Defense, intelligence, and IT solutions provider CACI International (NYSE: CACI) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 11.8% year on year to $2.17 billion. The company expects the full year’s revenue to be around $8.6 billion, close to analysts’ estimates. Its non-GAAP profit of $6.23 per share was 11.3% above analysts’ consensus estimates.
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CACI (CACI) Q1 CY2025 Highlights:
- Revenue: $2.17 billion vs analyst estimates of $2.13 billion (11.8% year-on-year growth, 1.5% beat)
- Adjusted EPS: $6.23 vs analyst estimates of $5.60 (11.3% beat)
- Adjusted EBITDA: $253.5 million vs analyst estimates of $233.5 million (11.7% margin, 8.6% beat)
- The company slightly lifted its revenue guidance for the full year to $8.6 billion at the midpoint from $8.55 billion
- Management slightly raised its full-year Adjusted EPS guidance to $24.56 at the midpoint
- Operating Margin: 9.1%, in line with the same quarter last year
- Free Cash Flow Margin: 8.7%, similar to the same quarter last year
- Backlog: $31.4 billion at quarter end, up 9.8% year on year
- Market Capitalization: $9.48 billion
Company Overview
Founded to commercialize SIMSCRIPT, CACI International (NYSE: CACI) offers defense, intelligence, and IT solutions to support national security and government transformation efforts.
Defense Contractors
Defense contractors typically require technical expertise and government clearance. Companies in this sector can also enjoy long-term contracts with government bodies, leading to more predictable revenues. Combined, these factors create high barriers to entry and can lead to limited competition. Lately, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression towards Taiwan–highlight the need for defense spending. On the other hand, demand for these products can ebb and flow with defense budgets and even who is president, as different administrations can have vastly different ideas of how to allocate federal funds.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, CACI’s 8.4% annualized revenue growth over the last five years was decent. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. CACI’s annualized revenue growth of 12.2% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
CACI also reports its backlog, or the value of its outstanding orders that have not yet been executed or delivered. CACI’s backlog reached $31.4 billion in the latest quarter and averaged 13% year-on-year growth over the last two years. Because this number is in line with its revenue growth, we can see the company effectively balanced its new order intake and fulfillment processes. 
This quarter, CACI reported year-on-year revenue growth of 11.8%, and its $2.17 billion of revenue exceeded Wall Street’s estimates by 1.5%.
Looking ahead, sell-side analysts expect revenue to grow 9.2% over the next 12 months, a deceleration versus the last two years. Still, this projection is noteworthy and implies the market sees success for its products and services.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
CACI has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.6%, higher than the broader industrials sector.
Looking at the trend in its profitability, CACI’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q1, CACI generated an operating profit margin of 9.1%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
CACI’s EPS grew at a remarkable 14.4% compounded annual growth rate over the last five years, higher than its 8.4% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t expand.
We can take a deeper look into CACI’s earnings quality to better understand the drivers of its performance. A five-year view shows that CACI has repurchased its stock, shrinking its share count by 12.1%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. 
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For CACI, its two-year annual EPS growth of 16.9% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.
In Q1, CACI reported EPS at $6.23, up from $5.74 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects CACI’s full-year EPS of $24.72 to grow 7.4%.
Key Takeaways from CACI’s Q1 Results
We were impressed by how CACI beat analysts’ revenue, backlog, EPS, and EBITDA expectations this quarter. We were also glad it raised its full-year revenue and EPS guidance. Zooming out, we think this was a good quarter with some key areas of upside. The stock traded up 1.9% to $432 immediately following the results.
CACI may have had a good quarter, but does that mean you should invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.
