BAH - Earnings call transcript Q3 2022 | Booz Allen Hamilton Holding Corporation

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Operator

Good morning. Thank you for standing by and welcome to the Booz Allen Hamilton Earnings Call covering Third Quarter Results for Fiscal Year 2022. 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 Ms. Adams. Laura

Laura Adams

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

Howell, make information you Slide may among financial Officer with We and actual we results. may on today's and and Officer or revise disclaimer caution uncertainties our please therefore our statements we are update be of place to not this any Relations government presentation considered discussed on keep known services shown materially and assume subject for President, and Interim to differ quarter our Chief discussed and Those this factors are our step provided XXXX fiscal statements no on call. economic the Executive risks our Laura periods statements reliance talk President from include business future am that three, that SEC that included undue also the remind third may uncertainties, cause to funding which to to mind Lloyd Executive in filings. and on discuss earnings our earnings release forward-looking We the Head Vice you obligation results forward-looking things, include the I of some availability Chief in on have today and and Horacio Rozanski Officer Treasurer release and that Adams, forecasted general company are conditions, and of under me our about in website and results forth other other do will and in the slides in now two. Slide Chief Accounting forward-looking unknown and items Investor and Financial disclaimer risks on we'll As morning,

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

are four. We now on Slide

Horacio Rozanski

and families Today, thank Thank quarter third to the and context results year have your everyone. stay thesis. the you, of that and through and and Laura I the joining healthy good multi-year hope Lloyd been in our guidance for share you able morning, COVID-XX safe our call. current investment fiscal will and I wave you our XXXX

Day, We Investor of strategy. will Vault business October the we go To are and back outlined where associated on our Vault let's to describe we our dynamics strategy and our making set underlying our context, progress the goals. the also

a mover As a the It federal technologies. to helping Technology. of missions and reminder, through first in capitalize transform Leadership core advantage government our use is launched the Vault Allen Booz strategic on Velocity has stands new for program.

cyber grow as battle to physicians building look faster such next in we the Over by critical and years, areas, national few scaled space. digital

We making already progress. are strong this stages are early seeing journey, in the strides, of but

deliver both part business. goals our we continued new Vault, financial growth As set of multi-year and in have that profit investment strong

$X.X in growing on fiscal centers year increase. billion to thesis in a XX% investment year XXXX. dollars million adjusted billion EBITDA That's to Our $X.X from approximately XXXX $XXX

that margins growth, prioritizes We in adjusted X% strategic annual to expect EBITDA total organic be billion revenue tens X% capital increase through acquisitions. and $X.X mid billion the accomplished to in to this $X.X deployment

range goals. in of and adjusted share range XXXX consistent diluted per with year the Gross X% were the these $X.XX. earnings fiscal XX% revenue for to in growth expectations $X.XX to Our

year pattern and fiscal second slower significant this from growth in acceleration revenue first the look the said half half. years, would different growth also recent in with We

release, numbers [indiscernible] in track line saw expectations you press As are guidance. our our and bottom are we on with reaffirming our our

several will growth for expected the There quarter guidance quarter we and year contributed was through a in forecast to the than quarter. lowering greater account dynamics strong revenue full fourth third slower on pace. in Lloyd to the take we the quarter revenue while we're our XXXX depth. revenue outlook results you our for lighter updated revenue that were Our factors fiscal growth,

the on of and lower contracts, ramp surging the pockets our resolution, we of increases hard the our business right XX growth part work up lower headcount continued our staff work large in of people over the Conversely, number and reflected translation than the awards greater and of in larger during slower to awards a and the hit, impacted of by factors, standards, the base. last side, a driven some quarter sold number and positive those positives kind dynamics a was billable These billable due anticipated on continuing were entire including to backlog and higher delayed than protractive months. delayed value as On hire proportion in slower defense expenses. protest, into Omicron variant expense historical their part productivity of win especially the right revenue portfolio due dollar a their to revenue of growth

coming see these the we continuing months. dynamics into challenging some ahead, Looking of

result, proactively we taking a As manage environment. three-pronged a through are to this approach

areas where we funding the are see uncertainty. business we greatest those addressing First,

