CACI's CEO views artificial intelligence as an 'enabling tech'

CACI CEO John Mengucci tells Wall Street that artificial intelligence is similar to cybersecurity in how deeply woven they are in technology programs.

CACI CEO John Mengucci tells Wall Street that artificial intelligence is similar to cybersecurity in how deeply woven they are in technology programs. Courtesy of CACI.

John Mengucci tells investors that AI's pathway of advancement is similar to how cybersecurity entered the mainstream 10-to-15 years ago.

CACI International's website has a "What We Do" section that lists cybersecurity as a core focus area and further down the page is a link to learn more about the company's work in artificial intelligence.

The way CACI's chief executive put it to investors in a conference call Thursday, how cyber became woven deep into everything government contractors do for federal agencies is an allegory for today's AI conversation all across the public sector ecosystem.

"I think it's an enabling technology just as cyber was 10-to-15 years back. Will it have an impact in the space that we serve? Absolutely," John Mengucci said during the call to discuss CACI's fourth quarter and fiscal year 2023 financial results.

Mengucci estimated that of CACI's 200 major programs, the company has included AI in its offerings for "more than half of them" and has "been doing that for either years, months or days."

A pair of examples he cited are at the National Geospatial-Intelligence Agency, including one called Feature Trace that focuses on using AI-based software to help analysts crunch through and work with geospatial data.

Program number two called Sapphire has seen NGA go live with a new imagery analytics platform that uses computer vision and deep learning techniques to enhance image identification and processing functions.

Mengucci told analysts that for Feature Trace, the AI aspect of CACI's work was "self-funded (and) was all our own intellectual property" in order to help NGA make digital maps faster.

NGA's larger goal as Mengucci described it is to incorporate "more machine learning over a number of years to not replace what the analyst does, but allow us to create maps in a much more repetitive and much more efficient manner."

Robotic process automation and generative AI represent the other two major categories of CACI's work in artificial intelligence, along with the computer vision aspect.

"It's so much a part of our technology work, which I call delivering versus the expertise side," Mengucci said. "We're not advising, we're not consulting, we're actually doing."

Fourth quarter revenue of $1.7 billion was 3.7% higher than the prior year period, while profit of $185.7 million showed an 18.2% year-over-year increase in EBITDA (earnings before interest, taxes, depreciation and amortization).

Full fiscal year 2023 sales of $6.7 billion were 8.1% higher than the prior year and include organic growth of 6%, while EBITDA of $716 million showed a 12.3% increase. The fiscal 2023 year-end EBITDA margin of 10.7% was higher than the FY 2022 figure of 10.3%.

CACI ended its fiscal 2023 on a $25.8 billion backlog with $3.7 billion of it funded, respectively 11% and 16% higher than the prior year, and a book-to-bill ratio of 1.5x for the 12-month period to measure backlog growth versus bookings against it for sales.

The company's initial guidance for its 2024 fiscal year has revenue of $7 billion-to-$7.2 billion, which suggests growth of 4.5%-to-7.5%, and an EBITDA margin in the high 10% range.

Buoying CACI's outlook for its new fiscal year that started July 1 are these three big wins in the related articles section below, the first of which is the largest in the company's history: