CACI at Cantor Fitzgerald: Strategic Resilience Amid Challenges

On Tuesday, 11 March 2025, CACI International Inc (NYSE: CACI) participated in the Cantor Fitzgerald Global Technology Conference, highlighting its strategic resilience in the face of government efficiency impacts. Led by CFO Jeff McLaughlin and CTO Jason Bales, the discussion centered on CACI’s strong market position and future growth potential, despite a slight dip in stock value.

Key Takeaways

• CACI expects minimal disruption from government efficiency initiatives, reaffirming financial guidance and long-term targets.
• The company is strategically focused on sectors with bipartisan support, such as signals intelligence and counter-UAS.
• CACI is the only U.S. manufacturer of space-qualified optical communication terminals meeting SDA specifications.
• A flexible approach to capital deployment prioritizes strategic acquisitions and share repurchases.
• CACI projects $1.6 billion in free cash flow over the next three years, with potential upside.

Financial Results

• Revenue: Anticipated to reach approximately $8.5 billion for the current year.
• Backlog: 95% of fiscal 2025 revenue is secured, with 3% from recompete contracts and 2% from new wins.
• EBITDA Margin: Targeting a mid-11% margin over the next three years.
• Free Cash Flow: Projected at $1.6 billion, with deployment representing potential upside.
• Cost Structure: Comprises 60% cost-type, 30% fixed price, and 10% time and material contracts.
• Share Repurchases: Ongoing, with $337 million available from an earlier authorization.
• Leverage: Aiming for a sustained leverage of 2.5 to 3 times trailing EBITDA.

Operational Updates

• Minimal Disruption: Government efficiency impacts are minor, affecting only $1 million in revenue annually.
• Space Business: Focus on contested domains, including analytics of overhead imagery and optical communication terminals.
• Optical Comm Terminals: Expecting a 6 to 8 times increase in units delivered compared to the previous year.
• Counter-UAS: Active in counter-drone activities globally, focusing on drones from Group one through five.
• Open Architecture Systems: Emphasis on software-defined solutions for rapid capability deployment.

Future Outlook

• Long-Term Targets: High single-digit revenue growth, mid-11% EBITDA margin, and $1.6 billion free cash flow over three years.
• Government Budgets: Focus on areas with enduring need, less dependent on top-level budget decisions.
• Supplemental Budget: Anticipating a $300 billion increase in defense and Homeland Security budgets over two years.
• Capital Deployment: Flexible and opportunistic, focusing on strategic acquisitions and share repurchases.
• Acquisition Focus: Prioritizing technology and customer footprint gaps, with recent acquisitions like Azure Summit.

Q&A Highlights

• Government Efficiency Impacts: Minimal disruption, with quick customer defense of mission-critical activities.
• Space Business: Significant production ramp-up in optical comm terminals.
• Counter-UAS: Positioned for homeland defense with a long history in counter-drone activities.
• Cost-Plus Exposure: Managing conversion to fixed price contracts, focusing on outcome-based performance.
• Open Architecture Systems: Emphasizing flexibility and integration of third-party capabilities.

In conclusion, CACI remains confident in its strategic positioning and financial outlook. For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - Cantor Fitzgerald Global Technology Conference:

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: right. We’re back with Cantor’s Global Technology Conference for our Government Technology and Space track. I’m Colin Canfield, Cantor’s Government Technology and Space Analyst. We have the pleasure today of having Jeff McLaughlin, CACI’s CFO, as well as Jason Bales, CACI’s CTO. So it should be a good conversation today.

Thank you for joining us.

Jeff McLaughlin, CFO, CACI: Great. Thank you. Of course.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: So I assume all the investors have read the forward looking statements, we’ll get right into the questions. So just first and foremost, as we think about the latest government efficiency impacts in the business, how are those impacts tracking in the quarter? And how has that impact varied by CACI’s end market?

