CACI INTERNATIONAL INC /DE/
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 6, 2026
CACI$611.16+1.1%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2025-06-30; filed 2025-08-07.
0001628280-25-038739
Item 1A. Risk FactorsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-08-06.
0001628280-26-054195
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 121 previous paragraphs and 132 current paragraphs.
72 unchanged; 33 reworded; 24 added; 14 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
There are several reasons why our backlog may not convert into revenue as expected. Many of our federal government contracts include multi‑year performance periods that depend on annual Congressional appropriations, and unfunded work is subject to future funding decisions. A lack of appropriated funds, delays in the federal budget or appropriations process, or efforts to reduce federal spending could delay or preclude the government from funding work included in our backlog. In addition, the maximum contract value specified under a contract or task order is not necessarily indicative of the revenue we will ultimately realize under that contract. For example, we perform significant work under multiple-award and IDIQ contract vehicles that do not require the government to order a minimum amount of goods or services and under which agencies may choose to obtain support from other contractors.
Current report
Changes in mission priorities, procurement strategies, or program execution may also result in reductions in scope, fewer task order awards, or lower-than-anticipated ordering levels.
Current report
Backlog may also not be collected if a customer reduces, delays, or cancels planned work; elects not to exercise contract options; or shifts work to other contractors. Our estimates of unfunded backlog may prove inaccurate, and the timing and amount of revenue ultimately realized may differ materially from our expectations. If we do not receive the anticipated funding, if the government does not order work at expected levels, or if we are unable to perform or retain the work included in our backlog, our future revenues, cash flows, and operating results could be materially and adversely affected.
Current report
We use estimates in recognizing revenues, and changes in those estimates may adversely affect our financial results.
Current report
A significant portion of our revenue is recognized over time using a cost-input measure of progress, which requires us to make accurate estimates of total costs at completion and the fees to be earned on our contracts. Because of the technical complexity of the solutions and services we provide, as well as the extended duration of certain contracts, this estimation process is highly complex and requires significant management judgment. As contract performance progresses, we routinely adjust our initial estimates based on experience gained and newly available information, even when the scope of work under the performance obligation has not changed. If our underlying assumptions or estimates prove to be inaccurate, or if circumstances change, we may be required to make material adjustments to our revenue and profit margins. Such adjustments could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Current report
We must observe laws and regulations relating to the formation, administration and performance of federal government contracts which affect how we do business with our customers and may impose added costs on our operations. These laws and regulations continue to evolve, and the federal government regularly updates or expands compliance obligations in areas such as cybersecurity, supply‑chain integrity, industrial security, cost accounting, and ethical conduct. Keeping pace with these changes requires ongoing investment in compliance processes, monitoring systems, training, and internal controls, and increases the complexity and cost of maintaining compliance across our business.
Current report
Disruptions in our supply chain, including shortages of materials, components, or qualified suppliers, could impair our ability to perform on contracts and increase our costs, which could adversely affect our operating results.
Current report
We work with a network of suppliers and subcontractors to provide materials, hardware, software, and other critical components necessary to perform on our contracts, and disruptions, including shortages of specialized parts, supplier capacity constraints, transportation delays, labor shortages, or the financial instability of key vendors, could impair our ability to meet customer requirements. Geopolitical developments, export control restrictions, sanctions, cybersecurity incidents affecting suppliers, changes in trade policy, and evolving federal requirements related to supply chain security may further restrict the availability of qualified suppliers or increase our costs. In addition, certain programs require cleared suppliers or domestically sourced materials, and disruptions affecting these vendors may delay performance or require costly requalification of alternatives. If we are unable to obtain necessary materials or services on a timely and cost effective basis, we may experience performance delays, incur additional costs, or be unable to meet contractual obligations, any of which could materially and adversely affect our revenues, operating results, and customer relationships.
