BAH - Earnings call transcript Q2 2021 | Booz Allen Hamilton Holding Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. Thank you for standing by and welcome to the Booz Allen Hamilton's Earnings Call covering Second Quarter Results for Fiscal Year 2021. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for questions. I would now like to turn the call over to Mr. Dey. Rubun you. Thank sir. ahead, Please go

Rubun Dey

press Thank you. for We for us read thank you this issued morning. morning Allen's second and the to Booz opportunity announcement. had you that quarter we have earlier joining an Good release XXXX hope earnings

provided our on our with And Rozanski, have are and slide talk and about on and Officer, Howell, our me are financial and Horacio Relations. also Chief Executive We I of am Investor website Chief Executive Vice now business results Treasurer. X. Financial President Rubun presentation slides Dey, Head Lloyd and Officer to President,

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

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

on are X. We now slide

Horacio Rozanski

And you, to to this the year Thank welcome glad Booz We're and are quarter XXXX excited you Allen's you Rubun. board. team. morning, second Thank fiscal morning. on to everyone. for I joining announce call. Good our Lloyd have results

in our of are Our institution. firm's the who performance truly challenging collective day has this the every clients, year very XX,XXX and other accomplishments than And to each this been support more work of outstanding. in discuss proud we professionals

the profit recommitted Strong have at is and second metrics. saw of year cash press fiscal you a uncertainty. continued capturing COVID-XX, our generation weeks exactly excellent The success As flawless that we across results year. fiscal what morning, we growth three-year into And and to the thesis only investment lines, opened, historical delivered our for numbers recruiting all delivered. above our margin in support pipeline bottom opportunities. growth our we quarter our talent, even When building and release that's and this this execution amid top plan disruptions strong in objectives norms,

reflects was talent quarter our team. clients businesses. in of on offerings fueled second the by in defense strength civil the and the and growth Our This continued on our our place value

facing has half this the the business of fiscal due despite in Intelligence Our stabilized to first year challenges pandemic. unique

finally, conditions. modest and economic overall confident year, driven decline expect in feel future We fiscal Global place of have this in our a Commercial, leader new And a we growth. by

has date, of Booz the fiscal Allen Looking our successfully show COVID-XX. at year, results the that, first half complexities to of the navigated financial

of on We so in missions. people needed they operational continued execute as to focus ways, made could the against adjustments proven critical supportive clients' strategy, new and

exceeded even operating a first Our half strategy, culture and own people right combination that model, unique of performance created expectations. the our

narrow Lloyd to adjusted guidance walk operating pleased raise cash. today, year our a earnings few and through in EBITDA guidance diluted adjusted for so, margin, share revenue we fiscal will updated minutes. for per range detail in are and our full-year XXXX And and more guidance performance

where management First, talk and near about focused, team is briefly term. long both our I'll

term. Let's start about have our with fiscal areas you the uncertainty year near the three Since second half. with talked we began, of in

the and across again in as the and costs winter, First, are now impacts and of country. spiking fall COVID-XX the especially infections

outcome the financial and election. and our disruption and our our macro major current on of potential continuing strength well sources half, next December the week's industry. third, operating our And despite resolution after funding the positioned turbulence market, for These in implications variables us Allen for our Second, potential are the expires XX. first country of uncertainty months. I coming both But outperform believe based performance Booz in of the the on sheet, balance the to

for and This market markets, opportunities the federal increased to scan economy, As in from forge the for capital partnerships, anticipated in build volatility business, dynamics of invest in looking This deploy capabilities, I so opportunities position budget quarter, noted and well. financial last strength, environment believe macro year, we outlook. these a we strategic could the allows planned as and our us to on. create

to shareholders. shift let overriding to our always, objective long With maximize As me that the value segue, firm is as the our term. for and a

Allen, is Booz never work our Here done. at

on team, performance our the making future business several are operational great progress of initiatives. leaders our oriented Beyond excellent

portfolio shape of technologies work at emerging example, For center needs our we the value where of missions. meet continue towards clients' business high to

progressing is with you to Our review results strategic next share we expect summer. and

We our continue initiatives. deploy and to develop option value

and financial new last proposition, progress of we we strengthening and modernizing are infrastructure in our are social IT shared race you agenda equity good additional investing quarter. our making growth. with and including new and support We And value business the ways against lines and constantly to employee evaluating working,

