Jasper Bibb: Yeah. No, that’s helpful. And then you’ve mentioned the new business pursuit targets. So curious if there’s been any change in how you manage bidding proposal activity recently, including potentially going after more international work. And then also, what does fiscal ’25 look like from a re-compete risk perspective?
John Mengucci: Yeah. Let me take a step up on that one. Look, how we’re focused in our business development organization, where we spend BNP and the like, it really starts at a different level. It starts with the fact that we have a very different strategy within our sector on how to grow this company. We are focused on investing to have a customer need, developing differentiating capabilities that then address critical enduring national security and modernization priorities. That statement in itself says that we approach how we do business win — how we approach a new business with a very different lens, right, we’re looking at first, what’s going to grow the fastest? And then second, if that’s what we’re going to plan, that’s got to be a ten-year to 20-year look.
That has to be a narrow, deep funding stream. And I use that term many, many times. And then our strategy is technology and expertise versus just expertise. The days of trying to find just expertise work and what is over the longest term will be a commodity based delivery model, was not the way we believe long-term we could grow this business. So that’s why we built nearly from scratch a technology part of this business that would be inextricably connected to the expertise side, right? So we could understand what customers need and then develop it. And then it really comes down to you know, bid less and win more, right, Jasper? So, you know giving you that comment, you know, so how do you bid less and win more? It’s called focus. So there’s a lot of people out there talking about, you know, retooling BD teams that we’re going to go out there and win, hey, the model starts, what are you about?
What are you going to focus on? How you’re going to be very transparent with your shareholders? How do you find patient shareholders that over the long term are going to be looking to us to provide that reliable long-term growth? So, you know, we align with customer needs, we invest ahead of need, we shake the heck out of things which really means show the customer the art of the possible and really drive preference, not drive price down. And then at the end of the day, you know who doesn’t like somebody who you know performs better than everybody? So that’s the mix we have that’s the recipe we have in this company. So we’re not sitting here worried about do we spend more money in Fed/Civ versus, you know, DoD. We really say, does this fit the markets that we’re in, and a technology and expertise strategy.
When it does, we will stop at nothing to win that business because the investments both in BNP, IRAD and in CapEx as Jeff mentioned are crucial to driving our long-term growth. On the ’25 view, you know this year frankly, we went to a lot of recompetes. What you don’t see is we have a lot of contract extensions. So those are customers who may have recompeted next year. They came to us during the last couple of quarters and said if you want to take another three years, four years, two years, so, you know, there was a lot of work that we did to gain extensions and then, Jasper, that drives potentially a lower recompete rate as we move into ’25 and ’26.
Jasper Bibb: I appreciate the detail there. Thanks for taking the questions guys.
John Mengucci: Thank you.
Operator: Your next question is from the line of Seth Seifman with JPMorgan. Please go ahead.
Rocco Barbero: Good morning. This is Rocco on for Seth.
John Mengucci: Good morning.
Jeffrey MacLauchlan: Good morning.
Rocco Barbero: Building on the prior question, what were the drivers of CACI’s impressive awards in the quarter? Did the bidding trend shift and how is CACI thinking about bidding on future awards? Also should we be thinking about that the strong bookings will drive another strong revenue year in fiscal year ’25 above the long-term growth rate you mentioned earlier? Or is there more lag in these awards?
John Mengucci: Love the last question trying to crowbar into 2025, but we will — we will clearly be overly transparent when we get to ’25. But on the spirit of the first part of the question, look, yeah, we have had great win. It’s more about the more about the culture and it’s more about the strong business development team, solution architects, but also the deep bench that really know how to win. This is not a one or you know two person driven business development machine. They are absolutely connected both business development and sales teams to the P&L centers. They are really looking at how do we competitively position ourselves? The large win we had this quarter the ELITE program right that was — that was one where we spent an awful lot of time, you know working with current customers, you know, how do we do more for you given that the world is still even more dangerous place.
So that is a two-year ago plan is to as these programs are being run, how do we merge what we do for them that helps unity of purpose, that helps supportability across those two combatant commands, so it’s a very involved, detailed process that is not in the hands of, you know, less than five people. It’s in the hands of 150 people that are actually focused each and every day as how do we shape. And you know we have this mantra within this company we’re going to go into ’25, our entire FY’25 bidding lineup, most of that is already been bid in ’24. The rest of that will be solutions in bid here shortly. So when we get into ’25, we’re talking about how do we grow ’26? From a, you know, wins and award spot. That’s why we’ve been traditionally, you know, a long number of quarters you know over 1.0, why we had a 1.8 book-to-bill and why our you know trailing 12-month book-to-bill is always above 1.0. So, it is in the ethos of this company how to go drive growth, but we’re going to stay true to what is we do well, we’re not going to drop an anchor and some kind of work that we have no idea doing and then chase that job based on price and promise you all we’re going to get better.
