Hey, good morning, everyone. We're gonna get started here. I'm Brian Gesuale, senior analyst covering the defense and space markets at Raymond James. Thanks so much for joining us. Really delighted to have CACI here to take us through their story. It seems like this year there's always something big to uncover at our conference. Last year, you convinced people DOGE didn't matter, and then your stock doubled. This year, you know, people wanna talk about how structurally different CACI is from its peers, how AI is creating an opportunity and not as much of a threat, and really some of these other topics around your product business. Perfect time. We've got the CEO and CFO here, John Mengucci, Jeff MacLauchlan. Really excited to go through a fireside chat, and then we'll adjourn to the breakout. Gentlemen, thanks so much for joining us. Brian, thanks for having us. Yeah. Thanks. Appreciate it. Let's maybe just level set, John. You know, maybe talk about CACI's core skills, key markets you serve, and talk briefly about how you've transformed CACI into a very different organization than the one that the public markets first got to know in the start of the century here. Thanks. Look, thanks and thank you all for attending this session. We're, you know, if you look at our GICS code, we're a government services company. We've been in business since 1962, so a long-term provider of what used to be expertise or labor hours and support to the federal government, predominantly the intelligence community and the Department of Defense. As Brian Gesuale mentioned, you know, we've transformed this company since 2012 to really reshape and drive us in a very different direction. What we focused on was the ability to or the desire to deliver labor hours into this government starting 2012 forward was gonna be a commodity play. All you heard about from Better Buying Power and Lowest Price Technically Acceptable, which were the terms that were being used in the 2012-2014 timeframe. It was clear that buying labor hours in a non-discriminant matter and taking past performance away was going to be a very low margin, commodity-based business. It's not the kind of business we wanted CACI to be going forward. We very much transformed this business over a number of years. We announced in the 2015-2016 timeframe, we were going to move on into the technology delivery side. Why did we do that? Because we had 50 years of purchase with Department of Defense customers who understood that we deliver, and when we put bids in place, we don't walk back from them, so a high track record of delivering. If I could get these customers to agree that we could move more towards a technology company and less of a labor hour delivery company, that would be great for investors, be great for this nation. Here we are, 2026, a very different company, a $9.4 billion company, prime mount predominantly focused on free cash flow, free cash flow per share growth. Every question about top line growth and bottom line growth, I start with free cash flow, 'cause that's sorta how we measure. We are in seven different markets. We're in space, we're in cyber, we're in spectrum superiority, we're in digital solutions and a few other markets, and we'll talk a lot, I'm sure, about space and our electronic warfare market as well. We've been in these markets for a number of years, probably just over a decade now. We chose these markets. One is because of the bipartisan support these markets have. We're a 90% national security company. 6% of our revenue is in the federal civilian space. That's not by accident. That's myopically intentional. Doesn't mean that citizen services is bad, but it only pays the bills every other year. It's rarely bipartisanly supported, and it doesn't generate great growth. You know, folks who want us to diversify into the civilian space, talk to the probably the wrong CEO and the wrong CFO. We've been down that path. It's really, really dry. It's really, really hard. National security company is where we've re-branded ourselves, and it's driving more than respectable top and bottom line growth. It's driving free cash flow. Park it there. We're gonna double-click on a lot of those topics. Let's move on. Before we hit some of those topics, I wanna talk about the budget. Two questions for the budget. There's a lot of discussion about an urgency to spend these fiscal 2026 reconciliation funds. One, are you seeing that? In what areas are you starting to see that in? I do wanna get your thoughts on this $1.5 trillion budget for fiscal 2027 and how you could possibly get there and what your thoughts are. Yeah. I'll spend a little time on the first part of that question. Look, based on what this company does and what we do, in the electronic warfare area and the space area, you should expect that the $150 billion additional funding for Golden Dome and $150 billion additional funding for DHS for, protection of the homeland. There's some overlap in both of those areas, but different authorities force that. Additional $300 billion being spent in the backyard of what we're really good at, doing. As for the spending, I don't know if I'd call it an urgency. I think, you know, if you look at this administration, everything has to happen yesterday, okay, which I'm a more supporter of than I am less. We need to move quickly. I do think that if you look at the government shutdown, you look at just getting budget authorizations put in place, I think