Government IT services contractors build, run, and modernize the information-technology systems that U.S. federal agencies and the military depend on — networks, applications, cloud migrations, cybersecurity, and AI/ML platforms. The four largest pure-play public companies — Leidos (LDOS), Booz Allen Hamilton (BAH), SAIC, and CACI — collectively reported ~$45B in trailing-twelve-month revenue and carried ~$142B in total contract backlog as of their most recent quarterly filings (spring 2026).
Government agencies contract out IT work to cleared integrators on multi-year deals because they lack the internal capability to build and run modern systems. Backlog (signed contracts awaiting execution) is the leading revenue indicator. All four companies grew backlog YoY in their most recent filings. AI, cloud, and cyber mandates are adding new contract volume; DOGE-driven cancellations have concentrated in civilian consulting, DEI, and foreign-aid contracts rather than core defense IT.
These companies sell labor hours and project deliverables to U.S. government customers — primarily the Department of Defense, the intelligence community (CIA, NSA, NGA, DIA), and civilian agencies (NASA, DHS, VA, State Department). The deliverable is a bundle: cleared personnel (employees holding security clearances to access classified systems), software development, systems integration (connecting disparate agency IT systems), cloud migration, cybersecurity operations, and AI/ML deployment.
Contract types determine margin structure. Cost-plus contracts reimburse actual costs plus a negotiated fee — low risk, thin margins (6-8% operating). Fixed-price contracts pay a set amount regardless of actual cost — higher margins (10-15%+) but exposure to overruns. Time-and-materials (T&M) contracts bill hourly at a negotiated rate. Most government IT work is cost-plus or T&M, which is why group EBITDA margins cluster around 8-12%.
Backlog is the central metric. Funded backlog = Congress appropriated the money and the agency obligated it (most certain near-term revenue). Unfunded backlog = authorized work where funds have not yet been obligated (typically out-year option periods). Priced options = exercisable at the government's discretion. Total backlog = funded + unfunded + priced options.
Cash conversion is strong because the businesses are asset-light — the main cost is payroll. Capex runs 1-2% of revenue. FCF margins are typically 5-8%. The government pays reliably, though DSO (days sales outstanding) runs 50-65 days and can spike during continuing resolutions.
| Company | As of | Total Backlog | Funded | Unfunded + Options | YoY |
|---|---|---|---|---|---|
| LDOS | Apr 3, 2026 | $48.4B | $9.6B | $38.8B | +11% |
| BAH | Mar 31, 2026 | $38.0B | $4.0B | $34.0B | +3% |
| SAIC | May 1, 2026 | $22.9B | $3.7B | $19.1B | +5% |
| CACI | Mar 31, 2026 | $33.4B | $5.0B | ~$28.4B | +6% |
Leidos 8-K (May 5, 2026); BAH FY2026 press release (May 22, 2026); SAIC Q1 FY2027 press release (Jun 1, 2026); CACI Q3 FY2026 press release (Apr 22, 2026).
Leidos grew fastest (+11%) to $48.4B, roughly 2.8x annual revenue. CACI's 9-month bookings of $8.6B against $6.9B revenue yielded a 1.25x book-to-bill. SAIC's TTM book-to-bill was 1.0x. BAH's was 1.1x.
The binding constraint is security clearances. A Secret clearance takes 3-6 months to process; Top Secret/SCI takes 8-24 months. The four companies employ ~127,000 people combined (LDOS ~47,000; BAH 31,500; CACI ~25,000; SAIC 23,000).
LDOS 10-K (Dec 2025); BAH 10-K (Mar 2026); SAIC 10-K (Jan 2026); CACI per stockanalysis.com.
BAH headcount fell 12% YoY from 35,800 to 31,500, reflecting a shift from staffing-heavy work toward AI/analytics. LDOS was flat at ~47,000. SAIC declined from 24,000 to 23,000.
All four companies increased backlog YoY despite DOGE civilian contract cancellations — defense/intel/AI awards more than offset losses. Leidos added $4.8B to backlog in one year. CACI's 9-month bookings ran 25% ahead of revenue.
The mix is shifting: legacy body-shop contracts are being cut or consolidated, while AI, cloud, and cybersecurity contracts grow. BAH cut 4,300 employees while maintaining $38B backlog — fewer people, same contract volume.
