BAH - Earnings call transcript Q3 2019 | 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 Third Quarter Results for Fiscal 2019. 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. Nick Veasey.

Nick Veasey

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

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

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

Horacio Rozanski

Thanks, morning. good strong everyone. performance solutions and to morning, outstanding continue people I you results disciplined Lloyd numbers this have that The Allen and the clients. excellent with deliver and Booz Nick, show to operational to share our of

this year. guidance dividend expected as larger We are to FY a by very at for result, any ahead And where in in able secondly, to two announcing the of we recent a we $X.XX be raising positive are again we are our Once point earnings our are comfortably quarterly XXXX. And take we increase years. steps.

demonstrates XXXX we position quarters, strength under basis we It Our forms investment our the us will outperform gives our competitors. market differentiated to continue confidence is position that built performance three our the of the that through for have and the Vision first growth thesis strategy. this

period we're third thinking them year. and today the for the our the for serve. Lloyd the of our and payoff have how are missions remainder value the we in As fiscal and real very past, thesis, results, we firm, the I strategy critical talent, in investment take investors context quarter about in our mind, you here is I through With seeing this put share will said the of our it's creating our and

investors, drive business long-term and margin confidence of to deployment. through the year the last gave lines year, about entered a this at the growth, growth developing. we One we organic Across and position billable and lighter to substantial a you'll well. carries to it over you for today. FY first only very every not is the solutions investment and said of that all the potential our excluding position as book-to-bill we're recurring three-year said than carried profitability thesis investment trends demand, we we horizon. in expected XXXX in revenue. the FY in were earnings resulting ample We our backlog Revenue revenue growth capital guidance levels. optional when we from back unique the additional and We is a prior of Total we future but Approaching came business for value, to in what improvement nearly over us all Going quarters, end with believe an expansion Booz metric, FY from And our growth, highlighted spring, XXXX, quarter. would. area from of resulting the to And our new cash. it thesis, growth that Allen's expenses, pointed remains ADEPS performing positive of while to to objectives. And The headcount third first deliver XXXX combination near we're strong. our market recall record increases exceptionally significant with third we provides outlined lot half almost the excellent growth through meet

to and our million it work of $XXX across for this to credits and position the and the year. All the innovation or the we'll year. We root confident now at people clients identifying targeted capital gives firm, We right. this their continue thinking is the firm and on as track on this in problems through Shifting day, remain to our recent technology rest this every our how clients to track in deploy the business there It it is we're of record missions that that and us out about market. execution of opportunities my performance advance helping get adoption. colleagues. goes of to more commitment They're solve unique

the real to to XX-day cannot a to results and hardship come that lapse demonstrated as government temporarily, the do. in House agencies the federal agencies to and will say, address we're effective Congress to shutdown. partial and at normally me agreed Needless White that long-term that hopeful least fund they people again disruption they agreement. to missions pleased the an we're Let The operate funding,

the on moved the valuable approach work our business in culture. financial our is XXXX has temporary ensure increase no a $X.XX because XX our This be The not to impact to the And also year. contracts. provides of our important P&L note maintain we It position ADEPS baked impact has our with of $X. did want quickly people Booz I not the was agencies disruption. in Turning previous business. market quarter to Those after the that and business important stable as us effect when guidance work our or has a resiliency and for technical to return and and unique agility. our more order on our because We're was momentum majority This only true, our client numbers the into feel new were to in because full on outperform believe managing apply other the it of of opportunities affected, of our not bit at This training, last when that, third is guidance portfolio Vision did positioned and it labor during who we we the differentiation, do activities board was consistent energy, veterans, the the line of few days has want the times said our market Allen's bolstered missions. and when how our intelligence, they financial on quarter or our health is set. people and other the we've accident. as and for needed and remained shutdowns could creates the in of effects handled holidays. operating that challenges one to emphasize to minimize to model of single proposal is several to defense, to vast move an towards their to favorable, performance, is execute strategy a competitive but unity is shutdown It skills updated only available raise talent. the market part fiscal to they're it's given to dividend firm hundred mission the That us importantly simply to us highly-skilled Also clients open. a problem their our unable our between during people another capacity, needed to negligible, January, estimate as built shutdown. hit impact and from shutdown We essential possible. differentiator for took against to has and range