Jeff McLaughlin, CFO, CACI: Yes. So let me first say that as we have said several times over the last couple of weeks in similar kind of venues, the disruption to our business has really been minimal. We had a couple of contracts that were early on the Doge board. Two, one of them turned out to be over and the other one was nearly over, but was a very low level of activity, $1,000,000 or so a year of revenue. We did have a number of contracts on the GSA list.

Eight of them were in the relevant NAICS codes at the risk of geeking out for everybody. Those are the codes, types of contracts that the Doge activity is focused on. Two of them accounted for about 90% of the volume of the eight. They were both mission critical activities that were kind of quickly defended by our customers and removed from consideration. So we’re really only really minimally disrupted by this and don’t see anything at this point that gives us pause relative to our guidance for the year or the three year targets that we established last fall.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Brilliant. Brilliant. And if we think about the moving pieces within this year’s guidance outlook, if you can maybe talk us through kind of what are the swing factors, the sensitivities, the big moving pieces that you’re assuming?

Jeff McLaughlin, CFO, CACI: Yes. So for the current year, again, it’s going to be we expect everything to be fairly uneventful. About 95% of our fiscal year twenty twenty five revenue at this point is in backlog. About 3% of that is recompete or 3% in addition is recompete, meaning that about 98%, we have a really clear view on to the extent there’s any delays or any disruptions that recompete sort of continues only about 2% to win, which is a relatively small amount at this point in the year. Couple of other wildcards that we’ve gotten a few questions about, continuing resolution, our guidance for the year accommodates a CR.

So a full year CR would also be a non event. And again, we don’t see anything that really gives us any pause for the year.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Got it. Got it. You mentioned before just no disruption in terms of your longer term targets. If you can maybe just for the investors in the room and as well as on the webcast refresh us around what the long term targets are? Thanks.

Jeff McLaughlin, CFO, CACI: Sure. So what we said last fall on our Investor Day was that we foresaw over the next three years, high single digit revenue growth, mid 11% mid 11% EBITDA margin and $1,600,000,000 of free cash flow. And significantly, none of that free cash flow the deployment of none of that free cash flow is contemplated in the revenue and margin guidance. So that represents upside to the targets that we laid out.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Right. Turning over to company exposure, if we want to maybe talk a little bit about kind of the buzzier topics, maybe update us on the size of your space business today, how large the relative revenues across geospatial analytics, satellite manufacturing and satellite communications? And then maybe talk about some other stuff too.

Jeff McLaughlin, CFO, CACI: Yes. Jason will want to expand on this, but a few overview items about our space business. We’re really positioned in our space business to think about it in terms of a contested domain. So if you think about analytics of overhead imagery, think about optical comm terminals, those are really the activities that we’re focused on and they’re related both to security and also processing and analyzing intel data. We’re not probably going to we won’t be giving any specific sort of size references to this particular part of the business other than to say that we’ve kind of previously disclosed we have some ramp ups in the optical comm terminal production.

We expect to be six to eight times units delivered relative to last year. And it’s an important and growing part of the business. But I’m going to defer to Jason to talk a little bit more about some of the specifics of the things we do in that area.

Jason Bales, CTO, CACI: Yes. Thanks, Jeff. So I think in terms of growth in those areas, the photonics area is still a big place for us that we’re putting in, but continue to put investments and moving. We have relationships with SDA, with NASA, Space Force, where we’re developing to put those optical communications up and proliferate up in space. Continue to growth inside that areas in the counter space domain too.

We do a lot of play in, like Jeff said, in the overhead kind of analytics of imagery data, but also in the mission management of the space based assets and extending that to the counter space domain. We’ve actually taken a lot of our software from other domains and moved it in to create stuff like a remote modular terminal, which was an orbit space for us for the counter space area. So a lot of growth in that

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: domain for us. Sure. And maybe digging into that a little bit, I think the dynamics that have been occurring within the space supply chain have been challenging. And I think that a lot of people have kind of worked to gain confidence that things like Linx can scale. So maybe you just want to talk about kind of digging a little bit deeper into that, kind of how you think about scaling that business and the level of kind of manufacturing supply chain pull ahead and the like.