Current report
We rely on the confidentiality, integrity, and availability of our information systems, the systems of our third-party service providers, and the systems we operate for customers. Cybersecurity incidents, including malware, ransomware, phishing campaigns, credential compromise, and other unauthorized intrusions, could result in the loss, corruption, or exposure of data or disruptions to our operations or those of our customers. Consistent with industry trends, we continue to experience attempts to gain unauthorized access to our systems and information. Although past incidents have not had a material adverse impact and we actively invest in detection, response, and mitigation capabilities, the nature of these threats continues to evolve, and we cannot predict the impact of any future event. A significant cybersecurity incident could result in operational delays, remediation costs, reputational harm, legal or regulatory exposure, or the loss of current or future business.
Current report
Operational, Infrastructure, and Other Non-Cyber Systems Failures
Current report
Our operations depend on the performance and reliability of our internal networks, data centers, communication systems, critical facilities, and utilities. Systems failures, including software defects, hardware malfunctions, third‑party service outages, natural disasters, power disruptions, or other physical or environmental events, could interrupt our ability to perform on customer contracts or conduct normal business operations. Our property and business interruption insurance may be inadequate to compensate us for all resulting losses. In addition, the systems and networks we maintain for our customers, even when designed with redundancy and resiliency features, may also experience failures or service interruptions. If these systems fail or are disrupted, we could face claims for damages, contract termination, or loss of revenue. Any such event could cause our actual results to differ materially and adversely from those anticipated.
Current report
In addition, differences in business practices, labor environments, data protection obligations, and legal or regulatory requirements may increase our cost of compliance or limit our ability to expand certain offerings abroad. Unexpected changes in local laws, government policies, or geopolitical conditions could delay program execution, result in increased operating expenses, or reduce the profitability of our international work. If any of these events occur, our actual results could differ materially and adversely from those anticipated.
Current report
Our integration of artificial intelligence and related technologies subjects us to operational and regulatory risks, and our failure to effectively manage these risks could have a material adverse effect on our financial results.
Current report
We use AI and machine learning technologies in certain solutions we provide to customers and in aspects of our internal operations, which requires robust governance, secure data environments, and continuous innovation. Due to the technical complexity of these emerging technologies and the highly sensitive nature of our national security and enterprise IT contracts, developing and deploying AI systems is highly complex and involves significant judgment.
Current report
Adjustments to our technological approach, security protocols, and compliance frameworks are often required as AI capabilities rapidly evolve, new vulnerabilities or algorithmic biases are discovered, and government regulations, such as executive orders and agency specific directives, are established, even though the core objectives of the performance obligation may not have changed. Flaws in underlying algorithms, vulnerabilities to data poisoning, unpredictable system outputs, or a failure to adapt to evolving federal procurement standards could necessitate costly remediation efforts, result in a loss of competitive advantage, or damage our professional reputation. Such outcomes could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Current report
In addition, competitive dynamics in the AI marketplace are evolving quickly. Rapid advancements by existing competitors, new entrants, or commercial technology firms may outpace our internal development efforts or reduce the value of certain offerings. We may also face challenges recruiting and retaining personnel with specialized skills needed to develop, test, secure, and maintain AI‑enabled systems. If we are unable to adapt to changes in AI technologies, comply with emerging regulatory requirements, or meet customer expectations for responsible and secure AI, our ability to deliver solutions, win new business, or achieve expected financial and operational results could be adversely affected.
Removed paragraphs (14)
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
•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.
Previous report
Restrictions on or other changes to the federal government’s use of service contracts may harm our operating results.
Previous report
We derive a significant amount of revenues from service contracts with the federal government. The government may face restrictions from new legislation, regulations, or government union pressures, on the nature and amount of services the government may obtain from private contractors (i.e., insourcing versus outsourcing). Any reduction in the government’s use of private contractors to provide federal services could cause our actual results to differ materially and adversely from those anticipated.
Previous report
The maximum contract value specified under a government contract or task order awarded to us is not necessarily indicative of the revenues that we will realize under that contract. For example, we generate a substantial portion of our revenues from government contracts in which we are not the sole provider, meaning that the government could turn to other companies to fulfill the contract. We also generate revenues from IDIQ contracts, which do not require the government to purchase a pre-determined amount of goods or services under the contract. Action by the government to obtain support from other contractors or failure of the government to order the quantity of work anticipated could cause our actual results to differ materially and adversely from those anticipated.
