Q1 2026 CACI International Inc Earnings Call

Today's call is being recorded.

At this time all lines are in a listen only mode.

We will announce the opportunity for questions and instructions will be given at that time.

So you shouldn't need during the call. Please press star zero and some of them will help you.

At this time I would like to turn the conference call over to George priced Senior Vice President of Investor Relations for CACI International. Please go ahead Sir.

Thanks, Gina and good morning, everyone I'm, George price Senior Vice President of Investor Relations for CACI International. Thank you for joining us this morning.

We are providing presentation slides, so let's move to slide two.

There will be statements in this call that do not address historical fact, and as such constitute forward looking statements under current law. These statements reflect our views as of today and are subject to important factors that could cause our actual results to differ materially from anticipated.

Those factors are listed at the bottom of last Night's press release and are described in the Companys SEC filings. Our Safe Harbor statement is included on this exhibit and should be incorporated as part of any transcript of this call.

I would also like to point out that our presentation will include discussion of non-GAAP financial measures. These should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.

Let's turn to slide three please to.

To open our discussion this morning, Here's John <unk>, Gucci, President and Chief Executive Officer of CACI International John.

Thanks, George and good morning, everyone.

Thank you for joining us to discuss our first quarter fiscal year 2006 results.

Me. This morning is Chuck Mclaughlin, our Chief Financial Officer.

Slide four please.

CACI has a strong first quarter results are a great start to our fiscal year 2026.

We delivered free cash flow of $143 million, driven by revenue growth of 11% and EBITDA margin of 11, 7%.

We also won $5 billion of contract awards, which represents a book to Bill of two two times for the quarter and one three times on a trailing 12 month basis.

Over half of our awards were for new business to CACI. We also continued our excellent track record of winning re competes and securing sole source extensions.

Our first quarter performance gives us increased confidence in achieving both our full year guidance, which we are reaffirming at our three year financial targets.

Jeff will provide additional details shortly.

Slide five please.

Turning to the macro environment. The federal government continues limited operations under a shutdown.

However, our business remains resilient given our national security focus, but most of our work funded and deemed essential.

Looking beyond the shutdown, we continued to see enduring needs good demand signals from our customers and prospects for healthy funding environment for National security priorities.

In addition, we are starting to see early indications of how reconciliation funds available to DMD and DHS may be used.

For DHS. The focus is likely to include modernization and border security, which we expect will benefit programs like Google and drive demand for our currently OIS technology.

<unk>.

In addition to areas. We have previously discussed we also expect reconciliation funds, including those for Golden Dome will benefit some of our intelligence programs as we focus on left of launch situational awareness.

Our ability to reaffirm our guidance and deliver on our commitments even in the face of a government shutdown demonstrates the resilience of our business and as a result of deliberate choices and investments we have made over many years, our actions have positioned CACI for success in any environment, including.

This one slide.

Slide six please.

Let me discuss some examples of awards program performance and investments that highlight our competitive differentiation in several areas.

First in counter UAS escalating drone threats and increasing incursions globally are driving strong demand for our capabilities, including from our international partners.

In fact during the first quarter, we received a follow on order from the Canadian government for additional manpack software defined counter UAS systems. Thus.

This follows the initial order we received in fiscal 'twenty four as well as an order for a vehicle mounted counter UAS systems were received from Canada last quarter.

But thats why there is no longer just abroad. It is here at home as well and the administration has made it clear that the defense of the homeland is the top national security priority.

That's why <unk> has been investing ahead of need to develop Maryland, our latest counter UAS detected feed system.

Maryland's counter UAS capabilities are extremely differentiated and particularly well suited for defending the homeland for many reasons.

It is based on technology that has been operational improvement across the globe for years focused on real missions real threats and delivering real hills with non kinetic capabilities that include low to no collateral damage to fee Boes with a detection range of up to 75 kilometers and providing industry.

Leading wireless capabilities that address <unk> threats utilizing cellular networks.

Yeah.

Our Maryland system has outperformed competitors several government sponsored demonstrations against a wide range of UAS systems utilizing our software defined technology.

In Q into third party kinetic system to defeat a drone and also integrating with <unk> labs platform, which was recently selected as the Army's counter UAS fire control system.

These results are what is driving strong customer interest both in the U S and abroad.

A second area is counter space modernizing our nation's capabilities is crucial to address peer threats and the increasingly contested space domain.

We're seeing increasing customer interest and demand for CACI capabilities.

This includes a $240 million award.

In the first quarter to sustain and modernize the tactical integrated ground suite Ortega counter space program for the Army.

Additionally, a few days after quarter end, we received an initial production order from the U S space force for a remote modular terminal or RMT.

R&D as a broadband counter satellite electronic warfare system that leverages, our existing counter UAS software to provide our customers with enhanced counter space capabilities.

<unk>, an RMT are great. Examples of how we can liberate leverage our differentiated software defined technology and our strong past performance to help warfighters execute critical missions across the entire electromagnetic spectrum.

Slide seven please.

Third as network modernization are foundational dependency for many critical national security priorities without modernized networks, Dod priorities like NGC too and GNC to either won't be as effective or just won't be possible.

Given this reality in the administration's focus on modernization across the government. We continue to see good demand and a strong pipeline of network monetization opportunities.

For example, <unk> recently awarded CACI task orders over two and number three on the base infrastructure modernization program previously known as ipads wave two.

CCI will modernize networks for the U S. Indo Pacific command in the U S space force, ensuring more efficient and more secured network operations.

Together. These task orders represented approximately $400 million of awards this quarter.

Additionally, we continue to execute on our existing network modernization programs.

On our Super My program, we receive MSA authorization for use of our software defined TSMC technology, allowing for the processing of classified data through our framework.

This accelerates our ability to test and field devices on the network and positions us to make the network operational in 2026.

The final area is digital application modernization.

Our customers are seeking greater efficiency effectiveness and speed of delivery as they modernize software applications.

CCI continues to lead the industry with our use of commercial agile software development processes and Dev ops.

For example, our vivo program for customs and border protection is one of the largest agile software development programs in the federal government are exceptional performance on this program recently yielded us our second one year contract extension a strong indication of the value we delivered to CBP and a further indication of how well.

Ill positioned CACI is with our customer base.

The combination of our leading agile development capabilities and strong past performance has enabled us to win the $1 6 billion Atms Award this quarter.

<unk> transportation management system as transforms enterprise modernization initiative to unify end to end transportation and financial processes across the Dod on our commercial software platform.

CACI will leverage our agile software development and AI capabilities combined with SAP.

Thus far Hana off the shelf commercial platform to significantly improve visibility collaboration analytics ability for the command.

It's yet another example of the federal government selecting CACI to modernize its scale to enable mission success, while generating long term value for the government and taxpayers.

It is also important to note that as we continue to win in the marketplace. We also continue to invest ahead of customer need and our industry, leading agile capabilities to ensure the CCI remains well positioned to win and execute these critical monetization initiatives.

We are now expanding our use of AI tools to increase the speed efficiency and scalability of our agile software development processes and continuing to innovate to stay at the forefront of utilizing commercial software development tools and processes to address critical national security priorities faster and more efficiently.

These are just a few examples of the many successes we are seeing that CACI. Thanks to our focus on critical National security priorities software defined technology commitment to investing ahead of customer need and unwavering focus on superior execution.

With that I'll turn the call over to Jeff.

John Good morning, everyone. Please turn to slide eight.

As John mentioned, we're very pleased with our first quarter performance. The continued strong performance once again underscores the deliberate positioning of the portfolio and the differentiation of our business.

In the first quarter, we generated revenue of nearly $2 $3 billion representing.

Representing 11, 2% year over year growth between five 5% was organic.

I'd also like to call your attention to the revenue by customer disclosure in our earnings release, where we are now breaking out revenue from intelligence community customers.

This additional transparency aligns our revenue disclosure with the National security focus that is a foundational element of our strategy.

EBITDA margin of 11, 7% in the quarter represents a year over year increase of 120 basis points, driven primarily by strong program execution.

<unk> of some higher margin software defined technology deliveries and overall mix.

First quarter adjusted diluted earnings per share of $6 85.

16% higher than a year ago, greater operating income along with a lower share count more than offset higher interest expense and a higher income tax provision.

Finally free cash flow was $143 million for the quarter, driven by our strong profitability and increasing cash generation from working capital management.

Days sales outstanding or DSO was 56 days.

Slide nine please.

The healthy long term cash flow characteristics of our business, our modest leverage of two six times net debt to trailing 12 month EBITDA.

And our demonstrated access to capital will continue to provide us with significant optionality.

We remain well positioned to continue to deploy capital in a flexible and opportunistic manner to drive long term growth and free cash flow per share and shareholder value.

Slide 10 please.

We are reaffirming our fiscal 'twenty six guidance, we continue to expect revenue between $9 2 million to $9 4 billion.

EBITDA margin in the mid 11% range.

Adjusted net income between 605 and $625 million.

And finally free cash flow of at least $710 million.

Jeffrey MacLauchlan: Long-term cash flow characteristics of our business are modest leverage of 2.6 times net debt to trailing 12-month EBITDA, and our demonstrated access to capital continued to provide us with significant optionality. We remain well-positioned to continue deploying capital in a flexible and opportunistic manner to drive long-term growth and free cash flow per share and shareholder value. Slide 10, please. We're reaffirming our fiscal 2026 guidance. We continue to expect revenue between $9.2 billion and $9.4 billion, EBITDA margin in the mid-11% range, adjusted net income between $605 million and $625 million, and finally, free cash flow of at least $710 million. One item I'll note is that our strong Q1 performance has helped us de-risk the EBITDA margin step up from the first half to the second half that we discussed last quarter.

One item I'll note is that our strong Q1 performance has helped us de risk the EBITA margin step up from the first half to the second half that we discussed last quarter.

To help with modeling, we expect EBITDA margin in the second quarter to be about 11%.

Slide 11 please.

Turning to forward indicators all metrics to provide good long term visibility into the strength of our business. Our first quarter book to Bill of two two times and our trailing 12 months book to Bill of one three times reflect strong performance in the marketplace.

We remain. Well positioned to continue deploying capital in a flexible and opportunistic manner to drive. Long-term growth in free, cash flow per share and shareholder value.

Slide 10, please

we're reaffirming our fiscal 26 guidance. We continue to expect revenue between 9.2 and 9.4 billion.

The weighted average duration of our awards in Q1 was over six years, our record backlog of 34 billion increased 4% from a year ago and represents nearly four years of annual revenue.

Heba margin in the middle 11% range.

Adjusted net income is between $605 million and $625 million, and finally, free cash flow is at least $710 million.

And finally, our funded backlog grew nearly 26% year over year, some of which was likely driven by our customers preparing a central programs for the government shutdown.

Jeffrey MacLauchlan: To help with modeling, we expect EBITDA margin in the second quarter to be about 11%. Slide 11, please. Turning to forward indicators, all metrics provide good long-term visibility into the strength of our business. Our first quarter book-to-bill of 2.2 times and our trailing 12 months book-to-bill of 1.3 times reflect strong performance in the marketplace. The weighted average duration of our awards in Q1 was over six years. Our record backlog of $34 billion increased 4% from a year ago and represents nearly four years of annual revenue. Finally, our funded backlog grew nearly 26% year over year, some of which was likely driven by our customers preparing essential programs for the government shutdown. For fiscal year 2026, we now expect more than 92% of our revenue to come from existing programs, with less than 4% coming from recompetes and 4% from new business.

1 item. I'll note is that our strong q1 performance has helped us de-risk, the Eva margin step up from the first half to the second half that we discussed last quarter.

For fiscal year 'twenty six we now expect more than 92% of our revenue to come from existing programs with less than 4% coming from re competes and 4% from new business.

To help with modeling. We expect even though margin in the second quarter to be about 11%

Slide 11, please.

Congrats on these metrics specifically on Recompete revenue, which was 11% just last quarter reflects our successful business development and operational performance and yields increased confidence in our expectations for the year.

Turning to forward indicators, all metrics provide good long-term visibility into the strength of our business.

Our first-quarter book-to-bill ratio of 2.2 times and our trailing 12 months booked-to-bill ratio of 1.3 times reflect strong performance in the marketplace.

In fact, I'd like to point out that in the past 10 years. This is the second highest amount of revenue from existing programs that we've had at this point in the year.

The weighted average duration of our Awards in q1 was over 6 years. Our record backlog of 34 billion dollars increased 4% from a year ago and represents nearly 4 years of annual revenue.

In terms of our pipeline, we have $6 billion of bids under evaluation.

Around 80% of which are for new business to CACI.

We expect to submit another $13 billion in bids over the next two quarters with about 75% of that for new business.

And finally, our funded backlog grew, nearly 26% year-over-year, some of which was likely driven by our customers preparing essential programs for the government shutdown.

In summary, we delivered outstanding first quarter results Derisked fiscal year, 2006, and continued to demonstrate our differentiated position in the marketplace.

Jeffrey MacLauchlan: Progress on these metrics, specifically on recompete revenue, which was 11% just last quarter, reflects our successful business development and operational performance and yields increased confidence in our expectations for the year. In fact, I'd like to point out that in the past 10 years, this is the second highest amount of revenue from existing programs that we've had at this point in the year. In terms of our pipeline, we have $6 billion of bids under evaluation, around 80% of which are for new business to CACI. We expect to submit another $13 billion in bids over the next two quarters, with about 75% of that being for new business. In summary, we delivered outstanding first quarter results, de-risked fiscal year 2026, and continued to demonstrate our differentiated position in the marketplace.

Our fiscal year 26. We now expect more than 92% of our revenue to come from existing programs, with less than 4% coming from recompete and 4% from new business.

We are winning and executing high value enduring work that supports long term growth increased free cash flow per share and additional shareholder value.

Progress on these metrics specifically on recompete Revenue which was 11% just last quarter reflects our successful business development and operational performance and yields increased confidence in our expectations for the year.

That I will turn the call back over.

Thank you, Jeff Let's go to slide 12. Please.

CCI delivers distinctive and differentiated expertise and technology to address our nation's critical national security priorities.

In fact, I'd like to point out that in the past ten years. This is the second highest amount of revenue from existing programs that we've had at this point in the year.