that slowed things down. It definitely was not intentional. I also think that the folks who are in charge at Golden Dome understand what this administration's calendar is, and they're probably gonna be knocking on the door saying, "Hey, what, you know, when are we moving forward?" Yeah, we have seen some funding. We'll talk more about Golden Dome today. One of the things that they crossed the Golden Dome in the budget lines are left of launch. If you all are watching what the Golden Dome system is supposed to do, part of that is to protect the nation from on a missile defense side. There's also a counter UAS layer in that as well. There's a lot of work being done on left of launch. We're a plank holder in the SHIELD MDA contract. Our focus is gonna be space, and it's going to be left of launch. How do you reduce the number of missiles aimed at the U.S. if, as, and when somebody pushes an awful lot of buttons on a bad Tuesday? How do you, how do you take the flow of those missiles down? How do you use electronic warfare? How do you use knowledge of the signal space around the globe to understand how we can affect a potential enemy launches of missiles? There's money being spent there. There's architecture money being spent. Counter-UAS, there are funds. There's RFPs out there. I think you should see that start to come out in the next month to 3 months. Some rather material awards in Counter-UAS, both from DA, DHS, and from JIATF 401, which is a Department of Defense agency that's sort of consolidating all counter-drone purchases. $1.5 trillion. Awesome tweet. I think that was on a Tuesday also. Look, here's how we think about budgets. We don't track the $1.5 trillion. We sort of track $9.4 billion company, $300 billion addressable market. We're making sure that those seven markets have really rich funding streams. The other reason why we chose those markets as well is they are in areas that are inescapable to continually spending more and more money on. SIGINT, signals intelligence around the globe that feeds into our EW systems. I don't believe on a Thursday the government's gonna say, "Here's an idea. Let's stop spending money collecting signals around the globe." It's something you're gonna be able to turn on and off. It's, it's historical levels of funding. We'll see that continue. $300 billion addressable market, we're really making certain that the markets we're in stay funded. There's so many things that go into the $1.5 trillion. Will we get to a, $1.5 trillion? Sure. As a public company CEO in national security, would I enjoy that? More money sooner, better? Yes. I'm not, you know, we're not lighting any candles or, you know, watching that. We've got our markets defined. Yeah. Fair enough there. You know, John, you've performed so well fundamentally this last 12 months. Many of your peers have struggled a bit. As I talk to investors and newer people to the story, the question I get more is how do we think about CACI qualitatively and quantitatively, structurally different from that peer group that people typically talk to you about. People that have been in the markets for a while have seen the government services be a mean reverting space, where a couple of good years on, then you kind of mean revert a little bit and so forth. How do you think about quantifying the structural differences? Yeah. If you go back a number of years, at least 10 years, when we looked at how do we move this company forward in a different direction, we spent a lot of strategic time, and I always talk about strategy as a place where we come from. You know, we're not a reactionary company. We've been in business for a really long time. 40% of our workforce are veterans, so when people talk about the mission and where the threat's coming from, we understand it better than most. Another element of what differentiates us is, which is, which is highly legal but grossly unfair, is we have 1,400 people embedded with all 5 combatant commands around the globe. what happened this past weekend, you should bet your last dollar that we have hundreds of people who were in that area of responsibility, understands everything from target planning all the way through effects, all the way through threats, all the way through the technology that can make the next time we have to prosecute something like that better. we learned on Friday what happened on Thursday, we learned on Saturday what happened on Friday. again, highly legal, grossly unfair that we have 1,400 people that are positioned where we need them to. that was the crux of how we rebuilt this company going forward. I already shared that being a commodity low price supplier of people was not in our future. we did pick the seven markets we wanted to be in. We built an infrastructure because we're highly acquisitive to make certain we could handle FAR Part 15, which is cost reimbursable, cost accounting standard business, as well as FAR Part 12, which is what we're all hearing about commercial, right? FAR Part 12 isn't buying from commercial companies. FAR Part 12 is buying commercially. Have companies invest ahead of customer need. Let us put some money and mission knowledge on the table, and then let's work on a model where we can spend our own money, but therefore the reward is gonna be larger. Read that in faster re-revenue and higher margins. We spent a lot of time focused on that area and how we would come out. We explained that we believe we made an awful