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CACI

CACI INTERNATIONAL INC /DE/
NYSE · TECHNOLOGY · SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN
633.98
+14.76 +2.38%
USD · close Oct 23
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1 / 0
buys / sells · latest disclosed Oct 12
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nobody we score has called it yet
MKT CAP $14.1BP/E 26.0DIV YIELD —FCF YIELD 5.51%REV TTM $9.8B +10.1%NET INCOME $541.4M +7.3%NET DEBT $4.6B52W 440.76 – 680.08SEC XBRL · TTM TO Invalid Date

How CACI rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026
Text kept
45%
of sentences unchanged
Added
110
new sentences
Dropped
93
sentences removed
Length
+718
words, now 7,885

New in FY2026

  • The federal government is our primary customer, with revenues from federal government contracts, either as a prime contractor or a subcontractor, accounting for 95.6% and 95.7% of our total revenues in fiscal 2026 and 2025, respectively.
  • Specifically, we generated 53.6% and 53.5% of our total revenues in fiscal 2026 and 2025, respectively, from contracts with agencies of the Department of War (DoW).
  • We also generated 24.6% and 25.6% of our total revenues in fiscal 2026 and 2025, respectively, from contracts with the Intelligence Community (IC).
  • If we were suspended or debarred from contracting with the federal government or any significant agency in the IC or the DoW, if our reputation or relationship with government agencies was impaired, or if the government otherwise ceased doing business with us or significantly decreased the amount of business it does with us, our business, prospects, financial condition and operating results would be materially and adversely affected.
  • Because we derive substantially all of our revenues from contracts with the federal government, the success and development of our business will continue to depend on our successful participation in federal government contract programs.
  • Actions taken by the federal government to address government budget deficits, the national debt, or prevailing economic conditions, including the use of continuing resolutions, delays or reductions in appropriations, or a federal government shutdown, may prevent us from performing on existing contracts, delay our ability to begin work on new awards, or require us to use our own funds to meet our customers’ desired delivery schedules.
  • A lapse in appropriations, delays in the passage of annual budgets, or the use of continuing resolutions can postpone contract awards, slow program execution, interrupt customer decision making, or defer funding availability, even in periods where long-term spending levels remain stable.
  • The duration, frequency, and severity of any such disruptions are unpredictable and could materially impact our financial results.
  • Additionally, the federal government may also change its budgeting in response to evolving national security, technology, economic, or policy considerations.
  • A significant decline in expenditures for programs in our addressable markets, or a reallocation of funds toward missions or capabilities we do not directly support, or a change in federal government contracting policies could cause federal agencies to decrease purchases under existing contracts, terminate contracts for convenience, or choose not to exercise options and impact our ability to win new awards.
  • For further discussion, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this Annual Report on Form 10-K.
  • Federal government contracts contain termination rights and numerous other provisions that are unfavorable to us.
  • Federal government contracts contain provisions and are subject to laws and regulations that give the government rights and remedies, some of which are not typically found in commercial contracts, including allowing the government to: • terminate contracts for convenience; • cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable; • claim rights in systems and software developed by us; • suspend or debar us from doing business with the federal government or with a governmental agency; • impose fines and penalties and subject us to criminal prosecution; and • control or prohibit the export of our data and technology.
  • Depending upon the value of the matters affected, a performance problem that impacts our performance of a program or contract could cause our actual results to differ materially and adversely from those anticipated and impair our prospects for future contract awards.
  • If we are unable to consistently win new awards over any extended period, or if we face significant delays due to competitor protests, our business and prospects will be adversely affected.
  • In addition, in consideration of the practice of agencies awarding work under such contracts that is arguably outside the intended scope of the contracts, both the GSA and the DoW have initiated programs aimed to ensure that all work fits properly within the scope of the contract under which it is awarded.
  • This competitive bidding process presents a number of risks, including the following: • we bid on programs before the completion of their design, which may result in unforeseen technological difficulties and cost overruns; • we expend substantial cost and managerial time and effort to prepare bids and proposals for contracts that we may not win; and • we may be unable to estimate accurately the resources and cost structure that will be required to service any contract we win.