P&L. by down we deliver to of are to the growth into and managing adjusted while opportunity, model are our continuing short, both in to growth on unique significant we operating our In face we order tightly continue grow portfolio, across Second, EBITDA single our areas market greater And in in commitments in the and lean volatility. to leveraging invest doubling costs resources control of business. shifting third,

so far. over the business to our to the return have longer turning let made outlook me and Before call Lloyd, in the we progress term

growth revenue, growth, margins, track continued by EBITDA XXXX, ahead, adjusted capital. strategic look fiscal of deployment remain stable we in strong year we EBITDA and As supported to through deliver on adjusted

strategy confidence times in belief execute several Our the future the ones months few points. and ability last in from challenging have good underscore and right proven we predicated both to the accomplishments these and is our in the that

First, center to the we executed. is at priorities innovation the government of continue national mission way work right can of kind the where the win help the transform

the Our in Air for clients new their AI from the Veterans of as to Booz advance to commercialization DevSecOps, the areas missions. Affairs to are Allen department of Force and expertise technologies looking such

key Second, making investments we that our are service to clients. differentiate

grade of as digital environment a up The December, solutions. ramp advanced lab we of expand cyber For several national are announced support our cyber, Central Maryland. on This offers in our XG of our in capabilities client battle the secure for investment Similarly, our our as carrier example, advance art on we state we lab of Honolulu. significantly deploys last of XG into the high the to footprint some our most space, expanding part missions. opening resilient INDOPACOM testing work priority region,

acquisition and Third, addition, extremely upside expected. to going strategic and and Integration accelerators, these we acquisitions are with we as using we continue successfully are and strengthen acquisitions most well, the is requirement. I our for Liberty manage pipeline. deliver in value strategic Trace create to as support through our we and proud financial resiliency build pleased to ensure importantly, they continue volatile the our environment. forth am and team too to the of complete COVID compliance and we continue a we perhaps our with clients achieving vaccination And extremely our focus have workforce Point

we do. of values everything and core at the are purpose Our

focus thesis. growth to So This clients, and do believe Lloyd always our and clients we I'll quarter, post to of in to that Booz are the employees a us entering that phase. the collaboration is client's and more the create our people right for that, the institution, over what our our Together, workforce shareholder the our forging allows prioritizing safer with term on our fiscal with Furthermore, our in-person investment ahead the together, value. fully critical all communities. the and pandemic missions of supports And serve third health for results is and Lloyd give better year our strategy. thing a floor safety Allen to you. details consistent is to vaccinated delivers long relentless

Lloyd Howell

Thank you, Horacio.

coupled on impacted did were PTO staff the get corner anticipated, a that in the the wave year, turns, overhang continued our near which an uncertainty to we not guidance. top by outpacing factored believe we XXXX strong have our supported year rates, for are second many convert This seeing patterns, bottom line have line delivering our just did give will expanding greater I the of another from twists said, resulting wins our completed performance continuing that when foresee quarter, build the into we achieve while long with overall shortly demand turning we utilization first a our performance. we updated on to predictable of effect as invest were we detail visibility hit the at we did levels market business nor and generation. marked which now some fiscal growth three anticipated. ability as XXXX by pandemic's on Omicron, what to and reverting we expectations underlying has growth. We year not into we half changes cash results we With and more top more growth fourth some into fundamentals, delays are not people As second impacts into this at we but are in end of the our fiscal business spike to and deliver had resolution level quarters And translating anticipate term to macro the in to utilizing, the and we transitory led initiatives. normalizing the in line guidance, fully our half. The on I into impacting impact need Horacio revenue

approximately top quarter, of the revenue $X to this line, the quarter five. billion. billion, expenses to contributions. from inorganic the X.X% Now Revenue, for million excluding for was the growth billable to includes please Slide year-over-year grew slower increased Revenue At three which following turn reasons. third $X.X year-over-year $XXX X.X% details

delays resulting work ramps new and in slower on work. funding First existing

this right. the staff quarter's pushed material expenses arise Second, eve patterns of third, and holiday lower PTO part getting COVID holiday period and Year’s continue taken travel due resulting New in the billable to an slower pressured in the over to the And purchases the of by to results. inclusion in utilization in from cases timing be uptick