Previous report
Without additional Congressional appropriations, some of the contracts included in our backlog will remain unfunded, which could materially and adversely affect our future operating results.
Previous report
Many of our federal government contracts include multi-year performance periods in which Congress appropriates funds on an annual basis. As a result, a majority of our contracts are only partially funded at any point during their full performance period and unfunded contract work is subject to future appropriations by Congress. As a result of a lack of appropriated funds or efforts to reduce federal government spending, our backlog may not result in revenues or may be delayed. We calculate our unfunded backlog based on the aggregate contract revenues that we have the potential to realize. If our backlog estimate is inaccurate and we fail to realize those amounts as revenues, our future operating results could be materially and adversely affected.
Previous report
Any systems failures, including network, software, or hardware failures, whether caused by us, a third party service provider, unauthorized intruders and hackers, computer viruses, natural disasters, power shortages, or terrorist attacks, could cause loss of data or interruptions or delays in our business or that of our customers. Like other global companies, we have experienced cyber security threats to our data and systems, our company sensitive information, and our IT infrastructure, including malware and computer virus attacks, unauthorized access, systems failures, and temporary disruptions. Prior cyber attacks directed at us have not had a material adverse impact on our business or our financial results, and we believe that our continuing commitment toward threat detection and mitigation processes and procedures will reduce such impact in the future. Due to the evolving nature of these security threats, however, the impact of any future incident cannot be predicted. In addition, the failure or disruption of our mail, communications or utilities could cause us to interrupt or suspend our operations or otherwise harm our business. Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and, as a result, our actual results could differ materially and adversely from those anticipated.
Previous report
The systems and networks that we maintain for our customers, although highly redundant in their design, could also fail. If a system or network we maintain were to fail or experience service interruptions, we might experience loss of revenues or face claims for damages or contract termination. Our errors and omissions liability insurance may be inadequate to compensate us for all the damages that we might incur and, as a result, our actual results could differ materially and adversely from those anticipated.
Reworded paragraphs (33)
Previous wording
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. We expect that federal government contracts will continue to be the primary source of our revenues for the foreseeable future. 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.
Current wording
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). We expect that federal government contracts will continue to be the primary source of our revenues for the foreseeable future. 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.
Previous wording
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.
Current wording
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.
Previous wording
Federal government contracts contain numerous provisions that are unfavorable to us.
Current wording
Federal government contracts contain termination rights and numerous other provisions that are unfavorable to us.
Previous wording
If the government terminates a contract for convenience, we may recover only our incurred or committed costs, settlement expenses, and profit on work completed prior to the termination. If the government terminates a contract for default, we may be unable to recover even those amounts and instead may be liable for excess costs incurred by the government in procuring undelivered items and services from another source. Depending on the value of a contract, such termination could cause our actual results to differ materially and adversely from those anticipated. Certain contracts also contain organizational conflict of interest (OCI) clauses that limit our ability to compete for or perform certain other contracts. OCIs arise any time we engage in activities that (i) make us unable or potentially unable to render impartial assistance or advice to the government; (ii) impair or might impair our objectivity in performing contract work; or (iii) provide us with an unfair competitive advantage. For example, when we work on the design of a particular system, we may be precluded from competing for the contract to develop and install that system. Depending upon the value of the matters affected, an OCI issue that precludes our participation in or performance of a program or contract could cause our actual results to differ materially and adversely from those anticipated.
Current wording
Certain contracts also contain organizational conflict of interest (OCI) clauses that limit our ability to compete for or perform certain other contracts. OCIs arise any time we engage in activities that (i) make us unable or potentially unable to render impartial assistance or advice to the government; (ii) impair or might impair our objectivity in performing contract work; or (iii) provide us with an unfair competitive advantage. For example, when we work on the design of a particular system, we may be precluded from competing for the contract to develop and install that system. Depending upon the value of the matters affected, an OCI issue that precludes our participation in or performance of a program or contract could cause our actual results to differ materially and adversely from those anticipated.
