BAH - Earnings call transcript Q2 2018 | Booz Allen Hamilton Holding Corporation

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Operator

Good morning. Thank you for standing by and welcome to Booz Allen Hamilton's Earnings Call covering Second Quarter Results for Fiscal 2018. At this time, all lines are in a listen-only mode. Later there will be an opportunity for questions. I'd now like to turn the call over to Mr. Riggle. Curt

Curt Riggle

opportunity Good second results you our and earnings now earlier quarter hope had on you. for joining about announcement. this Vice and press and you've and Allen's Relations, Investor to the Officer; are provided Booz of Howell, an on slide morning. morning We've talk Thank we Riggle, presentation and Rozanski, Officer. for thank website Executive and us with We business our are release also Chief Executive Great. that read slides financial issued Vice our to fiscal and President, President Chief X. I'm Horacio me Lloyd Curt XXXX Financial President

and remind we reliance call. undue that the place may forward-looking and this set which please company discussed the revise include quarter and statements some We keep other statements in in our today on any shown considered may to As update on to release mind XXXX know discussed earnings and government other items morning risks fiscal of services, will for we'll economic results unknown X, to on included in of include, earnings discuss statements this among not the that our actual are subject you caution no forward-looking, you things, be and from in uncertainties, forth risks the uncertainties may filings. disclaimer information SEC These therefore of availability slide that obligation today's or materially forward-looking the results. second under differ that conditions, on cause our factors and we disclaimer our and make assume to periods that release funding and general future in forecasted

CEO, the reconciliations for adjustments our measures in slide useful our slides. During non-GAAP GAAP an non-GAAP pleasure now comparable today's other the now most We my we which turn provide investors. of we the second Rozanski. of and measures to also It's our and other information XXXX on quarter believe to measures Horacio metrics, to We're fiscal over financial include discuss X. will call, call explanation

Horacio D. Rozanski

Thank you, us. Curt. joining you thank everyone, for morning, Good and

I to San we yesterday. is to near San our large number acknowledge staff events Before dear Booz with and area. the like a tragic clients take would the Allen a moment Antonio and begin, to our the of in in family Antonio

the of with deal feel of to half great confidence we And months conditions and created This so the entire firm's first for victims we that Booz the strong sustainable in to In operational more even quarter community. May operational the our strength Lloyd hearts and performance positioning told our future the strategic results, you of hand, growth report go morning, another capping and market. financial long pleased Allen. a term. we at about Today, over families very that the are in out results confident had the because excellent six their and have I quality of we

to to new closer most We're needs business. are and client We're our been never advancing clients. missions. winning their where we have We pivoting anticipating opportunities are and attractive the

to drivers in of on our two position focus discipline Allen's talent. any like remarks firm to our addressing and so would performance, with annual the the long-term key near-term I achieve we We future. our capacity and my attract pride year managing challenges. can and Booz the head-on for each objectives we're always, ourselves with that value As foresight, differentiated today build market

we continue understood had technology-centered that demands As years world. to you growth know, five we to Allen adapt increasingly in launched our strategy XXXX client because meeting Vision an Booz ago,

where point the positioned precisely are market technology demand is the we greatest, meets where Now mission.

problems and toughest technology, requires the to their our develop recognize technology, clients turned Allen right and consulting they've know-hows, and new advanced Booz because solving new implement heritage, to ideas Our of solutions. mission and that

So, for example, we deliver secure Agile development large for at scale enterprises.

enabled technology step information managed. how in early Defend our a have adoption is security District of change through We client

generating and revenue And Most importantly, advantage. and We that Lloyd organic analysis is innovation, growth on, holds are sustainable our we will level Morphick, create cyber growth firm collection later technology with we is currently offer agility, believe improving a from advanced and intelligence the With data separating acquisition Booz the integration we of that continue competitive us Allen's identifies the capabilities differentiation with and of an exceptional adaptive experience, and that stops skill, and now people, attacks. pack deliver. science. industry-leading clients accelerate. our to describe will that this of which platform

Now by the increased second moving to head quarter other I our the long-term on Allen this alone, performance required position. want and capacity skill people to count with unique that XXX. today, Booz tremendous retain market is to maintain highlight to our In driver attract demonstrating sets

We have skills, base, talent both made. of more growth We not number essential our and could range growing in pleased long that in strategy. be the with said to we've our is progress

nearly September people Allen at of than have X,XXX As Booz ago. a more we year XX,

the technology work, We prevailing who push work to problems collaborate do a and to frontiers, to opportunities with new advance. a learn competitive diversity professionally, grow labor to mission-critical because solve XX,XXX-plus and meaningful market of women very of and colleagues, are what for great here; offer in we men

central and topic, I to to other purpose to firm, speaks Finally, to our before over one call clients the want on and attracting are values retaining talent. of Lloyd, touch the something and that turning which also