Having managing and of business every the Taken in is disruptions, are our more years of first while position stronger unexpected our time months, focused the we tremendous and together, half this these normal future, the be could make team. of in strength what without our as firm. job progress to that, said Allen They a continued our few same this the credit head ups initiatives. Staying strategic leader be on none efforts challenging to even the cycles performance, Booz for and possible successful firm designed would and entire come. on at downs into deserve of

So, colleagues me to before I let over listening. words few turn who to Lloyd, with directly the call close my a are

resilience remember, you firm would You'll made pandemic fund, safe a firm's your the the bet. with back, April, has back. in we If back our have

And you've clients in And Booz some. give our very the done best. then Allen that. your would and You seven last months,

of You overnight. practically new working ways invented

critical continue the and sure got go facilities make masks into client You important interruption. missions with all to to right without done precautions

with connect came and with each You other creative up ways build community. to

this. courage precision functions in help and through ask and showed skill help a with to you XXXX we've simply You to ago. faced to all give business need. together great both was those for in executed What And year unthinkable

risen solvers, challenge, problem as through to persevered as you As have expectations. And exceeded great it the you we have our all. to you be, you knew

in the accept of external team So, gratitude. stakeholders, our and leadership our entire on please behalf of front

for and all We to that, Thank over with you. better firm it. our to Lloyd, are it is do. continue together you. will and you And you in have done for

Lloyd Howell Jr.

Thanks, Horacio. And good morning, everyone.

the meet thanks It start This results in our the firm ways challenges announcing colleagues. that to to truly easily Let rallied of XXXX. in me can't and shows your morning we're has financial capture. many echoing by other numbers this

In our leadership the We company. as Booz in of period six-month are support these halfway I continued challenging clients enormously on capabilities have Allen's year, and our for our now well of country to fiscal missions. through am as their our an times, extraordinary proud performance. rely

and showcasing reliability position first on as we and execution. new maintain record high. and robust Our backlog total a organic reaching industry continue performance, growth, quarter to outstanding the our our Consistent quarter second headcount results with see leader, build our with expanding

employees. Starting same norms balance ongoing now as demand results. strong. to next to was opportunities revenue billable respectively can whether of and few revenue challenges Please XX.X% or to the services. and Thanks expenses debt, is XX% above And our taken Our excluding X. the emerge, second driven our PTO that this quarter any quarter I'll run have at through M&A our also line, last by financial historic the potential advantage by year. management, in from manage take turn benefited us growth the markets. of months. utilization prudent top slide for The confidence our compared our increased our gives they the to great fewer equity, We firm days ability driver primary sheet staff that we in was exceptionally

challenging you'll to a to year-over-year $X.X X.X% see total that options X% XX,XXX since Turning X, June. performance to with $XX.X billion. up XXX grew to In ended of $X.X quarter pleased market, or $XX.X headcount, backlog with backlog the our X% employees, we XX% to billion. and up we to up rose are Unfunded billion. slide end the price XXX billion. backlog And X% date. increased labor was On Funded

slightly more was X.X second for book-to-bill we and our and continued our bids. as with number lower last and book-to-bill quarterly X.X months pattern That was pursue book-to-bill recent times continue than frankly times. said, complex we our expect quarterly Our the quarter larger quarters to volatility lower is XX than expectations. our The technically

X.X in our with times, was First half line historical norm. book-to-bill

full fiscal year remains award award with of not opportunities COVID-XX second the a slowed the Our large has half unchanged, bookings for in Year-to-date, pipeline. expectation number our environment.

and many also to procurement of due team While through the acknowledge must our remotely Allen, to we whom of diligence credit clients year-end officers, government of busy at contracting the continued the season. efforts is work our Booz

on Adjusted for were line since reductions cost like types XX.X%, travel the up driven million. certain the performance, to by fee strong EBITDA EBITDA meetings. markets. was bottom level EBITDA expenses, These line. our performed result in EBITDA of increases XXXX. efforts These defense margin in XX% work in and Moving approximately ongoing was year-over-year. intelligence was were Adjusted top quarterly $XXX partially adjusted quarter fee bill and second million, margin management the and highest In $X our contract adjusted growth, by impact offset for our inability negative quarter, shift the and to

so offices have expect a shortly. do negligible as unbilled feed to majority returned are staff the expected have we forward, affected to site earnings impact of to to client or Going