Previous wording
As is common with government contractors, we have experienced and continue to experience occasional performance issues under certain of our contracts. 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.
Current wording
As is common with government contractors, we have experienced and continue to experience occasional performance issues under certain of our contracts. 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.
Previous wording
We derive significant revenues from contracts and task orders awarded through a competitive bidding process. If we are unable to consistently win new awards over any extended period, our business and prospects will be adversely affected.
Current wording
We derive significant revenues from contracts and task orders awarded through a competitive bidding process. 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.
Previous wording
Our contracts and task orders with the federal government are typically awarded through a competitive bidding process. We expect that much of the business that we will seek in the foreseeable future will continue to be awarded through competitive bidding. Budgetary pressures and changes in the procurement process have caused many government customers to increasingly purchase goods and services through IDIQ contracts, GSA schedule contracts and other government-wide acquisition contracts. These contracts, some of which are awarded to multiple contractors, have increased competition and pricing pressure, requiring that we make sustained post-award efforts to realize revenues under each such contract. 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. The net effect of such programs may reduce the number of bidding opportunities available to us. Moreover, even if we are highly qualified to work on a particular new contract, we might not be awarded business because of the federal government’s policy and practice of maintaining a diverse contracting base.
Current wording
Budgetary pressures and changes in the procurement process have caused many government customers to increasingly purchase goods and services through IDIQ contracts, GSA schedule contracts and other government-wide acquisition contracts. These contracts, some of which are awarded to multiple contractors, have increased competition and pricing pressure, requiring that we make sustained post-award efforts to realize revenues under each such contract. 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. The net effect of such programs may reduce the number of bidding opportunities available to us. Moreover, even if we are highly qualified to work on a particular new contract, we might not be awarded business because of the federal government’s policy and practice of maintaining a diverse contracting base.
Previous wording
•we expend substantial cost and managerial time and effort to prepare bids and proposals for contracts that we may not win;
Current wording
•we expend substantial cost and managerial time and effort to prepare bids and proposals for contracts that we may not win; and
Previous wording
•we may be unable to estimate accurately the resources and cost structure that will be required to service any contract we win; and
Current wording
•we may be unable to estimate accurately the resources and cost structure that will be required to service any contract we win.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
Federal government agencies, including the DCAA and the Defense Contract Management Agency (DCMA), routinely audit and investigate government contracts and government contractors’ administrative processes and systems. These agencies review our performance on contracts, pricing practices, cost structure, and compliance with applicable laws, regulations and standards. They also evaluate the adequacy of internal controls over our business systems, including our purchasing, accounting, estimating, earned value management, and government property systems. Any costs found to be improperly allocated or assigned to contracts will not be reimbursed, and any such costs already reimbursed must be refunded and certain penalties may be imposed. Moreover, if any of the administrative processes and systems are found not to comply with requirements, we may be subjected to increased government scrutiny and approval that could delay or otherwise adversely affect our ability to compete for or perform contracts or collect our revenues in a timely manner. Therefore, an unfavorable outcome of an audit by the DCAA or another government agency could cause actual results to differ materially and adversely from those anticipated. If a government investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeitures of profits, suspension of payments, fines, and suspension or debarment from doing business with the federal government. In addition, we could suffer serious reputational harm if allegations of impropriety were made against us. Each of these results could cause actual results to differ materially and adversely from those anticipated.
Current wording
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. These agencies review our performance on contracts, pricing practices, cost structure, and compliance with applicable laws, regulations and standards. They also evaluate the adequacy of internal controls over our business systems, including our purchasing, accounting, estimating, earned value management, and government property systems. Any costs found to be improperly allocated or assigned to contracts will not be reimbursed, and any such costs already reimbursed must be refunded and certain penalties may be imposed. Moreover, if any of the administrative processes and systems are found not to comply with requirements, we may be subjected to increased government scrutiny and approval that could delay or otherwise adversely affect our ability to compete for or perform contracts or collect our revenues in a timely manner. Therefore, an unfavorable outcome of an audit by the DCAA or another government agency could cause actual results to differ materially and adversely from those anticipated. If a government investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeitures of profits, suspension of payments, fines, and suspension or debarment from doing business with the federal government. In addition, we could suffer serious reputational harm if allegations of impropriety were made against us. Each of these results could cause actual results to differ materially and adversely from those anticipated.