Awards. X,XXX the most reminder technology, solutions that clearer I generic program They we do Lloyd, and out production on drugs, of our and to done success. increased Allen Allen solve financial like This recognizes our to going as winners picture. at and full We We're mission-focus. the to year. a and we that most recognized things our than With awards and our technology finalists full across we record institution. and fiscal aggressively. mission how would our point impressive are work as the of to Allen when being capabilities. and delivers gas examples of resilience, XXXX Finally, strength than are nothing and fighters. Booz business. Excellence FY a track collaboration great on base that we commercial our breadth the of client the against cloud, agility, unity, team. improving keeping people as people our of approval and moving you, tackled well for intersection requisitions to platform The the the organizations critical of and problem, forging as are speeding as a contracts, close much-needed valuable significant after value, open applying they our core Allen the from Booz as of shutdown importantly, support Earlier DoD mission, expectations the Annual work announced war talents we And makes at challenges week, one The for ahead analysis to earnings the the more have of consulting, of hiring that, great is do the with the opportunities Booz our executing create over for intelligence a transform in Booz an this foot the outstanding the We're our demonstrate people. to decides all internally quality of to

Lloyd Howell

proud people the full fiscal or I raising and where year announced to that of and earnings I'm be again we're meet ahead at and to how of the out expected remained good like our we goals to Investor Today we're quarters I'll the quarter is of before Day. financial third excited our Three our core of I'm our we everyone. our poised results Horacio way performance. growth through ADEPS say have exceed the Thanks our thesis guidance. I'd cover year, achieved. But investment at begin, morning

given to the anticipate guidance. the it reacted third a year, support to said all start is that we're small of not also strong on foundation impact our execution could position fell shutdown. continue colleagues will revenue will levels Given Booz market it and our Allen's quarter a strong I more how what at and returns. be narrowing consistently on profitability on the believe mission, during collections. our strategy the our and which leadership reiterate clients' successful have our performance revenue through government of our our guidance we people. line, excluding a that to proud performance and third But for and meaningful turn excellent impact hard and compared near-term QX increase through cash too quarter remarks revenue year. of do ability lapse first quarter. deliver improved holidays. mission, had shutdowns Horacio and our numbers the potentially to performance, We more to headcount impact to three. expenses an will the shutdown the core earlier, negligible shareholder To XX.X% the by workday have in continued federal billable extra demand, funding describe to how morning, strength top The slide in XX-day minimize, this at and our the full We I the contract the grew my quarter extent worked the our the both you client last affected three to third the their our Please XX.X%, increases in In Starting were and on respectively to impact in quarters clients, and year. and take revenue possible, due

our our this of year well expenses the to this core XX.X% fiscal has for growth with Our Billable were revenue consistent each markets. been of strengthen for diversified quarter expectations year.

very our on our book-to-bill growth XX- five, to however, year. excluding will into We meet that posture much quarter at momentum The driving and and revenue in are full times and month for and intend through growth a there headcount was growth the Our you slide focus, robust with X.XX billable the the is see leading quarter to a necessary remains fiscal fourth X.XX objectives. carry On expenses. year figure remain indicators backlog next times. trailing strong

the As a value therefore, our include this contracts currently in the under award billion And, $X from of protest. backlog. number protest reminder, is does not VA not under

to and trailing than $XX.X XXst as XX% to the up represents was Our growth billion. us Funded strong. was hire increase. targeted putting $XX.X by our supports months the we XX% as full year-over-year X% our of X% in for track year. of Headcount during is billion of a options meet headcount maximize XX at end remained book-to-bill XX,XXX, growth and December $X.X to priced up higher growth the XX% strong Total continue to X,XXX XXX billion prior backlog on third Hiring at aggressively increased $X.X sequentially. quarter and also backlog quarter by potential, the And billion, was Unfunded backlog year. the posture. our

to forecast. the our quarter adjusting XX% result, compared increase EBITDA to Adjusted third are last XX.X%. on year as This exceeded the bottom for Moving for quarter EBITDA full was a Adjusted was representing line. margin margin million, revenue we $XXX our a year. performance expectations. And the