We help customers address their biggest challenges and their most important priorities, we help them succeed in their missions and because of that our customers increasingly rely on us. We are the company that consistently gets things gets the hardest things done on a customers need it most.

In terms of our pipeline, we have 6 billion dollars of bids under evaluation around 80% of which are for new business to caci.

We expect to submit another $13 billion in bids over the next two quarters, with about 75% of that being for new business.

Because of this our business continues to perform well and we continue to meet our financial commitments, even in this dynamic and somewhat uncertain near term environment.

Jeffrey MacLauchlan: We are winning and executing high-value enduring work that supports long-term growth, increased free cash flow per share, and additional shareholder value. With that, I'll turn the call back over to Jeffrey.

In summary, we delivered outstanding first quarter results de-risked fiscal year 26 and continued to demonstrate our differentiated position in the marketplace.

The strength of our strategy, our differentiation and our execution is borne out by our consistent performance.

We are winning and executing high-value enduring work. That supports long-term growth increased free, cash flow per share and additional shareholder value.

John Mengucci: Thank you, Jeff. Let's go to slide 12, please. CACI delivers distinctive and differentiated expertise in technology to address our nation's critical national security priorities. We help customers address their biggest challenges and their most important priorities. We help them succeed in their missions, and because of that, our customers increasingly rely on us. We are the company that consistently gets things, gets the hardest things done when our customers need it most. Because of this, our business continues to perform well, and we continue to meet our financial commitments even in this dynamic and somewhat uncertain near-term environment. The strength of our strategy, our differentiation, and our execution is borne out by our consistent performance. Our outstanding first quarter results represent a great start to fiscal year 2026.

Our outstanding first quarter results represent a great start to fiscal year 'twenty six.

And with that, I'll turn the call back over to you. Thank you, Jeff. Let's go to slide 12, please.

We are successfully executing our strategy, winning and ramping significant new work.

CCI delivers distinctive and differentiated expertise in technology to address our nation's critical National Security priorities.

During our re competes and driving additional on contract growth from our large contract portfolio.

As a result, we are pleased to reaffirm our fiscal 'twenty six guidance and we remain confident in achieving our three year financial targets we.

We are well positioned in the right markets with the right capabilities. We are confident in our ability to drive long term growth and free cash flow per share and shareholder value.

We help customers address their biggest challenges and their most important priorities; we help them succeed in their missions. And because of that, our customers increasingly rely on us. We are the company that consistently gets the hardest things done when our customers need it most.

As is always the case our success is driven by our 25000 employees, who are ever vigilant and expanding the limits of national security.

Because of this, our business continues to perform well, and we continue to meet our financial commitments, even in this dynamic and somewhat uncertain near-term environment.

To everyone on the CACI team I am proud of what you do each and every day for our company and our nation and to our shareholders I want to thank you for your continued support of CACI.

The Str of our strategy, our differentiation and our execution is borne out by our consistent performance.

John Mengucci: We're successfully executing our strategy, winning and ramping significant new work, capturing our recompetes, and driving additional on-contract growth from our large contract portfolio. As a result, we are pleased to reaffirm our fiscal 2026 guidance, and we remain confident in achieving our three-year financial targets. We are well-positioned in the right markets with the right capabilities, and we are confident in our ability to drive long-term growth and free cash flow per share and shareholder value. As is always the case, our success is driven by our 25,000 employees who are ever vigilant in expanding the limits of national security. To everyone on the CACI team, I am proud of what you do each and every day for our company and our nation. To our shareholders, I want to thank you for your continued support of CACI. With that, Tina, let's open the call for questions.

Our outstanding first quarter results, represent a great start to fiscal year 26.

With that let's open the call for questions.

Yes.

Thank you to ask a question simply press star one on your telephone keypad, we do respectfully ask you limit your questions to one and one follow up.

We're successfully, executing our strategy winning and ramping significant new work catering. Our rec, competes and driving additional on contract growth from our large contract portfolio.

As a result, we are pleased to reaffirm our fiscal 2026 guidance. And we remain confident in our three-year financial targets.

First question comes from the line.

Okay.

With Cantor Fitzgerald. Please go ahead.

Hey, Thank you for the question good morning.

We are well positioned in the right markets with the right capabilities. We are confident in our building to drive long-term growth and free cash flow per share and shareholder value.

Morning, gentlemen, perhaps.

Set from an early expectations for the FY 'twenty sample request I think we have kind of two camps, forming up in terms of the buy side and one being that.

As is always the case, our success is driven by our 25,000 employees who are ever Vigilant and expanding the limits of National Security.

The step down from kind of reconciliation plus base implies.

It implies a step down year on year and then another camp is that it's pretty insane to think that Congress would kind of imply a cut on defense budgets into the horizon National security environment you can.

I want to thank you for your continued support of caci.

With that Tina, let's open the call for questions.

Operator: Thank you. To ask a question, simply press star one on your telephone keypad. We do respectfully ask you to limit your questions to one and one follow-up. Our first question comes from the line of Colin Canfield with Cantor Fitzgerald. Please go ahead.

Set some light on kind of where you would expect.

High level budgets.

Yes, Colin Thanks, that's a media first first question.

Look we're very very focused strategically on critical national security priorities.

And we've always talked about.

[Analyst]: Hey, thank you for the question. Good morning.

Thank you to ask a question. Simply press star 1 on your telephone keypad. We do respectfully, ask to limit your questions to 1 and 1 follow-up. Our first question comes from the line of colon sanfield with Cantor Fitzgerald, please go ahead.

Those priorities have deepened enduring funding streams, and we have great bipartisan support that bipartisan support as why we re vectored. This portfolio over the last decade to be 90% focused on national State and security.

John Mengucci: Morning, gentlemen.

[Analyst]: Perhaps you could shed some light on early expectations for the FY2027 request. I think we have kind of two camps forming up, in terms of buy-side sentiment. One being that the step down from kind of reconciliation plus base implies, or it implies a step down year on year. Another camp is that it's pretty insane to think that Congress would kind of imply a cut on defense budgets into a rising national security environment. If you can shed some light on kind of, you know, where you expect, kind of high-level budgets to go.

Hey, thank you for the question. Good morning.

What we've also said before that we're really focused.

On the top line budget budget growing but at the end of the day were $9 $3 billion company and a $280 billion total addressable market. So we look at that tone is we have plenty of room to grow.

And then whereas where is the money going so if you look across the areas like electromagnetic spectrum.

John Mengucci: Yeah, Colin, thanks. That's a meaty first question. Look, we're very, very focused strategically on critical national security priorities, and we've always talked about those priorities have deep and enduring funding streams, and we have great bipartisan support. That bipartisan support is why we revectored this portfolio over the last decade to be 90% focused on national security. Look, we've also said before that we're really focused on the top-line budget, budget growing, but at the end of the day, we're a $9.3 billion company in a $280 billion total addressable market. We look at that telling us we have plenty of room to grow. Where is the money going? If you look across the areas like electromagnetic spectrum, software-defined tech space, counter-UAS, border security, that's where current budget dollars and reconciliation dollars go. I think we're in the right spot.

Morning. You said some white on earlier, expectations for the FY. 27 request, I think we have kind of 2 camps forming up. Um, in terms of buy side, says that 1 being that the the step down from kind of reconciliation plus base implies or if it applies and stuff, you're on the year. And then another Camp is that it's, it's it's pretty insane to think that Congress would kind of imply a cut on defense budgets into arising National Security environment. So if you can can shed some light on kind of, you know, where you'd expect um, kind of high level budgets to go.

Software defined.

<unk> space counter UAS border security, that's where current budget dollars and reconciliation dollar towers go. So I think we're in the right. The right spot. We continue to have a great book to bill greater than one.

And our software defined Tac continues to do.

<unk> delivered growth for us so.

Theres <unk> Theres a lot of what is as we get into 'twenty six 'twenty seven.

Yeah, Colin thanks. That's a that's a meaty first. First question. Um look we're very very focused strategically uh on critical National Security priorities. Uh and and and we've always talked about uh those priorities have deep and enduring funding streams. So we have great bipartisan support that bipartisan support is why we we Vector this portfolio over the last decade uh to be 90% focused on National Society and security.

Factors.

But we've also said before that we're really focused.

Winning a lot of long term business that really.

Draws across a number of year budgets, so with the level of backlog, we have with the liquid.

With the duration of contracts, we just put it into backlog of right around 6% six years. It does allow our company to endure and allows us to continue to grow regardless of what some of those topline numbers are.

Uh, on the Topline budget budget growing but at the end of the day we're 9.3 billion dollar company in a 280 billion dollar total addressable market. So we we we look at that tone as we have plenty of room to grow

Um, and then where is it? Where's the money? Money going. So if you look across the areas like automatic spectrum, uh, software defined...

Got it. Thank you for the color and then in terms of like kind of a yes, cyber electronic warfare contracts.

John Mengucci: We continue to have a great book-to-bill greater than one, and our software-defined tech continues to deliver growth for us. You know, there's a lot of what-ifs as we get into 2026 and into 2027. The fact is, we're winning a lot of long-term business that really draws across a number of year budgets. With the level of backlog we have, with the duration of contracts we just put into backlog of right around six years, it does allow our company to endure and allows us to continue to grow, regardless of what some of those top-line numbers are.

<unk> traditionally been conditioned to kind of large multi year vehicles, but it seems like contracting officers are taking.

A more agile approach. So maybe if you can kind of talk about how you expect those contracts to be awarded.

As well as kind of the level of.

Agility that is rewarding within folks like yourselves apparatus aerovironment.

Tech space kind of as border security. That's where current budget dollars and Reconciliation dollars dollars go. So I think we're in the, right the right spot. We continue to have a great book to build greater than 1, uh, and our software to find Tech continues to, uh, uh, deliver growth for us. So, uh, you know, it's, there's, there's, there's, there's a lot of what-ifs because we get into 226 and into 27, but the fact is, you know, we're winning a lot of long-term business, that really

Commercially developed solutions in that domain.

Yes. Thanks, So look I think it's safe to say that the U S government has been buying.

Our capabilities are very differently ways.

Draws across a number of your budgets. So uh with the level of backlog, we we have with the with the uh with the duration of contracts, we just put in the backlog of right around 6 6 years uh it does allow

As of late.

About three years back we started here about otas.

That's within the last year, we heard about.

[Analyst]: Got it. Thank you for the color. In terms of counter-UAS, cyber, electronic warfare contracts, I think investors have traditionally been conditioned to large multi-year vehicles, but it seems like contracting offices are taking a more agile approach. Maybe if you can talk about how you expect those contracts to be awarded, as well as the level of agility that it's rewarding within folks like yourselves, Applied Insight, Azure Summit, folks that have commercially developed solutions in that domain. Thanks.

Our company to endure and allows us to continue to grow uh regardless of what some of those pipeline numbers are.

How advantageous this to be a commercial company.

And look we've doubled the amount of <unk> work that we've done in the last two years from the last five.

We're a company that has both Cas compliant, which means we have a rate based business like traditional government vendors, but we also have a portion of our business is truly commercial as commercial accounting and commercial practices, so that sort of lays that groundwork.

Got it. Thank you for the caller and then in terms of like kind of as cyber electronic warfare contracts, I think investors have traditionally been conditioned to kind of large multi-year vehicles, but but it seems like Contracting officers are taking a more agile approach. So maybe if you can kind of talk about how you expect those contracts to be awarded.

As well as kind of the level of, um, agility that. It's it's rewarding within folks, like, yourselves arrows, a lot folks, that, you know, kind of have a commercially developed Solutions in that domain.

That should tell everybody a CCI has unique company within our space and that we're very well positioned to address how the government buys.

John Mengucci: Yeah, thanks. I think it's safe to say that the U.S. government has been buying capabilities in very different ways as of late. It was about three years back we started to hear about OTAs. It's within the last year we heard about how advantageous it is to be a commercial company. We've doubled the amount of OTA work that we've done in the last two years from the last five. We're a company that is both CAC compliant, which means we have a rates-based business like traditional government vendors, but we also have a portion of our business that's truly commercial, has commercial accounting, and commercial practices. That sort of lays that groundwork, that should tell everybody CACI is a unique company within our space and that we're very well positioned to address how the government buys.

Most of our software defined technology work has actually been purchased over the last few years in a very different manner. So it is true that some of our technology technology is funded by.

Yeah, thanks. So, uh, look, I think it's safe to say that the US government has been buying, uh, capabilities and very differently ways, uh, as of as of late. Uh, you know, it was about 3 years back, we started to hear about OTAs.

A large multiyear programs.

But it's also.

More and more of the norm that we receive are awards on purchase orders and a very commercial like manner.

Um, it's within the last year we heard about, um, how advantageous it is to be a commercial company. Um, and look, we've doubled the amount of OTAA work that we've, uh, done in the last two years from the last five.

Can now buy from CCI in just about anything across.

Electromagnetic spectrum, whether it's <unk> or CW.

And it allows us to provide an item number.

Part number.

Price and so we're very used to.

Two supporting those types of.

Uh, we're a company that is both CAST compliant, which means we have a rates-based business like traditional government vendors. But we also have a portion of our business that is truly commercial, as commercial accounting and commercial practices. So, that sort of lays that groundwork. That should tell everybody CACI is unique.

Ordering vehicles at the end of the day, it's also what moves our financials around right I mean, if we're sitting here getting purchase orders that come in in quarter of quarter, one and we turn that around in the first quarter, that's going to move our financials around so true that the government's buying different loved the fact that the government's buying there.

John Mengucci: Most of our software-defined technology work has actually been purchased over the last few years in a very different manner. It is true that some of our technology is funded by large multi-year programs, but it's also more the norm that we receive our awards on purchase orders in a very commercial-like manner. You can now buy from CACI just about anything across the electromagnetic spectrum, whether it's SIGINT or it's EW. It allows us to provide an item number, a part number, and a price. We're very used to supporting those types of ordering vehicles. At the end of the day, it's also what moves our financials around, right? I mean, if we're sitting here getting purchase orders that come in in Q1, and we turn that around in the first quarter, that's going to move our financials around. It's true that the government's buying different.

Company within our space and that we're very well positioned to address how how the government buys. Um, most of our software defined technology work is actually been purchased over the last few years in a very different manner. So it is true that some of our technology technology is funded by

a large multi-year programs.