Previous wording
We may not receive the full amounts authorized under the contracts included in our backlog, which could reduce our revenues in future periods below the levels anticipated.
Current wording
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.
Previous wording
Our total backlog consists of funded and unfunded amounts. Funded backlog represents contract value for which funding has been appropriated less revenues previously recognized on these contracts. Unfunded backlog represents estimated values that have the potential to be recognized into revenue from executed contracts for which funding has not been appropriated and unexercised contract options. Our backlog may not result in actual revenues in any particular period, or at all, which could cause our actual results to differ materially and adversely from those anticipated.
Current wording
Our total backlog consists of funded and unfunded amounts. 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.
Previous wording
Our continued success depends to a substantial degree on our ability to recruit and retain the technically skilled personnel we need to serve our customers effectively. Our business involves the development of tailored solutions for our customers, a process that relies heavily upon the expertise and services of our employees. Accordingly, our employees are our most valuable resource. Competition for skilled personnel is intense, and technology companies often experience high attrition among their skilled employees. There is a shortage of people capable of filling these positions and they are likely to remain a limited resource for the foreseeable future. Recruiting and training these personnel require substantial resources. Our failure to attract and retain technical personnel could increase our costs of performing our contractual obligations, reduce our ability to efficiently satisfy our customers’ needs, limit our ability to win new business, and cause our actual results to differ materially and adversely from those anticipated.
Current wording
Our continued success depends to a substantial degree on our ability to recruit and retain the technically skilled personnel we need to serve our customers effectively. Our business involves the development of tailored solutions for our customers, a process that relies heavily upon the expertise and services of our employees. Accordingly, our employees are our most valuable resource. Competition for skilled personnel is intense, and technology companies often experience high attrition among their skilled employees. There is a shortage of people capable of filling these positions and they are likely to remain a limited resource for the foreseeable future. Recruiting and training these personnel require substantial resources. Our failure to attract and retain technical personnel could increase our costs of performing our contractual obligations, reduce our ability to efficiently satisfy our customers’ needs, limit our ability to win new business, and cause our actual results to differ materially and adversely from those anticipated. In addition to attracting and retaining qualified technical personnel, we believe that our success will depend on the continued employment of our senior management team and its ability to generate new business and execute projects successfully. Our senior management team is very important to our business because personal reputations and individual business relationships are a critical element of obtaining and maintaining customer engagements in our industry, particularly with agencies performing classified operations. The loss of any of our senior executives could cause us to lose customer relationships or new business opportunities, which could cause actual results to differ materially and adversely from those anticipated.
Previous wording
We may experience an increase in the costs in our supply and labor markets due to global inflationary pressures and other various geopolitical factors. We generate a portion of our revenues through various fixed-price and multi-year government contracts which anticipate moderate increases in costs over the term of the contract. With the current pace of inflation our standard approach to moderate annual price escalations in our bids for multi-year work may be insufficient to counter inflationary cost pressures. This could result in reduced profits, or even losses, as inflation increases, particularly for fixed-priced contracts and our longer-term multi-year contracts. In the competitive environment in which we operate as a government contractor, the lack of pricing leverage and ability to renegotiate long-term, multi-year contracts could reduce our profits, disrupt our business, or otherwise materially adversely affect our results of operations.
Current wording
We may experience an increase in the costs in our supply and labor markets due to global inflationary pressures and other various geopolitical factors. We generate a portion of our revenues through various fixed-price and multi-year government contracts which anticipate moderate increases in costs over the term of the contract. With the current pace of inflation our standard approach to moderate annual price escalations in our bids for multi-year work may be insufficient to counter inflationary cost pressures.