Jeff McLaughlin, CFO, CACI: Yes, we are in that area, as I mentioned, ramping up production. Significant to note that we are the only U. S. Manufacturer of space qualified optical comm terminals to the SDA’s spec. And we have done both air to ground, air to air and what’s the third one?

Air to air, air to ground and

Jason Bales, CTO, CACI: Underground? Well, space to space.

Jeff McLaughlin, CFO, CACI: Space to interspace, right. Sorry. So we’re the only one we have demonstrated interoperability in all three of those required domains and the only one with U. S.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Manufacturing. Got it. And then maybe if you can provide a similar context around the level of kind of directed energy exposure, CUAS, for people in the audience that’s counter uncrewed air systems. That would be just kind of helpful in thinking about where you think the real growth shoots are in that business. Yes.

Jeff McLaughlin, CFO, CACI: I’m going to let Jason talk about counter UAS, but it’s a very important part of our portfolio.

Jason Bales, CTO, CACI: Yes. I mean, the key there, right, is with counter drones. We’ve been doing counter drone stuff for over two decades with the full group. If you think of the size of the drones from the small stuff you buy at Best Buy to the nation state stuff whose wingspan is the size of this room, right? That’s Group one through five.

And we’ve been doing the full group one through five for over two decades. We’ve got thousands of systems deployed all over the world, doing national defense in that space. And we see a lot of interest nowadays in bringing that back to the homeland, right, with Iron Dome and now Golden Dome in that space. So we’re well positioned to pivot towards homeland defense, whereas historically we’ve been kind of world defense on that side with the nation there. So it’s an important part of our field.

I would like to say we’ve also built not just the systems themselves, but also the backbone that disseminates that information to the warfighter for near real time intelligence. So bringing that expanding that to the homeland defense is something we’re well positioned to pivot into.

Jeff McLaughlin, CFO, CACI: And really like all of our technology solutions, The key component of that is the software defined and the flexibility that comes from it being a software centric kind of solution.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Got it. Got it. Okay. Turning over to maybe the margin side of the house, as we think about company’s cost, cost loss exposure, can you maybe just size what your latest cost plus exposure is and how the team thinks about its ability to do more fixed price work fixed price work?

Jeff McLaughlin, CFO, CACI: Yes. We this year are about 60% cost type work, about 30% fixed price, about 10% time and material, which is kind of a hybrid. It gives us an opportunity to make some money on rates. But we also have some exposure about the time and material that are expended. The margins this year, our guidance is low 11 s.

Obviously, with the three years in the mid elevens, that’s an increasing metric for us. There are a couple of things that are going on in there. One is growth. It’s really driven to a large extent by growth in our spectral and Azure acquisition recently and the mix that that brings with it with some greater profitability.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Got it. And just tying those that theme together, if we maybe think about how investors think about, so I think one of the things that folks have been kind of concerned is cost plus conversion to fixed price and the ability of management teams to kind of manage that risk. If you can maybe just talk about kind of how you think about the comparison of CACI business to like a commercial IT business and why that comparison doesn’t necessarily hold? Well, that might

Jeff McLaughlin, CFO, CACI: where things are logically priced and executed under fixed price contracts. Outcome based performance is our preference and we have steadily moved the business in that direction. More of the technology side of the business is already in that direction. The business model though relative to commercial software companies, the second part of your question, is a little different. The commercial companies are more sort of arriving with a finished product sold as a service.

Our business model is a little different and we think a little bit better received or more customer friendly. And that we generally are interested in developing and fielding systems where we have open architectures, where the government owns the data, the government is able to use the systems and the data as they like. And we’re obviously well positioned to manage and improve, enhance and evolve those systems for them. But they’re not necessarily locked into a particular approach or structure. It gives them really the maximum flexibility.

And the open architecture aspect of that in particular, we find that they find appealing because it gives them the flexibility to add things and evolve as threats evolve. I don’t know if I missed anything.

