We delivered free cash flow of $143 million, driven by revenue growth of 11%, and an EBITDA margin of 11.7%. We also continued our excellent track record of winning recompetes and securing sole source extensions. Our first quarter performance gives us increased confidence in achieving both our full-year guidance, which we are reaffirming, and our three-year financial targets. Looking beyond the shutdown, we continue to see enduring needs, good demand signals from our customers, and prospects for a healthy funding environment for national security priorities.
For DHS, the focus is likely to include modernization and border security, which we expect will benefit programs like Beagle and drive demand for our counter UAS technology. 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 man-packed software-defined counter UAS systems. RMT is a broadband counter-satellite electronic warfare system that leverages our existing counter-UAS software to provide our customers with enhanced counter-space capabilities.
Both TIGS and RMT are great examples of how we can leverage our differentiated software-defined technology and our strong past performance to help war fighters execute critical missions across the entire electromagnetic spectrum. Given this reality and the administration's focus on modernization across the government, we continue to see good demand and a strong pipeline of network modernization opportunities. For example, the Air Force recently awarded CACI task orders number two and number three on the base infrastructure modernization program, previously known as IPAS Wave Two. Together, these task orders represent approximately $400 million of awards this quarter.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | FY2026 | $9.2-$9.4 billion (Reaffirmed) |
| EBITDA margin | FY2026 | mid 11% range (Reaffirmed) |
| Adjusted net income | FY2026 | $605-$625 million (Reaffirmed) |
| Free cash flow | FY2026 | at least $710 million (Reaffirmed) |
| EBITDA margin | Q2 FY2026 | about 11% (New) |
| Revenue from existing programs | FY2026 | more than 92% (with <4% recompetes, 4% new business) (Recompete revenue improved from 11% prior quarter) |
| Metric | YoY | Note |
|---|---|---|
| Revenue | +11.2% (5.5% organic) | Strong program execution and ramping new work |
| EBITDA margin | +120 bps to 11.7% | Strong program execution, timing of higher-margin software-defined technology deliveries, and overall mix |
| Adjusted diluted EPS | +16% to $6.85 | Greater operating income and lower share count, partly offset by higher interest expense and higher income tax provision |
| Funded backlog | +26% | Partly driven by customers preparing essential programs ahead of the government shutdown |
| Federal civilian agency sales | +17% | All organic, driven by DHS growth and ramping on NASA NCAPS |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Counter-UAS / electronic warfare | Ongoing investment ahead of need | Merlin system with 75km detection range, strong domestic and international demand, follow-on Canadian orders; EW portfolio generates about $2 billion of revenue annually | Growing |
| Government shutdown resilience | — | Most work funded and deemed essential; de minimis revenue impact expected to be made up within the year | Stable/managed |
| Counter-space | — | Increasing customer demand; $240 million TIGS award and initial Space Force RMT production order received | Growing |
| Reconciliation / Golden Dome funding | Previously discussed DOD areas | Early planning-stage indications; expected to benefit DHS border security/Beagle and DOD intelligence programs, none yet directly identified in Q1 results | Emerging |
| International / NATO demand | Sold to 5 countries | Expanded to 15 NATO countries with demand signals in 7 more; moving from FMS to direct commercial sales | Growing |
| Commercial buying / agile procurement | — | Doubled OTA work over two years; positioned for both FAR Part 12 commercial and FAR Part 15/CAS-compliant sales | Growing |