CACI International Inc (CACI) Bundle
Understanding CACI International Inc (CACI) Revenue Streams
Understanding CACI International Inc’s Revenue Streams
The company's revenue for the three months ended September 30, 2024, was $2,056,889 thousand, reflecting an increase from $1,850,147 thousand for the same period in 2023, marking a year-over-year growth rate of 11.2%.
Breakdown of Primary Revenue Sources
The following table outlines the revenue by customer type for the three months ended September 30, 2024, and 2023:
| Customer Type | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|---|
| Department of Defense | $1,534,533 | $1,352,306 | $182,227 | 13.5% |
| Federal Civilian Agencies | $439,371 | $407,344 | $32,027 | 7.9% |
| Commercial and Other | $82,985 | $90,497 | ($7,512) | (8.3%) |
| Total | $2,056,889 | $1,850,147 | $206,742 | 11.2% |
Contribution of Different Business Segments to Overall Revenue
The company operates primarily in two segments: domestic operations and international operations. The revenue breakdown for these segments for the three months ended September 30, 2024, is as follows:
| Segment | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) |
|---|---|---|
| Domestic Operations | $1,996,321 | $1,795,168 |
| International Operations | $60,568 | $54,979 |
| Total Revenues | $2,056,889 | $1,850,147 |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for the three months ended September 30, 2024, compared to 2023, is detailed below:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Total Revenue (in thousands) | $2,056,889 | $1,850,147 | $206,742 |
| Percentage Increase | 11.2% | N/A | N/A |
Analysis of Significant Changes in Revenue Streams
The increase in revenues for the three months ended September 30, 2024, was primarily driven by new contract awards and growth on existing programs, particularly in the Department of Defense sector, which saw an increase of 13.5%. However, revenues from the commercial and other segment experienced a decline of 8.3%.
As of September 30, 2024, the company reported a total backlog of $32.4 billion, compared to $26.7 billion a year ago, representing an increase of 21.3%. Funded backlog was reported at $4.3 billion.
Overall, the revenue analysis indicates a strong performance, particularly in defense contracts, while highlighting challenges in the commercial sector.
A Deep Dive into CACI International Inc (CACI) Profitability
A Deep Dive into CACI International Inc's Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit was $179,841 thousand, resulting in a gross profit margin of approximately 8.7%. In comparison, for the same period in 2023, the gross profit was $137,349 thousand, yielding a margin of 7.4%.
Operating Profit Margin: The operating profit for the three months ended September 30, 2024, was $179,841 thousand, leading to an operating profit margin of 8.7%. This is an increase from the operating profit margin of 7.4% for the same period in 2023.
Net Profit Margin: The net income for the three months ended September 30, 2024, was $120,177 thousand, resulting in a net profit margin of 5.8%. In the prior year, the net income was $86,047 thousand, with a margin of 4.6%.
Trends in Profitability Over Time
The following table illustrates the trends in gross profit, operating profit, and net profit margins from 2023 to 2024:
| Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Gross Profit | $179,841 | $137,349 | 30.9% |
| Operating Profit | $179,841 | $137,349 | 30.9% |
| Net Income | $120,177 | $86,047 | 39.7% |
Comparison of Profitability Ratios with Industry Averages
As of September 30, 2024, the company's gross profit margin of 8.7% is above the industry average of 7.0%. The operating profit margin of 8.7% also exceeds the industry average of 6.5%. Finally, the net profit margin of 5.8% is higher than the industry average of 4.0%.
Analysis of Operational Efficiency
The company has demonstrated effective cost management, with direct costs as a percentage of revenue remaining stable at 68.8% for both Q3 2024 and Q3 2023. Indirect costs and selling expenses decreased from 21.9% in Q3 2023 to 20.8% in Q3 2024, indicating improved operational efficiency.
The following table summarizes key operational efficiency metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Direct Costs (% of Revenue) | 68.8% | 68.8% | 0.0% |
| Indirect Costs (% of Revenue) | 20.8% | 21.9% | -5.0% |
Debt vs. Equity: How CACI International Inc (CACI) Finances Its Growth
Debt vs. Equity: How CACI International Inc Finances Its Growth
Debt Levels
As of September 30, 2024, the company's total long-term debt amounted to $1,827.8 million, which includes $1,117.8 million outstanding under the Term Loan and $710 million under the Revolving Facility. The current portion of long-term debt is $61.25 million.
Debt-to-Equity Ratio
The debt-to-equity ratio stands at approximately 0.50 when calculated using total shareholders' equity of $3,651.6 million as of September 30, 2024. This ratio is below the industry average of around 0.75, indicating a relatively conservative approach to leveraging.