Jason Bales, CTO, CACI: And I think the big team takeaway there, right, is that we have developed the ability to bring commercial applications and pull them through into the defense and the national space to produce mission outcomes, right. And build like Jeff was saying, we build our applications on top of those commercials and tailor them towards the defense mission. And that’s really the big value add that we bring in. So we can bring that speed and that velocity to commercial world to produce mission outcome.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: That’s a big focus for us. Got it. Maybe kind of digging into that a little bit further. If you can just kind of, while we have Jason, if you can maybe talk about kind of the evolution of open architecture systems, where we’re at now, where we used to be and where we’re going.

Jason Bales, CTO, CACI: Yeah. Yeah. I would, you know, historically, and this gets kind of to a hardware software kind of balance as well. You know, whenever you brought new capability to the defense, a lot of it was kind of a closed box. And so every time you needed to bring a new capability to the mission to handle a new threat, you’re bringing a new box and the soldiers backpack was getting too full.

The Humvees were getting too packed, right? It was too hard. As we’ve migrated over time, and focused on, as CACI is focused on an open architecture, we’ve been able to kind of reduce those boxes and collapse them down into a nice set of hardware that’s flexible, that we can continue to just do software updates on top of. But then also make that so that’s great, right? Because software lets you move rapidly for the for the threat and that’s a focus we have on acceleration.

But then also building it with an open architecture, meaning that you can drop in third party capabilities. So now we come and we bring commercial partnerships to the table and we’re bringing commercial capability and we’re dropping it right in, right. We’re bringing other partners in the defense and we’re dropping their capabilities in. And then we can help act as an integrator, but also get rapid capability to the field because it’s a layered approach for national defense and you got to bring all the player stuff to the table. Sure.

Sure.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: And just maybe in the vein of that question, we’ll do one more on the subject and move on. But focusing on kind of the level of co competition within the space, I think the previous iteration of tech coming from Washington was something of the kind of mid-2010s, and the kind of outcome there being largely a beneficiary for the Gov IT names, right, who are able to kind of benefit from better productivity, better efficiency and assigning the right headcount to it. So within that vein, if you could kind of maybe talk about how much of this time is different versus this time is just good for CACI? Yes.

Jason Bales, CTO, CACI: I think it falls back again to the concept I mentioned earlier about how we’ve pivoted ourselves towards a portfolio bringing the sixty plus years of our company’s kind of expertise and mission space, bringing that forward and over the last decade or so establishing ourselves as a technology company that is informed by that expertise, right? So we’re informed by that expertise and we’re pulling in commercial capabilities through and commercial, not just capabilities, but tools and processes or agile methodologies, right? So we’re basically presenting ourselves with the best of commercial for defense mission outcomes. That’s our focus and that’s what is making us different in the past. We’re continuing to be efficient and have improvements to the customer.

Jeff McLaughlin, CFO, CACI: And so, well, I was just going to point out our partnerships with organizations like GitLab, AWS, the whole DevSecOps framework is a big part of that. So we are very active with several prominent commercial software providers for tools and skills.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Got it. Maybe switching over to government budgets, if you can just provide the latest on what we’re hearing with respect to D. C. And government budgets and then breaking that out by ’25 and ’26.

Jeff McLaughlin, CFO, CACI: Yes. Probably can’t do that super specifically, but I can make a couple of general observations. The first one is that our revenue this year will be about $8,500,000,000 with a $250,000,000,000 TAM, total addressable market. So we really are not in a position where top line budget in and of itself drives a lot for us. And a key part of our positioning in our portfolio and the work we’ve done over the last number of years is being in areas where we see enduring need and solid, stable support bipartisan support for budgets.

So if you think about things like signals intelligence, we’ve talked a little bit about counter UAS work in the electromagnetic spectrum, optical communication terminals and a number of other items. These are areas that generally are not super dependent on top level, top line budget decisions, which often have a lot more to do with platform rates and volumes and a number of other factors. So you really have to get a level or two into it and say, okay, the total budget is the noise. The signal is areas of the budget where you can see specific moves, where we generally have fared pretty well. We’ve actually grown reliably in growing budgets environments, declining budget environments and flat budget environments.