Loved the fact that we saw that coming seven to eight years back we positioned the company very well and then I'll sort of and Collingwood Tls Manpack is a perfect example that went from an OTA to a program of record where that customer continues to buy 200, 5300 500 units so better for us to.

Put it put a program in place that allow our customer to buy an amount of supports their budgets.

Got it appreciate the color. Thank you. Thanks.

Thanks, Tom.

And your next question comes from the line of.

Scott Michael with Melius Research. Please go ahead.

Good morning, John Jeff very nice results.

John CACI was ahead of the game when it came to investing in counter UAS solutions, we've seen Ukraine both sides.

John Mengucci: Love the fact that the government's buying different. Love the fact that we saw that coming seven to eight years back. We positioned this company very well. I'll sort of end, Colin, with TLS Manpack is a perfect example. That went from an OTA to a program of record where that customer continues to buy 250, 300, 500 units. Better for us to put a program in place and then allow our customer to buy in a manner that supports their budgets.

Fiber optic cables to prevent their drones can.

How are you thinking about that challenge when it comes to developing.

Or counter UAS offerings is it an opportunity for you.

Good to get your thoughts on that.

Yeah. Thanks, a lot Scott look.

I wanted to sort of step back on this whole counter UAS story.

Part number and a price. And uh so we're very used to um to supporting those types of um, of ordering vehicles at the end of the day. It's also what moves our financials around, right? I mean, if we're sitting here, getting purchase orders that, you know, come in in quarter quarter 1 and we turn that around in the first quarter, that's going to move our financials around. So, truth that the government's buying different love. The fact that the government's buying different love, the fact that we, we saw that coming 7 to 8 years back. We positioned this company very well and then I'll sort of end calling with TLS, man, manpack, is a perfect example that went from an otaa to a program of record where that customer continues to buy, you know, 250 300 500 units. So better for us to put a, put a program in place and then allow our customers to buy an amount of supports their budgets.

I guess first of all first of all we've been doing it for a really long time, a couple of decades.

[Analyst]: Got it. Appreciate you, Colin. Thank you.

John Mengucci: Thanks, Colin.

Got it. I appreciate the call. Thank you. Thanks, Tom.

Operator: Okay. Your next question comes from the line of Scott Mikus with Melius Research. Please go ahead.

And I've covered a lot of the basis of some of my prepared remarks with the creation of Berlin to frankly allows us to quickly bring different different phenomenology in so we can better better refining drones that the drone threat.

in your next question, comes from the line of

Scott, Mike.

[Analyst]: Morning, John and Jeff. Very nice result.

With Melius research. Please go ahead.

John Mengucci: Morning.

Morning John, Jeff. It's a very nice result morning.

[Analyst]: John, CACI was ahead of the game when it came to investing in counter-UAS solutions, but we've seen in Ukraine both sides are now using fiber optic cables to prevent their drones from being jammed. How are you thinking about that challenge when it comes to developing more counter-UAS offerings? Is it an opportunity for you? Just wanted to get your thoughts on that.

Is really unique in some ways, but very much the same in other in other ways.

Time is going to be the differentiator for this for this threat. Most other solutions that are out there look at simple drones within a 1% to three kilometer range Marlin and other of our system's detect out to 75 kilometers away and what that does is it gives the operator time so.

John Mengucci: Thanks a lot, Scott. I want to sort of step back on this whole counter-UAS story. First of all, we've been doing it for a really long time, a couple of decades. I've covered a lot of the basis of some of my prepared remarks with the creation of Merlin that frankly allows us to quickly bring different phenomenology in so we can better find drones. The drone threat is really unique in some ways, but very much the same in other ways. Time is going to be the differentiator for this threat. Most other solutions that are out there look at simple drones within a 1 to 3-kilometer range. Merlin and other of our systems detect up to 75 kilometers away. What that does is it gives the operator time.

John Caci was ahead of the game when it came to investing in counter UAS solutions. But we've seen in Ukraine that both sides are using fiber optic cables to prevent their drones from being jammed. So, how are you thinking about that challenge when it comes to developing more counter UAS offerings? Is it an opportunity for you? Just wanted to get your thoughts on that.

So in some instances up to 15 minutes of time versus about eight seconds of time by those who are looking at group, one or maybe two drones within a 1% to three kilometers space.

We're already in the U S government inventory are already producing at scale already battle Battle hardened with hundreds of confirmed kills so it is true that there are drones that are <unk>.

Trailing fiber there of drones that are operating in the cellular and for infrastructure. So if you look at what the homeland.

Yeah, thanks a lot. Scott look. Um, I want to sort of step back on this whole counter uas story. Uh, I guess. First of all, first of all, we've been doing it for a really long time, a couple of decades, um, and I've covered a lot of the basis of some of my prepared remarks with the creation of Merlin that frankly allows us to, uh, quickly bring different different, uh, phenomenology in. So we can better better find drones, uh, that the Drone threat

is really unique in some ways, but very much the same in other ways.

Our freight is going to be we may have drones from people, who are not our friends flying their drones on our networks.

So at the end of the day I think we have an outstanding solution I know, we have an outstanding solution.

John Mengucci: In some instances, up to 15 minutes of time versus about 8 seconds of time by those who are looking at Group 1 or maybe Group 2 drones within a 1 to 3-kilometer space. We're already in the U.S. government inventory. We're already pushing at scale, already battle-hardened with hundreds of confirmed kills. It is true that there are drones that are trailing fiber. There are drones that are operating in the cellular infrastructure. If you look at what the homeland fight is going to be, we may have drones from people who are not our friends flying their drones on our networks. At the end of the day, I think we have an outstanding solution. I know we have an outstanding solution. I'm also going to end with, to most companies, counter-UAS is like the new AI, right? Everybody does it now that it's popular.

You know, time is going to be the differentiator for this for this threat. Uh, most other solutions that are out there. Look at simple drones within a 1 to 3, kilometer range, Merlin, and other of our systems detect out to 75 km away, and what that does is, it gives the operator time.

But I'm also going to end with most companies.

Counter UAS is like the new AI right everybody does it now that is popular in.

And the difference between the AI stockpile pipe.

So in some instances up to 15 minutes of Time Versus about 8 Seconds Of Time by those who were looking at Group 1 or maybe group 2 drones within a 1 to 3 kilometre space. Um

And the counter UAS Stockpot pipe.

As if you have a <unk> solution you say it does and it does so much and it doesn't at the end of the day somebody dies.

If you have only deployed your kit at demos around the USA floor, it's very timely if unaddressed market for a couple of decades with a great installed base hundreds of systems thousands of sensors I would expect this threat to continually change and Thats why our solutions are software based that's why our.

The um, we're already in the US government inventory. We're already pushing the scale already battle battle hardened, with hundreds of confirmed kills, so it's true that there are drones that are, you know, trailing fiber. There are drones that are operating in the cellular for infrastructure. So if you look at what the Homeland um a fight is going to be. We may have drones from people who are not our friends flying their drones on our Networks.

<unk> system brings different phenomenology, and so we're able to.

More than that adequately downwind defend this nation, but other nations out there.

So, at the end of the day, I think we have an outstanding solution. I know we have an outstanding solution, but I'm also going to end with, you know, to most companies.

Thanks, and then Okay, and then I had one for Jeff Jeff What really surprised me was your fed civilian agency sales were up 17% year over year.

John Mengucci: The difference between the AI stockpile hype and the counter-UAS stockpile hype is if you have a counter-UAS solution, you say it does, and it does so much, and it doesn't, at the end of the day, somebody dies. If you've only deployed your kit at demos around the AUSA floor, it's very telling. We've been on this market for a couple of decades with a great installed base, hundreds of systems, thousands of sensors. I would expect this threat to continually change. That's why our solutions are software-based. That's why our Merlin system brings different phenomenology in. We're able to, more than adequately, not only defend this nation, but other nations out there. Thanks.

How are uas is like the new AI, right everybody? Does it. Now that it's popular?

And the difference between the AI stock pop hype.

I'm wondering if you could maybe parse it out between organic versus inorganic and then perhaps what was it.

Versus non DHS.

And the counter uas stock. Pop hype is if you have a carnivore solution you say it does and it does so much and it doesn't at the end of the day, somebody dies,

Yeah, so about 10 points of that percentage.

Basis of content as DHS. So the growth there Scott is in DHS and its in the ramping on NASA end caps, which is.

Which is ramping up nicely.

Moving with our plan, it's really all organic.

Don't think there is no inorganic in there because I think about azure and deposit side, none of those are going to be.

If you're going to deploy your kit at demos around the, a USA floor, it's very talented. We've been on this market for a couple of decades with the great installed base hundreds of systems, thousands of sensors. I would expect this threat to continually change and that's why your Solutions are software based. That's why our Merlin system brings different phenomenology in. So we're able to, uh, more than adequately, not only defend this nation. But other nations out there,

[Analyst]: Okay. I would, one for Jeff. I mean, Jeff, what really surprised me was your fed civilian agency sales were up 17% year over year. Just wondering if you could maybe parse that out between organic versus inorganic, and then perhaps what was DHS up versus non-DHS?

It fits.

Alright, thank you.

Alright.

Our next question comes from the line of Gavin Parsons with UBS. Please go ahead.

George Price: Yeah. About 10% of that percentage basis of content is DHS. The growth there, Scott, is in DHS, and it's in the ramping on NASA MCAPS, which is ramping up nicely and, you know, moving with our plan. It's really all organic. I don't think there's any inorganic in there. As I think about Azure Summit and Applied Insight, none of those are going to be intensive.

Thank you good morning.

Thank you, Jeff. What really surprised me was your fed civilian agency sales were up 17% year-over-year. So, just wondering if you could maybe parse that out between organic versus inorganic and then perhaps what was DHS up versus non DHS?

Good morning, Kevin to Gavin.

John I know, you've always remind us bookings or are super lumpy, but obviously, a pretty strong booking quarter here. So I guess two part question that the submitted pipeline is down but obviously for the balance of those strong bookings. So first part of the question did the simple math and play a very strong win rate on that conversion and then the second question.

Yeah, so about 10 points of that percentage, uh, basis of content is DHHS.

Should we expect bookings to maybe take a breather over the next few quarters given the submitted pipeline is down a bit.

Yes potentially.

uh, I don't think there's there's no inorganic in there because I think about Azure and applied Insight, none of those are going to be, uh,

Look.

inventive.

[Analyst]: All right, thank you.

I'm actually quite quite happy that the transparent information that we share.

All right. Thank you.

George Price: Great.

Great.

Operator: Our next question comes from the line of Gavin Parsons with UBS. Please go ahead.

As exactly what should lead to questions.

We really pride ourselves in giving you all the information we have as we run run this company.

What our next question comes from the line of Gavin. Parson with UBS, please go ahead.

[Analyst]: Thank you. Morning.

John Mengucci: Morning, Gavin.

[Analyst]: Hi, Gavin. John, I know you always remind us bookings are super lumpy, but obviously a pretty strong booking quarter here. That gets a two-part question. The submitted pipeline is down, but obviously we're back with those strong bookings. First part of the question, does the simple math imply a very strong win rate on that conversion? Second question, should we expect bookings to maybe take a breather over the next few quarters given that the submitted pipeline is down a bit?

Hi, Gavin. Gavin

We do our best to talk about bids that are going to be awarded at some time, we look at.

What our pipeline of submit all of the models are.

And we talk about what we ended up winning so.

Yes, there's going to be different and movement of numbers out there very proud of our first quarter and right of course I look at where we are at the end of the end of the year, but winning five $5 billion in the first quarter, which is half of the total one lat last year it really does.

John Mengucci: Yes, potentially. Look, I'm actually quite happy that the transparent information that we share is exactly what should lead to questions like this. We really pride ourselves in giving you all the information we have as we run this company. We do our best to talk about bids that are going to be awarded at some time. We look at what our pipeline of submittals are, and we talk about what we end up winning. Yeah, there's going to be different movement of numbers out there. Very proud of our first quarter win rate. Of course, you know I look at where we are at the end of the year, but winning $5 billion in the first quarter, which is half of the total we won last year, it really does position us well.

John, I know you've always reminded us. Bookings, are are super lumpy, but obviously a pretty strong booking quarter here. So I guess 2-part question that the submitted pipeline is down, but obviously the factors of those strong bookings. So first part of the question, does a simple math imply? A very strong win rate on that conversion and then second question should we expect bookings to maybe take a breather over the next few quarters? Given the the submitted pipeline is down a bit

Uh, yes. And potentially

It really does position us well I think you also have to look Kevin at the whole dataset, because we obviously had a really good awards quarter you would expect.

So probably result in a dip in the awaiting decisions number but you also have to look at do you expect it to submit piece which is up.

So this.

The adequacy of the pipeline is really a little bit like a balloon I mean, any one time on piece of it may dip down on another piece picks up I mean, thats inherent in the Lumpiness right.

Uh look uh we I'm actually quite quite happy that the transparent information that we share, um, is exactly what should lead to questions like like this. Look we we really pride ourselves in giving you all the information we have, as we run run this company we we do our best to talk about bids that are going to be awarded at sometime. We look at um what our pipeline of submittals are and we talk about what we

And I think your second question was around with everything going on how could it potentially impact second quarter look I think it's unrealistic to believe that the pace of awards.

George Price: I think you also have to look, Gavin, at the whole data set because we obviously had a really good awards quarter. You would expect that to probably result in a dip in the awaiting decisions number. You also have to look at the expected to submit piece, which is up. The adequacy of the pipeline is really a little bit like a balloon. At any one time, one piece of it may dip down and another piece dips up. That's inherent in the lumpiness, right?

Given we're in a shutdown mode is going to continue to the to the level that we have what that number ends up being is whatever that number ends up being and I'm sure. We'll talk about what the book to Bill was at the end of the second quarter I'm more excited about what the book book to Bill is at the end of the year and even more excited by having a trailing 12 month book to Bill of one three time.

End up winning. So um, yeah, there's there's going to be different movement of, uh, numbers out there very proud of our first quarter end rate, of course, you know, I look at where we are at the end of the end of the year, but, uh, winning 5 5 billion dollars in the first quarter, which is half of the total we won last last year. It really does, uh, really does position us. Well, I think you also uh, have to look Gavin at the, at the whole data set because we obviously had a really good Awards quarter, you would expect uh, that to probably result in a dip in the awaiting decisions number but you also have to look at the expected to submit piece which is up.