Previous wording
We may lose money or generate less than anticipated profits if we do not accurately estimate the cost of an engagement which is conducted on a fixed-price basis.
Current wording
We may lose money or generate less than anticipated profits if we do not accurately estimate the cost of an engagement which is conducted on either a fixed-price or a time-and-materials basis.
Previous wording
We generated 26.3% and 27.3% of our total revenues in fiscal 2025 and 2024, respectively, from fixed-price contracts. Fixed-price contracts require us to price our contracts by predicting our expenditures in advance. In addition, some of our engagements obligate us to provide ongoing maintenance and other supporting or ancillary services on a fixed-price basis or with limitations on our ability to increase prices. Many of our engagements are also on a time-and-materials basis. While these types of contracts are generally subject to less uncertainty than fixed-price contracts, to the extent that our actual labor costs are higher than the contract rates, our actual results could differ materially and adversely from those anticipated.
Current wording
Fixed-price contracts require us to price our contracts by predicting our expenditures in advance. In addition, some of our engagements obligate us to provide ongoing maintenance and other supporting or ancillary services on a fixed-price basis or with limitations on our ability to increase prices. Many of our engagements are also on a time-and-materials basis. While these types of contracts are generally subject to less uncertainty than fixed-price contracts, to the extent that our actual labor costs are higher than expected, our actual results could differ materially and adversely from those anticipated.
Previous wording
At June 30, 2025, our backlog included cost reimbursable, time-and-materials and fixed-price contracts. Cost reimbursable and time-and-materials contracts generally have lower profit margins than fixed-price contracts. Our earnings and margins may therefore vary materially and adversely depending on the relative mix of contract types, the costs incurred in their performance, the achievement of other performance objectives, and the stage of performance at which the right to receive fees, particularly under incentive and award fee contracts, is finally determined.
Current wording
We generate revenue from a mix of cost reimbursable, time-and-materials, and fixed-price contracts, of which profit margins vary. Our earnings and margins may therefore change materially and adversely depending on the relative mix of contract types, the costs incurred in their performance, the achievement of other performance objectives, and the stage of performance at which the right to receive fees, particularly under incentive and award fee contracts, is finally determined.
Previous wording
We have substantial investments in goodwill as a result of prior acquisitions, and changes in future business conditions could cause these investments to become impaired, requiring substantial write-downs that would reduce our operating income.
Current wording
We have substantial investments in goodwill and intangible assets as a result of prior acquisitions, and changes in future business conditions could cause these investments to become impaired, requiring substantial write-downs that would reduce our operating income.
Previous wording
As of June 30, 2025, goodwill accounts for $5.0 billion of our total assets. We evaluate the recoverability of goodwill amounts annually or when evidence of potential impairment exists. The annual impairment test is based on several factors requiring judgment. Principally, a decrease in expected reporting unit cash flows or changes in market conditions may indicate potential impairment of goodwill. If there is an impairment, we would be required to write down the amount of goodwill, which would be reflected as a charge against operating income.
Current wording
We evaluate the recoverability of goodwill amounts annually or when evidence of potential impairment exists. The annual impairment test is based on several factors requiring judgment. Principally, a decrease in expected reporting unit cash flows or changes in market conditions may indicate potential impairment of goodwill. We evaluate impairment for intangible assets with finite lives whenever events or changes in circumstances indicate that the carrying value may not be recoverable at the asset group level. If there is an impairment, we would be required to write down the amount of goodwill and intangible assets, which would be reflected as a charge against operating income.
Previous wording
Our senior secured credit facility (the Credit Facility), senior secured term loan (Term Loan B Facility), and senior unsecured notes (2033 Notes) impose certain restrictions on our ability to take certain actions which may have an impact on our business, operating results and financial condition.
Current wording
Our debt instruments impose certain restrictions on our ability to take certain actions which may have an impact on our business, operating results, and financial condition.