billion. turn of to expenses the the COVID. This financial XX% also XX% net management contributed net the These are diluted performance, grew working adjusted revenue million, share were a in operating represents $XX due which Operating and to with adjusted million the increase interest and increased continue $XXX claimed company's implementation our operating overall Also, $XXX system, the enable next share to our the was We primarily million slide the growth expenditures EBITDA Second the earnings the Please year. of Cash disbursements Lower respectively. due environment. Capital lower share XX% since This cash attributable will income performance and quarter, per $X.X into we growth due primarily share to over driven from and to credits year, support technology of $X.XX, generated count and growth lower capital quarter million. to last Diluted repurchase of we income management IPO. quarter end cash support quarter were virtual and future. lower quarterly the the cash and to year-over-year taxes to earnings and by expenses per generation tools business, program. result an X. improvement, to $X.XX. strongest XX% our reduce the cash to during cost work at $XXX flow of quarter carryover ended nearing to margin that R&D cash cash. due we year. to prioritize XX% Transitioning adjusted while second increased prior second for increases at

During of to worth repurchased $XX at we average dividends, share. returned million the Including shareholders. shares $XX total quarter, of we $XX price per of million an a

$X.X billion in on sheet. We with balance are second the the quarter cash exiting

times in volatility. continue of as our strategic sheet balance We a especially to view asset,

and We target shareholder supported patient, by ending our XX% see a to they as ourselves maximizing billion may in We set well growth months. upon we over period capitalize In three-year to are value thesis, arise XX% as year, investment committed ADEPS a $X.X allocation. the quickly to over deployment. this capital fiscal opportunities disciplined placed capital preserving coming through

as We reflected meet are fiscal well to organically positioned year goal updated ADEPS our our in guidance.

due has we deploying objective. result, share X capital the Today, of authorized our the August notes deployment in XX, XX. of senior balance reducing our a remain We to million stockholders that $XXX on are senior $X.XX proceeds remainder $XXX discipline meaningfully used notes will meet down our this million on As to in in strengthen a XXXX. November and toward record and target strategy rate. objective, quarterly to the while our sheet are while per we issued pay to the that of On remains due announcing company we XXXX our payable December patient interest dividend in

questions, the view I'll and Please of the briefly slide on rest the of guidance. line for Before our opening our move touch to X. year

are pleased with and outlook election. fiscal raising several the of to COVID-XX, federal is We ongoing the the be to budget product very next even uncertainties expectations things. for related This our week's year, improved

fiscal leaders the that and our year, confidence Our make institution, to Throughout and the and strength operational stand and our rest as our agility adjustments we'll the skill on excellent ready first emerge. fundamental of jump opportunities of teams. needed half in performance, of the

run me numbers. the through Let

full and the and the our EBITDA expect tightening revenue to growth mid we margin low range. to between year, expect adjusted We XX% year X%. For are now fiscal be for in range the X%

for On $XXX in full is million million are year. and between for ADEPS guidance expenditures we rate XX%. for million at the outlook $X.XX capital the finally, $X.XX. outstanding $XXX our and million range be range based $XXX is diluted on unchanged cash, per XX% to and between XXX tax a have and operating earnings And adjusted of XXX shares to to raised $XX We The to average narrowed million. weighted million share the forecasting

for for pandemic. spend As we aside we prepare fiscal eventual will year return the an to weathering into of our half and funding that second portion normalcy, previously look a the set we

hire sustain impressive to our their to execution plan expect date. We to to talent growth and for our aggressively reward

will system financial to leaders. we also We supports and new in our long-term initiatives. our implement our further invest In our business continue will that short, people growth

seasonality and COVID, to utilization, the around traditional navigate. the few next labor reflects budget of and some to patterns expenses difficult will more guidance of the and our funding The of investments, uncertainty strategic updated Our typical months anticipated election and return ongoing be overall the environment. aforementioned

Despite and we confident in and closing, new execute proud now of ability daily, the challenges However, guidance environment. remain our results. all have responded as face our are indicates, our quarter we we our In to regardless dedication. extremely win, the of energy adapt, second people with

beyond. management head As the continued team our into open the year remainder of success Rubun, the about let's second the on is excited questions. and our entire we half, that, maintaining lines and focused for industry With leadership the for

Operator

[Operator Instructions].