lot of changes, that we're not as exposed to, you know, labor hour contracts, and then DCAA came, right? Was the best independent auditor we could have found that we had no vote on. It was to look at all these contracts, find consulting hours, find companies who are just providing services. Maybe they could buy them cheaper some other way. We sat in this meeting, I think, a year back. Said I, to all of our investors, "We did the right thing. We're not gonna be impacted by this." The entire marketplace went and down, you know, we're tagged with the same ticks code as others. We had just under $5 billion of an impact over that entire year. Other companies had billions of dollars lost. I'd say we differentiated well, and we had an independent source called DOGE. I like how we came out of that. We're into this next phase, which is let's find things that we can buy where you're willing to invest ahead of customer need and put your own money on the table, then we'll buy defense needs in a very different model. It's music to our ears. We were already down that path in the past. Qualitatively, we've done a fantastic job, the entire leadership team has. Then quantitatively, I think you can look at our free cash flow per share. I'll have Jeff talk a little bit about that. We have put some 3-year targets out there, I sort of like where we're sitting. Jeff? Yeah. I'd also add to that question, you know, quantitatively, we appreciated following DOGE, the opportunity to buy $150 million worth of shares for $344, which warmed the cockles of at least my heart. I would also add to the DOGE evidence, the qualitative point about the government shutdown. Once again, we have an artifact that we could talk about publicly and say, "We told you that we've deliberately positioned ourselves in places and activities that we can't practically stop." The fact that we'd have, you know, the revenue that we did in a quarter, $2,250,000,000 dollars or so, when our government customer was closed for half the quarter, which was in line with what we thought, what we'd communicated, I think is another kind of point along that path. Absolutely. The performance has been clear. Let's keep pulling on this product and technology thread. That's where I wanna kinda take the rest of these discussions, or at least most of them. John, you've made comments that the EW business is approaching $2 billion or about $2 billion. I think about that as largely sitting in your $6 billion technology market. How do you think about the other pieces of that portfolio in there? Yeah. When we talk about electronic warfare, it's tough for us to segregate cyber from that, and the fact that some of the defeats we do in counter-UAS areas and in the signals world actually come from space. We're being very careful as to roughly just went to $5 billion of technology revenue. How do we share a little bit more? We put everything into an electronic warfare bucket, and the example is if there's a drone out there flying, we electronically do something to that drone in a low, no collateral manner. It stops it from operating, and it was a cyber bullet that we actually fed. Is it cyber market? Is it EW? I don't wanna get into those, you know. It's growing. It's growing is all we really care about, right? Beyond EW, a lot of the digital applications that we build, that we modernize is probably a close second to how that, how the technology part of our business builds out. Then there's a number of a space kind of market thing. It's a very strong portfolio of work. And we've used a lot of our acquisitions to sort of put the foundational elements in it over a number of years, and we can talk through that on a one-by-one basis. Yeah, great. I wanna dig into the space market for sure, and we're big believers in that strategic industrialization of low Earth orbit. Yeah. you know, as we talk about this, ARKA's a deal, a transaction that's coming up. Talk about your space business. I wanna deep dive ARKA. I wanna think about your addressable market and where you sit across the value chain in space. When we got involved in the space market, we were well known for processing signals data from signal-based satellites. Any satellite out there that's collecting signals, when all that information comes down to the various ground centers, we're quite a substantial processor of all that information. Think about a bunch of zeros and ones coming down and how do we classify what the satellite has actually picked up and is this a good, is it a bad signal and the like. That's sort of all of the all the information processing side. In the 2015, 2016 timeframe, we did a couple of acquisition. One was LGS Innovations. It gave us two pieces that are very germane to space. One is cellular, one is photonics. You all have listened to the proliferation of space a number of years ago. It was how safe is space? We no longer, you know, own the final frontier. Everybody else is there. Oddly enough, the way that most satellite builders talked about protecting satellite, like, assets in space and from jamming is to build more satellites. 