So we put a lot of awards in our $34 billion backlog funded backlog is up 26% I think it really bodes well.

Regardless of what gets thrown at us.

Great. Thank you definitely appreciate the transparency.

John Mengucci: I think your second question was around, with everything going on, how could it potentially impact the second quarter? Look, I think it's unrealistic to believe that the pace of awards, given we're in a shutdown mode, is going to continue to the level that we have. What that number ends up being is whatever that number ends up being. I'm sure we'll talk about what the book-to-bill was at the end of the second quarter. I'm more excited about what the book-to-bill is at the end of the year, and even more excited by having a trailing 12-month book-to-bill of 1.3 times. We put a lot of awards in our $34 billion backlog. Funded backlog's up 26%. I think it really bodes well, regardless of what gets thrown at us.

So you know this the the the the the the adequacy of the pipeline is really a little bit like a balloon. I mean any 1 Time 1 piece of it may dip down on another piece you know dips up. I mean that's inherent in the lumpiness right?

Yeah.

Thanks, Kevin.

Sure.

Our next question comes from the line of Seth Simon with Jpmorgan. Please go ahead.

So the government shutdown. It appears some awards, especially funded where accelerated ahead of the shutdowns so should that and mitigate some of the near term impact and is there some sort of length of the shutdown that presents a risk a risk to the guidance.

Yes.

Yes, certainly.

Certainly it leaves us better positioned.

And I and I think your second question was around uh, with everything going on. How could it potentially uh, impact what second quarter look? I I think it's unrealistic to believe that the pace of awards uh, given we're in a shutdown mode is going to continue uh, to to the level that uh we have what that number ends up being is whatever that number ends up being. And I'm sure we'll talk about what the book to bill was. At the end of the second quarter, I'm more excited about what the book book to bill is at the end of the year and even more excited by having a trailing 12-month book book to Bill on on

I think it's important in the sense that it leaves us.

Better positioned in terms of programs being funded obviously, but I think it also is sort of an expression of confidence and support.

[Analyst]: Great. Thank you. Definitely appreciate the transparency.

3 times. So, we put a lot of Awards in our 34 billion. Backlog funded backlogs up 26%. I think it really bodes. Well, um, regardless of what gets thrown at us,

By customers to position us to have minimal disruption from this.

Great. Thank you, definitely appreciate the transparency.

John Mengucci: Thanks, Gavin.

Operator: Our next question comes from the line of Seth Seifman with J.P. Morgan. Please go ahead.

Thanks. Kevin.

So that certainly that's true.

Our next question comes from the line of Set Side.

With.

One of the reasons that we affirmed our guidance.

Please go ahead.

Despite the fact that you can kind of see some growing momentum in the business as our approach to the guidance, which we've talked about with you before and this left goalpost Brightcove post approach.

[Analyst]: Regarding the government shutdown, it appears some awards, especially funded, were accelerated ahead of the shutdown. Should that mitigate some of the near-term impact? Is there some sort of length of the shutdown that presents a risk to guidance?

Really encompasses sort of a range of outcomes.

To the government shutdown, it appears some awards, especially funded work accelerated ahead of the shutdown. So, should that mitigate some of the near-term impacts? And is there some sort of length of the shutdown that presents a a risk to guidance?

George Price: Certainly, it leaves us better positioned. I think it's important in the sense that it leaves us better positioned in terms of programs being funded, obviously. I think it also is sort of an expression of confidence and support by customers to position us to have minimal disruption from this. Certainly that's true. One of the reasons that we affirmed our guidance, despite the fact that you can kind of see some growing momentum in the business, is our approach to the guidance, which we've talked about with you before, and this left goalpost, right goalpost approach really encompasses sort of a range of outcomes. We really, at this point, don't see a reasonable outcome that isn't encompassed in the guidance range we've given you. Not only is there minimal disruption, the nature of much of the work is that we would expect to make it up within the year.

We really at this point don't see.

Yeah. Certainly um,

Reasonable outcome that has helped us in in the guidance range, we've given you.

Certainly it leaves us better positioned. Um, I think it's important in the sense that it leaves us.

Not only is there a minimal disruption the nature of much of the work.

We would expect to make it up within the year.

We really don't see this being a disruptive factor.

Sure.

Yes, Seth I'd also just add to Jeff's comments.

Given our significant intentional exposure to national security work and as Jeff said the level of technology work.

And a large level of funded backlog.

And in fact that a lot of our work is essential and that is not there says that we're able to make that work or you may not see that in any Q2 impacting quarter, two but you'll definitely see that that no any short short term impact over the full the full year can we get the full year to meet.

Um, better positioned in terms of programs being funded, obviously. But I think it also is sort of an expression of confidence and support, uh, by customers to position us to have minimal disruption from this. Uh, so that, you know, certainly that's true. You know, one of the reasons that we offered our guidance, despite the fact that you can kind of see some growing momentum in the business, is our approach to the guidance, which we've talked about with you before and this left goal post, right goal post approach, uh, really.

Encompasses sort of a range of outcomes.

That.

Those times up so I think we're in a really good position clearly if it continues to linger for months and months I think Jeff already cover cover that.

George Price: We really don't see it as being a disruptive factor. I don't know, John, I'm sure.

Doctor.

John Mengucci: Yeah. If I also just add to Jeff's comments, you know, given our significant intentional exposure to national security work, and as Jeff said, the level of technology work, and the large level of funded backlog, you know, and the fact that a lot of our work is essential and that which is not there says that we're able to make that work up. You may not see any Q2 impact in quarter two, but you'll definitely see that any short-term impact over the full year because we have the full year to make those times up. I think we're in a really good position. You know, clearly, if it continues to linger for months and months, I think Jeff already covered that. It's well covered within our guidance that we have out there today.

Well covered within our guidance that we have out there today.

I don't know. John. No sir.

Great and then how is the hiring environment look over the last few months and do shutdowns tend to impact me like pullback, whether theres more people coming from say like a federal agency that are applying or people are kind of scared off from the industry.

Yes, at the house, I will just add, uh, to Jeff's comments. Um,

You know, giving our significant intentional exposure, to National Security work. And as Jeff said, the level of Technology work

Yeah Rocco.

We're actually seeing.

Applicant value or volume sorry.

All time high.

Believe it or not we had a half a million applicants in fiscal year 2025.

And we have quite a large number of folks applying for jobs today.

It does help that we're more of a technology company.

We were purely a pure play government services company. When you see shutdowns that go on for $15 $20 $25 $30 30 days that gives folks pause if they want to go do national security work on the expertise side.

[Analyst]: Great. How does the hiring environment look over the last few months? Do shutdowns tend to impact the pool of applicants, whether there's more people coming from, say, a federal agency that are applying, or people are kind of scared off from the industry?

Uh and the large level of funded backlog. Uh, you know, in the fact that a lot of our work is essential and that which is not there says that we're able to uh, make that work work up. You may not see that null any 22 impact in quarter 2? So you'll definitely see that that, uh, null any short short-term impact over the full, the full year, because we have the full year to make that, um, those times up. So I think we're in a really good position, you know. Clearly if it continues to linger for months and months, I think Jeff already covered that. It's it's, it's well, well, covered within our, uh, guidance. That we have out there today.

But we've got we're still running about 40% of our hires are coming from referrals. We've got about it we will have well over 300 person in turn program that will be.

John Mengucci: Yeah, Rocco. Look, we're actually seeing applicant volume at an all-time high. Believe it or not, we had half a million applicants in fiscal year 2025, and we have quite a large number of folks applying for jobs today. It does help that we're more a technology company. You know, if we were purely a, you know, pure-play government services company, when you see shutdowns that go on for 15, 20, 25, 30 days, that gives folks pause if they want to go do national security work on the expertise side. You know, we're still running 40% of our hires are coming from referrals. We've got well over a 300-person intern program that will be kicking off here shortly. You know, we haven't seen any slowdown in the number of applicants, and we sure haven't stopped hiring given the level of wins we had in the first quarter.

Great. And then how is the hiring environment looked at the last few months and do shutdowns tend to impact me like full of applicants? Whether there's more people coming from say like a federal agency that are flying or people are kind of scared off from the industry.

Kicking off here shortly so we haven't seen any slowdown in the number of outlet applicants and we start having stopped stopped hiring given the level of wins, we ended the first quarter.

Great. Thanks, guys.

Okay.

And our next question comes from the line of Tobey Sommer with <unk> Securities.

Yeah, Rocco look. We're uh, we're actually seeing um, applicant value or volume, sorry, uh, at an all-time high, uh, believe it or not, we had a half a million applicants in fiscal year 2025, um, and we have quite a large number of folks applying for jobs today. Um,

Um, it does help that we're more of a technology company.

Okay.

Hi, Henry on for Tobey here, Thanks for having us.

Hi, Andrew.

Maybe just to start that I go back to counter UAS for a second but let me.

I'm curious if you could roughly quantify the full opportunity set for that space over the next 12 months, let's say.

And how much of that could be related to golden dome on the on the non Reg.

The U S side.

Thanks.

Yes, Henry Thanks, Luke.

I think that the government given the.

Different funding bucket is still sorting sorting through that.

I'm not going to give you a direct answer on amount of counter UAS sales, we expect in the next 12 months.

[Analyst]: Great. Thanks, guys.

Uh, you know, if we were purely a, you know, Pure Play government services company, when you see shutdowns that go on for 15, 20 25, 30, 30 days, that gives folks pause, if they want to go do National Security work on the expertise side. Uh, but you know, we've got, we're still running a 40% of our hires are coming from a referrals. We've got about, we have well over 300% intern program, that will be, uh, uh, kicking off here shortly. So, you know, we haven't seen any, uh, slowdown in number of applicants. And we start having stop. Stop, stop hiring given the, uh, level of wins. We end the first quarter?

John Mengucci: Yep.

All right. Thanks guys.

Yep.

Operator: Our next question comes from the line of Tobey Sommer with Truist Securities.

But I will I will share that our portfolio of VW technologies that includes counter UAS and it includes a number of systems because if you remember the hardware form factor is different for us, but the software baseline is the same okay. So as we build systems, whether they're manpack, whether theyre handheld whether there.

And our next question comes from the line of Toby. Some are with truth securities.

[Analyst]: Hi. Henry on for Tobey here. Thanks for taking the question.

John Mengucci: Hi, Henry.

[Analyst]: Maybe just to start, I'll go back to counter-UAS for a second. I'm just curious if you could roughly quantify the full opportunity set for that space over the next 12 months, let's say. How much of that could be related to Golden Dome on the non-physics counter-UAS side? Thanks.

Hi. This is Henry on for Toby here. Thanks for taking. Hey um,

Mobile whether they are fixed.

The beauty not by accident of our solution is that software base allows us to continually monitor modern quantify these with a common software baseline.

John Mengucci: Yeah, Henry, thanks. Look, I think that the government, given the different funding buckets, is still sorting through that. I'm not going to give you a direct answer on the amount of counter-UAS sales we expect in the next 12 months. I will share that our portfolio of EW technologies includes counter-UAS. It includes a number of systems because if you remember, the hardware form factor is different for us, but the software baseline is the same. As we build systems, whether they're manpacked, whether they're handheld, whether they're mobile, whether they're fixed, the beauty, not by accident, of our solution is that software-based allows us to continually modify these with a common software baseline. Our portfolio, EW technology, generates about $2 billion of revenue each and every year. We expect with newer requirements on counter-UAS that we'll experience continued growth.

Uh, let me just to start. So to go back to counter uas for a second, but, um, I'm just curious if you could, you know, roughly quantify the, the full opportunity set for that space over the next, you know, 12 months. Let's say. Um, and then how much of that could be related to to golden dome on the, on the nanak. Cuss side. Thanks.

Our portfolio VW technology generates about $2 billion of revenue each and everywhere and we expect with newer requirements and counter UAS that we will experience continued growth some of that growth youll see on a quarterly basis, when we talk about where our technology portfolio is growing their relationship to our.

Through our expertise one but administration priorities are very much focused on defense and homeland border security world events use of drones and modern modern warfare.

Yeah, Henry, thanks look. Uh, you know, I think that the, uh, government given the, uh, the different funding, buckets is still starting starting to do that. Um, I'm not going to give you, uh, a direct answer on amount of counter uas sales. We expect in the next 12 months, uh, but I will, I will share that our portfolio of ew Technologies. It includes counter uas. It, it includes the number systems because if you remember, the hardware form factor is different for us with the software. Baseline is the same.

European Allies are are all up and.

We're going to have additional funding through record reconciliation some of that growth is planned in our current FY 'twenty six plan and.

And we gave you a low and high end to our to our guidance guidance range.

Are very well positioned.

For other upcoming Continental ESI opportunities, which do include Golden Dome.

John Mengucci: Some of that growth you all see on a quarterly basis when we talk about where our technology portfolio is growing in relationship to our expertise. The administration priorities are very much focused on defense of the homeland, border security, world events, use of drones in modern warfare. Your European and allies are all up. We're going to have additional funding through reconciliation. Some of that growth is planned in our current FY2026 plan. We gave you a low and a high end to our guidance range. We are very well positioned for other upcoming counter-UAS opportunities, which do include Golden Dome.

Okay I appreciate.

Great color there.

Maybe just to follow up.

The contracts are awarded and in this past quarter.

How much if any of those or where do the reconciliation bill funding at this point in time.

Another question looking ahead.

Filiation Bill funding kind of one of the key difference makers the youre seeing in terms of funding priorities as I shut that moves along that differentiate <unk> from competitors. Thank you.

Sure.

Okay, so as we build systems, whether they're man man, pack, whether they're uh, handheld, whether they're mobile, whether they're fixed, the beauty, not by accident of our solution is that software base allows us to continually on a modify these with a common software Base Line, um, our portfolio VW technology, generates about 2 billion dollars of Revenue, each and everywhere, and we expect with newer, requirements, and encounter uas, that will experience continued growth. Some of that growth, you'll all see on a quarterly basis. When we talk about where our technology portfolio is growing in relationship to our to our expertise 1, uh, but the administration priorities are are very much focused on defense of the Homeland border, security world events. Use of drones in modern modern warfare. Um, European and allies um, are are all up and um, you know, we're going to have additional funding through Rec.