Taken business together, dissipate more we to these rhythms. that normal are return timing factors as issues we largely believe will

impacts the work, walk by is defence Since and year line impacted roughly some dynamics factors top and Starting with declined impactful been on where were subsequent me especially let portfolio hardest our performance these More was through the macro X.X% our ramp Horacio this has specifically of over level by XX% largely defense, cost account revenue and year was business quarter. market. expand quarter hit army to over what trending up comprised some of Now market reimbursable losses. in by I and noted in performance. down our slowness said challenges, budgetary the of

our our headcount, defense which down marking managing digit year-over-year forward, capture including strong revenue these aggressively utilization organic, and of such on the initiatives growing doubling is XX.X% by Civil leadership our was growth. by consecutive Going of space platform. hypergrowth to X.X% issues double digital addressing battle quarter In value talent as second opportunities, grew deploying

see administration's we wins. reflect where solid the across important which portfolio, with yielding alignment Our particularly performance results strong health, priorities, the are in

we data integrated mission performance additional and API technological market recorded our share multiyear us advanced Additionally, year areas capabilities growing intelligence, we in to demand of to recompetes and our intelligence, key Liberty digital growth for development in over cloud offerings strengthen high artificial in key hire our capitalize expertise on new across work analytics. This secure our end In opportunities. year. at as ahead to improvement growth ability second continued of market prepare including to our the and positions modernization, to position consecutive and This unique of and reflects quarter areas, DevSecOps continues portfolio. pursue broader leverage X.X%

from XX.X% commercial period. cross-selling growing the Tracepoint to revenue demand seeing in synergies. grew compared are year Lastly, US was we contributions and our commercial where early strong driven global momentum Performance and cyber by prior business

and the the were of Net translating now artificial a to bookings XX% partner on $XX.X approximately billion. digital times a third $X.X $XX.X to times. position of Six. the missions backlog year-over-year book-to-bill and grew a We in to over XX.X% to X.XX $XXX period, quarterly XX X.X% price cyber quarter name $X XX.X% month Total trusted and up results are for of and million prior billion. to year book-to-bill leader. grew XX.X% a Funded underscore grew approximately to grew modernization trailing market alignment clients' These backlog and demand areas X.XX billion to backlog strong few Unfunded options billion. intelligence, our and our as core further Slide continued

in Looking business more an Pivoting we and increasingly as labor our resulted we consistent into employer continue ahead, our digit cycle, to that headcount tech technically as are as are hiring third pleased normal we but complex and headcount, successfully reflection to larger become quarter expectations. our mid-single factoring ongoing approximately choice. retention highly operating a continue protest appeal The XXXX or XX,XXX of competitive, tech adjacent and X.X%. strategies, anticipate December we a XX, This pursue market of that for the remains on execute part approximately our we growth, plan. of consecutive will year-over-year with which talent of an we employees, to of had of increase bids,

margin the XX.X% million from margin to was by up in to year prior on The compared the line, X% for adjusted driven in Adjusted factors. the $XXX EBITDA was prior period. period. revenue adjusted the year three EBITDA Moving increase quarter bottom XX.X% EBITDA was

mix, First, profitable includes contributions. and which performance contract level inorganic

return taper quarter. management, prior Cares that Second, negative had third, and the period this to a a Intel, year under impact on for fee cost Act, within after a prudent million will $X tailwind off billing which the

decreased to to from $X.XX prior net X.X% decreased was Adjusted period income year-over-year Both the $XXX offset share and $XX.X by the year and metrics an program. diluted to Diluted $X.XX. GAAP X.X% following earnings of down prior tax income period to a acquisition, were million. higher in lower quarter interest Third year-over-year. million per reserve count the $XXX share decreased X.X% XX.X% $X.XX earnings $X.XX as non-GAAP per adjusted effective net income share to as repurchase from of the share our impacted by partially Aquilent well release tax rate higher due million related expense, year

