CACI International Inc (NYSE: CACI) Raises Outlook as Funded Backlog Grows

What happened

CACI International Inc (NYSE: CACI) raised its fiscal 2027 revenue and adjusted-earnings outlook after a strong first quarter. Revenue rose 8.2% to $2.47 billion, while EBITDA increased 22.4% to $328.8 million.

Contract awards reached $4.8 billion, producing a 2.0x book-to-bill ratio. Funded backlog rose 14.8% to $6.2 billion, but total backlog grew only 0.3% to $34.0 billion. That gap matters because funded backlog carries clearer near-term budget support.

Read more: CACI International (CACI) stock analysis and investment case

Why it matters

The quarter supports the standing case that CACI International Inc (NYSE: CACI) can move toward higher-value defense and intelligence technology work. EBITDA margin reached 13.3%, up from about 11.7% a year earlier, as operating profit grew faster than revenue.

Cash conversion moved the other way. Dividing $133.5 million of free cash flow by $2.47 billion of revenue gives a 5.4% margin. The comparable prior-year figures produce 6.2%, so free-cash-flow margin fell about 85.5 basis points.

The guidance increase is modest at the midpoint. Revenue guidance rose by $50 million to $10.8 billion, or about 0.5%, while adjusted net-income guidance rose by $5 million to $750 million. The unchanged free-cash-flow floor therefore remains a separate hurdle.

Management attributed lower operating cash flow to working capital, and days sales outstanding increased to 59 from 56. That makes the unchanged full-year free-cash-flow floor of at least $900 million more important than the small increases to revenue and adjusted-earnings guidance.

The countercase is that large government awards do not automatically become high-return revenue. Appropriation delays, contract protests, hiring needs and acquisition leverage can slow conversion. Interest expense rose 58.6%, which helps explain why diluted EPS increased just 3.7% despite 16.6% operating-income growth.

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What's next

Watch the next two quarters for funded-backlog conversion, days sales outstanding and free cash flow. The case strengthens if CACI International Inc (NYSE: CACI) holds its higher margin while restoring cash conversion toward the prior-year level. It weakens if working capital remains elevated or total backlog fails to grow behind the large awards.

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