Previous wording
The Credit Facility, Term Loan B Facility, and 2033 Notes impose certain operating and financial restrictions on us and requires us to meet certain financial covenants. These restrictions may significantly limit or prohibit us from engaging in certain transactions, and include the following:
Current wording
We have several debt instruments, including a senior secured credit facility (the Credit Facility), senior secured term loans (Term Loan B and Term Loan B-2), and senior unsecured notes (2033 Notes and 2033 Notes-2). These debt instruments impose certain operating and financial restrictions on us and require us to meet certain financial covenants. These restrictions may significantly limit or prohibit us from engaging in certain transactions, including:
Previous wording
•transforming or selling certain assets currently held by us, including certain sale and lease-back transactions;
Current wording
•selling certain assets currently held by us, including certain sale and lease-back transactions;
Previous wording
We have been in compliance with all covenants since inception of the Credit Facility, Term Loan B Facility, and 2033 Notes.
Current wording
We have been in compliance with all covenants since inception of the Credit Facility, Term Loan B, Term Loan B-2, 2033 Notes, and 2033 Notes-2.
Previous wording
Despite our outstanding debt, we may incur additional indebtedness.
Current wording
We may incur additional indebtedness, which could impact our ability to service our debts.
Previous wording
The Credit Facility consists of a $1,975.0 million revolving credit facility (the Revolving Facility) and a $1,225.0 million term loan facility (the Term Loan). The Revolving Facility has sub-facilities of $100.0 million for same-day swing line loan borrowings and $25.0 million for stand-by letters of credit. The Credit Facility has an accordion feature that may provide additional borrowings. As of June 30, 2025, $124.5 million was outstanding under the Revolving Facility. The terms of our debt allow us to incur additional indebtedness from other sources so long as we satisfy the respective covenants. If new debt is added to our current debt levels, the risks related to our ability to service that debt could increase.
Current wording
The Credit Facility consists of a $2,000.0 million revolving credit facility (the Revolving Facility) and a $1,250.0 million term loan facility (the Term Loan). The Revolving Facility has sub-facilities of $150.0 million for same-day swing line loan borrowings and $25.0 million for stand-by letters of credit. The Credit Facility has an accordion feature that may provide additional borrowings. As of June 30, 2026, $660.0 million was outstanding under the Revolving Facility. The terms of our debt allow us to incur additional indebtedness from other sources so long as we satisfy the respective covenants. If new debt is added to our current debt levels, the risks related to our ability to service that debt could increase.
Previous wording
The Credit Facility and Term Loan B Facility provide that certain change in control events will constitute a default. The 2033 Notes provide that upon the occurrence of certain change in control events accompanied by a ratings decline, the Company may be required to repurchase outstanding notes, in whole or in part, at a redemption price of 101% plus accrued and unpaid interest to the date of redemption.
Current wording
The Credit Facility, Term Loan B, and Term Loan B-2 provide that certain change in control events will constitute a default. The 2033 Notes and 2033 Notes-2 provide that upon the occurrence of certain change in control events accompanied by a ratings decline, the Company may be required to repurchase outstanding notes, in whole or in part, at a redemption price of 101% plus accrued and unpaid interest to the date of redemption.
Previous wording
We must observe laws and regulations relating to the formation, administration and performance of federal government contracts which affect how we do business with our customers and may impose added costs on our business. For example, the Federal Acquisition Regulation and the industrial security regulations of the DoD and related laws include provisions that:
Current wording
For example, the Federal Acquisition Regulation and the industrial security regulations of the DoW and related laws include provisions that:
Previous wording
Our failure to comply with these or other laws and regulations could result in contract termination, loss of security clearances, suspension or debarment from contracting with the federal government, civil fines and damages and criminal prosecution, and penalties, any of which could cause our actual results to differ materially and adversely from those anticipated.
Current wording
Our failure to comply with these or other laws and regulations could result in contract termination, loss of security clearances, suspension or debarment from contracting with the federal government, civil fines and damages criminal prosecution, or other penalties, any of which could cause our actual results to differ materially and adversely from those anticipated.
Previous wording
Systems failures may disrupt our business and have an adverse effect on our operating results.