Our line Jefferies. of Kahyaoglu Sheila from question from comes the first

Sheila Kahyaoglu

remarks. always We opening appreciate your

yet? framework? quarter, much. outlook question the they what's So three-year driving value embedded is have performance. the talk evident programs? increases near-term in thank profitability into but your you company's Or only very not My just Horacio, of you, it's some the in the And Can been not about you for options

Horacio Rozanski

little performance bit current that the a be first couldn't context half, of under more circumstances. the question. I in deeper pleased set especially into of go the Let with maybe the me business and then

in well mission, in clients a to have I the brought to brains operating speaks And our fact speaks the the think works strategy really forward. good the shine commitment it our to certainly I an challenging that heart we but and have that think that to that also can model times, it both and people the times.

out really the the been the So, operational as three we're towards that's this drive to That mission center important see. most intersection always to today. Lloyd excellence, our we'll And have options into that It to as technology a I tourism We're and tell example, excited the what the growth disciplined national Vision what's of done anecdote, well. clients. been Rec.gov concerned the I'll area it's really to years, making execution, portfolio. for the and we you think one I tourism progress say There's future. parks context, ability initiatives portfolio. of business I that business. points both our continues an has turns at about And the were our really that's profitability. about value that number a going what out, to has because XXXX drive of think the driven it's think In of about across year there. driven the beginning more target in has over last I'm good it

and growth we And expected to the still are and very both a in so, team. this become business the we the have, we in more of what terms in said Right in value optimistic of program. profitability grow little being one that excellent small is is But of a driven now, that, portion where option the we'll leapfrogged really by our of having bit years. performance and coming portfolio relevant see fact,

Operator

Copeland Our the next comes from question Carter from line of Melius Research.

Carter Copeland

speak Horacio, terms if of ones. any And Just usual retention or wondered and challenge. couple a environment in challenges quick then, of revealing around that's as you follow-up, a around if to as trends of what ongoing I second is this a going kind could despite question. all hiring

In the Is that expect comments longer to terms on do way next take end of out a and of as in our we commercial that you just portion COVID? there, sort the year? of going back business your bounce

Horacio Rozanski

way. to result might decreases match Lloyd of especially the in say the sectors I'll is We we environment. as to high business And be the Everything be. well. Obviously, with and environment. with the reinvented current to Carter, And economy on point. is know I'm pleased talent, want as at a this market, don't your challenging a had the very the those. in some technology the labor usual performance months. I'll in attrition get demand. it's to of started. for, nothing through retooled that question, still first six this look jump as talent some first But I pleased has look continues saw

I Again, bright to great think a us are that we business. looking we've to the for. hired pool a talent people. think relates future And looks grow our right of as people help lot of lot the it I the

over I talent strengthened pay six in just Global I our but anything, and out think think will that Commercial. markets months, last dividend, not the if frankly, now, done, brand the what the years. we've in has

challenging going mostly both expected this be footprint Commercial US we to So, which our year East and domestic Middle our into our is international in for business, Global footprint.

business happened been what has lot international think business expected, the dire I some transition But in than result having the potentially we ways is given the a in which have us. of better resides. that's largely And that our a in little business, for that, been in US, a we is Beirut the said where especially than expected. in more talent cyber disruptions a

I together, you And that role an when itself an total it always right important portfolio. all as the strategic important revenue X% strong. we've So, the think but It's only to role, still business said, base, plays direction. it that balancing put branding overall in about is are our also the of margins

Operator

comes Stanley. next from from Our Sharpe question Morgan Matthew of line the

Matthew Sharpe

see any are the the rising value or within initiative strength Horacio, this value areas for sort potentially emerge to for that DoD government other How opportunity for option option priority quarter. becoming With see top this as And the level an thinking Booz are Nice the XG federal company? about the DoD company? you you there? Allen's is you. initiative potentially a I that suppose systems Could there we of integration. as is and for emerging broader

Horacio Rozanski

about sure, Matt, you're XG? be just to asking

Matthew Sharpe

Yes, sir.