The few was our me, Rico. service throughout have both in to our in the Texas years. its resilience community. As worst employees after rallied in is endured be how country by August not the and challenge. remarkable, know, affected the weeks has a and though storms surprising people to a season and been Florida, Harvey meet Houston to of What their to the few hundreds team and Booz I the of to hurricane the their privilege meet had Allen Hurricane in has since with inspired Southeast, you Puerto

our colleagues During others. worked formed helped shelters. houses in the colleagues Antonio Afterwards, of up San and several emergency our storm, of and rescue volunteers office flooded at and teams to Houston search and of clean

Asia today One we to registered East, Booz the and are, by values the they therefore, Allen. of between the helping technical the five a Booz our people emergency organizations central Management and around-the-clock matter disaster with our critical our planning, At federal from that for define assistance success and to and damage teams they we has future. to than details assistance six donations both it our worked through I for They Since client match Allen demonstrated our during in away quarter a the people because share the and our in zones. supported business numbers, disaster managing talent, website. donated to who time of define fundraising across not relief from to And as also million purpose believe far more the have and markets absolutely but evacuation communication August, weeks second contributed employee differentiation. to Middle Roughly are, relief difference vehicles, Emergency provided made of the site. late Federal provided deployment because just Agency, and data and these have disasterassistance.gov as the people government's recovery. $XXX,XXX in geospatial I X.X are help imagery and was campaign a firm, for

over Lloyd, that, with you. to So

Lloyd W. Howell, Jr.

how results now fit I'll and our they pivot Horacio. of quarter expectations our to second Thanks, rest for the the year. into

had great continues organic terms we talent, numbers quarter. grow to as Allen another clients. capabilities, and the as in clearly show, revenue on basis, Booz an As well of

And a cash we building and every increased setting for and momentum. robust pipeline, capital capturing we count, market demonstrated have up only opportunities commitment in We head clear shareholder backlog, revenue through record also that but our with consistent continued ourselves Furthermore, we deployment. generation serve. are value not in it's to growth performance are high

primarily increases to demand labor. by the led clients, second turn count slide me driven take through expenses continues strong Revenue continued excluding Let you to X. the direct from increased and Please quarter billable details. in gains accelerate. were Revenue to head which

increased it remains of Billable up revenue. XX.X%. at XX% expenses X.X% revenue total quarter, the For was about and

park we mentioned, out in hiring it Horacio As the QX. of on knocked

our One contracts need and at The clear onto of colleagues to maintain we backlog our efficiently main as Total XX% book-to-bill. year-over-year newest focus our hiring. areas right backlog possible, of typically is you billion. it government's quarter now is billion, for when of is of moving category; $XX.X span XX.X% is fiscal as look as for momentum our on even has our a focus for up our our priced abundantly that Increases backlog, unfunded, strongest XX.X% it backlog new funded for is X.X% than for with coincides bigger every been. bookings. year-end, options. ever At Because $X.X and funded the record second

book-to-bill our QX times at ever. Our X.X highest second is

Moving the bottom from earnings contract income and gains revenue numbers, and line to benefited our profitability. improved

However, our on margin. adjusted some EBITDA we are experiencing headwinds

of the our There large headwinds we were those legal from employees a number come Two still resulted associated accelerating of a expected. expenses and expenses, of than the second billable to us reason about factors expected. on-boarding caution Specifically, higher spending maintain but line half increased was growth, the as top new saw with higher give incremental year.

growth expect year, fall vis-à-vis all that strength our fiscal the the will even planned competitors. we bottom not For line to of as about our the remain full of we and line, top business do fundamental the confident performance above

quarter, spending. of same for income income due and quarter in primarily compared XX% offset contract refinancing increased increases XXXX the million I factors quarter over mentioned, compared and Both transactions. growth X.X%. Net by for $XX.X income to prior-year to adjusted excludes and operating X.X% adjusted year net X%, to partially income $X.XX. respectively, adjusted For million in by grew the drove last operating for was the and profitability, operating fiscal margin operating that and to debt add adjusted just and the revenue to and related EBITDA was Adjusted operating income. factors the year to the was second back EBITDA grew income X.X% same XXXX increased costs income the X% were $X.X the million. up X.X% $XX.X EBITDA quarter increased period nearly driven ADEPS the Adjusted improved