We just don’t operate that way. It’s a long-term strategy.
Rocco Barbero: Great. Thank you.
John Mengucci: You bet.
Operator: Your next question is from the line of Conor Walters with Jefferies. Please go ahead.
Conor Walters: Hi guys. Good morning. Congrats on a great quarter. Thanks for taking my question. Trying to get back to the growth you had, you know exiting this year, you’re on a really strong organic growth trajectory here in the second half in the low double-digit range, curious if you could point to what some of the key drivers are here. I don’t know if it’s all from the accelerated program ramps, you touched on earlier, perhaps some share gains anything you’d point to would be great.
Jeffrey MacLauchlan: John will likely want to expand on this. But it’s really pretty broad-based, I mean we’ve talked about a couple of the major sort of franchise wins we’ve had over the last couple of years. Those are all ramping on or ahead of our expectation. We’re really, you know, the portfolio broadly is kind of hitting on all cylinders. Really, can’t point to one or two or three programs and say it’s this or that. It’s very broad-based.
John Mengucci: Yeah, I think you know, you can look at the future programs we’ll be talking about driving revenue, right? You know, during this year beyond EITaaS and the large Intel expertise program and EITaaS, we’ll be talking about ELITE, GENMOD and [indiscernible] and you know some of those items. So we’re — you know, we’re not a one program company, we’re not a three program one. Well, you know, we’re looking to now get our stride. Now as I say that, we also have, you know, technology programs that — and we actually do deliver, right? And when we deliver that revenue goes away, right? And there’s some sustainment there. But you know at a company of this size, you know coming up on $8 billion, you know, we are going to have programs that are going to sunset, which is a positive thing, means we deliver everything we’re supposed to deliver.
And so and that’s why we’re in the middle of building our ’25 plan, right? What gives you the right range so you can assess what our most probable cases. I’ll also say, if you look back to where we were in August, folks, right, we were there, we gave you a growth rate, we also gave you a range. We said low-end and high-end. I invite you all to go back to what we presented to you all as the left end of the goalposts as we used to say in the right end. You know five of the six things on the what would allow us to drive growth, five of the six things on the high end were actually achieved. And those were some pretty high bars, but it proves maybe not every single year, but you know when things align, things align, awards are lumpy, right? So we can never count on a war coming in a specific quarter and you all — you all know based on where our fiscal year is, and the government’s fiscal year is, there are times when we’re going to win great awards that are going to come too late to have any material difference in the current year that we’re in.
We expect those questions, but there are times when we have to say it’s going to show up in the next year. So it’s this, you know rubric of what’s exiting what’s ending? And that really drives the reason why Jeff and I always say, we’re not going to talk about ’25 is not to be flippant frankly it’s just that we don’t have a really good eyeball yet, and we’re in the middle of, you know, stirring that soup and absolutely when we get to August we’ll be in a really nice position to tell you how ’24 buttoned up. You got some great guides earlier today, and what we expect for the future.
Conor Walters: Got it. That’s super helpful. Thanks so much guys.
John Mengucci: You bet.
Operator: Your next question is from the line of Louie DiPalma with William Blair. Please go ahead.
Louie DiPalma: Good morning.
John Mengucci: Good morning, Louie.
Louie DiPalma: Following up on the Spectral comments, but what is the progress in terms of installations across the Navy surface fleet?
John Mengucci: Yeah, thanks, Louie. So, we are in the design phase now. We’ve gone through a number of PDRs and CDRs using really great system engineering and software engineering terms. So, we are looking at how the program moves forward. At a macro level we are looking for, you know a minimally viable product which means what’s that first spiral of capabilities are going to be delivered to this 200 plus Navy surface ship fleet, closer to the — you know end of this calendar year. And then based on how that goes, we’d be looking at end of next calendar year in ’25, as to start to make deliveries to the fleet. That’s a highly fluid schedule. So you know, we’ll have much better view when we get to August, but that’s sort of the period we’re in.
We’re in the development period now. We’ll develop and deliver product at the end of the calendar year and some later which is why we’ve been talking about that we’re in design phase now and ramp will actually start to show itself in ’25, and then clearly N number of ships as we go ’26 and beyond.
Louie DiPalma: Great. And for the software solution, is the vision that it would last for the entire useful life of the ship and that a significant component is software and you’ve discussed the dynamic nature of the threat. And so do you have the ability to upgrade the software in response to the changing nature of the threat such that you know even as requirements change your software allows your solution to change with those requirements so that the solution can last for decades rather than I think the contract is only for seven years, but do you envision that your software is going to last for decades and decades?