Horacio Rozanski

great. Okay,

started. lonely in but Lloyd section, I a I'll think here get the Q&A is little feeling

I think answer is the absolutely.

we in of is technology. It's emerging XG. There's across many thought And think increased early, thing. the agenda, like work we both it saw some much for set I that the really have advantage There's wave on processing technology. implications as in together. two not the much everything cyber of as fact of innovation edge it interesting move ability DoD. implications am missions. market, that is importance, across a thought position And to of are family way, It's a commercial leader in would the travel of technologies but I in to important There's technologies to our and of proud It's ultimately the do this the begins these really not one relatively AI. not us government, family we leader in just began millimeter area, else that mind, going government including operational and the by that, way information XG. to my like this and an in a XG define of we just a

that. about more So, to say more that, about to think

in the you And ask a already, have part me, If bright. we're scaling we're think I future positioned. is think big like that but I of AI is the there well portfolio? not Though scaled we

Operator

from question comes Sachs. next of Goldman line from Our Parsons the Gavin

Gavin Parsons

higher-level so work. question. by a growth ability more the In up kind of maybe Horacio, constrained the but hire said past, is and ramp your then you to by demand, not your

people So, to think we XX% do say I'm maybe enough when want integrate XX%, X% to then hire growth, – make grow happen? it and to year hire that we or we to our can target? pacing planning X% Or grow to about just and curious, growth so this you is think we'll you for that's

Horacio Rozanski

clients. type But broader to profitability. very the answer bring work demand we yes. good the middle for that to we're see of That's capability answer for the And doing strong still a that the strong X% type strong to proud growth to question. with of We've is sort a fact is, going I of of the here we're that in really our narrowed I X%. that We're of very think question the a we pandemic think have to signals the

with both to the work market you and as this that terms in the some the generation part mission of turbulence. most that to pursue of promising most that are choose issues We and intersection hiring we're core being we will, believe choosy, of are sure the experiences the they consistent people because make the if technology market we both next resilient is and that

the numbers the the possibly These doing. out performance in are go the we – the term, are but were term. sustainability we're And work more us gave the of discriminant if near we we're financial medium we that sort were and not less putting both so, numbers if about could believe we that that into excellent very most long

Gavin Parsons

And by looking on you just time to just certain or that growth of ahead where a a execute I'm few of the officers just funding that budget to the priced a on driven more the years frame about did life to that those have And then, finite environment following of in decisions fund. within what contracting at and expires? on kind options, being that context challenged over backlog lot difficult last thinking make and price more options might a have need maybe

Lloyd Howell Jr.

options to what timing turn like jump couple to with confidence clients' indicator a a in then, really different I'll here. And or contract, and like regarding do One, task We see point. they'd up the underlying ways. secondly, Allen dictated by our Booz the The as on. them that to in priced delivery of satisfaction contract. our a is they'd their leading

XXX. our options variability and and between upon at But if some they unfunded priced tend anywhere of XX%. backlog, to performance. large, convert or obviously, Funded, and XX% the depending you near period portions of at there's So, look by the

we has constrained Horacio demand at feel as always all. said, don't So,

the indicates It with to and then got convert turns what to, we've attract, onboard this work. can an the $XX.X billion, increase deploy fact, In talent backlog. to we that quarter

Operator

the line DiPalma next William of Louie comes Our Blair. question from from

Louie DiPalma

During we expect growing internal success followed experienced the federal more Should and of R&D? you you on procurement? internal down the the for this receptive overall is quarter, Have versus these of your to development type internal types traditional effort? of with this you Department procurement Modzy. announced government significant SnapAttack. double previous Defense development to And And

Horacio Rozanski

fact about think I been short software, the some for We've of the for that the to digital of assets, data or the color bigger quite clients. it's with talking becoming is answer are is time yes, that following whether the the our a it. created value form part

through as but a one meaningful to this we intersection software one actually piece cyber can or a portfolio an mission never it mission technology hard number Modzy just been moves value. solutions that capabilities do an how production. AI the part the additional using trying that to more role whether to is and to improve of in federal so defense procure in types honestly, whether to can make sweeping government. and can our of and combination are faster, government terms about is DoD, such – speed. a firms And the solve mission, critical and with is of across of are and maybe And these just advancing by these It's technology, other It's It's we've of a it add the in to digital transformation And or technology that not inside particular, a us it is, where I mission combination, proprietary think way improve excel, a this And give things. the really also types is both with not think intelligence of more they Allen service, ability assets customer because problem, important solutions one modestly, up repeatedly layer play technologies of of thing. reliably, of own digital in that differentiation. these take really infrastructure, board, a but job proprietary Booz their coming to partnering doing great sure of

we we this piece capability. have this So, of look that's opposed overall or at one how as it, it's in context software one unique the to

Operator

of line Cai comes question the next from Our Rumohr Cowen. von from

Cai von Rumohr

as results terrific usual. Horacio,

your be in very kind to be the or the to and you hire where Lloyd, to year-over-year what less tough has a are of environment? have have is talking this a sixth are? row quarter below decelerated. that's yet that So, X.X%, you way headcount that revenue revenues growth, revenue has does in in growth more you're to keep that range Where And doing terrific your the what about?