Current wording
Systems failures, including cybersecurity incidents and other operational disruptions, may disrupt our business and have an adverse effect on our operating results.
Previous wording
Many of the systems that we develop, integrate, maintain, otherwise support or use involve managing and protecting intelligence, national security, and other sensitive government information. While we have programs designed to protect such information and comply with all relevant privacy and security requirements, the threats that our clients face have grown more frequent and sophisticated. A security breach or system failure in a system that we develop, integrate, maintain or otherwise support could result in a loss of revenues, remediation costs, claims for damages or contract termination and our errors and omissions liability insurance may be inadequate to compensate us for all the damages that we might incur. Any such event could also cause serious damage to our reputation and prevent us from having access to or being eligible for further work on such sensitive systems for U.S. government customers.
Current wording
We develop, integrate, maintain, support, or use systems that handle classified and sensitive U.S. government information, including intelligence and national-security data. While we have programs designed to protect such information and comply with all relevant privacy and security requirements, the threats that our clients face have grown more frequent and sophisticated. A security breach or system failure in a system that we develop, integrate, maintain or otherwise support could result in a loss of revenues, remediation costs, claims for damages or contract termination and our errors and omissions liability insurance may be inadequate to compensate us for all the damages that we might incur. Any such event could also cause serious damage to our reputation and prevent us from having access to or being eligible for further work on such sensitive systems for U.S. government customers. In addition, in order to provide services to our customers, we often depend upon or use customer systems that are supported by the customer or third parties. Any security breach or system failure in such systems could result in an interruption of our customers’ operations, significant delays under a contract, and a material adverse effect on our results of operations.
Previous wording
We conduct the majority of our International Operations in the U.K. and the Netherlands. As a percentage of our total revenues, our International Operations generated 3.0% and 3.0% in fiscal 2025 and 2024, respectively. Our International Operations are subject to risks associated with operating in a foreign country. These risks include fluctuations in the value of the British pound and the Euro, longer payment cycles, changes in foreign tax laws and regulations, and unexpected legislative, regulatory, economic or political changes.
Current wording
We conduct the majority of our International Operations in the U.K. and the Netherlands. Our International Operations are subject to risks associated with operating in a foreign country. These risks include fluctuations in the value of the British pound and the Euro, longer payment cycles, changes in foreign tax laws and regulations, and unexpected legislative, regulatory, economic or political developments.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
If the government terminates a contract for convenience, we may recover only our incurred or committed costs, settlement expenses, and profit on work completed prior to the termination. If the government terminates a contract for default, we may be unable to recover even those amounts and instead may be liable for excess costs incurred by the government in procuring undelivered items and services from another source. Depending on the value of a contract, such termination could cause our actual results to differ materially and adversely from those anticipated.
Current report — wording carried from elsewhere
Our contracts and task orders with the federal government are typically awarded through a competitive bidding process. We expect that much of the business that we will seek in the foreseeable future will continue to be awarded through competitive bidding.
Current report — wording carried from elsewhere
This could result in reduced profits, or even losses, as inflation increases, particularly for fixed-priced contracts and our longer-term multi-year contracts. In the competitive environment in which we operate as a government contractor, the lack of pricing leverage and ability to renegotiate long-term, multi-year contracts could reduce our profits, disrupt our business, or otherwise materially adversely affect our results of operations.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
In addition to attracting and retaining qualified technical personnel, we believe that our success will depend on the continued employment of our senior management team and its ability to generate new business and execute projects successfully. Our senior management team is very important to our business because personal reputations and individual business relationships are a critical element of obtaining and maintaining customer engagements in our industry, particularly with agencies performing classified operations. The loss of any of our senior executives could cause us to lose customer relationships or new business opportunities, which could cause actual results to differ materially and adversely from those anticipated.
Previous report — wording carried elsewhere
In addition, in order to provide services to our customers, we often depend upon or use customer systems that are supported by the customer or third parties. Any security breach or system failure in such systems could result in an interruption of our customers' operations, significant delays under a contract, and a material adverse effect on our results of operations.