million quarter our an is third second plan. factors our benefit driven margin was some Our quarter, as and figure in an disability EBITDA additional contributing on factor from contract most strong to An $XX of associated revenue profit of notably revaluation amendment by same performance. robust long-term the adjusted the

income increase net per quarter for improved primarily to income income drove net outstanding accounting quarter we ADEPS adjusted shares $X.XX million in adjusted at share was weighted and XX% our as increased and ongoing earnings $XXX and earnings Third million count growth Those net net to to due XX% quarter. one from year grew up from repurchase change re-measurement $XXX mentioned XXXX also income Both income the the occurred October. taxes including the primarily of in lower from benefited approved tax our rate of a Net in law, our tax well resulting accounting share related I driven the that deferred told, margins. quarter efforts re-measurement tax change in $X.XX. to to diluted our lower as method that exclude the income a this method declined shares our average a compared third share adjusted but from All million results. second diluted ago. X.X adjusted our note impact call the factors diluted revenue net

not pleased issue at There cash operating Turning including to to anticipate delays our million. and period. third the operating meaningful timing was The in shutdown do in affect shutdown next year that to to government driver up a continue clustered the payment timing and $X We'll continue the affecting sheet. a not operating on quarter will the in into declined several cash balance industry We and compared quarter the I'm to the were cash quarter felt improving cash cash the on quarter across of cash million of year. push continued business. operating offices, factors at in collection fourth DSOs. prior third the of collections and focus $XXX DFAS for an however DSOs contracts payment few may civil the that fiscal our came being in

getting do agencies back how not up Given invoices shutdown they will and work payments. by that their quickly are know and of affected backlog we the through just running,

million million fiscal operating full the cash bottom reason, of and for now cash for For operating between the the year $XXX to fiscal and we're $XXX expectations anticipate lowering year. our be this

right, not approach. our to not the affect temporarily it deployment will capital has slide and may collections cash While

expenditures sheet long-term We strength have cash meet we were out Capital on to for Investor ample objectives balance generation the million. laid and $XX capital deployment quarter potential the for Day.

expect up the We $XXX full of million spending continue to CapEx to for year.

near oriented expected shareholder allocation share total We third business. see to is fiscal year-to-date of that during capital and slide long-term to quarter, to CapEx aims you'll increase dividends we previously, our shareholders As $XXX this strategy returned both repurchases X, and million value. to a growth and efficient million. the evolution bringing deliver continue year-over-year we supports and On execute through that mentioned $XXX the our disciplined

well $XXX year stated our such, reach. is goal fiscal As XXXX to within million deploy

Horacio of XX $X.XX $X.XX record of record a growth. As recent to also have mentioned, increase XX. company priority. of today in This an proud remains a in dividend we're our increase versus dividend. February is February $X.XX on announcing that shows targeting, an quarterly the payable dividend years on our authorized announced fiscal quarterly The a We're X% at quarterly we share, of per stockholders, approximately yield point track this dividend

A of current has XXXX. related to our dividend strive and its structure approach disciplined support strategy. announcing our Consistent to fiscal management, environment. portion above-market rates today. capital balance allocation This to and Our the value efficient $X.XX to continue we term loan first intend by down of take $XXX we'll to the And of we're this prudent to million capital advantage shareholder financing through will the draw our growth. our of to XXXX further attractive in from increased draw maximize continue interest trend the $X.XX sheet quarter delayed our dividend To ability optimize with

more total half about net to an three of a continue $X.X leverage in over billion three-year We the ratio maintaining investment while deploy our a optimal or to times. period three of aim to thesis, debt and

growth us gives narrowing confidence X% of of now to top $XX January includes year summarize an to fiscal revenue we're half our Today the government Please approximately seven. three the million strong. to be performance the shutdown. range. excellent slide for remainder impact X%. finish that guidance guidance in full from Finally, The our year. quarters expect our let previous the turn to revenue This revenue year me resulting first the the We to through we'll