Yes ill take the last comment first and I'm sure Jeff will have some comments here as well.

<unk>.

The.

The Golden Dome funding in the reconciliation funding, we haven't seen that begin to be <unk>.

<unk>.

So that sort of gives us.

I can I can selling agent, you know, some of that growth is planned in our um current FY 26 plan. Uh and we gave you a low and a high end to our to our uh, guidance guidance range. And we are very well positioned. Uh for other upcoming continuous opportunities, which do include building Dome

[Analyst]: Thanks, Jeff. Appreciate the color there. Maybe just to follow up, you know, the contracts awarded in this past quarter, how much, if any, of those were due to reconciliation bill funding at this point? I think on the question looking ahead, you know, is reconciliation bill funding kind of one of the key difference makers that you're seeing in terms of funding priorities, you know, as the shutdown moves along that differentiates you all from competitors? Thank you.

<unk> stopped to what we're going through and we're experiencing now perhaps.

Yes, that's right.

We're seeing it in our planning.

We're starting to see opportunities.

Meetings about.

Developing alternatives things like that so we're starting to be able to see a little bit of where it's going to land we believe.

And of course, the MEP IHS content.

Is is essentially Bill funding kind of 1 of the key difference makers that you're seeing in terms of funding priorities, you know, as a shutdown moves along that that differentiates you all from from competitors.

John Mengucci: Yeah. I'll try to take the last comment first, and I'm sure Jeff will have some comments here as well. The Golden Dome funding and the reconciliation funding, we haven't seen that begin to be spent. That sort of gives us a backstop to what we're going through and we're experiencing now, perhaps.

Thank you.

Along with the portions of the Dod's reconciliation funding that are focused on the areas that are in our sweet spot.

Yeah, I'll try to take the last comment first, and I'm sure Jeff will have some comments here as well. Um,

the um,

Give us some confidence about that but none of the none of the performance in the first quarter.

Or the or the funded backlog that we talked about we'd identified directly to reconciliation funding.

Okay.

George Price: Yeah, that's right. We're seeing it in a planning sense. We're starting to see opportunities, meetings about, you know, developing alternatives, things like that. We're starting to be able to see a little bit of where it's going to land, we believe. Of course, the heavy Department of Homeland Security content, along with the portions of the U.S. Department of Defense reconciliation funding that are focused on the areas that are in our sweet spot, you know, give us some confidence about that. None of the performance in the first quarter, or the funded backlog that we talked about, we'd identify directly to reconciliation funding.

Yeah.

The golden dome funding and the reconciliation funding. We haven't seen that. Begin to be. Um, spent so that's sort of, uh, gives us a a back stop to what we're going through and we're experiencing now perhaps. Um,

Thanks Henry.

Okay.

Our next question comes from the line of Jon Hickman with Stifel. Please go ahead.

Okay.

The margins were really impressive.

Yeah, that's right. It's it's, uh, we're seeing it in a planning sense. We're starting to see opportunities, uh, meetings about, uh, you know, developing Alternatives things like that. So we're starting to be able to see a little bit of where it's going to land. We Believe.

Especially in the context of your earlier outlook of lower margins to start the year.

Uh, and of course, the heavy DHS content.

The incremental sales year over year, we're all technology.

Which implies incremental margin year over year was over 20%.

Can you comment a bit about the mix or any one time benefits this quarter.

It suggests the margins in technology or maybe are trending higher than at least we were modeling. Thank you.

Yes. Thank you.

Along with the portions of the dod reconciliation funding that are focused on the areas, uh, that are in our sweet spot. Uh, you know, give us some confidence about that, but none of the none of the performance in the first quarter, uh, or the or the funded backlog that we talked about, we'd identified directly to reconciliation funding,

John Yes.

I mean.

Im not going to quibble with your math.

[Analyst]: Thanks, Henry.

Thanks Ellie.

<unk>.

Technology margins were strong in the quarter.

Operator: Our next question comes from the line of Tobey Sommer with Stifel. Please go ahead.

I would remind you that the <unk>.

Our next question comes from the line of John Sigmund with Stifel. Please go ahead.

<unk> is not monolithic there.

There are pieces of the technology portfolio.

John Mengucci: The margins were really impressive, especially in the context of your earlier outlook of lower margins to start the year. The incremental sales year over year were all technology, which implies the incremental margin year over year was over 20%. Can you comment a bit about the mix or any one-time benefits this quarter? It suggests the margins and technology maybe are trending higher than at least we were modeling. Thank you.

Have margins north of what you mentioned.

There obviously are some that are obviously less.

Uh, the margins were were really impressive, um especially in the context of your earlier Outlook of lower margins to start the year.

So when we talk about mix, it's both mix of technology and expertise, but its also mix within the technology segment sector.

Uh, the incremental sales year-over-year were all technology.

So.

I would also note.

But it did not change our view of the year. So.

I would encourage you to think about that as sort of de risking what you see what <unk> seen historically is our customary first half second half margin step up we now see that increase in the second half as being.

George Price: Thank you, John. I mean, I'm not going to quibble with your math. The technology margins were strong in the quarter. I would remind you that the segment is not monolithic. There are pieces of the technology portfolio that have margins north of what you mentioned, and there obviously are some that are less. When we talk about mix, it's both a mix of technology and expertise, but it's also a mix within the technology segment sector. I would also note that it did not change our view of the year. I would encourage you to think about that as sort of de-risking what you see, what you've seen historically as our customary first half, second half margin step up. We now see that increase in the second half as being a little smaller than it has been in some recent years. You've done the math the right way.

Which implies incremental margin year-over-year was over 20%, uh, can you comment a bit about the mix or any 1 thyme benefits this quarter? Uh it suggests the margins and Technology. Maybe are trending higher than at least we were modeling. Thank you.

Yeah, thank you. Um, John the yeah, I mean the I I I'm not going to equivale with your mass the uh,

Technology. Margins were strong in the quarter.

Um,

A little smaller than it has been in some recent years.

But you've.

You've done the math, you've done the math right way.

I would remind you, uh, that the segment is not monolithic. Uh, there are pieces of the technology portfolio.

Uh, that have margins north of what you mentioned.

That's great maybe just a follow up on what John said about loving the fact that government is buying differently.

Uh, and there are obviously are some that are obviously less.

Is it more.

The impact of these changes the more customers are embracing some of these more progressive ways to buy software and agile software.

So when we talk about mix, it's both mix of technology and expertise, but it's also mixed within the technology segment sector.

Its aim customers just buying more thank you very much.

So, um, I would also note, uh, that it did not change our view of the year.

It's a little bit of both John John will want to add to this but if.

Certainly theres been a tremendous increase in otas both.

Both and they are used by people that have been using them, but also customers that.

But haven't used them before I think I think also.

I would go back and underscore the answer to one of the first or second questions, where John talked about the fact that we really are positioned deliberately by design.

So, uh, I would encourage you to think about that as sort of de-risking. What you see what you see in historically is our customary first half second, half margin step up. We now, see that increase in the second half as being, uh, a little smaller than it has been in some recent years. Um, but you you've, uh, you you've done the math, you've done the math the right way.

John Mengucci: That's great. Maybe just to follow up on what John said about loving the fact the government is buying differently. Is it more the impact of these changes being more customers are embracing some of these more progressive ways to buy software and agile software, or is it the same customers just buying more? Thank you very much.

That's great, and maybe just a follow-up on what John said about loving the fact that the government is buying differently.

To be able to sell commercially to be able to sell in a traditional far cast disclosed environment.

We literally there is no way that customers buy that we don't sell.

George Price: It's a little bit of both. John will want to add to this, but if you certainly there's been a tremendous increase in OTAs, both in their use by people that have been using them, but also customers that haven't used them before. I think also, I'd like to go back and underscore the answer to one of the first or second questions where John talked about the fact that we really are positioned deliberately by design, to be able to sell commercially, to be able to sell in a traditional FAR CAS disclosed environment. I mean, there is no way that customers buy that we don't sell. I think that can't be overemphasized.

So.

Is it more the the impact of these changes being more customers are embracing some of these more Progressive ways to buy software and adverse software or or the same customers just buying more. Thank you very much.

I think I think that cant be overemphasized.

Hey, John.

I'll also add.

Look what customers want is.

<unk> 12 <unk>.

It's a little bit of both. John will want to add to this. But if, uh, certainly there's been a tremendous increase in OTAs, both, uh, in their use by people that have been using them.

<unk> and wanted to be able to use those when they believe that one of those supports their needs over the other the days of large development programs, where you write your requirements in 2025 and you get your first taste of the system in 2035 are not going to support how far.

But also customers that um, that haven't used them before.

I think I think also I'd like I would go back and underscore the answer to 1 of the first or second questions where John talked about the fact that we really are positioned deliberately by Design.

The threats are.

So as Jeff mentioned about a decade ago, we position this company to be very agile in both right. So and it's why we invest ahead of customer need but the government's asking everybody to do is hey, how about invest ahead of need more on euro dollar than ours.

John Mengucci: Yeah. John, I'll also add, look, what customers want is FAR Part 12, FAR Part 15. They want to be able to use those when they believe that one of those supports their needs over the other. The days of large development programs where you write your requirements in 2025 and you get your first taste of the system in 2035 are not going to support how fast the threats are moving. As Jeff mentioned, about a decade ago, we positioned this company to be very agile in both, right? It's why when we invest ahead of customer need, what the government's asking everybody to do is, "Hey, how about invest ahead of need more on your dollar than on ours?" Okay?

Uh, to be able to sell commercially, to be able to sell in a traditional far, cast disclosed environment. I mean, we literally, there is no way that customers buy that, we don't sell. So, uh, I, I think, I think that can't be overemphasized.

Okay explain to us how that fits into part of our solve and then allow us to buy that as I answered earlier from a commercial price sheet. It says if you want a mobile counter UAS system or a hand, how it have had handheld E. W. Gadget.

Yeah. John I'll uh also add look what customers want is.

Far part 12.

Then give me the part number and let me start buying and buying that our software.

<unk> around these things is that when you buy that youre going to find different uses for it. So there should be a quick upgrade path either from a from a licensing yearly fee that gets that customer additional upgrades and updates to it again at the end of the day I have been saying this for a decade.

Sure.

This is not.

The old way, where if you want a new capability by the new device.

1 of those supports their needs over the other, the days of large development programs, where you write your requirements in 2025 and you get your first taste of the system in 2035, are not going to support how fast the threats are moving. So as Jeff mentioned about a decade ago, we positioned this company to be very agile in both, right? So and it's why when we invest ahead of customer need, what the government's asking everybody to do is hey how about invest ahead of need more on your dollar than on ours?

John Mengucci: Explain to us how that fits into part of our solve, and then allow us to buy that, as I answered earlier, from a commercial price sheet that says, "If you want a mobile counter-UAS system or a handheld EW gadget, then give me the part number and let me start buying that." Our software wrapper around these things is that when you buy that, you're going to find different uses for it. There should be a quick upgrade path either from the licensing yearly fee that gets that customer additional upgrades and updates to it. Again, at the end of the day, I've been saying this for a decade. This is not the old way where if you want a new capability, buy the new device. You're continuously throwing devices away. They're looking for agility.

We're continuing to see throwing devices away. So so looking for agility and what Youre seeing is they want to be able to buy the way commercial companies buy and not be locked to long term.

Development contracts and as Jeff said, we can support either in both in any other any other ways. Thanks Jonathan.

Thank you.

okay, explain to us how that fits into part of our solve and then allow us to buy that as I answer earlier from a commercial price sheet that says if you want a mobile counter uas system or a hand, hand hand, hand hand, hand, hand hand hand, hand handheld, uh, ew Gadget, then give me the part number and let me start buying buying that

Our next question comes from the line of Glenn Conor.

Ladies Cowen. Please go ahead.

Sure.

Great results guys.

Thank you.

Wanted to ask two questions to follow up on some earlier ones first have there been any impact to the business from the shutdown with respect either revenue cash.

Our software wrapper around these things is that when you buy that, you're going to find different uses for it. So, there should be a quick upgrade path, either from a, from the licensing yearly fee that gets that customer additional upgrades and updates to it again. At the end of the day, I've been saying this for a decade.

This is not.

The old way, where if you want a new capability by the new device.

Or unusually soft awards in the <unk>.

John Mengucci: What they're saying is they want to be able to buy the way commercial companies buy and not be locked to long-term development contracts. As Jeff said, we can support either in both and any other ways. Thanks, John.

The quarter, and then I have a follow up.

Yes, I can I can start with some of that John will want to add to this uncertainty.

There's been a slight amount of.

Cash collections disruption.

George Price: Thank you.

So you're continuously throwing devices away. So they're looking for agility, and what they're saying is they want to be able to buy the way commercial companies. Buy and not be locked to long-term uh um development contracts. And it's just said we can support either in both and you know any other any other ways. Thanks John.

Thank you.

That's primarily related to staff, that's available for invoice approval and things like that.

Operator: Our next question comes from the line of Gavin Parsons with Phoebe Cohen. Please go ahead.

We're feeling a little bit of administrative.

Okay, question comes from the line of Guatemala with KB Cohen. Please go ahead.

[Analyst]: Great results, guys.

Sure.

Sluggishness I'll call out related to that.

John Mengucci: Thank you.

And great results, guys.

[Analyst]: I wanted to ask two questions to follow up on some earlier ones. First, has there been any impact to the business from the shutdown with respect to either revenue, cash, or unusually soft awards in the first month of the quarter? I have a follow-up.

Thank you.

It's not it's not tremendous.

It's <unk>.

Collections may be 10 or 15% off.

But but it's it's small but noticeable.

Wanted to ask 2 questions, uh, to follow up on some earlier ones first. Has there been any impact uh to the business from the shutdown with respect to either Revenue cash.

And similarly, I would say in terms of revenue we have pockets of places.

George Price: Yeah, I can start with some of that. John will want to add to this, I'm certain. There's been a slight amount of cash collections disruption that's primarily related to staff that's available for invoice approval and things like that. We're feeling a little bit of administrative sluggishness, I'll call it, related to that. It's not tremendous. Collections may be 10% or 15% off, but it's small but noticeable. Similarly, I would say in terms of revenue, we have pockets of places where we have attenuated levels of activity. It's really de minimis. I'm going to say it's kind of single-digit millions, revenue. It's activities that we expect to recover during the year. It doesn't really affect our view of the year, but yeah, it's detectable, but small and manageable.

