CACI International Inc (NYSE:CACI) Q2 2023 Earnings Call Transcript

Page 7 of 10

But I see a much more positive environment with the customer set that we’re supporting. Everything we’re doing in the EW and cyber and how that begins to converge, what we’re doing in commercial solutions for what I’ll classify with our ID tech acquisition, what we’re seeing in space, those are all highly funded areas that are absolute must-dos within where we had. On the IT modernization side, we’ve won some nice sized contracts there. We have to get some of this protest period, but yes, I have not picked up any concerns, Mariana, around funding. Where will we go in FY24? We’re all going to have to watch. I hear the same things you all hear – you know, could we have a full year CR? Perhaps, but we’re in some pretty important areas, and I believe we’ll still continue to receive the requisite funding.

Mariana Perez Mora: Thank you, and then you mentioned these recent wins. You have recently won significantly large multi-billion dollar wins. Has your appetite to pursue those larger contracts, like in the pipeline of submitted bids or the bids that you expect to submit in the near term, how much of that is multi-billion dollar contracts?

John Mengucci: Yes, look – we’ve been on a long term strategy here of bidding larger jobs, and for a company like ours, we have to contrast that against winning a lot of work that gets you a nice revenue pop, doesn’t do much with margins, and if you find yourself in that grey area where you’re bidding programs with tighter and tighter rates, the reward for that – trust me – is you get to re-compete on that work even sooner. It’s why we’ve been very strategically focused on duration of contracts in our backlog, which is now around four, four and a half years. Yes, it does mean that awards are lumpy, it does mean that there’s a much larger price on winning some of those larger ones because you’re not chasing these really small ones that can sort of fill that in.

I think we’ve got the right–I think we have the knob dialed right, Mariana, in that we’re out there winning some nice C-court wins, but we’re also winning these multi-billion dollar ones that, frankly, provide a nice floor and a nice base so that we can be, again, quote-unquote long term growth. We have the appetite for it. We’ve got an outstanding business development team, an outstanding sales support team. We’ve been building it over the last decade, so we’re going to stay with that strategy because once you win something like that, not only do you deliver the long term tech tail but then you get into the with those programs and that moves us into really nicely positioned expertise work. Thank you for those questions.

Operator: Our next question comes from Sheila Kahyaoglu with Jefferies. Please go ahead, Sheila.

Sheila Kahyaoglu: Hey, good morning guys, and thank you. John, just on those comments, I feel like you have a good set-up with longer term contracts, but on your organic growth in the first half, you performed pretty well, up 5% organically, and just the full year guidance implies some slowdown, so maybe can you talk about that a little bit more? You touched on it. Then specifically, I know your contract wins are being held up, including EITaaS, but can you talk about what your assumptions are around EITaaS, DFCA and the IC win? What sort of assumptions do you have for those starting to ramp?

Page 7 of 10