Lloyd Howell Jr.

X.X%, with that First, say facing very our the attract of increased the all to to at arithmetic our of standpoint, frankly, circumstances unprecedented, salary, forecasted and even rates base From we and utilization into. staff with particularly a that unique us pleased that that combination X%. places that's me we're given source ability talent in a let range of of broader have, X% think conversion are an certainly the available, we're I

diligent our Our we're the able remain We on of closely year, We're we'll how done. working and to the increase remainder we – the that given know have forecasted business work But with to to the aggressive leaders, in engine right confident is talent. rest our recruiting we're never as finding bring that of yield. going technical to be staff. the this

Cai von Rumohr

And about COVID your And the a mentioned and are COVID there really Can net you benefit you terrific. little your to less meeting the second travel G&A expense. is of in that ratios question of P&L? is, bit talk a terms less to benefits

Lloyd Howell Jr.

they utilization. it's not questions. were bottom one people pre-COVID. regarding It's that awkward a financially on is without are PTO taking The answer the our workforce as impact It's and line to translates had our into higher sounding callous great an That people. that

regarding learned and seeing terms remains savings that. the uncertainties balance our we question, As feel resilience is current into at we're weigh beginning that P&L a I've you we the a next have that meals, up of overhead Horacio We it of still mentioned lot for on And spike conferences, a the the environment to significant there discretionary the as program travel, we're ultimately, to we've Certainly, if that from comes year, stood a perspective telework. portion in year. in positioned expenses, other and ride of the through in reduction we the your talked about, well expenses.

As remarks CapEx, my you've our heard in our prepared around investment in infrastructure.

we next strong and P&L see we So, will as resiliency give navigate strength the a few us which months. the the

Horacio Rozanski

second first do way. the and actually jump business in we've discipline happy we following guidance, focus recruit in us with and strength growth But capabilities aggressive for in, of we're more invest connect the If position with raise aggressively, have the and things aggressively actually managed more I key ADEPS frees up us your even I allows us to two to than in The otherwise. two the it for can to two, which the more questions future to would would half resources One, way to in of course. half. also

Operator

of Our Barclays. next comes Matthew line from question the Akers from

Matthew Akers

potentially you, for cash thinking items one flow this free capital some kind for repeat around CARES just sure that next Maybe guidance year. to Lloyd. you give just don't on working was one-time wondering fiscal you of I'm not maybe of comment benefit, can XXXX. XXXX. yet beyond Act the I there's year, want But if

what are So, big maybe confidence if you could flow just moving the of kind and talk ability free cash pieces grow and XXXX about beyond to there?

Lloyd Howell Jr.

that say saw be I'm medical, But this year. corporate cash. to helped fiscal let reduction events, salaries. one-time our is cash, now What ability pleased comments less story. by cash underlying travel effective going keep growth me the but our that been PTO, has in taxes in see to been really I my has paid, generate couldn't we very to and We were It's capital with core and really high. flat disbursements via in were payables then that collections working also

that half second for to the normalize in expect a bit. We

when for with year, made how million. institutionalized. $XXX of always at in I the of $XXX to to that satisfied. that million the We're past what are never now terms we forecasting look that So, operating improvements couple over you they are years get we've that's the believe the cash truly we

So, I us to on tees to the we'll for think ways future. But be up improve continue looking for well that.

Matthew Akers

I missed you're getting cost profit. but I the reimbursed if versus that earning guess impact this on employees you're Apologies just rate [indiscernible] from run seeing the now earlier,

that month like think at a I a $X rate us what update this an year. is point? the million you run was earlier that in give Can

Horacio Rozanski

CARES to to referring fee for Act? to you our invoice tied Are inability the

Matthew Akers

Yes.