Or, you know, unusually soft Awards in the first month of the quarter and then I have a follow-up.

Where we have attenuated levels of activity.

It's really de Minimis.

I'm going to say, it's kind of single digit millions.

Yeah, I can, I can start with some of that, uh, John will want to add to this uncertain. But, um, you know, there's been a slight amount of, uh,

Revenue.

Oh, cash collections disruption.

Activities that we expect to recover during the year. So it doesn't really affect our view of the year.

But but yes.

It's detectable, but small and manageable.

Okay.

Just wanted to ask given the environment, maybe tougher for some of the.

Quote peers in this space.

<unk> have you seen any intensifying.

Price competition.

That's primarily related to staff, that's available for invoice approval, and things like that. So we're feeling a little bit of administrative. Uh, um, you know, sluggishness, I'll call it related to that. Um, it's not, uh, it's not tremendous, you know, it's it's, you know, collections may be, you know, 10 or 15% off. Um, but but you know it it's it's it's small, but noticeable.

Maybe talk about the bits that you didn't prevail on is that typically a price shoot out or anything you've changed that you've seen in terms of competitor behavior.

If any.

Uh, and similarly, I would say, in terms of Revenue, we have pockets of places, uh, where we have attenuated levels of activity, uh, it's really diminished.

Yes, Thanks John.

I can't answer for everybody else out there I can tell you that.

If we've ever lost time price, it's not because we are under price shoot out because we gave up that that part of the.

The ecosystem.

Seven to eight years back.

Uh, you know, I'm going to say it's kind of a single digit Millions, uh, Revenue its activities that we expect to recover during the year. So it doesn't really affect our view of the year, um, but but yeah, it it, it's detectable, but, but small and manageable,

But I would imagine.

[Analyst]: Okay. Just wanted to ask, given the environment may be tougher for some of the, quote, "peers" in the space relative to CACI, have you seen any intensifying price competition? Maybe talk about the bits that you didn't prevail on. Is that typically a price shootout or anything you've changed that you've seen in terms of competitor behavior, if any?

<unk> are going to do whatever they need to do to continue to win business. I mean, we've seen a little uptick in the number of protests, which are out there that.

Okay. And um, just wanted to ask given the environment, maybe tougher for some of the

That to me being in this marketplace for a few decades is usually that early sign is.

Quote peers in the space relative to khaki. Have you seen any intensifying?

Price competition.

If you when you win if you don't you.

Test.

So I think we'll continue to watch the level of protests, which are out there, but for us I haven't seen pricing.

You know, maybe talk about the bits that you didn't prevail on. Is that typically a price shootout or anything you've changed? You've seen in terms of competitor behavior.

John Mengucci: I'm glad on thanks, John. I can't answer for everybody else out there. I can tell you that if we've ever lost on price, it's not because we're in a price shootout because we gave up that part of the ecosystem about seven to eight years back. I would imagine people are going to do whatever they need to do to continue to win business. We've seen a little uptick in the number of protests which are out there. That to me, being in this marketplace for a few decades, is usually that early sign. If you win, you win. If you don't, you protest. I think we'll continue to watch the level of protests which are out there. For us, I haven't seen pricing be an issue.

If any?

Be an issue we believe that we are fairly priced and where we invest ahead of customer need.

Where we've gone out on risk to spend the company's money to help.

Yeah, that's what I'm thinking. Sean uh, I I'm I'm not I can't answer for uh, everybody else out there. I can tell you that um,

Defend this nation and a better better manner, we would expect to see higher margins and thus far that.

um, if we've ever lost our price, it's not because we're on a price shootout, because we gave up that, that part of the

That's our plan and that mode of running this business has served us very very well.

Thanks.

Thank you.

<unk>.

Okay.

Next question comes from the line of Walter <unk> with Jefferies. Please go ahead.

Good morning, guys. Congrats on a great great year. Thanks for taking my question.

Maybe just to start it seems like the unchanged top line growth.

The ecosystem uh about 7 to 8 years back. Um but I would imagine, you know, people are going to do whatever they need to do to continue to win business. I mean we've seen a little uptick in the number of protests which are out there. You know that to me being in this Marketplace for a few decades is usually that early sign is, you know if if you win you win, if you don't you protest

7%, 9%, but stronger organic and perhaps around.

And $40 million and lower acquired revenue. So curious first if I'm reading that correctly, but also if you could provide an update on the acquisition integration process.

John Mengucci: We believe that we are fairly priced and where we invest ahead of customer need, where we've gone out on risk to spend the company's money to help defend this nation in a better manner, we would expect to see higher margins. Thus far, that plan and that mode of running this business has served us very, very well. Thanks.

Uh, it can be an issue. We believe that we are fairly priced and that we invest ahead of customer need.

Yes.

The acquisitions of Azure and AI are largely complete.

And in fact.

We're finding what we've always found which is when it's done well, it's increasingly difficult to tell them apart.

Uh, where we've gone out on risk to spend the company's money to help, uh, defend this nation in a better manner. We would expect to see higher margins and thus far, that, um, that a plan and, uh, that mode of running this business has served us very, very well.

[Analyst]: Thank you.

Thanks.

Thank you.

There is some azure timing John May want to comment some more on this related to.

Operator: Our next question comes from the line of Connor Walters with Jefferies. Please go ahead.

Next question, comes from the line as Conor. Walters with Jeffrey's, please go ahead.

[Analyst]: Morning, guys. Congrats on a great start to the year.

Some of the activities.

Yes.

John Mengucci: Thanks.

[Analyst]: Thanks for taking my question. Maybe just to start, it seems like the unchanged top-line growth of, you know, 7 to 9%, but stronger organic and perhaps around $40 million in lower acquired revenue. I'm curious first if I'm reading that correctly, but also if you could provide an update on the acquisition integration process.

Between the Azure legacy programs and spectral.

But but no.

They're very definitely meeting expectations, and we remain convinced of their strategic and financial value.

We are a terrific.

Terrific fits both of them.

George Price: The acquisitions of Azure Summit and Applied Insight are largely complete. In fact, you know, we're finding what we've always found, which is when it's done well, it's increasingly difficult to tell them apart. You know, there is some Azure Summit timing. John may want to comment some more on this related to some of the activities between the Azure Summit legacy programs and Navy Spectral. They're very definitely meeting expectations, and we remain convinced of their strategic and financial value. They're terrific fits, both of them.

Morning guys. Congrats on a great start to the year. Thanks for taking my question. Uh maybe just to start seems like the unchanged Topline growth of, you know, 7 to 9%, but stronger, organic and perhaps more around 40 million and lower acquired Revenue. So curious first, if I'm reading that correctly but also if you could provide an update on the acquisition integration process,

I don't have anything else that.

Gotcha. Thanks.

Perfect. That's helpful. And then maybe just one follow up you guys discuss the upside you're seeing from reconciliation funding for Goldman them, you mentioned the EW potential there curious if any of the areas you would call out is considerable opportunities in your portfolio tied to that and then how youre thinking about the bid process and timeline now that youre starting to see that.

Yeah, the, uh, the Acquisitions of azure and AI are are largely complete. Um, and in fact, uh, you know, we're finding what we've always found, which is when it's done. Well, it's increasingly difficult to tell them apart.

uh,

The money actually being spent.

Yes.

A bit about Golden Golden Dome.

And the public.

Don domain Youre going to hear a lot about sensors any factors in command a command and control.

But it's not just the ballistic threat. It's also threats from unmanned systems as well so.

John Mengucci: I don't have anything else to add. That's good, John. Thanks.

We're making it very clear that the Golden Dome concept is going to be completely reliant on early indications and warnings.

You know, there is some Azure timing, uh, John may want to comment some more on this related to, um, some of the activities, uh, between the Azure Legacy programs and Spectral. Um, but no, the, uh, they're very definitely meeting expectations. And we remain, uh, convinced of their strategic and financial value. Um, we're they're terrific fits, both of them.

Don't have anything else to add.

[Analyst]: Perfect. That's helpful. Maybe just want to follow up. You guys discussed the upside you're seeing from reconciliation funding for Golden Dome. You mentioned the EW potential there. Curious if any other areas you would call out as considerable opportunities in your portfolio tied to that, and how you're thinking about the bid process and timeline now that you're starting to see that money actually being spent.

It's good job. Thanks.

<unk> as I mentioned earlier, knowing far in advance when a threat is eminent and then given folks who have to defend against those.

Minutes and hours of time, we've actually coined that is left of launch.

Sort of our contribution to the entire Golden dome effort. There is not that money is spent on this yet.

John Mengucci: Yeah. I'll talk a little bit about Golden Dome. You know, out in the public domain, you're going to hear a lot about sensors and effectors and command and control. You know, it's not just a ballistic threat. It's also threats from unmanned systems as well. We're making it very clear that the Golden Dome concept is going to be completely reliant on early indications and warnings, meaning, as I mentioned earlier, knowing far in advance when a threat is imminent and then giving folks who have to defend against those minutes and hours of time. We've actually coined that as left of launch. It's sort of our contribution to the entire Golden Dome effort. There has not been money spent on this yet. General Guttlein is taking our activity responses. We've submitted our credentials on a few related proposals.

Perfect that's helpful and then maybe just want to follow up you guys discussed. You know the upside you're seeing from reconciliation funding for golden dome you mentioned the ew potential there. Uh Curious any other areas you would call out as considerable opportunities in your portfolio, tied to that and then how you're thinking about you know, the bid process and timeline now that you're starting to see that money actually being spent.

General Good line is taking.

RFP raised sponsors we submitted our credentials on a few related.

Yeah. Um, talk a little bit about golden, golden dome. Uh, you know, out in the public. Uh, don't don't don't domain. You're going to hear a lot about sensors and effectors, and commanded commanded control.

Pauses, but we're really looking at taking on all of our sensitive activities work and our all of our worldwide set of embedded sensors, which are in the thousands.

Um, you know, but it's not just a ballistic threat. It's also threats from unmanned systems as well. So,

To give a common operating picture and from there. Let's go work on that that non kinetic low collateral defeat of those of those threats, because clearly taken a hypersonic missile and using that to knockdown a drone or other missiles over the continental U S has a high collateral issue.

So we're looking at non kinetic low ones.

So we would expect funding to begin to ramp up I think we'll know better as we get to the end of the second quarter early third.

And we're very excited to be looking at that 150 billion central spend purely focused on defending this cut.

John Mengucci: We're really looking at taking all of our sensitive activities work and all of our worldwide set of embedded sensors, which are in the thousands, to give a common operating picture. From there, let's go work on that non-kinetic low collateral defeat of those threats. Clearly, taking a hypersonic missile and using that to knock down a drone or other missiles over the continental U.S. has a high collateral issue. We're looking at non-kinetic low ones. We would expect funding to begin to ramp up. I think we'll know better as we get to the end of the second quarter, early third. We're very excited to be looking at that $150 billion that you'll spend, purely focused on defending this country.

<unk>.

That's perfect. Thanks, so much guys.

Yes.

Our next question comes from the line of Louis Dipalma with William Blair. Please go ahead.

um, you know, we're making it very clear that the golden dome concept is going to be completely Reliant, uh, on early indications and warnings. Meaning, as I mentioned earlier, you know, knowing foreign Advance when a threat is imminent. And I'm giving folks who have to defend against those, um, you know, minutes and hours of, uh, time we've actually coined that as left of launch. Uh, it's sort of our contribution to the entire golden dome effort. Uh, there has not been money spent on this yet. Uh, General goo line is taking, um, uh, uh, our responses, we've submitted our credentials on a few related, uh, proposals, but we're really looking to taking all of our sensitive activities work and our all of our worldwide set of embedded sensors, which are in the thousands,

[laughter].

Louis you there.

Yes can you hear me.

Good morning.

Yes, good morning.

Following the positive.

POS manpack developments is khaki also well positioned for the U S. Army's modular missing tailored plan for small drowned with your FID and kick flip and unrelated to this how does the modular mission payload differ from.

Uh, to give a common operating picture. And from there, let's go. Work on that. That non-kinetic, low collateral defeat of those of those threats because clearly, you know, taking a Hypersonic missile and, and, you know, using that to knock down a, uh, drone or other missiles over the, with a continental US has a high collateral issue. So we're looking at non-kinetic low ones. Um, so we would expect funding to begin to ramp up. I think we'll know better, uh, as we get to the end of the second quarter, early third,

Um, and, uh, we're very excited to be looking at that $150 billion that you'll spend, you know, purely focused on defending this, um, country.

[Analyst]: That's perfect. Thanks so much, guys.

John Mengucci: Yeah, thank you.

George Price: Yeah.

That's perfect. Thanks so much, guys.

How the army is currently using spectral says on Puma or C 100 guns.

Yeah, thank you. Yeah.

Operator: Our next question comes from the line of Louis De Palma with William Blair. Please go ahead.

Yes, let me. Thanks, So look our entire I should say our entire a large portion of our EW portfolio really is modular mission payload try and for the rest of the audience, that's really taking common software.

Hi, next question comes from the line of Louie DePalma with William Blair. Please go ahead

John Mengucci: Louis, are you there?

[Analyst]: Yes, can you hear me?

Louie, are you there?

John Mengucci: Yeah, we hear you now. Good morning.

Yes, can you hear me?

[Analyst]: Good morning. Following the positive TLS Manpack developments, is CACI also well positioned for the U.S. Army's modular mission payload plan for small drones with your Spectral SIG and Kickflip? Related to this, how does the modular mission payload differ from how the Army is currently using Spectral SIG on Puma or C100 drones? Thanks.

No, we hear you now. Good morning.

Our capabilities and putting that on different form form factors can be looking for wireless signals that can be looking for a land based I know you've been looking at missiles say boats service there is a plethora of.

Good morning. Um, following the the positive

RF out there around around the globe.

Program that Louis mentioned as we.

We already deliver a number of modular mission payloads to <unk> vendors folks, who build drums and theyre looking for an overall package they have a.

