How CACI views DOD's push for more commercial and consolidated software buys
CACI International CEO John Mengucci. CACI
By
Ross Wilkers
In talking with Wall Street, CEO John Mengucci also describes how the company's portfolio in networks is driven by work on software.
The Defense Department’s directive that commercially-available products, and also commercial-like approaches, should dictate how it buys software is five months old and can be seen in the Army’s recent Palantir contract consolidation.
What was 75 different data and software contracts is now a single enterprise license agreement with Palantir. This is also how General Services Administration is working with consumer and commercial tech companies through its OneGov initiative.
During CACI International’s fiscal fourth quarter earnings call Thursday, chief executive John Mengucci told investors one of the main ideas behind these contract consolidations is to get more volume discounts on licensed products.
A second main idea for bringing the disparate contracts together is to get more agility in the customers’ overall software acquisition engines.
“Anywhere where the government is looking to do more with less on the enterprise side, on the mission side, I think the government should continue to look for more software solutions,” Mengucci told analysts. “They are faster, they are better, they are cheaper, and they're also able to be modified and changed much more quickly and lethally as the threats change.”
Of course, software and hardware products centered around it have also been cornerstones of CACI International’s long-term vision and strategy for at least a decade.
Even CACI’s portfolio in networks has a significant software-defined component, Menucci said. This line of work involves bringing devices onto networks and taking them off, plus adjusting those networks to handle data at different classification levels.
“That's all going to be driven by software. We don't put new fiber in the ground,” Mengucci said. "We actually find more creative ways to push protective bits and bites over those strands of fiber or over space, so I think the drive will be to consolidate software in a more rapid manner.”
Fiscal fourth quarter revenue of $2.3 billion was 13% higher than the prior year period with organic growth of 5.3%, while profit of $264.5 million showed a 12.6% year-over-year increase in EBITDA (earnings before interest, taxes, depreciation and amortization.
Full fiscal year 2025 revenue of $8.6 billion were 12.6% higher than the prior year period with organic growth of 7.2%, while EBITDA of $966.8 million showed a 21.2% year-over-year increase. The company reported an FY 2025 EBITDA margin of 11.2% compared to the figure of 10.4% for FY 2024.
CACI’s initial guidance for its FY 2026 that started July 1 has sales in the range of $9.2 billion-to-$9.4 billion, which suggests growth of 6.6%-to-8.9%, on an EBITDA margin in the mid-11% range.