Our non-GAAP of the SnapAttack the of acquisition costs exclude non-cash million the certain $X.X during from spinoff and quarter. gain metrics

quarter from $XX operations period factors $XXX the with the and cash cash, performance more in to decline line third period. million volatile higher was disbursements. to to some Turning top the million from quarter prior coupled in this pronounced Operating was comparable cash impacting down year is the quarter growth, a due of

in performance As efforts strong cash have our have to we are sheet done a we we improving nearing generated and before, flow on positioning supporting Year focused to cash rate, capital Seven. free cash operating balance continue to working cash management Slide Please priorities. turn reinforce and for our $XXX balance operating XXX% and cash million collection sheet. conversion million $XXX deployment free our our strong in and date, cash

committed one we to our strong capital dividend, quarterly in promise position With to a are million share stockholders $X.XX $XXX fundamental growing a marks testament disciplined approximately capital Today $X.XX more board deployed by shareholder This in our near we an allocation that year, to March has X a environment. of pleased strength value. payable increased term dividends of million also we quarterly manner, long $XX this record quarter, repurchases. the operating and remain our accretive share inclusive to announce strategy, dividends creating in February ninth year quarterly our challenging increasing per fiscal and our left sheet the on deploy our even XX. dividend consecutive quarter of to million fiscal leveraging on $XX in patient, to During and in balance continue to

October, strategic focused said sustaining deployment have on capital M&A enhance remain opportunistically our healthy a to priorities dividend and we while in repurchasing growth As shares.

margin quarter, into Let me to of challenges from Despite updates year proud we manage business what how efforts this move in cash Slide full you translate fiscal through our takes puts guidance. the operating solid now wave and macro we XXXX and revenue to are fourth sheet focused fiscal priorities. our executing the on lighter performance walk on are efforts operational Please with These year preparation controlling our and to reinforce our the the of environmental throughout can another the balance ADIP's fundamentals enabled execute of quarter spite we team's as have our we thesis. quarter, investment strength to expansion challenges. against of In this Eight. laser in

opportunities of demand portfolio to on work long We capitalizing will aggressively of hire organic sustain new term to strong growth. continue ahead our

to technology continue pipeline businesses disciplined We strategic will that business wave M&A to And serve our in and our as next efficiently accelerators. of lead criteria manage the our the meet lastly, build and investing people by innovation. acquire to

revised reflects guidance Our these efforts.

the performance trends the let In quarter through I addition third just and run to numbers. me outlined,

of in growth largely fiscal million revenue our million is million For and million unsold funded staff to pandemic funding reflects delays tied $XX $XX They staff $XX deploying revised in the materials and the pushed the million resulting now in revenues PTO and of million uncertainties be tied break to and X.X%. follows. to pandemic $XXX right. from step year, continuing related range down the At usage million slowness tied incremental $XXX we earlier. down $XX expected travel an full to work. purchase lower to due to $XXX utilization $XX in getting the midpoint, million to to timing X.X% the of to to outlined guidance to range as the

the XXX the in of to become points differences the top the implementation NextGen holiday will inclusion fourth quarter, roughly line. minor financial our of costing management related the of Eve As basis a in to reminder, Year’s system tailwinds and adding the labor New

approximately increase expect the reflects now cost in control over XX%. be we our structure This margin and our line, even year of fiscal adjusted EBITDA bottom margin levers considerable the to times uncertainty. for On

our earnings The million. expense to guidance be and ADIP's are rate cash to of for anticipated, one $X.XX share based reaffirming average step $X.XX. performance. shares line in $XX million We to of we weighted diluted the and lower with outstanding operating a our per of is on between a for We XX% $XX adjusted to acquisition, interest now between million management combination to XX%, $XX of expect million and had $XXX operating effective $XXX accounts tax down to incremental be time guidance payments million an Liberty follows being $XXX connection capital and through working and able top growth $XXX The which million the make up expectations million.