John Mengucci: Yeah, Louis, thanks. Look, a large portion of our electronic warfare portfolio really is modular mission payloads, right? For the rest of the audience, that's really taking common software capabilities and putting that on different form factors. It could be looking for wireless signals. It could be looking for land-based signals. It could be looking at missile signals. There's a plethora of RF out there around the globe. The program that Louis mentions is, we already deliver a number of modular mission payloads to counter-UAS vendors, folks who build drones, and they're looking for an overall package. They have a drone that's size X that can carry weight Y. What kind of features do we have? What type of devices can we put into those unmanned systems? We have delivered those. We have delivered to the Puma and a number of other ones, either directly to the U.S.

Payload um defer from how the Army is currently using spectral Civ on on Puma or c100 drones.

They have a drone this size X that can carry weight why what kind of features do we have what type of devices can we put in into those two.

To those.

Unmanned systems. So we have delivered those we have delivered to the Puma and a number of other other ones either directly to United States Army and other Dod and agencies are all be gone directly to a drone builders. So I believe that market will only continue to grow <unk>.

That's what we think. So, look our entire uh, I shouldn't say our entire um a large portion of our ew portfolio really is modular mission payloads, right? And for the rest of the audience, that's really taking uh, common software. Um,

And why we got into this market in a number of years back. That's the reason why we position this company to be able to deliver either under our firepower 12 are far apart athene and allows not only the U S government, but OE oes.

Oems of.

Of drones and alike to easily be able to.

By our systems and have them ready and also allow us to modify those as the spread changes so.

That's what we've been up to.

That makes sense.

How is the Navy spectral program been progressing.

John Mengucci: Army and other U.S. Department of Defense agencies, or we've gone directly to a drone builder. I believe that market will only continue to grow. That's the reason why we got into this market a number of years back. It's the reason why we positioned this company to be able to deliver either under a FAR Part 12 or FAR Part 15. It allows not only the U.S. government, but OEMs of drones and the like to easily be able to buy our systems and have them ready and also allow us to modify those as the threat changes. That's what we've been up to.

Maybe structural program is going very well, Jeff talk about Azure Azure has the precursor programs.

Uh, capabilities and putting that on different form form factors, uh, it could be looking for wireless signals. It could be looking for a land base. They know if they're looking at missile signals, there's there's a plethora of, um, RF out there around around the globe, the uh program that Louie mentions is, uh, we already deliver a number of modular mission payloads to County as vendors who build drums, and they're looking for an overall package. You know, they have a, uh, they have a drone that's size X that can carry weight. Why, what kind of features do we have? What, uh, type of devices can we put in into those? Uh, to those um, uh, unmanned systems. So we have, uh, delivered. Those we have delivered to the puma and a number of other other ones. Either directly to the United States Army and other DOD, agent agencies, or we've gone uh directly to a drone.

And we worked very very closely with the Navy.

To make certain that we could tie in some of the azure deliveries.

In a manner that tend to support the spectral delivery so on the Azure Azure front.

Yeah.

There were some deliveries that have been pushed out to it so that it can be more closely integrated with the spectral ones then.

Builder. So I believe that market will only continue to grow. Uh, it's the reason why we got into this Market a number of years back. It's the reason why we position this company to be able to deliver either under a far Part 12 or far part 15 and allows not only US Government but all we owe. Oh oh oh oh EMS of um

The next phase for spectral is a January February timeframe, where that program will.

Get through its mile milestone C and that will freeze the design will be able to begin deliveries as we've always mentioned during calendar year 2020.

Of drones and the like to easily be able to, um, buy our systems and, uh, have them ready and also allow us to modify those as the threat changes. So,

Um, that's what we've been up to.

[Analyst]: That makes sense. How has the Navy Spectral program been progressing?

Thanks and how has the Navy spectral program been progressing?

John Mengucci: Navy Spectral program is going very well. Jeff talked about Azure. You know, Azure has the precursor program, and we worked very, very closely with the Navy to make certain that we could time some of the Azure deliveries in a manner that then support the Spectral delivery. On the Azure front, you know, there were some deliveries that have been pushed out so that could be more closely integrated with the Spectral ones. The next phase for Spectral is a January-February time frame where that program will get through its milestone C, and that will freeze the design. We'll be able to begin deliveries, as we've always mentioned, during calendar year 2026. Thanks, Louis.

Thanks, Luke thanks.

Thanks, everyone.

Yeah.

Our next question comes from the line of John Engel.

Uh maybe Spectrum Program is going very well. Jeff talked about Azure, you know, Azure has the precursor program.

With Baird. Please go ahead.

Good morning, John Jeff and George.

Thats on a strong set of results.

I wanted to talk a little bit about just the international opportunity I think it's not something that you.

Maybe highlight a lot, but just given with native budgets are going they are about three 5% of GDP and then there is the additional one 5% bonus on top of that just sort of this.

Clearly capability gaps.

In the EU and in Europe as a whole.

Is there anything you can highlight where maybe areas that you guys are targeting in the next couple of years.

Yes.

Thanks Luke.

And we worked very, very closely with the Navy uh, to make certain that we could time some of the Azure deliveries, uh, in a manner that then support the spectral delivery. So on the Azure Azure front, uh, you know, there there were, there were some, um, deliveries that have been pushed out to so that can be more, um, closely integrated with the spectral ones. Uh, the next, uh, phase for spectral is a January, February time, time frame where, that program will, um, get through its mi. Mi don't see and that will freeze. The design will be able to, uh, begin deliveries. As we've always mentioned during calendar year, uh, 2026.

[Analyst]: Thanks, Connor. Thanks, everyone.

I've said many times that the world is a dangerous dangerous place and I think that the Ukraine was a real wakeup call. It definitely raised the urgency level around defense and National security globally.

Thanks. Thanks everyone.

Operator: Okay. Our next question comes from the line of Jan-Frans Engelbrecht with Baird. Please go ahead.

Hey, our next question comes from the line of Jan in

George Price: Morning, John, Jeff, and George. Congrats on a strong set of results. I wanted to talk a little bit about just the international opportunity. I think it's not something that you maybe highlight a lot, but just given the way the NATO budgets are going, you know, we're now about the 3.5% of GDP, and then there's an additional 1.5% bonus on top of that. There's clearly capability gaps in the EU and in Europe and NATO as a whole. Is there anything you can highlight where maybe areas you guys are targeting in the next couple of years?

I would say, mostly in the electronic warfare area and we're in that market not by accident slipped by a very very very solid planning.

So as you as you mentioned Theres, many allies are going to be expanding their defense budgets, we deliver technology to a number of five countries today and I've been on this slow reveal of what we're doing in the international front.

Good morning John Jeff and George uh, congrats on a strong set of results. Um, I wanted to talk a little bit about just the international opportunity. I think it's not something that you maybe highlight a lot, but just given where NATO budgets are going, you know, we know about the 3.5% of GDP and then there's the additional 1.5%, bonus on top of that, just sort of

Solely because we wanted to be very cautious or very very careful because you can spend a lot of money on the international front very.

John Mengucci: Yeah. John, thanks. Look, I've said many times that the world is a dangerous, dangerous place, and I think that the Ukraine was a real wake-up call. It definitely raised the urgency level around defense and national security globally, and I would say mostly in the electronic warfare area. We weren't in that market, not by accident, but by very, very, very solid planning. As you mentioned, there's many allies that are going to be expanding their defense budgets. We deliver technology to a number of five countries today. I've been on this slow reveal of what we're doing on the international front solely because we want to be very cautious and very, very careful because you can spend a lot of money on the international front very, very quickly.

Very very quickly since we last talked we've expanded our sales to 15 NATO countries.

There's clearly capability gaps you know in in the EU and in Europe and NATO as a whole and is there anything you can highlight where maybe areas you guys are targeting in the next couple of years?

And we continue to assess demand single in seven other countries Eastern Europe.

Allies are increasingly interested in our singing our EW and our and our counter UAS.

Check.

I will tell you that our initial focus was on technologies with existing U S government and <unk> sales following the Fms path. The number of countries that we have added have now gone to direct direct commercial sales.

Yeah, in France. Thanks look. Uh, I, I, I've said many times with the world as a dangerous dangerous place and I think that the Ukraine was a real wake-up call. It definitely raised the urgency level around, uh, defense and National Security globally. Uh, and I would say mostly in the electronic warfare area, uh, and we're in that market, not by accident, but by, uh, a very, very, very solid planning,

I have only temporary and that.

I should say temporary not only by the fact that it's true a lot of European nations are going to be spending far more money, but those same European nations are going to look to spend those that that money within their borders. So our next step is to understand what relationships, we need so we either license or we co produced some.

So uh as you as you mentioned there's many allies are going to be expanding their defense budgets. Uh we deliver technology to a number of 5i countries today and I've been on this slow reveal of what we're doing in the international front.

John Mengucci: Since we last talked, we've expanded our sales to 15 NATO countries, and we continue to assess demand signal in seven other countries. Eastern Europe allies are increasingly interested in our SIG and our EW and our counter-UAS tech. I will tell you that our initial focus was on technologies with existing U.S. government and U.S. Department of Defense sales following the FMS path. The number of countries that we have added have now gone to direct commercial sales. I'm tempering that only by the fact that it's true a lot of European nations are going to be spending far more money, but those same European nations are going to look to spend that money within their borders. Our next step is to understand what relationships we need, so we either license or we co-produce some of our tech here and then add the applicable software baseline to those products.

Our tech here and then add the applicable softer baseline to those products, so still a long way too.

There, but it's a market that over the last 90 days since we last spoke and it has truly opened up to us.

Uh, solely because we want to be very cautious and very, very careful, uh, because you can spend a lot of money on the international front, uh, very very quickly. Uh, since we last talked, we've expanded our sales to 15 NATO countries and we continue to assess the man, single in 7 other countries uh Eastern Europe. Uh allies are increasingly interested in our Sig, in our ew, and our and our uh counter uas.

Okay.

Follow up if you could just comment on that.

The slide deck talked about the M&A pipeline, expanding just any areas that you think that.

We'd sort of be inescapable goodwill.

Just any comment on M&A just in the environment.

Jan France as you know Todd.

Talk many times before and there is no departure from this R. R.

Our process and approach, it's very much GAAP driven.

DOD sales following the FMS path. The number of countries that we have added uh, have now gone to direct Direct commercial sales. Um, and I've only temporary in that on. I should say I'm I'm trampling that only by the fact that it's true. A lot of European nations are going to be spending far more money but those same European nations are going to look to spend those that that money within their borders. So you know, our next step is to understand what relationships do we need.

The opportunities that we see in the pipeline are generally a little bit more technology and they are expertise.

John Mengucci: Still a long way to go there, but it's a market that, over the last 90 days since we've last spoken, has truly opened up to us.

Little bit more focused on.

Sensors as well as <unk>.

Not surprisingly software applications to co around those sensors and things that kind of fit nicely into our <unk>.

George Price: Thank you, John. Let me just do a quick follow-up. If you could just comment on, you know, the slide deck talks about the M&A pipeline expanding, just any areas that you think that would sort of be a niche capability that you could fill. Just any comments on M&A in the environment. Yeah. Yeah, I'm Frans. As you know, we've talked many times before, and there's no departure from this. Our process and approach is very much gap-driven. The opportunities that we see in the pipeline are generally a little bit more technology than they are expertise, a little bit more focused on sensors as well as, not surprisingly, software applications that go around those sensors and things that kind of fit nicely into our sweet spot. We are seeing a little bit of life in the pipeline, and we look forward to developing a few of these ideas.

So we either license or we uh, co-produce some of our Tech here and then add the uh, applicable software Baseline to those products. So still a long way to um, go there. But it's a market that, you know, over the last 90 days since we've last spoken, uh, it has truly opened up to us.

Into our sweet spot. So we are seeing a little bit of life in the pipeline.

We look forward.

To developing a few of these ideas very early stage at this point, but.

We will.

It's an active area of interest for us.

Well, thanks John, let me take a quick follow up. If you could just comment on, you know, the the slide deck talks about the m&a pipeline expanding, just any areas that you think that would sort of be in this capability that you could fill, um, just any comments on m&a just on the environment. Yeah. Uh yeah, on France. As you know, uh we've talked many times before and there's no departure from this our our

Great. Thanks for taking the question.

Operator, we have time for one more question.

Yeah.

Yes. Our final question comes from the line of Noah <unk> with Goldman Sachs. Please go ahead.

Our process and approach is very much Gap driven. Um, the opportunities that we see in the pipeline, uh, are generally a little bit more technology than they are expertise. A little bit, more a focused on uh, sensors as well as,

No are you there.

Got it.

Line is open Hey can you hear me now yes.

Yes, we can.

Yes.

Got to check my headset.

John.

Spoke about.

George Price: Very early stage at this point, but it's an active area of interest for us.

Are you alluded to kind of everyone at the USA, having counter UAS.

It was like if you did 15 meetings <unk> had it in turn led with it which is pretty unusual is the.

John Mengucci: Great. Thanks for taking the question.

Not surprisingly software applications that go around Those sensors and things that kind of fit nicely into our, uh, into our sweet spot. So, we are seeing a little bit of life in the pipeline and, um, we're, uh, you know, we, we look forward to, to developing a few of these ideas very early stage at this point. But, you know, we'll, uh, it's an active area of interest for us.

Thanks for taking the question.

[Analyst]: Operator, we have time for one more question.

Funding coming down the pipeline that significant and can it move the needle for companies much larger than yours.

Operator. We have a time for 1 more question.

Operator: Yes. Our final question comes from the line of Noah Popanek with Goldman Sachs. Please go ahead.

And I know that you didn't want to quantify the forward on that but can you give us the baseline of how much of the current revenue base is counter drone.

Yes, our final question comes from the line of Noah papanack. With Goldman Sachs. Please go ahead.

[Analyst]: Noah, are you there?

No, are you there?

Yes, I'm going to stick with about $2 billion of our entire portfolio is in EW place, which does include counter counter drone and.

Operator: Noah, your line is open.

[Analyst]: Hey, can you hear me now?

John Mengucci: Yes, we can, Noah. Thanks.

No way your line is open. Hey, can you hear me now?