deployment. over second We capital to the and payment thanks strong. of the cash improvement in on at main centers. our slide revenue one cash from of In previous to the easing X. saw quarter, remained an now I'm healthy government's cash these expenditures of an of leasehold making that conversion turn the these Capital generation because quarter found delays and Let's allow spaces. were updates tenant than period after improvements we completion QX We us need, corresponding and to talent higher update many and project rent of continuing year or same the helps $XX.X reductions. leases retain in last our office attract for reimbursements improvement million operations

for $XX We are to to fiscal year, CapEx expect $XX still projecting year. XXX% about in we million now income of the flow and fiscal net full to adjusted million cash this convert free in

about on knowledge acquisitions. solutions approximately focused us together It in meaningful strategy best clients. to fits Morphick. consistent emphasized is of has and solutions, in shares. a service past, a the engineering, revenue As to overall and strong areas growth, Booz sheet nearly excellence, of of with healthy tuck-ins week, strength We demand digital after sheet acquisition value acquisition, Horacio We our squarely announced shareholder have is allowed Year-to-date, and of the value as a paying to in repurchasing approach the dividends I shareholders our million the our commercial capabilities which we The for effective million Allen generation closed with last to million share as through our cyber $XXX the market, deployment. to tools. managed in for generating plus deliver long-term capital analytics, growing. prowess to $XX deploy $XXX and is the cash that form quarter near- our and value and and create cash dividends creation to balance with regular growth the balance and committed also million repurchases, disciplined in technical balance our intend X.X rapidly We mission fuse for into use of closed where cyber, consulting operational remain

capital near- Taken our to dividend, and value for demonstrate approach share as long-term and to together, well creation regular investors, commitment the repurchases, as our acquisitions flexible deployment.

As and strategy. we continue based the opportunities we available We market conditions, and past, deployment capital on in have capacity, external for this said flexible capital deploy plan investment. internal to

which last directors additional roughly share changed. let our board to warrant. not this In increase authorization. has support repurchase We strategy to have as approach, move our flexibility conditions $XXX approved see to XX. regular of guidance, now a of share. and November worth shares week on dividend million, in confidence the of million and announcement Our September closing, up of morning me a $XXX In slide repurchase to on about dividend on you'll payable our the performance strong November future, our the XX of this record It's recognition X. through per $X.XX In company stockholders our announced

also We will our full We revenue with reach of given affirming that will that we are for X% an first-half top-end performance. to fiscal the project our guidance grow range, the year. excellent expectation X%, that

described unchanged, due guidance also line earlier. to bottom remains headwinds Our and primarily I uncertainties the

share there be Curt per share earnings diluted conclude to kick $X.XX be and Q&A. per to back $X.XX. earnings expect turn off to We and diluted to $X.XX I'll $X.XX it to to adjusted

Curt Riggle

could Thanks, and for us that instructions launch if Q&A some the Great. off Lloyd. process. Candice, you on give And,

Operator

And Fargo. comes of our from first Edward Caso question Wells

Your open. now line is

Edward S. Caso

Great. here. your results and growth? head revenue on Congrats us growth of Thanks. count your Good portion Can the morning. dissect both organic the help you

Horacio D. Rozanski

are I'll guess both I The news on on we strategy. and good much start. very morning, good Ed, is

have types Lloyd and services, digital the roughly So on are on we of around cyber, engineering uptake solutions, things I technical More of talking we of around mentioned background. that that both things clearance. a are have security half seeing, the the than other two-thirds that about hires call around a them and

to our rate. drive growth are continue the we to that need these people So

double-digit The commercial. other and we civil global last terms growth growing, at our see we is intelligence the is element our in broadest defense, call continues across that level serve, most that markets of about talked Strong the our on business, and across business so across in business. that largest we our growth of

and the board, everything So can and is at the pretty portfolio you it else, and when said across the you and the look same at backlog pipeline is look growing be the broad-based. book-to-bill

Lloyd W. Howell, Jr.

client Aquilent And had our top of is growth us acquisition, so just when I folks would demand, add you just count – at with as function look head on that. so we of The Horacio XXX the join that a or growth, really mentioned. X,XXX

Clearly, is and Our acquisition to of in well-positioned the ever a clients, really and the that with the entire of that across gives X% lot growth about markets We're start. represents, Aquilent, And intelligence less of case a than off fiscal the us experiencing. portfolio. our of this we're defense optimism year. are entirety great the

Edward S. Caso

question now there Is sort your should SEC XX-Q of was focused course order is $X.XX Thank is that meaningful, $X.XX, it on? Great. other about this – And share the of also fees. Is noticed section. My something being around morning drag? the litigation is sort we noted business, the if it a a in normal I of this or in mention be magnitude, you. legal of