As I working growth mentioned, capital of level million. million future delivered focused to have strong we finally, the continue capital we between initiatives. $XXX will on cash we expect to be to expenditures to us our to remain ahead version And laser optimizing of return to historically position $XX

confident As in through to we the do our uncertainty investment ability our times team's as have we move our remain of I over towards proven manage thesis, to these years. ability

on We the as the Laura. to business, near long our upholding and objectives competent of over term leader role trajectory remain term the industry that our expect. will high come shareholders standards to you, to execute have growth our continue meeting With in the and

Laura Adams

the line. Lloyd. you, please Operator, Thank open

Operator

Sheila Kahyaoglu instructions] comes [Operator Our question from with first Jefferie.

is light Your open.

Sheila Kahyaoglu

and the that specifically that [ph] [indiscernible] Laura. efforts remained the growth down Horacio, within about uncertainty decline within mentioned How you we how you Lloyd, specifically. pick you leading and what X% Thank and the think think are Horacio, Lloyd, army you. to defense other funding do addressing and stated areas quarter. in there? you're business return the decline the do about areas Defense morning, up to with greatest Good

Horacio Rozanski

morning. the Sheila. for question. Hey, Good Thanks

business. prepare context both in slowness affecting in I driven CR funding as the and volatility portfolio of the funding just is our precise to we defense both and and by -- think market issues, the I Instead take to step in things try mentioned the the business, would to as the And through with COVID If certainly we're on in back, some abate. in we affecting particularly then and on getting and remarks, are put our terms we strategy really predict on defense issues contracts our actually are a them. timing not working our when firm going say, to fundamentals a are those strong. going are some I

of we're numbers they good tell backlog the our and and quality very, managing strong. We're winning hiring this you markets, are at the in investment story can backlog, very of work the that volatility and defense, and including If strongly backlog through that look to the really the and thesis. is increases you a the the about that on all see funded deliver work we then underneath record across

talked headquarters targets on dollar we first for our delivering our been then our really So we of double job we to that dynamics areas growth in costs And about in these portfolio defense work this investment hard defense some the portfolio, around importantly, we at things the to and and growth business, the all adjusted these the that and line in numbers make classified army see transformation work, some the have at performance to that. the of on we some across battle our to sure digital issues strong certain address space around there need in hit of that is and business. EBITDA are are department, of doing related are of all us of space down of both you have business thesis. need and pockets digital that's We around by control and doing entire bottom that that and we some edge. are our the our and in to Lloyd

grow. the in continue continue to through to at very to term, look term leader I track and, accepting much I near all of and on to be think volatility, and are So, the we medium that managing that the and

Sheila Kahyaoglu

organic more helpful. X% right growth implied been your fiscal below space. X%, growth of 'XX No have 'XX to this X% broadly, to one is X% leaders that. But you to then and And in XXXX more guys in that's target. revenue super maybe There's for no the the about doubt

about and QX? high growth a reac organic think So we of these Analyst addressed implied do kind how you digit mid-single acceleration during to your Day know digit of the single I this lot growth guidance too. for

Horacio Rozanski

you Lloyd, I'll… do then start want Yeah. and to

Lloyd Howell

start. I'll Yeah,

we X%, delays, remarks, that X% prepared the laser things lower in are combination our funding that overall. utilization Sheila, We our to focused we're in priority that lower said, X.X said, a control. the billable So our expenses. year, doing as being in work. was on the three us of talent that we're staff it's factors and year have that over said and year-over-year We're bringing operational winning organic and That X.X

year-over-year. up is XX backlog Our XX% at trailing Latest times. our months X.XX

winning that to talent. the feel our engaged topics forward focus that the work and best clients things through volatility win. we but these really are control, do we're and path the with winning our we we is that want face on to leaning, which on this hiring work So challenges We're are is that in

Operator

Goldman comes next with Gavin from Parsons question Our Sachs.

is line Your open.

