks Rank #2 (Buy) at present.

DXC Technology (DXC Quick QuoteDXC - Free Report) , ServiceNow (NOW Quick QuoteNOW - Free Report) and Gitlab (GTLB Quick QuoteGTLB - Free Report) are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.

DXC Technology, ServiceNow and Gitlab sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus mark for DXC’s 2025 earnings has been revised upward by 4 cents to $3.18 per share over the past 60 days, indicating a 1.6% year-over-year increase. DXC shares have lost 10.4% in the past year.

The consensus mark for NOW’s 2025 earnings has been revised downward by 2 cents to $13.85 per share over the past 60 days, indicating a 22.5% year-over-year increase. NOW shares have risen 49.4% in the past year.

The consensus mark for GTLB’s 2025 earnings has been revised upward by 17 cents to 63 cents per share over the past 60 days, indicating a 215% year-over-year increase. GTLB shares have lost 10% in the past year.