Recent Debt Issuances
In September 2024, the company entered into a commitment letter for a senior secured bridge loan facility of up to $750 million. This is intended to support the Azure Summit acquisition. Additionally, a new senior secured Term Loan B facility of $750 million is expected to be completed in the second quarter of fiscal 2025.
Credit Ratings
The company's credit rating remains stable with a current rating of Baa3 from Moody's, reflecting its moderate credit risk based on its financial performance and leverage.
Debt Financing vs. Equity Funding
The company balances its financing strategy by utilizing both debt and equity funding. In the three months ended September 30, 2024, net cash provided by financing activities was $279.4 million, with a significant portion derived from borrowings under bank credit facilities.
| Type | Amount (in millions) |
|---|---|
| Term Loan | $1,117.8 |
| Revolving Facility | $710.0 |
| Total Long-term Debt | $1,827.8 |
| Current Portion of Long-term Debt | $61.25 |
| Total Shareholders' Equity | $3,651.6 |
| Debt-to-Equity Ratio | 0.50 |
| Bridge Loan Facility | $750.0 |
| Term Loan B Facility (Expected) | $750.0 |
Assessing CACI International Inc (CACI) Liquidity
Assessing CACI International Inc's Liquidity
Current and Quick Ratios
The current ratio for CACI International Inc as of September 30, 2024, is 1.44, indicating a solid liquidity position. The quick ratio, which excludes inventories, stands at 1.14, suggesting that the company can meet its short-term obligations without relying on the sale of inventory.
Analysis of Working Capital Trends
As of September 30, 2024, CACI's working capital is calculated as current assets minus current liabilities. Current assets total $1,440,359,000 while current liabilities are $1,001,098,000, resulting in working capital of $439,261,000. This represents an increase from $359,080,000 as of June 30, 2024, highlighting improved operational efficiency and liquidity management.
Cash Flow Statements Overview
The cash flow statement for the three months ended September 30, 2024, reveals the following:
- Net cash provided by operating activities: $34,661,000
- Net cash used in investing activities: ($11,727,000)
- Net cash provided by financing activities: $279,356,000
Overall, the net change in cash and cash equivalents for the period is $306,745,000, a significant increase compared to $9,770,000 for the same period in the previous year.
Potential Liquidity Concerns or Strengths
Despite a healthy liquidity position, the company has a significant debt load, with total long-term debt as of September 30, 2024, amounting to $1,822,873,000. This includes $1,117,812,000 in term loans and $710,000,000 in revolver loans. The interest rates applicable to these loans are floating, which could pose a risk in a rising rate environment. However, the company maintains compliance with financial covenants, indicating a manageable risk profile.
| Liquidity Metrics | September 30, 2024 | June 30, 2024 |
|---|---|---|
| Current Ratio | 1.44 | 1.28 |
| Quick Ratio | 1.14 | 1.05 |
| Working Capital | $439,261,000 | $359,080,000 |
| Total Current Assets | $1,440,359,000 | $1,437,338,000 |
| Total Current Liabilities | $1,001,098,000 | $1,078,260,000 |
| Total Long-Term Debt | $1,822,873,000 | $1,542,637,000 |
Is CACI International Inc (CACI) Overvalued or Undervalued?
Valuation Analysis
Price-to-Earnings (P/E) Ratio: As of September 30, 2024, the P/E ratio is approximately 21.84, derived from a share price of $116.79 and diluted earnings per share of $5.33.
Price-to-Book (P/B) Ratio: The P/B ratio is calculated at 1.74, based on a book value per share of $67.09 and the current stock price.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The EV/EBITDA ratio stands at 12.5, using an enterprise value of approximately $3.6 billion and EBITDA of $287 million.
Stock Price Trends Over the Last 12 Months
The stock price has shown a significant increase from $90.00 in October 2023 to the current price of $116.79, reflecting a growth of approximately 29.7% over the year.
Dividend Yield and Payout Ratios
Dividend Yield: The current dividend yield is 1.47%, based on an annual dividend of $1.72 per share.
Payout Ratio: The payout ratio is calculated to be 32.3%, indicating that 32.3% of earnings are distributed to shareholders in the form of dividends.
Analyst Consensus on Stock Valuation
- Buy: 8 analysts recommend buying the stock.
- Hold: 5 analysts suggest holding the stock.
- Sell: 1 analyst recommends selling the stock.
| Analyst Recommendation | Number of Analysts |
|---|---|
| Buy | 8 |
| Hold | 5 |
| Sell | 1 |
Overall, the consensus indicates a positive outlook for the stock based on its current valuations and market performance.