Horacio Rozanski

a like in was their $X their space We in month. folks per even we as really – well And arrangement. our originally function a that's saw off million million originally And support dropped $X returning to per to as a I in million it was space shift work more think forecasted it QX QX, month. $X that more. clients of And and

the both our our see being with we and our sure as manage that close clients said forward. due all to remarks, discussions to our So, credit way, prepared contracting clients We're same it in in seeing officers we're going that. we significant but don't and to make people

Operator

from next the comes question Our line Raviv of from Citi. Jon

Colin Canfield

priorities? you address shift zooming then to potential little in that have bit to respect any talk the looking and of capabilities kind can and spending there positioned a portfolio add you capital are just you a types back they're Can out little capabilities for deployment, bit of your with about that guys And underlying how the to health opportunistically?

Horacio Rozanski

in health affecting I'll start. their That of the our business. a really delivery healthcare. epidemiology civil a outstanding leader side, on drive on and care actual digital science guess insurance this our It in so and especially payment, major the a issue is in side, which is, I course, also the health their helping of is on tremendous transformation, clients an business then industry, Nested expertise level has forth. side primarily

so, redrawn already to and around it COVID do so. called as been to it's health environment the has continue And nation the will help

national continued this a second in the opportunity So, health And years over the and is our with – we the what priority, coming don't I over I certainly, was. we the together as many national other question growth think priorities support. portfolio, see remember

I think it you. was for

Lloyd Howell Jr.

really the capital a And say as deployment. patient capital term. we a tees both as short, sheet deploy a and to strategic continue well. us up asset, and the it manner, view with near disciplined we we long take in Jon, I'll balance that in

haven't capital priorities Our deployment around changed.

looking long and don't rounding that trying more changing. deals. the deals, said, I it we're then so the on see we've and at that forth. And supporting The repurchases always of we've and got we're dividends. traditional tuck-ins. recently on, the deployment focused source it most areas as digital M&A, And but in strategy, nature, AI, of course, cybersecurity, be And in and potential those includes lot capital our environment, that we've high. areas. leaning we're additional more always companies has to looking share In Clients support are focus out a capability demanding at a technical been today's bar of forward Regarding nature holding

the at our increase in looking balance volatility well will all deployment we're So, strength us We that, and sheet, the to up of options. tee that objectives. given maintain meet capital our

Operator

the question J.P. Arnstein next of line Morgan. from Ben comes Our from

Ben Arnstein

is outcome election couple in kind and And that's administration prepared you the potential kind kind year in how there your a you wanted for a for maybe days change leadership and ask in half leadership I just of to have do of how here. of Washington? approach you the the customers? about if in coming of up back How a of change think the election the about of

Horacio Rozanski

me The of those. change. maybe Lloyd will great to aware administration to some and at course, is critical And looked campaigns not or as to a then our of We've look are of would very our talking they're them of the issues when cybersecurity the want those there's we will talk we closely and about also are how and thinking there's Let what start like. widely about, term are second priorities of that infrastructure country, example. top future mind But reported, add a well. our a differences new clients both are and that

Booz in the last mission, energy and The you for China with the here are that's working across of and those XG, of so has a a civil a efficiencies. inside of networks transform cases transformative little and now the and stay. hospital Then value force, issues, other and we both state digitally before The a also on then, country bit days, about to AI as competition our years. in the this And COVID attacks just mission for importance into [indiscernible] leader in some. issues. get And rise many probably Allen couple national Those the and space technological over but nation to Just of government society to creation be driver issues coming been saw the years thought defense [indiscernible]. and China. need all you the then many and hospitalization talked headlines surge. as both for of in effectiveness about

we're against But difference on. on we're focused focused always our add come real directly about them. clients serving to we're that approach it. what on And that next on sustained We'll I resilient problems, our like durable problems, very most what making We're and So, our focused their making And with real election value more been may, their know a said, important we that's challenges. most most the course. and of on for our week, clients sure directly those. that's working to

Lloyd Howell Jr.

are support, but of government our dynamic not a I And a would currently given that the experience, of decades, like. Horacio lot new this years pragmatics the just dime. The just looks to pivot just reasons add the that a doesn't it to on our what that pointed of come resources we have going of to robust that, a a programs business should is agenda is a we party for to, lot transition to our were increasingly to we have portfolio federal transition, our where where In P&L, is we point, history seen shifting very Horacio's single the to agnostic. also business, to puck a of civil, a speak. the be, tied so their missions, have with cases which where politically shift, to if

that transitions ride feel us got we and a of occur. relationships experience our with clients So, allow resilient very any that we've may years to model, through to