'Cause then I can block and I can defend and I can understand it. We thought a better solution would be to move all your data links to optics. High speed data optics, which unless you have a piece of glass and you got a jet pack and you're in space and you can hit that link exactly at the right time, you're not gonna interfere with that link. Mersen's supplier to all aerospace and defense companies that build satellites as well as commercials. That was our first step. Building this out came ARKA. ARKA was a company that came up for sale about 5 years back. They were the result of a UTC Raytheon merger. It was one of those must-sells. We looked at the company 5 years back. We just had a lot of other things going on. That one went to Blackstone. Blackstone did a fantastic job over the 5 years that they owned it, doing a lot of CapEx adjustments and investments. Where does ARKA play now? We build exquisite sensors on land, air, and sea. We don't have a space sensors business, that filled that capability. It also built out addressable market for Golden Dome. That's the second large footprint where we see us playing. The third part was they had invested in a few ancillary companies to bring into the fold. How can they use AI? I know we're not going to talk about AI at all today. Your multiple just went up a point. Using it because you can't spell CACI without AI. You know, when you go forward, they did a great job of building AI-based models that could process the imagery data that their on-orbit payloads provide. You know, ARKA, a 65-year-old company building exquisite space-based payloads in EOIR and space radar. That is not a new thing. They're not a new entrant into this field. Been doing it for, you know, a number of generations and do it exquisitely well. One of only 2 companies. If you ask them, they'd say they were 1 of 1 and a half. Bringing ARKA in gives us a strong space-based sensor. It gives us another heavy business to be a merchant supplier with aerospace and defense company and a commercial satellite company primes. All of the AI and the Agentic AI that they have created. Agentic because they are training their models that they have built on real top-secret classified payload information coming down from a national security asset. That is very different than training your models on the Internet. There's a lot of doors and tickets and clearances and rooms you need to get into before you can quickly translate, this is a cool commercial licensed product. Let's just throw that into the highest classified levels to go process space-based data. They are in those rooms and they have an Authorization to Operate it as well over an 18-month period. The play for us is to take that and bring it into the signal collection side and do that for national security companies and then take their Agentic AI models and the frameworks they built and take that across everywhere else where CACI processes information. Space is a great market growth area for us and budgets strongly support space and new ways of collecting and building payloads. I like our hand there a lot. I really, that was a transaction I'm really fond of. You know, another area if we think about it, space is growing really fast. You've built a really nice footprint there. Historically, CACI was heavy Army if we went back 15, 20 years ago. You've made some really good investments with the Navy and have a lot of technology there. Would you take us through those pieces that are building out that naval franchise and what your outlook and how you think about that business? Yeah, it all comes back to electronic warfare, frankly, right? If I look at the Air Force, Army, and the Navy, our large footprint there and our goal over a number of years was to be the EW, the unique and preeminent EW supplier to the armed forces. Now it's Department of War. In the, we did 6 acquisitions in this area over a 7-year period, all different size companies. Some of them were very, very small, founder-owned, 50 folks, and some were a little bit heavier. At the end of the day, what we have built is an EW capability that brought us a program called TLS Manpack. This was the first hint a couple of years back of moving to OTAs, other transactional authorities, where that's the model where the government wasn't quite FAR Part 15. They're ready to do something different. It's you put some skin in the game, the government puts some skin in the game. You get through the requirements process in about 2 months versus 2 years. We had already built potential kits. We showed the customer the art of the possible. We worked through that phase. We got the design and the development done in a 6-month period, and we received a $500,000,000 production contract. The Army also was able to cancel a 5-year, $5 billion contract with another larger, well-known company and set of companies to do the large-scale integration and design, the requirements and everything else that the tactical user did not need. We are the ground provider of EW to all Brigade Combat Teams across the Army. You step forward and take the same EW into the United States Navy. That shows up as technical software-based technology sales. It also drives large-scale production programs. One of those was Spectral. That is for all combatant surface ships. That is the EW system of the future. I say future because once we have it, we're not letting it go because it is a dynamic software-based solution where as signals and different apertures change and the threats change, it's a software baseline upgrade. There's some hardware with that as well, but it's not the old days of cutting a hole in the hull every seven or eight years to provide better and better capability to it. It is a large-scale system that can handle over-the-era upgrades, which is exactly what you would like to