Horacio D. Rozanski

recently much in it's normal the SEC. with this includes in been of matter we've we Very have same and don't covers The you've common informal it of us a that other that And, Q. contact as morning that is we like the continuing. to the strategy, at. informed an investigation, time to substantive have the And DOJ and and as seen looking agencies and the an believe the They do subject bring to And we're business, to And course. is this pretty Thanks an update, And question. where in prepared really for to topic. matters DOJ that's we stages on much you are the course, we resolution. in much describing all the and all excellent as possible because call, we is really cooperate today appropriate legal this today's the to going. what we're continuing on with team early are say government spend this want of investigation

Lloyd W. Howell, Jr.

at on your this not Ed, investigation to we're portion costs time. the relating the costs question, DOJ of to legal on going comment

Operator

Tim from comes question next of our Blair. William And you. Thank McHugh

line is Your open. now

Trevor Romeo

actually taking Thanks the for morning, Good Romeo is Trevor Tim This today. on Hi. for guys. questions.

Horacio D. Rozanski

morning. Good

Trevor Romeo

morning. Good

and highest they guess, a were I revenue just give of in First seen you of billable that we've quarter, percentage level while. this XX% the detail expenses kind quarter view all, to more forward? is what's on you closer just think or Could a higher as figures any the do going I one-off more us this that driving in the of of on of that sustainable

Lloyd W. Howell, Jr.

Trevor. Thanks,

some were expenses It's We XX%. are our the still perspective the to the were to tied us XX%. quarter, the billable to remains still They to our from seeing XX% range primarily range higher to market. billable business due year expenses asides quarter-to-quarter, really defense estimate for set XX% being of small difficult in of for this so that

Trevor Romeo

I kind follow-up, people would Got I of had forward? the it being But guess, been is challenge continually it to maintaining to it. environment is say Okay. guess, able support growth to biggest lately. your budget as the to Thanks. the backlog growth forward, And you strong what risk then, really if is up, to sum I growth you a has to risks biggest the guess, enough Thanks. or, going or going hire

Lloyd W. Howell, Jr.

– this we capabilities a labor so that the remains my the perspective, and that source it candidates in doing. From challenging year the Yeah. far attract been market we've technical in that candidates have very attract successful

challenge. that that mission up going delivery, on range said and in challenge forecasted conferences, to – we're the that day-in, we previous that great still maintain assuming I've As and for our where our clients' day-out that really And we the is calls in successfully to closer remains will we're closer end the in governor meeting year. get feel

Operator

Rumohr Company. our you. And Cowen Cai & next from Thank question von of comes

now is line open. Your

Cai von Rumohr, CFA

Thank Yes. very you much.

you us pay, is you did could how it, it? how profitable give is color how some Morphick, much big So,

Horacio D. Rozanski

play. try an a way. see of but science strategic and all we on want to start we basis into continue believe both red and hunt, me ability as opportunity coming the one We to networks them intelligence, buy is and buying things services, these we managed ways of commercial things our play. opportunity pen as Morphick it to in that not clients, front, the machine managed start, frame it our significant APT testing clients the and We Let this because especially teaming, strategic data buy bought a did as the using markets this scan a like to financial services sophisticated are delve to very a evolving. see is on and We

And so out we leapfrog own we approach And found were this platform ability by did it. the in why of years, and our building building the a couple of process that's we to so in capability. Morphick

financials, In of not any and they're strategic with financials acquisition we're potential. the to it, going small disclosing details great our material around it's terms to really a because be not

Cai von Rumohr, CFA

change didn't you you second point And you growth you your you. decelerate at official in stay the with and X% had half. this some guidance under the if is Thank Okay. type the organic quarter, of way yet only

didn't bought you yet X.X million and shares. You count, your change share

end, comment more comment other of on given didn't toward you end, Maybe elements. be why the of on booked toward some more mentioned could, the looks So would tax this maybe you quarter. and but if kind like you what with the kind a rate you revenues And top guide. little of color, the the the – it lower

Lloyd W. Howell, Jr.

Sure.