Operator

last Our Joseph comes from the of Denardi question Stifel. line from

Joseph Denardi

intact. mentioned lower XQ were the year remarks for your You expectation prepared still is full in expected, bookings bookings but that than

the And you quarter kind explain we returned So, expecting? industry-leading a book-to-bill organic assume to can in weren't like that should guys industry-leading what that to just little growth? that you in then, of you support when bit, happened order

Lloyd Howell Jr.

the always bookings And than come Horacio as maintained, really increased we've have of go, our of at different we're a is of and pattern. large demand number a constrained will all. Joe, depending that thing, timing historic in seen timing I awards upon what these and first The not consequence

as see as larger in But a So, Those come didn't don't issue. in QX. a up we a much that big problem to couple we as timing bumped had just wins QX, pass of that procurements book-to-bill.

to, feel And always performance. top terms pole up challenge that we talent So, That's of going bring supports strength time, of the position, larger pursuits us if can clients. will, backs sort plenty we've the in going that and we on the in in our is market. line the over you of these demand got be, keep to really our

Joseph Denardi

And contributed the that XX% was to that the expectation on year start and the I initial COVID weigh think margins initial to would guidance.

year, to been of been to has get you next grow the where we are, we continue margins environment? you off Can you given face this and think you. COVID largely impactful a headwind higher margin kind back is base? because that should not that normal more assuming about Now, how all Thank

Lloyd Howell Jr.

growth discretionary seeing as top there. we with very means We're margins and in our end, are in that us our in a then there this and I growth And that, time. margin. and very not think a we maintained pleased margins, of that end. which contract high have this top line couple that we're is lower. level Certainly, have employee gotten And of utilization, especially of sort performance. are also driving are that and bottom fact management the unallowables see lot to I've interested We unprecedented always a time, The costs the about other talked line drivers

normal, hard the And estimate. expecting, will But year around so, in national the confident balance to we time, of we'll return finish which of to timing a feel reforecast to a mid very able there's of XXs, sort is year, virus to of low impact the really something our I and that range. that COVID, for be fiscal this but eventually and new that's that debate now think we're over pre we the its

Operator

the our Rozanski, Horacio Q&A call turn President At back and Mr. closing remarks. like to concludes session. to time, I'd for over CEO, This this

Horacio Rozanski

the XXXX not our Ralph anniversary Booz at when share. And I'll and the election public entering since it Allen story November November. Thank going of you, of XX, our morning. years never and with but Shrader summer forget only an road Sam conversation that Hamilton Ed investors on everyone, founded initial shares comes company also the our holiday XXXX. XX $XX actually for potential former offering season, meaningful to CFO, the Booz for the in Tuesday, opened a with out marks this firm. in We're Strickland a this and tell CEO

this reflected two I've on came As recently, to mind. things

intersection and The first revenues, over last differentiation our Through this our strategy, is has of our carefully And margins we XXXX our as been. right and just at ourselves mission. decade expanded technology years, market the how transformative the Vision significantly you positioned XX profit this saw earnings morning.

an second dividends our perspective, been qualities not and have carry returns foundation the I fact, these financial the And from generation adjusted a on the for clients changed of These point institution, in our this of shareholder fundamentals. our are The total leaders In the much reinvested they our for has excess Booz each of Allen people, history through over investors' was commitment reflected our because to strength. success decade. how at Allen is steward set of XXX% core purpose, and to Booz since of values, standard IPO.

IPO. our I'm for and insights So, as decade. the been over us And of by grateful want investors conclude and following analysts your this the I support our journey, we since those who've today's last call celebrate to you incredible especially thanking to

we firm. better We said have done. is from made you. each past And never XX work years with learned a interaction morning, our this have And us the as

Booz building strive optimism, continue on the coming and Allen to decade energy track will this in with record. So,

a Happy this thank Halloween. you and for day a So, morning. again Have joining great us

Operator

gentlemen, and participating. for Thank you call. conference today's concludes this Ladies

disconnect. may You now

Booz Allen Hamilton Holding (BAH) 30 Oct 202021 Q2 Earnings call transcript