So it’s more about where you are in the pieces of the budget in our view.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Sure. And again, maybe something that investors probably don’t appreciate as much in CACI’s resilience, but if you can just kind of speak to your past experience navigating shutdowns and what kind of lessons you’ve learned from the past and if this time is any different. It seems like we’re not going to get one this time around, but it’s always a tool in the toolbox.

Jeff McLaughlin, CFO, CACI: Yes. We, feels like we probably won’t. But again, as you say, no, it’s not done till it’s done. We generally have fared pretty well in this regard. The 90 plus percent of our revenue that is security and intelligence has enjoyed a fair number of exemptions from specific shutdowns.

And even in the case of actually suspending the operation of the government, we have a number of areas, where we’re where we’re directed to not stop working. So there’s a little bit of pressure from that. Again, our guidance would not be affected by relatively short shutdown. I mean, if we were shut down for a few days or week or so, it would not have an appreciable effect on us. An extended shutdown, obviously, at some point, it does become more impactful and we’d have to see that where it is.

But it doesn’t feel to us like we’re on that trajectory at this point.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Right. Maybe going back to that TAM number you provided and talking to the underlying budgets, we will get FY ’20 ’20 ’5 request as maybe the proxy, but command and control budgets up roughly 40%, Intel growing well, IT growing well. So maybe talk about kind of where you expect to be most sensitized to and where you expect to be the fastest growth?

Jeff McLaughlin, CFO, CACI: Yeah. I think I would, the numbers that you quote obviously are correct, but I think I would probably also focus on the items in the supplemental budget where Congress is about to add about $300,000,000,000 1 hundred or so for defense, 200 or so for Department of Homeland Security. I say or so because there are slight differences between the House and Senate versions, but they’re, you know, tens of millions of dollars apart. They’re within easy relatively straightforward conference resolution range, but on the order of $300,000,000,000 about to be added to places that are right in the middle of where we live.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: And just maybe for the clarification of folks on the webcast, the supplemental you’re considering is in addition to the base budget. And so the way you want to think about that is if we have an $800,000,000,000 or $900,000,000,000 defense budget, that $100,000,000,000 goes on top of that, right? Yes. So maybe triangulating on that, what have you kind of heard in terms of the duration of that spend? I think we go back to the Infrastructure Act is kind of the big other supplements, obviously other supplementals related to war fighting.

But what is the sort of duration that we’ve heard on that $300,000,000,000

Jeff McLaughlin, CFO, CACI: Yes, I think that is that’s still an open matter between the two. We’ve heard in a number of cases that it’s expected to be sort of two year money. So think this year and next.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Got it. Got it. So a pretty substantial growth rate off of base, I would say.

Jeff McLaughlin, CFO, CACI: Substantial. Yes. Yeah.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Got it. Versus market expectations of cuts. So we’ll see how that shakes out. As you consider kind of capital deployment, how do you think about kind of visibility around government budgets and efficiency efforts and how that interacts with shareholder returns?

Jeff McLaughlin, CFO, CACI: So our capital deployment strategy, which many of you that follow us have heard us talk about this before, is remains to be one of being flexible and opportunistic. We are serial acquirers. We make regular acquisitions. The opportunistic part of that means in some years we’ve done three or four, in some years we’ve done none. We have also prior to this quarter, we’ve repurchased over the last several years about 12% of our outstanding shares.

I say prior to this quarter, because in this quarter, we have also been in the market with an open market repurchase program related to $337,000,000 or so of an earlier authorization. And so we have bought back some shares this quarter, which obviously we’ll disclose at the end of the quarter. So we’re very much focused on flexible and opportunistic. I don’t think we probably have acquisition targets in the near term. That can always change.

But the valuation volatility in particular makes for difficult sellers these days. Sellers process multiple contraction more slowly than do buyers. So I’m not sure that we see opportunities in the near term, but we certainly remain interested in being acquisitive. Our acquisition program very much GAAP focused, very much grounded in strategy. We don’t buy bulk.