And the to I the at that. first fact we the headwinds being As where end very year, forecasted remarks, year speculate range feel the to change of far so. still that are see basis But, to of you that we And few end do given a remains And having. don't the completely prepared top of the quarter-by-quarter ending my we're ourselves my the changes pleased half has of lot confidence. we guidance, and we're feel that in very said, the prepared further it's do folks performance onboard there expect the That our a in question within in year strong year. the gives on for for your happy we to we're been up again, the it up down range. come don't us with that into going we a to implied, the When range, XXX bottom appropriate we've I comments, want we'll right when end to able so what year. this look that get that with as to now, bottom. we're

uncertainty but As with I also intending we year, of fiscal of for this are a that and the great continue. to year, beginning we mentioned, half second off the more at to we're do the start see

Operator

And of our Raviv question from next you. Citi. Thank Jon comes

Your line is now open.

Jon Raviv

of Good following line just Hi. morning. Question, thought. on that up

fiscal flowing of the the some it For be bottom just it the line to the will the Just to on headwinds that up see line to side XX%? you XX% on and top of or it second the in more can is instance, where not some billable specifically SG&A more you flowing coming outline half? bottom end line? not where Is line? where higher the is Is legal top fees

Lloyd W. Howell, Jr.

Yeah.

said my we them onboarding we will that caution, rates. number are to this of have, higher remarks, people costs I so it exactly billable XX% expect they knowing our in the expenses though to us were the where Onboarding, at gives be As get that deployed it time associated the quarter, not within to utilized up, do that takes end XX%. some with targeted and prepared

as elevated, And we're so, in expected. then, previous to today the grappling as legal that is comment with. costs also we're that the And going one on they're headwinds not of question, but

Jon Raviv

or about sales of cost the cost What a fit comes margin? bit. how in that profile your of more, seeing into And are see on you're a about adjusted and can growth I you plus a various really you the to margin lower business margin the is all for talked accelerates, And in new bit into little Sometimes it. growth we And then, there is tendency fixed when backlog little talk when one then the margin profile winning? you of mid-Xs plus can some to period does Got up price, notion that following terms accelerating backlog that up you versus growth backlog? accelerates see that, of it in notice just this there wrap EBITDA reasons.

Lloyd W. Howell, Jr.

healthy you The portion that overall at look Sure. has price our When also fixed is of increased. XX%. very it backlog, a up

so, on improvement optimistic basis, we see And converts. that some a as that margin we're that are going over time in to backlog

of In We're bottom top on is profile, margin like. terms line, the and focused long-term believe the looks creating overall deploying what We're we're growth we this generating the fundamentally, shareholders. and value for cash. growing also our and

And then so we'll revenue being forward. to our that market, what that going able capabilities my be given the to work out past past ex-billables. global of that think And and going investing give in years. commercial this to comments time, forms the type three is technical the we've that about achieve mid-Xs we on still the leverages in expand move that's past, accelerated with five margin, We growth, want type, contract I've us at to I to been of the growth also the able over believe mix the over shift spoken targeting in

Operator

Epstein And comes question from Thank of of Bank Lynch. Merrill America next our Ronald you.

Your open. line is now

Kristine Tan Liwag

of your pursuing is mid-Xs what business. your to discuss Can your target, progress been embedded a morning, historically your follow-up expectation This calling is And is clients? in in for guys. Hey. margin it's commercial Good business? Ron. commercial you the understanding, From rest in my Liwag for growth your a that for higher margin global than Kristine

Horacio D. Rozanski

me let So start.

clients growing commercial and MENA all pleased of our very our kinds be just to initial portfolio the very, posting are key business, here not strategy. We right around a the all growth cyber-first feel numbers, Southeast of blue are region. will but in Singapore clients And we forays both future our chip in into presence with They're that creating the Asia global like the growth. finding We are well. a good and

talent to both also it Allen. that careers opportunity talent. there learn in forth, variety ways enhance retain to without business some us We back are for government think I value also of are attracting in leave is some but things to And having our and our – to our and travel clients, Booz great that sees have and allowing government an

a as So, very the story success both it a part small doing very across our and you contribute. financial the contributor It is it's not board, right it's to to is know, it now, largest good of and good business, continue we to with but economics. well our so expect

Lloyd W. Howell, Jr.

in On two years see times commercially past has example confidence side, continuing. with we we of The X over the grown XX%, economic better Morphick clients. And is our than the business margins X.X growth about and do federal respectively. excited to very our that that that. acquisition XX% an We're

grow And so, that we roughly of at and invest percent X.X times the portfolio, entire want to to continue business.