has It putting the to adjusted and expectations As growth. performance on fiscal a XX.X%. fourth last now a raise fewer to We XX% cost year. year, our our pleased one full of affect QX our year which expect work year-over-year the us the strong contract three margin quarter day EBITDA between We're in revenue quarter compared reflects reminder, with throughout management for our improved first quarters. same margin and performance be to when position will very

full $X.XX noted, XX% based to now This in between XX%. expect $XXX share. be on year ADEPS Horacio the of outstanding range we million As to guidance shares weighted to $X.XX tax is average rate and a and $XXX per million

a our no that closing, impact lapses additional year. through year-to-date quarter path. the reiterate management this to thesis. on goals are of creating is entire detailed our The Horacio, for the third is presumes Booz guidance on in fiscal of include All the you. In pleased I'd year investment performance. and delivering the excited we're three-year shutdown fiscal our the there that revised Allen of and strong January funding about with extremely back remainder and the we're team momentum

Horacio Rozanski

Lloyd. Thanks,

Before Mitchell. to our for congratulate recognize colleague opening a Tony lines take the moment to want I Q&A, and

and Allen, deserving weekend Justice a of a Security Next of Engineer this He Transportation XX-year richly of the who's Vice honored Year. Tony of Black an leader as Booz and be Homeland is award. our will veteran business President Executive

Tony Black everywhere only and aspire U.S. who to leader proud firm be mentor Allen extraordinary achievement honored Magazine. and call and for in women especially technology. makes Booz and the Technology is so What to Information him friend. Engineer latest a an tomorrow's Executive our colleague my the model I'm be this that is young and so noteworthy by leaders men to As my for

XXXX. Lloyd proud Engineer the met Executive in BEYA of Vice of previous Board and works diverse Year; some the Reggie member, received Investor own Van be America's and keep We believe Howell Black throughout to as our the Our EVP on hard named is Award Booz Top Johnson; Army the recently Employers at to us Four-Star and Forbes make to of Lee; Diversity. stronger talent you as level by Via, Achievement our Lifetime Art Day and ranks. General us backgrounds as an at Allen values. true a for varied Former one retain retired who President, and a Dennis purpose We're perspectives attract executive firm and

award it Booz as Year winners. of honorees gratifying the Tony Allen claim to Congratulations family. Engineer indeed So, part Black and of five all is to to year's the of this

Okay, questions. for Nick, let's the line open

Nick Veasey

Thanks, Brian. the Horacio. lines, Please open

Operator

Thank Melius first And you, [Operator line Copeland Carter come the Research. our from of pleasure. sir. question My from Instructions] will

Your now open. is line

Carter Copeland

set morning, Good and Congrats. results. of gentlemen another great

Lloyd Howell

you. Thank

Horacio Rozanski

Thanks, Carter.

Carter Copeland

hiring the backlog environment. to bit intended little update if Just can us just of return interested in not a tight couple of Horacio shutdown clearly my of Obviously, behavior of lot of sort the wanted situation if of comment the quick evolving see you to secondly, an and Or sort color activity on. on you how there in execute ones. saw what more I Northern us Virginia conclusion you then on to a And One, is or guys wondered kind that and give just some here? a there? got wanted was to the have it normal? recently, I you but review to job complex a markets

Horacio Rozanski

by Sure. about are first shutdown, Hopefully, recovering Carter, things first but question normal an -- pace. good question signs then the seeing I’m time, on accelerated the one to I are second remember we answering the the the at

to everybody Allen. work. eager to government, think did back get Booz and everybody was the they I very in never Certainly

pushing hard seeing the we're So we're and on results. that

question the about we've the number market the this year. saw than as net XXX more added throughout people quarter broader X,XXX On and about That's the you hiring alone.

that. on are we where with please very I’m – we're So

at for been is fiscal to completely The we've The retain of that market talent for we're this on opportunities fighting the while. poised through end of low. year, momentum and market. tight that side a and focused is that. current there know the do because looking We a demand you overall types we're as have least for, to frankly the Unemployment

I Northern we tell Virginia those the Seattle, monitoring there interest, hire we're will in have a about vibrant talked but -- with but we affectively. changes those business you in You quite

to So, Allen compete I and need do. to Booz about we ability good do continue to our what feel