We buy to fill gaps in technology, gaps in customer footprint, gaps in experience rather than just sort of we’re not in the business of just adding volume.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Appreciating there’s maybe less of a full pipe in terms of near term capital deployment, but maybe if you turn over to Jason and and get him involved, what are some of the capabilities that you want the most? And how often is Jeff saying no because of price?

Jason Bales, CTO, CACI: No, Jeff’s a good guy. So, Jeff, I want to first emphasize a point that Jeff made, right? It’s like when we do look for acquisition opportunities and things, we’re looking to fill gaps, right? With the acquisition of Azure Summit applied inside that we pulled, we filled some of our major gaps recently. So we feel we’re actually in a good strong position where we’re pulling our portfolio together to go out there and really strengthen our competitive position in the market because that’s important to us.

In terms of areas that we always want to grow inside of, right, obviously, like I said and I’m going to hit it again, right? Bringing kind of the fast commercial capabilities under the defense outcomes. A lot of that today is AI, right? In the generative AI space. So we’re always looking to bring new capability in there.

We build our applications on top of the commercial AI, so we’re not in the business of making AI. We’re in the business of applying it to the customer outcome. Right. So that’s an area that we’re always paying attention to. But for us, it’s more about developing the partnerships with the commercial entities, like we talked about AWS, right, GitLab.

We have partners, a slew of partnerships and we’re always looking to increase those partnerships to be able to bring kind of their investments into the government space. Got

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: it. Got it. And then turning back over to Jeff, as we think about return hurdles, what are some of the metrics that you contemplate with M and M and A? And how do you think of kind of the cash dynamics of technology versus expertise acquisitions?

Jeff McLaughlin, CFO, CACI: Yes. We should spend a second on that. We talk a little bit about the leverage levels at which we’d like to run the company. And we generally like to have a sustained kind of 2.5 to three times trailing EBITDA leverage. We find that that gives us based on the opportunities in our pipeline in particular, that gives us sort of the right combination of enough leverage to be a positive influence to our weighted average cost of capital, but also gives us enough flexibility to be able to hop up and make acquisitions generally in the size range that we’re looking for.

So once you do that, obviously, at any given time, we obviously have a WACC, a weighted average cost of capital. And so then our process is really more premised on evaluating the relative returns of acquisitions and share repurchases based on market conditions and available targets. And so that return decision rather than being a specific point is more often kind of a relative one. We’re obviously not doing anything that doesn’t generate returns pretty comfortably in excess of our WACC on a risk adjusted basis. But we’re able to balance those two together and weigh the relative returns and then execute accordingly.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Got it. And then digging into that statement a little bit, as we think about kind of your risk adjustment process, maybe high level conceptualize kind of what are the three to five points that you look for or run the ground as you risk adjust an acquisition? I know we focus more on kind of the conceptual financial, but actual operational risk investments.

Jeff McLaughlin, CFO, CACI: Yes. So obviously, like most serial acquirers, we maintain a view of our acquisitions for some number of some period of time. Often, it’s significant to note that if we’ve done our job well, within a year or two, you sort of can’t find them as they’re assimilated. But we generally have a pretty good idea and that gives us some solid rules of thumb around things like integration, synergy savings and our track record relative to business cases, particular opportunities that we may be better positioned for after an acquisition. And we keep sort of a track record of that.

So we’re there’s a feedback loop built into our process that we use as we evaluate acquisitions in particular.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: And maybe just staying on it while we have the while you have up here. Any sort of dynamics around kind of deal structuring that you want to call out, earn outs and the like that you like to use? How do you think about kind of keeping folks on and keeping them motivated or keeping them incentivized?

Jeff McLaughlin, CFO, CACI: Yes. We have done transactions both ways with and without earn outs. It’s usually a sort of transaction specific item. It may be related to founders. It may be related to being able to bridge evaluation gap relative to uncertainty in a business case.

We use it in a number of ways. We have a pretty decent track record of doing it. I personally am always a little bit slow to come to earn outs because as an acquirer, there’s an element of control that you seed when you do that for obvious reasons because you’re holding an acquired entity responsible for an outcome. And so you can’t always integrate them as aggressively as you might like. But we have a pretty we have a good track record and use them selectively in certain cases.