  • In addition to the challenges of the bidding process, our business could be adversely affected by our competitors protesting major contract awards.
  • Defending against these challenges can result in significant expenses and any such protest or challenge could lead to the resubmission of bids on modified specifications, an unfavorable modification, or the termination, reduction, or complete loss of an awarded contract.
  • Even an unsuccessful bid protest could delay the initiation, startup, and funding of the work under these contracts and may cause our actual results to differ materially and adversely from those anticipated.
  • We depend on the timely collection of our receivables to generate cash flow, provide working capital, pay debt, and support ongoing business operations.
  • If the federal government, any of our other customers, or any prime contractor for whom we are a subcontractor fails to pay or delays payment of their outstanding invoices for any reason, our financial condition and operating results could be materially and adversely affected.
  • The federal government may delay payment of invoices for several reasons, including lack of appropriated funds, delays in the budget or appropriations process, or other funding constraints.
  • We are also subject to audits or oversight activities by the Defense Contract Audit Agency (DCAA) which has the authority to revoke our direct-billing privileges and contracting officers who may impose contractual withholdings, including those required under the Defense Federal Acquisition Regulations when a contractor’s business systems are found to have a material weakness.
  • Prime contractors for whom we are a subcontractor may also experience cash-flow constraints or have limited financial resources, which increases the risk that payments due to us may be delayed or not paid in full.
  • Difficulties collecting receivables for any reason can impair our ability to meet our financial obligations, increase our cost of capital, reduce our ability to invest in growth or new opportunities, and require us to obtain additional sources of liquidity on less favorable terms.
  • If we are unable to collect receivables in the amounts or within the timeframes we expect, our actual results could differ materially and adversely from those anticipated, and our overall business performance could be negatively affected.
  • The federal government may change its procurement practices, or adopt new contracting rules and regulations, as a result of an increased focus on affordability, efficiencies, business systems and recovery of costs.
  • Any initiatives or changes to current procurement practices, including, but not limited to increased usage of fixed-price contracts, multiple-award contracts, small business set-aside contracts, new socio-economic requirements, or changes to the basis upon which it reimburses our compensation and other expenses or otherwise limit such reimbursements could have adverse effects on our business.
  • In addition, although we continue to expand our portfolio of technology solutions, changes to service-based procurement practices may also adversely affect our performance.
  • As new contracting methods could be costly or administratively difficult for us to satisfy, they could impair our ability to obtain new contracts or win re-competed contracts or adversely affect our future profit margin which could cause actual results to differ materially and adversely from those anticipated.
  • Specifically, certain federal agencies are increasingly using alternative or rapid acquisition pathways for emerging technologies, including flexible contracting approaches such as “other transaction authority” agreements.
  • These acquisition methods differ from traditional FAR based processes and may involve requirements, such as participation by non‑traditional contractors or cost‑sharing obligations, that could limit our ability to qualify or compete effectively.
  • If we are unable to adapt to these evolving procurement approaches or meet the associated eligibility, technical, or administrative requirements, we may be unable to pursue certain strategic opportunities in high‑growth areas.
  • As a result, our ability to capture new awards, expand into developing mission areas, or achieve expected levels of performance and growth could be adversely affected.
  • Federal government agencies, including the DCAA and the Defense Contract Management Agency, routinely audit and investigate government contracts and government contractors’ administrative processes and systems.
  • We may not realize the full value of the contracts included in our backlog, which could cause our future revenues and operating results to differ materially from those anticipated.
  • Funded backlog represents the value of contracts for which funding has been appropriated less revenues previously recognized on these contracts.
  • Unfunded backlog represents the estimated values that have the potential to be recognized into revenue from executed contracts for which funding has not yet been appropriated and unexercised contract options.
  • Backlog is not a guarantee of future revenues, and the timing or amount of work ultimately performed may vary significantly from our estimates.