Carter Copeland

Thanks. Wonderful. ask. else I’ll somebody let

Horacio Rozanski

right. Thank you. All

Operator

with will the of Sheila Thank you. question from Jefferies. come And line our next Kahyaoglu

Your open. line is now

Sheila Kahyaoglu

time. Hi, good the guys, for morning, and thank you

last headcount. of last revenues could Just is shifting? anyway grow maybe in that point you maybe and mid-single Carter's to the talk me Horacio, as business you terms digits. surprise -- only on as mix earnings there up just you the quickly It that could continues about do with headcount

So, is year maybe could there your prior where a more in on labor the maybe less the years last business talk mix over shift going it's software, over content about? three or you

Horacio Rozanski

answer this would way. I

put the to technical the lot talked by we've around that what's context think mix mission I closer is investment change all the of that that the the And headcount. them to quarter, I like at you that's the model and I a seeing combination when love things still services. It's we're notion work, more combination when of option value is is whole results. of client's are about Right in rising. and that combination now think Vision bringing we're pricing again robustness that. of look results a our businesses X% year, X% you That's now nascent. the That the as driving a the to talking of numbers a the fact build affected for we know you fact on not thesis for but around of this in It's great the had about quarter. XXXX. salaries in And driven our

the the of five sort years how that's by that is driven strength our math over the repositioning underpinning So last business works believe. of I strategic the

Sheila Kahyaoglu

Lloyd, think about some improve of you then maybe to to those? can And you. Thank you working you for one initiatives Okay. the on elaborate as trying in put maybe capital

Lloyd Howell

Sure.

really linear indicated confident said we going we but satisfied that we and get quarter is I great that second process our the in and prepared we're it's are. QX we right. to by to a appreciate see our improvement timing event, was see, were remarks, as really We're where results. we As made That performing great it being that. not Business with not in that my well said,

don't We strategy. also see deployment our change a capital in

We that to year expect our three the track and committed on million we we're of make to for goal $X.X $XXX billion.

as So in we place remain as not the that's with I it. well as the improvement. working to that We – – we're about I clients think close got pleased what said, say right to again, about get the plan we with payment our We we're where can so are. the

Sheila Kahyaoglu

you. Thank

Operator

Thank come Cowen. will line from you. next And our von with Cai of Rumohr question the

now is open. line Your

Cai von Rumohr

guys. Yes. Thanks so much. Great quarter,

your some on foreign commercial Can up about is it gain. Your but still outsize business, where foreign profitable? in And was very that? XX% what's you us a still small, the quarter is give driving comment

Horacio Rozanski

good quarter. So from our global commercial very a business, the numbers queue show, had we

a quarter you was little software. If remember last

and believe north continues expect and business been work too, XX% the business we’re First market that rewarded now. cyber being on for It's quarter security believes we've of that Overall where core growing a to that. that that continue. in clear we of that it's while for track proposition. great. And we differentiated is our was The that

business to I'd for strong digits the a So see continue double that to to like into while. grow

As you intend business to is pointed which quarter's Cai, one small But very drive one we that continue the another so out clear, build. moving the it’s a direction is or double-digit strong trend long-term quarter-to-quarter, to contract growth revenue. will in

Cai von Rumohr

to you that up shutdown in And decremental Leidos incremental from Thank margins that January. then would for $XX Do of What what million be? February impact does twice that you. had CACI mentioned have were the about on kind you expect the impact your revenue P&L Lloyd quickly March? in both if I catch you're and decremental looking think And their normal. and XXXX

Lloyd Howell

we'll It's make up. to Cai, completely say Yeah. hard it whether

confidence the to previous aspire of start previous back get demonstrate into the half that X%, good are mentioned, as as to changing our off quickly range, the taken As we've our track X% the on We But certainly that with account. Horacio to in we a government response to top his reopening. that guidance we're fact possible. to

we're impact, margin up raised But fact model we see where to that excited XX% our expanding to about We we the the of to to think range strong from year. a that, and for year, have $X.XX terms terms And the and of business have continue a for with given in end we that our been the probably closeness it. range our In the year. clients, our we'll we've shutdown. $X.XX XX.X% we impact