have had this past weekend if you're a Navy combatant ship commander. We did a number of acquisitions there, built that framework in, and have now won Spectral, which is a multi-billion dollar, multi-year job, as well as Azure Summit, which is another acquisition that had the precursor program to Spectral. If you're looking at Navy EW at a macro level, Azure Summit won the program from another aerospace and defense company to put all the baseline hardware and some of the preliminary EW capability in. Then CACI comes in with them as an acquired partner and delivers everything in an AI framework. As a true AI framework, it is thousands of signals hit a Navy ship every second. Instead of having operators sort through that Sasha's making, machine learning and AI have taken the processing and that cognitive overload away and been able to say the highest probability of that signal comes from these 3 devices, 2 are Iranian, 1 are Russian, and what you have on board kinetically and non-kinetically, here's a way to go take those out. It is a step function growth. In the EW space, if you look at Army, Navy, or Air Force, we're very well positioned there and growing. exciting markets. We're a big believer in the dollars there and the necessity of that technology. I wanna talk about one of the things, topics I need to get to is artificial intelligence. multiple goes up again, I guess. There's a lot of people that perceive it as a risk as well as an opportunity. It seems with some of the technology business, it's much more opportunity for CACI, but can you take us through your general thoughts of disruption to the market, both positively and negatively? Yeah, look, at a very high level, when you deliver people, you're delivering inputs to the federal government. When you're delivering technologies, you're delivering outcomes to them, right? I need this built, I need this process. When we read a lot of the research reports that came out 2 weeks ago, it hit the government services market like an asteroid, you know, we were not spared, 'cause that's sort of the way some research notes come out, right? The quants can't tell really good stuff from really bad stuff, it just sells. That's sort of the way the world works. In reality, we're a high-tech user of technology innovations, AI included, AI model companies, frontier models, everything we can get our hands on because we are not making money on developing the software. We're not selling the software as an end item. We're selling a solution or an outcome to the federal government. Somebody comes in and says, "I can understand the code you've already written. I can write that next set of code faster," outstanding. It's most likely better margins. It's faster delivery cycles. The difference between what goes on national security and goes on trying to find the cheapest red golf shirt at the local mall is that that's a singular issue. Find a cheap item at a mall. Simple to solve. Go train your model on the internet data. You can suck in all the information you want. Here's where that cheapest red golf shirt is. The difference is national security space never runs out of outcomes they have to solve, and how you solve them, because your enemy changes how they communicate in the electronic warfare world every 4 hours, this model never catches up. It's continually changing. We are that company that is providing outcome-based solutions to our federal government national security customers. That's never going to stop. Anthropic, OpenAI, nobody to really talk to here, great. Which one you wanna use? Doesn't much matter, 'cause the framework allows all of those models to come in with unique partnership with Amazon Web Services, who provides all of those models to us in a cloud-based manner that we can trial each of those models as we're trying to solve what we have to solve for. It truly was a misfire, against our company. The AI was going to, you know, be deflationary, I think what it was, to our revenue. At the end of the day, if you sell people who write software and you sell the labor hour of software, that would be a deflationary thing, okay? Last time I checked, as technology advances, all we do is buy more technology. Okay? This is a positive thing for us. Very clear. As we're coming up on time here, I wanna talk a little bit about margins. As this technology footprint continues to grow and proliferate, That part of the business looks like a more agile prime, which typically has a higher margin structure. Yeah. How do we think about this over a long period of time, how this model evolves? You've heard, you've heard us mention free cash flow a couple times. That's really the touchstone- here as well. I mean, we solve all of our investment decisions, all of our growth opportunities, margin, all solve for free cash flow. John started our remarks today by talking about our seven markets. We go through each one of them twice a year, kinda refresh our view, what's new, what's different, things have gone away, things have become less likely, more likely. All those decisions drive gaps and investments where we're trading off investment versus growth, versus margin, solving for free cash flow. Great, great answer. There's a lot of topics we couldn't really get to. We're gonna talk about counter-UAS in the breakout and some of the opportunities there. Join us downstairs. John and Jeff, thanks so much for joining us today. Thank you. Appreciate it. Thanks, everybody.