and 70 more.

Gone since FY2025

  • The federal government is our primary customer, with revenues from federal government contracts, either as a prime contractor or a subcontractor, accounting for 95.7% and 95.1% of our total revenues in fiscal 2025 and 2024, respectively.
  • Specifically, we generated 75.4% and 74.4% of our total revenues in fiscal 2025 and 2024, respectively, from contracts with agencies of the DoD.
  • If we were suspended or debarred from contracting with the federal government or any significant agency in the Intelligence Community (IC) or the DoD, if our reputation or relationship with government agencies was impaired, or if the government otherwise ceased doing business with us or significantly decreased the amount of business it does with us, our business, prospects, financial condition and operating results would be materially and adversely affected.
  • Our business could be adversely affected by delays caused by our competitors protesting major contract awards received by us, resulting in the delay of the initiation of work.
  • The number of bid protests of contract awards by unsuccessful bidders is increasing and the U.S. government is taking longer to resolve such protests.
  • Bid protests may result in an increase in expenses related to obtaining contract awards or an unfavorable modification or loss of an award.
  • In the event a bid protest is unsuccessful, the resulting delay in the startup and funding of the work under these contracts may cause our actual results to differ materially and adversely from those anticipated.
  • Because we derive substantially all of our revenues from contracts with the federal government, we believe that the success and development of our business will continue to depend on our successful participation in federal government contract programs.
  • Changes in federal government budgetary priorities, such as for homeland security or to address global pandemics, or actions taken to address government budget deficits, the national debt, or prevailing economic conditions, could directly affect our financial performance.
  • A significant decline in government expenditures, a shift of expenditures away from programs that we support or a change in federal government contracting policies could cause federal government agencies to reduce their purchases under contracts, to exercise their right to terminate contracts at any time without penalty or not to exercise options to renew contracts.
  • For further discussion, refer to “Management’s Discussion and Analysis of Financial Condition & Results of Operations” in Part II of this Annual Report on Form 10-K.
  • At times, we may continue to work without funding, and use our own internal funds in order to meet our customers' desired delivery dates for Expertise or Technology.
  • It is uncertain at this time which of our programs’ funding could be reduced in future years or whether new legislation will be passed by Congress in the next fiscal year that could result in additional or alternative funding cuts.
  • Additionally, our business could be affected if we experience an increase in set-asides for small businesses that could result in our inability to compete directly for prime contracts.
  • Our federal government contracts may be terminated by the government at any time and may contain other provisions permitting the government not to continue with contract performance, and if lost contracts are not replaced, our operating results may differ materially and adversely from those anticipated.
  • We generate substantially all of our revenues from federal government contracts that typically include a base period and discrete option periods.
  • The option periods typically cover more than half of the contract’s potential duration.
  • Federal government agencies generally have the right not to exercise these option periods.
  • In addition, our contracts typically also contain provisions permitting a government customer to terminate the contract for its convenience.
  • A decision not to exercise option periods or to terminate contracts for convenience could result in significant revenue shortfalls from those anticipated.
  • Federal government contracts contain numerous provisions that are unfavorable to us.
  • Federal government contracts contain provisions and are subject to laws and regulations that give the government rights and remedies, some of which are not typically found in commercial contracts, including allowing the government to: • cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable; • claim rights in systems and software developed by us; • suspend or debar us from doing business with the federal government or with a governmental agency; • impose fines and penalties and subject us to criminal prosecution; and • control or prohibit the export of our data and technology.
  • Depending upon the value of the matters affected, a performance problem that impacts our performance of a program or contract could cause our actual results to differ materially and adversely from those anticipated.
  • If we are unable to consistently win new awards over any extended period, our business and prospects will be adversely affected.
  • In addition, in consideration of the practice of agencies awarding work under such contracts that is arguably outside the intended scope of the contracts, both the GSA and the DoD have initiated programs aimed to ensure that all work fits properly within the scope of the contract under which it is awarded.
  • This competitive bidding process presents a number of risks, including the following: • we bid on programs before the completion of their design, which may result in unforeseen technological difficulties and cost overruns; • we expend substantial cost and managerial time and effort to prepare bids and proposals for contracts that we may not win; • we may be unable to estimate accurately the resources and cost structure that will be required to service any contract we win; and • we may encounter expense and delay if our competitors protest or challenge awards of contracts to us in competitive bidding, and any such protest or challenge could result in the resubmission of bids on modified specifications, or in the termination, reduction or modification of the awarded contract.
  • We depend on the collection of our receivables to generate cash flow, provide working capital, pay debt, and continue our business operations.
  • If the federal government, any of our other customers, or any prime contractor for whom we are a subcontractor fails to pay or delays the payment of their outstanding invoices for any reason, our business and financial condition may be materially and adversely affected.
  • The government may fail to pay outstanding invoices for a number of reasons, including lack of appropriated funds or lack of an approved budget.
  • In addition, the Defense Contract Audit Agency (DCAA) may revoke our direct billing privileges, which would adversely affect our ability to collect our receivables in a timely manner.
  • Contracting officers have the authority to impose contractual withholdings, which can also adversely affect our ability to collect timely.
  • The Defense Federal Acquisition Regulations require DoD contracting officers to impose contractual withholdings at no less than certain minimum levels if a contracting officer determines that one or more of a contractor’s business systems have one or more significant deficiencies.
  • Some prime contractors for whom we are a subcontractor have significantly fewer financial resources than we do, which may increase the risk that we may not be paid in full or payment may be delayed.
  • If we experience difficulties collecting receivables, it could cause our actual results to differ materially and adversely from those anticipated.
  • The federal government may change its procurement practices, or adopt new contracting rules and regulations, such as those related to cost accounting standards.
  • It could also adopt new contracting methods relating to GSA contracts or other government-wide contracts, adopt new socio-economic requirements, or change the basis upon which it reimburses our compensation and other expenses or otherwise limit such reimbursements.
  • In all such cases, there is uncertainty surrounding the changes and what actual impacts they may have on contractors.
  • These changes could impair our ability to obtain new contracts or win re-competed contracts or adversely affect our future profit margin.
  • Any new contracting methods could be costly or administratively difficult for us to satisfy and, as a result, could cause actual results to differ materially and adversely from those anticipated.
  • Restrictions on or other changes to the federal government’s use of service contracts may harm our operating results.

and 53 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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