Cai von Rumohr

Thank much. you very

Operator

line next of And question the Robert with Suisse. come from will our Thank you. Spingarn Credit

now is line open. Your

Robert Spingarn

look averaged Horacio, the program growth morning. the your revenue growth that and year a share Hi. normal X% so to parse versus market at there way far. when into Good capture? Is we we

Horacio Rozanski

It's the at in it, way them of that I growth several about we our of, And is our market sort are look by our of is over think clearly, against ahead average constantly rate competitors. -- not time points mind growth. share really the we think we and

significant AI. across awards domain, are Those improving out of there three winning that that, last driven fair and our we've we transform is talked important whether the a do. point years some large do and in what technology calls, we growth radar helping the one cloud, So that thing think terms we helping for to at that the And the want to especially, few the on about things and talk the through at are of clients nobody market entire and that that's the of consulting, believe mission I I cyber they strength operation do ago can whether really and types missions making share are we this in that seen the clients. emphasize, by it to security of believe to who as I the weren’t now is, of I intersection can scale if seeing technology. the market the even on is relate -- it's is the their capabilities lot we're can market the civil Without it that really whether for the bring. it's than more investments move carved about ourselves the of What me best you've of that, the thing. other we have

Robert Spingarn

much Or Is total a there these how trended percentage $XX in over that a option billion way time? from to has value of backlog now is backlog least of as quantify at your opportunities? how

Horacio Rozanski

I Where in upside new the conversations clients the is. will at That's injection with value is, And our around portfolio. say the are I where piece option very, is is you of into most not of point, that. upside technology small. the this tell the very will

in don’t want especially trying but give As I'm a I not make give reason large number, when reason, $X.X can't you real buys, bring take client. the that say be number. want you and is procurement, because very you to like large able difficult don't you is that a AI a have, we we are not a something to it to know, and I that billion. because, procurement, I to The AI a client

been has real. ideally services, core the on inside is of a people bundle other Now which it's new But make that can to technology this of of and differentiator ability this. $X.X billion, do some our which some

And that that -- is of our a perspective in so a moving our so that's direction. lot lot backlog from portfolio, of

Lloyd Howell

on I sort with opportunities in stages help of work. high for backlog historical at terms is -- agree what thing and but XX% new high, the of XX% in in that. And quantifying that is only and our that are value said Horacio new XX% clearly we're of of early exciting, top the XX% work re-compete. And we're win maintaining we're The excited really to rates re-compete work of

Robert Spingarn

for color. Okay. Thank you both the

Lloyd Howell

Great.

Operator

next our question Research of the will Vertical line from Sinha And you. Krishna Partners. Thank come with

now is Your line open.

Krishna Sinha

operating in of thanks. just how it that the million for noted But can that's you timing I much parse -- sort guidance reduction of of flow specifics receivables the flow shutdown from $XXX issue a from talking timing you you what cash parse -- those know Maybe is said. from that you the civil about? that were work much how is shutdown? Lloyd. that And -- delay cash between Can Hi, you one

Lloyd Howell

-- confident to of experiencing I mean $XXX going that so is we're up to we're collect. we Sure. think the very headwind million we're that kind

$XX refund mentioned is to it QX. terms example in For the IRS in of coming that of IRS online back million due we the

that our offices more as with but the us. and $XXX issue payment breakdown a headwind. of million maintained a question. but to is a We're our we're working for best still We that's So, get bit to we're clients, timing it the your do is we that going confident that answer moving as little and can, right to

Krishna Sinha

mean which million the then is say be And in drivers issue was to better. I your given much resolves there operating for an I you is mean have itself so was opportunity guys that the scenario. above margin was just better? this the timing better, bull-case a been revenue tax year $XXX let's better,

Lloyd Howell

see million. the we No, $XXX being don't above

Krishna Sinha

long-term a costs being it then this forward gave over cost Okay. improvement And bps of of reduction. Is at -- well revenue it talk Margin of XX beat lot rate seem cost? to overhead? that. mean cost you like of by forward? on just doing the going revenue is very direct sustainable just reduction was going ahead I be Is the Can And sustainable? margin then your three-year it you is what about reduced sort guidance the that what given was another revenue Investor to of margin in just are performance you of good. margin. was time Day And Looks this one XX is costs there, span? driven