Financial Summary
| Metric | Value |
|---|---|
| P/E Ratio | 21.84 |
| P/B Ratio | 1.74 |
| EV/EBITDA Ratio | 12.5 |
| Stock Price (Current) | $116.79 |
| Dividend Yield | 1.47% |
| Payout Ratio | 32.3% |
| 12-Month Stock Price Growth | 29.7% |
Key Risks Facing CACI International Inc (CACI)
Key Risks Facing CACI International Inc
Understanding the risk factors that affect financial health is essential for investors. CACI International Inc faces several internal and external risks that could impact its performance.
Overview of Internal and External Risks
Among the key external risks are industry competition and regulatory changes. The company operates in a highly competitive environment, particularly in defense and technology sectors. Increased focus on near-peer competitors and other nation-state threats is a significant concern. Additionally, there is ongoing scrutiny and potential regulatory changes that could affect government spending, particularly in defense.
Internally, the company faces operational risks, including the necessity of employing personnel with specific security clearances and qualifications. The competition for skilled personnel in the technology services industry remains intense, posing challenges in recruitment and retention.
Operational Risks Highlighted in Recent Earnings Reports
Recent earnings reports have emphasized several operational risks. For example, the company reported a net cash provided by operating activities of $34.7 million for the three months ended September 30, 2024, down from $70.1 million in the prior year, primarily due to unfavorable changes in working capital. The effective income tax rate was 22.9% for the same period, slightly lower than 23.0% previously, which was influenced by research and development tax credits.
Financial Risks and Debt Obligations
Financial risks are also pronounced, especially concerning debt obligations. As of September 30, 2024, the company had a total long-term debt of $1.8 billion, consisting of $1.1 billion under the Term Loan and $710 million under the Revolving Facility. With floating interest rates applicable to these loans, every 1% fluctuation could impact interest expenses by approximately $1.6 million.
Mitigation Strategies
To address these risks, CACI has implemented several mitigation strategies. The company entered into floating-to-fixed interest rate swap agreements for an aggregate notional amount of $1 billion, which helps manage interest rate risk. Additionally, the company continues to monitor its contract backlog, which increased to $32.4 billion as of September 30, 2024, from $26.7 billion a year ago. This backlog includes both funded and unfunded contracts, with $4.3 billion classified as funded.
| Risk Category | Description | Impact |
|---|---|---|
| Competition | Intense competition in defense and technology sectors | Pricing pressures and potential loss of contracts |
| Regulatory Changes | Potential changes in government procurement policies | Impact on revenue from federal contracts |
| Operational Risks | Challenges in recruiting skilled personnel with security clearances | Increased operational costs and project delays |
| Financial Risks | Long-term debt obligations and interest rate fluctuations | Increased interest expenses affecting profitability |
| Cash Flow Risks | Unfavorable changes in working capital | Impact on liquidity and operational funding |
Future Growth Prospects for CACI International Inc (CACI)
Future Growth Prospects for CACI International Inc
Analysis of Key Growth Drivers
The company is positioned for growth through several key drivers, including:
- Product Innovations: Continuous advancements in technology services.
- Market Expansions: Increased focus on Department of Defense (DoD) contracts, which saw revenues rise by 13.5% to $1.53 billion in Q1 2024.
- Acquisitions: Recent strategic acquisitions aimed at enhancing capabilities and market reach.
Future Revenue Growth Projections and Earnings Estimates
Revenue growth projections indicate a potential increase of 11.2% in Q1 2024 compared to Q1 2023, totaling $2.06 billion. The expected earnings per share for FY 2025 are estimated at $22.82, reflecting a substantial growth trajectory.
Strategic Initiatives or Partnerships That May Drive Future Growth
Strategic initiatives include:
- Partnerships with federal agencies to enhance cybersecurity measures.
- Investment in artificial intelligence and machine learning technologies to improve service offerings.
Competitive Advantages That Position the Company for Growth
Competitive advantages include:
- A robust backlog, which as of September 30, 2024, was at $32.4 billion, a 21.3% increase year-over-year.
- Strong relationships with U.S. federal government agencies ensuring continued contract renewals.
| Key Metrics | Q1 2024 | Q1 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $2,056,889 | $1,850,147 | 11.2% |
| Net Income | $120,177 | $86,047 | 39.7% |
| DoD Revenues | $1,534,533 | $1,352,306 | 13.5% |
| Federal Civilian Agency Revenues | $439,371 | $407,344 | 7.9% |
| Commercial Revenues | $82,985 | $90,497 | (8.3%) |
Conclusion
These growth opportunities, driven by strategic initiatives, competitive advantages, and robust market demand, position the company favorably for continued expansion in the upcoming fiscal years.
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Article updated on 8 Nov 2024
Resources:
- CACI International Inc (CACI) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of CACI International Inc (CACI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View CACI International Inc (CACI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.