Kristine Tan Liwag

that. to follow-up a And Great.

that your accelerating year? the for backlog, in book-to-bill growth quarter growth With in higher XX-plus does commercial and factor your percent another in the in the

Lloyd W. Howell, Jr.

wouldn't I No, subscribe math. that to

backlog commercial majority business, forward. feel growth be we've due it that the to in historic portfolio, and very part smallest the excludes given of $XXX is the federal protests. its our going of business confident about it about still prospects Our The our we seen, million

is that the don't in include of backlog, our So the but we due markets. majority that federal to

Operator

Thank question Research of you. from Krishna And Vertical Sinha comes our next Partners.

is Your open. now line

Krishna Sinha

Thanks. Hi.

price this your depressed. point? guess is forward So, up price how are I $XX, this over you repurchase, you're share so of lot a your valued, share going shares historically when back just that talk quarter the But as now on more can – you're about share you was from going prioritize to you when Obviously more did away repurchases. from kind fully share back the more

Lloyd W. Howell, Jr.

Sure.

my an a as and acquisitions, dividend, on with part a special regular deployment capital share strategy. disciplined Our that, of strategy, is have appropriate, remarks, when I as a of addition based strategy. we in recurring prepared really that flexible mentioned And repurchases, a

quarter, a million. the that and we to did again, at bringing we strategy. and authorize we Over for so total the authorization million of past purchase long-term us believe will The dictate, million, our we near $XXX market flexible $XXX our as And share board that level conditions creates That is X.X million. utilize provides flexibility asked value a shares, shareholders. amount to $XXX creation repurchase or

Krishna Sinha

I Okay. And your which sounds you're I XX% then is of remain to margins. this going expense, like I math so somewhat that dynamic, If your with talk to how cost labor margin? should anymore? labor deploying therefore right from remain are solutions, revenue does margin on to head you labor, am to contracts – stable. at your you or lot billables the that count, increases margin thinking are like, a of think accelerant guys the correlation that is increase your Can head translate a to at if as just not Is just perspective, side, expected about legal a count direct and your adding about be ex look one-to-one an XX%, direct on more the

Lloyd W. Howell, Jr.

Sure.

have of deploy It's You're how really that the there quickly new on on which the and timing of board. cost circumstances, costs. with we're contracts, associated X,XXX each board, the utilize close. we unique and coming timing bringing is a And can labor the with the folks

is impacting that, And that is so what the with really margin.

Operator

question from comes And of next Thank Spingarn Rob Suisse. Credit our you.

Credit now Lloyd, Suisse and questions. line backlog, rise Spingarn just a Good Horacio couple this of LLC - Robert in Your is (USA) M. open. Securities big morning. with

(XX:XX) variability. been (XX:XX) revenue in really backlog and You've

Lloyd W. Howell, Jr.

asking Credit question. Suisse your repeat broke I'm Robert Could you right. you M. All up LLC (USA) sorry, Securities when - it? Spingarn Rob, were you

that Let again. me try

at high expansion, why a backlog nonorganic, you've a the end understand day the want little such end got but of billables, some I the in So, in little of And you're and across that's revenue but maybe strength range see industry. – of of understand expansion, to the the bit at such variability we your your I better companies.

can are stronger or, still element throw guys here to there Some any single a as specifics defense campaign we is follow-up general, negative missile higher you're Korea about low readiness a or couple flat, any the more? on you Russian are and you. digits, services organic are than North that, And to of you frankly, think readiness in that. there across are growth your Thank supporting much Army agency growth? as deterrence, in Are that the that

Horacio D. Rozanski

Love that on comment to say. the have don't industry. And I I to question, want

started have our significant five to was me Let impact the about revolution us. premise ago with on this We years going technology a talk clients. that

invest through and relationships, to began capabilities. sure we expertise. invest innovation. knowledge of began make our We tightly client us looked coupled our so Vision consulting took to missions, traditional to that married was awhile to clients' We And our in XXXX, for ways, it our in and and that advanced

be an to tuck-ins, the we to Because was market our focus So this It with Lloyd on very did faster. talked transform ourselves focused in capability on better us We way clients. gave appendage. not that, large the as about, acquisitions. actually position and not was we that of

driving work that if Scrums we example, we at believe who my into So winning a fill in a is we in in not those. Agile sought things after went we're success, When specific this and from, know. the we're than that but the for secure you at success that. really backlog more enhancements at program we to into people Booz highly delve proposition, strategy. at few outside disciplined the last And now do this energy people the And that again, able Agile the complement firm, development our growth. industry, employee very We've doing breeds being you years five you budding that is inside Allen. to that value to now great the for it's recognizing in need our of one creating are as also with look begun can to industry. bringing differentiated Those We've are hundreds our because it's are presence our driving of scale development really the programs, been our been in and are career just

value can why we to we're That's talk adding unique clients. very So we can optimistic. about accelerating can growth. we That's about why our talk That's talk why about differentiation.