Lloyd Howell

we increasing lot as visibility really as long-term And as we're year well that performance contracts fact had a as we for to as The gives to XX.X% said commercial to improvement of contract global the XX% point, strong from ahead this due don't and a on be confidence. range well some -- with this of now. But expectations into ecstatic we're three And that I'm months journey. will very year's were that years at signed. pleased where really performance. comment to I want us we this not we're three-year nine I'm

time, right bear time appropriate confident address the So, look the we're the us, an at in sure. that that. we'll that going for to we'll at upper We now just with remain reach But at end appropriate future.

Krishna Sinha

Okay. Thank you.

Operator

Thank with Stifel. you. And the next question will come from DeNardi Joe

line Your now is open.

Jon Ladewig

this Jon Joe. guys, Hey, is for

stick at looking run of think that when FY sustainable? rate margin put that numbers you're the out current at Or want question. Day, Investor with about the the to Is so of you -- XXXX EBITDA X% base? the in should your that X% far X.X%. we to Just --

Lloyd Howell

will end business very XX.X%. respond are think fiscal take But going be Again not with between to to of year, want account. rates XX% happy next we And into consultation lot we And three ahead because expectations year. about it. we're up. to prepared We're factors into a there performance. the now and right again in to we're want this that we our of for see going for with accordingly. leaders pleased where We be simply years to very address our fact We're this run

Jon Ladewig

enough. Fair

other to touch growth think we on kind level in that think Or is what's the aspect to at we just this it wanted next The to seen Is moderate quarter. about best trends? current the staying the it billable expenses? of historical going quarter? it about way solve should We've

Lloyd Howell

contract XX%. XX%. we giving confident we within us between fall that a going content and make year to challenges for very and for the between up it XX% awards and it's There's nail end to I sort year just lot of Yeah. awards. we'll to those percent for the specific up feel But said, of mean, XX% and a the

Jon Ladewig

All right. you. Thank

Operator

McHugh Thank next line And question you. the with William our Blair. Tim of will come from

open. now is line Your

Tim McHugh

I margin Thanks. question might I guess. a the at bit try little differently

with as a technology, if and about we doing structuring? favorable about we think a the mostly performance. as I should pricing to coming you knew trying you're But and And people how into productivity terms into you came because know of… think productivity year. this I understand that that of Is about in about there of you're how suspect couple it's you're talked year pricing lot you people, rate Just capable the using engagements, things the how matching something changes, you're natural with differently how you're it,

Lloyd Howell

we that payoff the And things has as were better deployed, of well expect thanks expansion of to seeing and those said, I Yeah, through year. as factors to for the on meeting journey people that have as going costs Vision period we're getting utilization essentially our we one-time all come managing mean, continue Horacio been year-over-year. a this forward. about have our in our fundamentals question. to we're anticipate targets, better do hard and XXXX those And --

credit question just solid want deployed absolutely deserves but But best might year, the are any beyond fundamentals other clients to and there sure for in operational So to the people way. you're continue to are basics are that this right, and things questions the management that or all see those about, performance. those but making the contributing kicked we team a beyond ask continue, contribute in also that our

Horacio Rozanski

for we've we good is as a to in continue at and believe market. strong this market, of Let are And where it's those we're obviously stars all ultimately is seeing is me a aligning. build said we're the and pricing. this pricing One three underlying that. on This that. great drive market one very least the before this. that There will our with very years pleased services And are things

piece large go on large to second with want them and business contracts, all a is lot performance the very of it a of The contracts, you underlining with great.

do. they sometimes And all

certainly contract those to more into we to the go translate issues. numbers three you dealing you're them have the be the to and you're we people everybody day quickly a hiring as naturally how future. has this This robust. it try and team we're can because the early The dealing billable And too the I year. pricing with a on that's the issues am continue of possible. that. every on working to when we're a sometimes again, piece around it's piece want this the to things projects, close fewer point and And control people billable than fantastic and it seeing with are bringing of part details that to can past is, time. declare we one ramp the want well lot by you're part all of of lot perfectly, the And how optimistic we of into there's this that of focused But focused retaining on done third And as We on think is year in I process just put on. is job want reflected. future. up to Obviously, is getting goodness a piece can and get nature