[Analyst]: Got to check the headset. John, you spoke about, or you alluded to kind of everyone at AUSA having counter-UAS, and it was like if you did 15 meetings, 12 had it and 10 led with it, which is pretty unusual. Is the funding coming down the pipeline that significant? Can it move the needle for companies much larger than yours? I know that you didn't want to quantify the forward on that, but can you give us the baseline of how much of the current revenue base is counter-drone?

And we delivered to both Dod and the intelligence community and as I shared.

Got to check the headset. Um,

A large number of.

NATO countries.

Back to the fact that the first first part, yes, I think it's a burgeoning market.

Yes.

I think you have to look at two different streams of funding Noah right. One is.

John you you you spoke about um, are you alluded to kind of everyone at a USA having counter uas? And it was like if you did 15 meetings, you know, 12 had it and 10 Led with it. Um, which is pretty unusual is the

The $150 billion on Golden domes, some portion of that and I would tell you it's.

It's multiples of billions that.

That will be spent on a layered defense that's going to have to defend against unmanned systems and frankly unproved systems are a very different beast traditional radar is not going to find that it's going to look like a bird.

John Mengucci: I'm going to stick with about $2 billion of our entire portfolio is in the EW place, which does include counter-drone. We deliver it to both DOD and the intelligence community, and as I shared, a large number of NATO countries. Back to the first part. Yes, I think it's a burgeoning market. I think you have to look at two different streams of funding, Noah, right? One is the $150 billion on Golden Dome, some portion of that. I would tell you it's multiples of billions that will be spent on a layered defense that's going to have to defend against unmanned systems. Frankly, uncrewed systems are a very different beast. Traditional radar is not going to find that. It's going to look like a bird. It takes new technology. On top of that, we're not in a wartime in somebody else's zone where the U.S. is assisting.

Funding coming down the pipeline that significant that and and can it move the needle for companies much larger than yours. And I know that you didn't want to quantify the forward on that. But can you give us the Baseline of how much of the current Revenue base is counter drone?

So it takes new technology, and then on top of that we're not in.

And award time, and somebody else's zone with the U S is assisting will be defending this nation.

We're also going to have events like the World Cup, we're going to have the Olympics, we're going to have so many more things and that threat vector Noah is up materially.

You can look at common new sources that the threat vector for other countries potentially drug cartels and others.

Yeah, I'm I'm going to stick with about 2 billion dollars of our entire portfolio is in the ew place. Which does include counter. Count counter drone uh and we deliver it to both DOD and the intelligence um community. And as I shared um a large number of um uh NATO countries uh on back to the back to the first first part. Yes, I think it's a burgeoning market. Um I think you have to look at 2 different streams of funding. Noah, write 1 is

Using using drones.

So.

I think there is there is there is a market growth that we're all look watching it will be billions and billions of dollars worth of worth of Golden Dome funding and then if you look at the DHS additional funding that's going to work on the border security side.

The 150 billion dollars on golden dome, some portion of that and I would tell you, it's it's it's multiples of billions.

That will be spent on a layered defense. That's going to have to defend against unmanned systems. And frankly uncrewed systems are a very different Beast. Traditional radar is not going to find that. It's going to look like a bird.

And today, there is one kilometers systems that find group one drones.

MRO threats are going to be.

John Mengucci: We'll be defending this nation. We're also going to have events like the World Cup. We're going to have the Olympics. We're going to have so many more things. That threat vector, Noah, is up materially. You can look at common news sources that the threat vector for other countries, potentially drug cartels and others, using drones. I think there's a market growth that we're all watching. It will be billions of dollars worth of Golden Dome funding. If you look at the DHS additional funding, that's going to work on the border security side. Today, there's one-kilometer systems that find Group 1 drones. Tomorrow's threats are going to be, we need 75 or 100 kilometers to give us minutes of time to go defeat against that. That's going to be class 1 through class 5 drones.

Need 75, or 100 kilometers to give us minutes, such time to go defeat against that and that's going to be class one through class five drones. So yes, I think that the rest of the industry is waking up to this market. My only earlier comment around this height is we went through a year and a half period of.

Okay, so it takes new technology and then on top of that, we're not in a, in a wartime in somebody else's Zone with the US is assisting, we'll be defending this nation.

Of AI hype and I feel as though we're going to go through another year and a half of counter UAS hype. So at the end of the day. The government is going to go with systems that have been deployed where combatant commander swear by by the fact that they want one of what we have.

It's really allowing funding to catch up to that and then of course, you do well know Noah government shutdown.

Going to sort of slow that down as well so I think it's a burgeoning market.

We've been in it for a couple of decades, I think we understand it very very well we have the right partnerships and we're always looking for additional capabilities that we can add to our system and with and we build our latest system on our own nickel right. So we're not dependent on U S government IRA dollars to advance what we have because I do think that the.

John Mengucci: Yes, I think that the rest of the industry is waking up to this market. My only earlier comment around this hype is, we went through a year and a half period of AI hype, and I feel as though we're going to go through another year and a half of counter-UAS hype. At the end of the day, the government's going to go with systems that have been deployed where combatant commanders swear by the fact that they want one of what we have. It's just really allowing funding to catch up to that. Of course, you do well know, Noah, government shutdown is going to sort of slow that down as well. I think it's a burgeoning market. We've been in it for a couple of decades. I think we understand it very, very well. We have the right partnerships.

Is that real and the government asking us to.

Look at this is harder so.

Very hard to Montana, there I appreciate the detail there if I can.

Just ask one more question just.

To better understand a little bit shutdown impact.

And shape of the year on year can you shed a little more light on how the government.

Goes through deeming what is essential that the comments you made there at the beginning of the call are interesting I thought it would've been more.

Missed work in your <unk> that just made up before the end of the year, but it sounds like that's not the case and I think.

John Mengucci: We're always looking for additional capabilities that we can add to our system. I'll end with, we built our latest system on our own nickel, right? We're not dependent on U.S. government, you know, IRAD dollars to advance what we have because I do think that the threat is that real. The government's asking us to look at this as harder. Very large market.

And today there's 1 kilometer systems that find Group 1 drones, you know, tomorrow's threats are going to be uh, we need 75 or 100 kilometers to give us minutes of time to go defeat against that that's going to be class 1 through class 5 drones. So yes, I think that the rest of the industry is waking up to this Market. My only earlier comment around this hype is, you know, we went through a year and a half period of of AI hype and I feel as though we're going to go through another year and a half of of you know, counter uas hype. So at the end of the day, the government's going to go with systems that have been deployed. We're a combatant commander swear by by the fact that they want 1 of what we have. Uh, and it's just really allowing funding to catch up to that. And then, of course, you do, well know Noah government. Shut down, is is going to sort of slowed that down as uh well. So I think it's a purging Market. Um we've been in it for a couple of decades. I think we understand it very very well. We have the right part.

Historically <unk> had a <unk>, that's pretty often flat sequentially versus <unk> and then a back half that's up.

Of Partnerships. And we're always looking for additional capabilities that we can, uh, add to our system. How to end with, and we built our latest system on our own nickel.

Mid to high single versus the first half is that still the shape of your 26.

Yes broadly this is Jeff now probably it is.

Right? So we're not dependent on US Government. You know, Ira dollars to advance what we have because I do think that the uh, threat is that real and the government's asking us to uh, you know, look at this this harder. So

[Analyst]: I appreciate the detail there. If I could just ask one more question, hoping to better understand a little bit shutdown impact and shape of the year. Can you shed a little more light on how the government goes through deeming what is essential? The comments you made there at the beginning of the call are interesting. I thought it would have been more, you know, missed work in your Q2 that's just made up before the end of the year, but it sounds like that's not the case. I think, historically, you've had a Q2 that's pretty often flat sequentially versus Q1, and then a back half that's up, you know, mid to high single % versus the first half. Is that still the shape of your 2026?

With the caveat that I mentioned earlier about that step up will be between first half and second half we expect to be less pronounced this year than it has been in prior years.

There, appreciate the detail there. Um, if I could just ask 1 more question, just

Given the strong first quarter.

Which largely was comprised of items that.

It did not change our view of the year.

hoping to better understand a little bit, shut down impact, and, and shape of the year can can you shed a little more light on on how the government goes through deeming? What is essential that the comments you made there at the? Beginning of the call are interesting. I I thought it would have been more

So that's kind of a qualitative way to say quantitatively. The first half second half step up will not be as pronounced as it has been in the past.

I'll also throw in there if you look at the last shutdown rate was 18 19, if I remember right. Some of that was December to January rates you had.

George Price: Yeah. Broadly, this is Jeff, Noah. Broadly, it is. With the caveat that I mentioned earlier about that step up will be between first half and second half, we expect to be less pronounced this year than it has been in prior years, given the strong first quarter, which largely was comprised of items that did not change our view of the year. That's kind of a qualitative way to say quantitatively, the first half, second half, step up will not be as pronounced as it has been in the past.

You know, missed work in your 2q that's just made up before the end of the year but it sounds like that's not the case. And I think it historically, you've had a 2q that's pretty often flat sequentially versus 1 q and then a back half, that's up you know mid to high single versus the first half is that still the shape of your 26

A lower level of folks because you were around Christmas time.

Yeah, broadly, this is Jeff know a broadly it is. Um

It's different for our company between the 18 19 shutdown of where we are now is we've got far more long term type programs that are being developed we have far more programs that we're investing ahead of customer need and we're putting the enhancements into that software baseline we're selling them.

You know, with the with the caveat that I mentioned earlier about that, step up will be between first half and second half. We expect to be less pronounced.

Purchase orders so that has a very different funding schedule to it it doesn't take folks just sit around and do it down a down select they can buy these things off of a GSA approved price price list. So there are a lot of.

This year, than it has been in Prior years, given the strong first quarter, uh, which largely was comprised of items that that, uh, that did not change our view of the year.

Differences that leads to this sort of de Minimis impact and then you also closed up with that we can make a lot of these hours up.

John Mengucci: Yeah, Noah, I'll also throw in there, if you look at the last shutdown, right, was 2018, 2019. If I remember right, some of that was December to January, right? You had a lower level of folks because you were around Christmas time. What's different for our company between the 2018, 2019 shutdown and where we are now is, we've got far more long-term tech programs that are being developed. We have far more programs that we're investing ahead of customer need, and we're putting enhancements into that software baseline. We're selling them on a purchase order. That has a very different buying schedule to it. It doesn't take folks to sit around and do a down select. They can buy these things off of a GSA-approved price list. There are a lot of differences that lead to this sort of de minimis impact.

If we're at a help desk and nobody needs help now I'm not going to be more help later, so clearly that doesn't get made up that's your traditional government services work.

But the vast amount of this are.

Work that will have to be done and every agency back to your initial comment every agency is going through their own process I wish I had that rubric that told us what was.

Michelle essential and not but frankly, if I'm sitting on the government side that sort of changes to whether we are defense of the homeland different than other things that are out there drilling, but all in all really good book of business.

Right now as Jeff and Jeff and I look at the impacts how we can get those covered and we.

We believe we are right at quarter, one point to having an outstanding year.

John Mengucci: You also closed up with, you know, we can make a lot of these hours up. If we're at a help desk and nobody needs help now, they're not going to need more help later. Clearly, that doesn't get made up. That's your traditional government services work, but the vast amount of this is work that will have to be done. Every agency, back to your initial comment, every agency is going through their own process. I wish I had that rubric that told us what was mission essential and not. Frankly, if I'm sitting in the government side, that sort of changes too, right? Whether we have defense of the homeland different than other things that are out there going. All in all, really good book of business right now with Jeff.

So, you know, that's kind of a qualitative way to say quantitatively the first half. Second half, uh, Step Up will not be as pronounced as it has been in the past. Yeah. No, I'll also throw in there, if you look at the last shutdown, right was 1819. If I remember, right? Some of that was December to January, right? So you had, um, a lower level of folks, because you were around Christmas time. What's different for our company between the 1819 shutdown? And where we are now is and we've got far, more long-term tech programs that are being developed. We have far more programs that we're investing in. Had a customer need and putting enhancements into that software Baseline. We're selling them on a, on a purchase order, so that has a very different buying schedule to it, you know, it doesn't take folks to sit around and do it down down down and select. They can buy these things, uh, off of a, uh, GSA approved Priceless. So there are a lot of, a lot of, uh, differences that leads to this sort of diminishment impact and then you also closed up with, you know, we

Okay.

Sure.

That we can make a lot of these hours up.

Tom I will turn the call back over to John <unk> for closing remarks.

Well, thanks, Tina and thank you for your help on today's call I would like to thank everyone, who dialed in or listened to the webcast for their participation.

Uh, if we're at a help desk and nobody needs help. Now, they're not going to be more help later. So clearly that doesn't get made up, that's your traditional government services work.

Many of you will have follow up questions. So Jeff Mclaughlin towards price and Jim Sullivan are available. After today's call. Please stay healthy on my best to you and your families. This concludes our call. Thank you and have a great day.

John Mengucci: Jeff and I look at the impacts and how we can get those covered, and we believe we're right at the Q1 point to having an outstanding year.

Uh but the vast amount of this are um, you know, work that we'll have to be done and every agency back to your initial comment. Every agency is going through their own process. You know, I wish I had that rubric that tells us what was uh, Mission essential and not. But frankly, if I'm sitting in the government side, that sort of changes to write whether we have defense of the Homeland, different than other things that are out there going. But all in all really good books of business. Um, right now is Jeff and Jeff. And I look at the impacts. Now, we can get those covered and, uh, we believe we're right at the quarter. 1 point to have an outstanding year.

Operator: Okay. At this time, I will turn the call back over to John Mengucci for closing remarks.

John Mengucci: Thank you, Tina, and thank you for your help on today's call. I'd like to thank everyone who dialed in or listened to the webcast for their participation. We know that many of you will have follow-up questions, so Jeffrey MacLauchlan, George Price, and Jim Sullivan are available after today's call. Please stay healthy, and my best to you and your families. This concludes our call. Thank you and have a great day.

And at this time I will turn the call back over to John M**** for closing remarks. Well, thanks Tina, and thank you for your help on today's call. We'd like to thank everyone who dialed in or listened to the webcast for their participation. We know that many of you will have follow-up questions so Jeff McLaughlin George price and Jim Sullivan are available. After today's call, please stay healthy and all my best to you and your families. This concludes our call. Thank you, and have a great day.