so that's and think are what I And going where we're to be. where drives we

Booz comes have firm the can main, Allen be the challenges. we're market a time. means a get set with at of whole clicks perfect the could us. prouder not alluded, As us I done not perfect its the But on both our and work on of This where colleagues that all where take market of they by have I everything Lloyd and and to growth isn't here own no and

Lloyd W. Howell, Jr.

that would couple in We we And foot I'd points. to stomp XX,XXX about we real-time missions, to just got people. to other we salespeople. They our a like get the skate and do, agendas, They clients' feel quicker feel that our we've than most. like puck what our are with they clients. invest information

that Thompson, our support. value-added develop, the and to offerings Officer, through have in provides with Betty believe an place programs cultivate, excellent really train, workforce So, provides that we us Personnel Chief we

fact clients' our So the people missions. that my the find best seek people our and best deploy most to the we people, biases really toward against are important

Operator

our of comes Kumar ISI. Thank from question next you. Rayna Evercore And

Your line is now open.

Rayna Kumar

quantify... you Can morning. Good

Lloyd W. Howell, Jr.

morning. Good

Rayna Kumar

across trends ...pricing and... businesses your

Lloyd W. Howell, Jr.

sorry, Rayna, out. and in you're I'm fading

Rayna Kumar

you Could better hear me now?

Lloyd W. Howell, Jr.

you. Yeah, I Thank can.

Rayna Kumar

in and about the think remainder second the you pricing quarter of how businesses, the we quantify trends for then Can pricing across fiscal your should year?

Lloyd W. Howell, Jr.

speaking, from away low acceptable ourselves found is environment past in moving slightly couple in the Generally years. technically we the price of pricing

think I our markets. true of across most that's

that has current in there that they capability certainly a feel environment every has being much our it. a that improvement we modest single submit a to begin been bid improve general, are in very have the support it's pricing seen competitive said, has to the that advantage. with We we and bit. clients and of That a more pricing. But still pressure pricing appropriate degree the in environment in aligning to seeking, are that sophisticated played pricing So

Rayna Kumar

Thank helpful. very That's you.

Operator

question Jefferies. next our from Kahyaoglu And you. comes of Sheila Thank

now Your line is open.

Sheila Kahyaoglu

Hi. everyone. Good morning,

Lloyd W. Howell, Jr.

Good morning.

Sheila Kahyaoglu

so up it follow revenue wanted on to I versus growth, kind competition. stellar has because of the been

us what's agencies more So driving some on you maybe adding So work you're existing you've that on elaborate could or agencies, seeing on bit you that a in could for? volume adding scope you specifics with more good more contracts if if give existing it, done or are what that sort way. of

Horacio D. Rozanski

appreciate The broad-based but growth point. is question. the same this run exactly matter Not is of the pace, Sheila, at a portfolio. I we pretty everywhere the our truth at

given any this about, great end of supporting the the a we isn't, actually But one said can here. places. year, we're successfully we unique any day, okay, built of come doing business. from have drive and set given view, This growth of the different quarter, is positions at we're this all agency before, about, capabilities in our market on will as our so, slightly And I across that and

place Affairs give has has you a development Agile to the example, earliest. Veterans that an been embraced So,

that In presenting acquisition that fact, we really was you premise. exciting really lot an that understanding, The market especially that them fast we or Charleston took the will our remember, like that as and have not a to across as we're talent, as we like that of made markets, would would capability, and agencies all on moved defense that in in centered then of is perhaps or some piece to. they agile

at things just the clients capabilities these as around two then having and make said, they become need understand we XXX available, both XX XX XXX. and big but or or start people, and who and so not Lloyd a do or contracts the And match, people having, level, what as sometimes what three understand tactical XX,XXX

growth they're these the and places really and this market, where most move base through what's lot so to developing that a don't of then is the the needed them And hopefully, systematically they that's client ability exist. to of underlying having ahead capabilities, our

Allen. inventing so are well. that do I hard vintage But believe and is do know anything Booz don't is And we there. I we to that do that it that particularly

Lloyd W. Howell, Jr.

winning With our contracts growing. and losing, year-over-year X,XXX we been time more has any changes. comprise than point in it that believe plus we're But it at portfolio,

our clients. other side the think I of the is coin

senior long many years we relationships range and them. career professionals, civil have service cultivated tenured too. and between They executive over relationships, GS-XX Our closest clients developed are with

vagaries just So with change, entirety not that a of look try it's that, the market our across times or is tend point, to optimize. diverse to we portfolio. But very concentrated able whatnot, any change to at our Horacio's any of contract. political to we at business and very of portfolio against resilient well. one the feel one been to do historically, and we've We It's echo