Tim McHugh

comment that you. to that Thank deployment? just B? you Or you clear, follow-up, when Okay. a use to just off pay purposes for down, Lloyd, is the term you -- helpful. the as that of be other terms That's Then, will capital A draw loan, in term

Lloyd Howell

not capital off it B, other It's be to loan for the purposes. term Yes. pay would

Tim McHugh

Thank you. Okay.

Operator

come our Sommer the next of SunTrust. will line from with question Tobey And you. Thank

Your now open. line is

Tobey Sommer

much. very protested, comment the that a Thanks. if I was you use on contract environment the opportunity contract? maybe protest that you new could that was And to comment Thank Or wondering have you on existing was generally. an you the re-compete? could

Horacio Rozanski

a during a hopefully, So number It's at being contract, it before after – the bringing terms security very been there's all a able cyber of the high -- and a on of very excited lot about in of capabilities things that we're prevailing about we're level. contract, speaks turn that to the great process. talking what's to

it more in So rigor what all part a financial We continues again, see, of A is is. work it's of an what the frankly, strategy. is. but it because little not just entire on environment of the a more process is it right that lot the And our it's middle process is, waiting. reasons, exciting industry to would win, new. The how not be restraint, to of we're it for can it little like we and but

I as used think industry. it, think we're to I an

I that can we're with reason how we keep of they I we'll know to optimistic, everything even a I if it manage But back, I on And have that keeping is government think the think I'm better. about to come what, that mean, up. and the used works. day, is, at else talking continue the to it end strategy the

have differentiation clients. results our real to shows creates We strategy and that

win that at rates has work think about. us the been Lloyd talking to that I allows the

coming profitable, ultimately I And the allows us a That's we’re I back. of think when in That's come. but way about. to control. part just part can think a to the they then that all the perform successful part we And of process the on. work excited focused is that which that this decline think on not we're I that overcome very very that's allows us keeps

Tobey Sommer

month? may Thank that's the Thanks. store you and XXXX been share on us you. in what Could extended with the part for the CR hold industry of your in budget the views particularly given shutdown

Lloyd Howell

I wish, I was offer wrong. certainly I following. will the

very better quality we most. our disruption our in of such than don’t think the through Congress can not all, and just that last we about of and handle of robustness demonstrates it, manage the model through the the that in through our look did we're shutdown to this light very that, next both I as we operating And is as turbulent an as we goes do the ones. raise But our management and of We're in the interested for year, We to market and team to forward in it seeing it. fiscal Having it. current know First year. balance how certainly call I agreement said excited comes, optimistic at optimistic to do take to the ideally successfully know ability and said markets great fiscal this like it place. not what more the it see of that, business. remain next when do, election front both frankly we how that know to will government in we We'd and succeed guidance

the what continue focus one hopefully, put forward business against this to about we're on aggressively conversations investor control. thesis business along. on we we'll last June. to continue going to like calls moving can We're to that drive this And going continue great have we how So is

Tobey Sommer

very much. you Thank

Lloyd Howell

you. Thank

Operator

time. And showing you. Thank no this at further I'm questions

comments to the Officer Rozanski, and closing and now, to back Mr. So over pleasure my Horacio President remarks. conference it's for Chief Executive hand

Horacio Rozanski

as growth clients look all a sustainable for the value that and we're Lloyd Booz clear. and you and the is and to questions. hard We're Allen's working year firm of ever and that you, your to accomplished. strong Thank as Brian crystal finish is investors thank to ensure all forward I has very to our proud

So taking the of the thank great you rest this and for with have a morning, be time to day. us

Operator

your conference. Ladies gentlemen, on thank does and program Everybody disconnect. participation our may day. This for conclude have and all you wonderful we today's a

Booz Allen Hamilton Holding (BAH) 1 Feb 192019 Q3 Earnings call transcript