Margin trends: CACI EBITDA margin rose from 11.1% to 12.3% YoY. SAIC guided FY2027 margins to 10.1-10.3%, up from 9.7%. BAH held adjusted EBITDA margin at 11.1% despite -6.4% revenue.
| Metric | LDOS | BAH | SAIC | CACI |
|---|---|---|---|---|
| Market cap | $15.6B | $9.4B | $4.9B | $11.7B |
| Enterprise value | $22.2B | $12.8B | $7.4B | $17.1B |
| TTM revenue | $17.3B | $11.2B | $7.3B | $9.2B |
| Revenue growth | +3.7% | -6.4% | +1.5% | +8.5% |
| Total backlog | $48.4B | $38.0B | $22.9B | $33.4B |
| Backlog / revenue | 2.8x | 3.4x | 3.1x | 3.6x |
| Funded backlog | $9.6B | $4.0B | $3.7B | $5.0B |
| TTM book-to-bill | 1.1x | 1.1x | 1.0x | ~1.25x |
| EBITDA margin | 13.9% | 11.2% | 10.1% | 12.1% |
| TTM free cash flow | $1.19B | $951M | $577M | ~$670M est. |
| FCF yield | 7.6% | 10.1% | 11.8% | 5.7% |
| Total debt | $6.9B | $4.1B | $2.7B | $5.6B |
| Net debt / EBITDA | 2.7x | 2.7x | 3.5x | 4.9x |
| Goodwill | $8.1B | $2.4B | $2.9B | $6.5B |
| Employees | ~47K | 31.5K | 23K | ~25K |
| Trailing P/E | 11.4x | 11.4x | 12.9x | 21.8x |
| Forward P/E est. | 9.5x | 11.4x | 10.5x | 17.0x |
| EV/EBITDA | 9.2x | 10.2x | 10.0x | 15.5x |
| Dividend yield | 1.4% | 3.0% | 1.3% | None |
| 52-wk range | $121-$206 | $69-$120 | $81-$123 | $422-$684 |
Market data: yfinance, Jun 2, 2026. Financials: most recent quarterly filings.
LDOS and BAH share an 11.4x trailing P/E. LDOS trades at a lower forward P/E (9.5x vs. 11.4x) reflecting higher guided earnings growth. SAIC has the highest FCF yield (11.8%) paired with contracting revenue. CACI trades at ~2x the group's P/E, reflecting its faster growth and ARKA acquisition. est. for forward P/E figures, which derive from analyst consensus.
Tangible book value is negative for the group. Goodwill is 34-56% of total assets, reflecting decades of M&A. The relevant floor analysis is FCF durability, not asset liquidation.
Backlog conversion arithmetic: LDOS's $48.4B backlog converts at ~$17B/yr (1/2.8th per year). At ~7% FCF margin, that backlog alone implies ~$3.4B cumulative FCF over 2.8 years -- 22% of market cap. BAH's $38B at ~$0.95B/yr FCF implies ~$3.2B over 3.4 years -- 34% of market cap. SAIC's $22.9B at ~$0.58B/yr implies ~$1.8B over 3.1 years -- 37% of market cap.
Capital return: SAIC spent $422M on buybacks in FY2026 (8.6% of current market cap). BAH deployed $1.1B in total returns in FY2026. LDOS yields 1.4% and growing. CACI pays no dividend, buys back shares.
| Data point | Source | Tag |
|---|---|---|
| LDOS Q1 2026: backlog $48.4B, financials, guidance | Leidos 8-K, May 5, 2026 | Filing |
| BAH FY2026: backlog $38B, financials, FY2027 guidance | BAH press release, May 22, 2026 | Filing |
| BAH backlog breakdown (funded/unfunded/options) | BAH Q1 FY2026 10-Q via finsee.ai | Filing |
| SAIC Q1 FY2027: backlog $22.9B, financials, guidance | SAIC press release, Jun 1, 2026 | Filing |
| CACI Q3 FY2026: backlog $33.4B, financials, guidance | CACI press release, Apr 22, 2026 | Filing |
| DoD FY2026: IT $66.1B, cyber $14.3B, AI $13.4B, cloud $3B | DoD budget request via fedcon.com | Budget |
| DOGE: ~13K contracts, ~$61B notional, 60%+ small business | fedcon.com analysis, 2026 | est. |
| Clearance demand +12% YoY | ClearanceJobs 2024 survey | est. |
| TS/SCI wage premium 20-25% | Dice 2024 compensation analysis | est. |
| Employee counts | 10-K filings; stockanalysis.com | Filing |
| Market prices, multiples, yields | yfinance, Jun 2, 2026 | Live |
| Forward P/E figures | Analyst consensus via yfinance | est. |
| CACI TTM FCF (~$670M) | Derived from quarterly filings | est. |