Sheila Kahyaoglu

if may. I And you. just Thank one more,

terms labor the risk from sort inflation? just In Are tightening the can of earlier, about seeing you you is wage of comments in market? any talk there

Lloyd W. Howell, Jr.

seeing are wage inflation. We

we to indication our We're skilled, want pricing same to previous pool candidates comments, high-demand that first not access we're where my recognizing the do. our go to and after can't You They that. we of experience highly maybe type that back want that. seeing clients That's be. labor also

now digital we're folks But day willing to it's of dog this are whether or technically well low against away in cyber acceptable. modestly fight from type industries a talent. So they as analytics, for every move as in security, sector, price other in

Sheila Kahyaoglu

Thank you.

Operator

from Thank Melius of the you. comes And our final Copeland question Research. of Carter line

is line Your now open.

Carter Copeland

Hey. Good morning, gentlemen. results. Nice

to or there comment And getting sort to of quick comments to gross attrition process then thinking downers – new anything head relates Are seen typical count could on to you ones just your is the on the in just you. uppers on-boarded you wondered, two talent. talent seeing trends getting about the unique Just Thank this speak move? just to that A, you've contracts? the behind if on is I the and second heads new on organization around contracts. related of are one

Horacio D. Rozanski

both those on them them target to lag first getting seeing Hey, contract. reality And people time a door we of anything as Carter. is, the lot did are between their out, all, in of of in and questions, pointed terms onboard people. billability. not is getting a we there Welcome On The of back. unique Lloyd putting

something what is we with. familiar it's like, so with looks we're and very comfortable both And what and very that's that are growth observing,

over we people to numbers. world. the our when purpose helps. them confident have to period. feel We can on obviously, albeit that we reemphasize and And you growing, more And while. to then, about feel a comment had look we XX On in growth ramp-up new going that of there's more think Booz always about started importantly, But – a we we a for lot not work in enough Allen. to that, through each good change level that each to inside We attrition, the don't internally be about aggressively are a the environment piece the contributes internal how we are do, fun at specific of you're to values, talent people. you it, unleashed business find in to that know, to of we conversation I else, our when It's right continuing and of everything us allows really the last backlog has how we because our when market. bring of that a energy haven't lot months kind empowers for look do work the shy, and And part and

a of hires they're unique in fact, the talked that, past, you talent and from they're coming to and not our get hurt excited In about, great that telling to bring we've Booz and their virtuous talent does a how repeat ability bit friends circle. large admired they're in our additional of on campus when it Allen percentage referrals. example, for here, is that come And employee is to a

love a we can't market, still. competitive where are. talent on I It's very but the front, really stand So, we

Carter Copeland

guys. Thanks, Great.

Horacio D. Rozanski

Welcome.

Operator

concludes question-and-answer turn Rozanski I'd the session. for to closing Horacio And our Thank conference any back you. like over remarks. that to

Horacio D. Rozanski

performance, briefly close with putting very happen our of all people our us to to privileged leaders first like and our to them time recognize and to values, really both this Thank who and there will themselves empower and represent are and Booz Thank call ultimately Allen, who Lloyd you also today. Allen, because at are is you for that that allow us all and of making our to to the with I it the success and your them drives their on call the out this hard by work clients ultimately their world. much. would questions for and purpose recognizing are brag joining all each as And I and dedication drive people enterprise. about people colleagues come XX,XXX the truly quarter. high an Booz change them and

that, with day. good So again, have you a and thank

Operator

program and may in thank conclude a Ladies for does and day participating gentlemen, you great the all today's you This conference. have Everyone, disconnect.

Curt Riggle	Booz Allen Hamilton Holding Corp.
Horacio D. Rozanski	Booz Allen Hamilton Holding Corp.
Lloyd W. Howell, Jr.	Booz Allen Hamilton Holding Corp.
Edward S. Caso	Wells Fargo Securities LLC
Trevor Romeo	William Blair & Co. LLC
Cai von Rumohr, CFA	Cowen & Company, LLC
Jon Raviv	Citigroup Global Markets, Inc.
Kristine Tan Liwag	Bank of America Merrill Lynch
Krishna Sinha	Vertical Research Partners LLC
Robert M. Spingarn	Credit Suisse Securities (NYSE:USA) LLC
Rayna Kumar	Evercore ISI
Sheila Kahyaoglu	Jefferies LLC
Carter Copeland	Melius Research LLC

Booz Allen Hamilton Holding (BAH) 6 Nov 172018 Q2 Earnings call transcript