And certain times, it’s the best way to bridge a gap or keep someone interested for some period of time. Sure.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Going back to your repurchase matrix, if we can just kind of talk about how we think about that rubric in greater detail and then kind of the level of how you think about debt versus equity financing within the business. I think multiples come up, so obviously equity less relevant, but interest rates are high and that can be expensive and there’s always kind of ways to structure it.

Jeff McLaughlin, CFO, CACI: Yes. So once again, you’ve asked a question that has two or three questions.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: It’s my smile.

Jeff McLaughlin, CFO, CACI: There are a couple of things. First of all, in evaluating share repurchases, we obviously keep a close eye on market conditions and have a view of what near term volatility might look like and whether or not there’s an opportunity to be opportunistic around that. We also obviously pay a lot of attention to our own internal intrinsic value analysis, which frankly is not much of an element in the decision these days. So it’s quite a bit higher than anything anywhere we’ve traded in recent history. But that’s obviously an element in that.

Leverage is something that we’re kind of more inclined to use than equity. I think situations where we would use equity are probably for particularly strategic items, where it was important to the counterparty. We’re not necessarily focused on, I’ve learned to never say never, but we’re not particularly focused on large transformative sort of things, which would be cases where you would be more inclined to use equity. We’re not particularly focused on that or don’t see any particularly compelling options there. So I think we’d be more likely to be debt financed in terms of transactions.

Jason Bales, CTO, CACI: Sure, sure.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Circling back on that a little bit, as we think about kind of the like the dynamics within your, I guess, we’ll say like your visibility versus scale and like your ability to need scale. I know CAC has never been a company that’s needed scale before. And if you go back to kind of the the genesis of the scale conversation, you can make that argument that it’s it’s had positive and negative outcomes. So so maybe talk about kind of how much are you hearing the need for scale nowadays and and how does that kind of reflect on your M and A strategy?

Jeff McLaughlin, CFO, CACI: Yes. The areas that are of the most interest to us, where we see the most opportunity for growth and returns and opportunities to add to our free cash flow per share, which is our ultimate figure of merit, we’re not scale challenged. Jason alluded to our counter UAS position, which is a particularly important one to us. Couple thousand deployed locations, we’re the largest player. We have a really strong track record execution wise.

I mean, they’re not we have the three largest agile programs in the government. So our enterprise IT modernization is an important part of the portfolio. We have, I think, seven large network modernization programs underway. So I think if you decompose your question, while eight point five billion sounds like a relatively small defense company, if you look at the areas of interest to us and the areas where we play, we have a significant footprint. I mean, I don’t feel disadvantaged by size in any of those areas where we participate.

I don’t know. Did I miss anything?

Jason Bales, CTO, CACI: Sure. I think that’s good.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Brilliant. Well, in the last sixty seconds, is there anything seventy seconds, is there anything that you feel that we’ve missed or that we should follow-up on?

Jeff McLaughlin, CFO, CACI: I would only I would add that I think if there is a silver lining in our current situation here environmentally, macro sense, I think we’re going to have an opportunity to see how divergent the businesses in our sector have become. And I think the companies that we often are compared to as peers, not in a judgmental way that’s fine business, but we’ve become very different businesses. And we often find ourselves sort of being painted with a broad brush and sort of compared to companies that aren’t actually much like us these days. And so I think there’s an opportunity here for us to be able to sort of see that because you’re going to see, I think, that many of us will be affected differently, obviously, by some of the administration’s current activities.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Sure.

Jeff McLaughlin, CFO, CACI: And so I think that may actually help with the broader investor understanding of our portfolio and our position.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Great. Well, thank you for joining.

Jeff McLaughlin, CFO, CACI: Yes. Thank you.

Colin Canfield, Cantor’s Government Technology and Space Analyst, Cantor: Jeff and Jason.

Jeff McLaughlin, CFO, CACI: Thanks. Sorry, I used all the wrap up time. Thank you.

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