Gavin Parsons

year pullback been headwinds over appreciate I detail revenue slippage, and persisted and a thought, longer now said, grown dejavu having than appreciate would've but toward organically. everything we've of procurements I XQ the where funding, and has COVID you haven't us any all color I'm year delays much and last basically Guys, of etcetera. kind all but and to the and the you've

the they're curious, about spending? way do that behavior there thinking confidence So customer I'm isn't just structural actually you change and get how a in

Horacio Rozanski

appreciate would here's Gavin? what the I say. I and question

business, you you going as to and if constrained and growth some if talk their headcount and on I I aligned I that priorities grow about are, strategy clients this, lot backlog Typically a wage especially level I mission that, how all, said, good. fundamentals feel that, not. about how are when listen take not of we're strongly gives know, to where to increase can in very and for we numbers, and underlying like we're of we're much we're what the we're to you doing demand of First them from sense see our are you a

confidence market. So shape continue around term more I and the there in think to unpredictability these are, in grow we call some some of to there's with it we more have and I volatility come the that the the the, in -- reality we we've in good medium leader variables be I very are go positioned all that which these growth fundamentals and in to them. bottom of the to funding terms And we are our to but COVID delivering is together. back Lloyd on structure have where over at the thesis. we that make anticipated, the point control on And made, the focused cost We're that perhaps to around we're the put we line underlying strong. investment focused deliver business sure

Lloyd Howell

with. the a just Kevin, that would well, add of many still dynamics as had grappling year I we like yourself. grappling moment I dejavu because were with a ago we're and

up definitely on open in came I workforce. October, and again had an along, were things impact to Omicron think, our we early that going expected

just operational line the and our I results off but bottom and excuses. we going with not we're executing are focused Horacio which We playing to that about seeing We're out kicking and, on and Like choppiness up staying have said, have items as the in we're well and in expected we're line up that strong that's control. the but as this to top into very things, we strategy It's at point. to are still and we're keep proud just we're going slowness start now. things that making ramp environment the far administration flow, would on this have to and

Gavin Parsons

of that maybe to just like appreciate and kind continuing on outperform is definitely there That budget feels margins, there. the insight. the is so. And I need already too there

you've think shift you is you number day is if containment? investment or a at I XX.X, Are kind You offset upside from partially target growth. to outperform that to of obviously, Investor term Day, and outlined the and that can the cost XX.X% managing to makeshift longer mix you cost investor containment by got there tailwinds on continue

Lloyd Howell

Yeah, XXs. mid to we're not managing

The cost expectation around raise speaks because and fact that and really and is of we've approximately as this we seeing for XX% with we're contract experiencing. that an control types. on mid XX.X% operational given have In our our forward. talked pleased going about that, continue really, core terms very quarter that that ourselves business to to of well discipline discipline to it the we're shift that as our going reality of The to good that fundamentals volatility fundamentals we've that we're stay solid in had a focused performance, we're

the confident us that full XX.X% we're on That's we're been point. what at that's focused that's we've why So around for the been fundamentals to But really about moving this to. year. it's gotten

Operator

Thank you.

Our Colin Barclays. next comes Canfield with question from

Your open. line is

Colin Canfield

in at growth M&A point, both you a substance valuation this on public talk to private well documented is Can about pipeline, the this and your just how basis? of names. kind you services of impacting So trading pretty

Horacio Rozanski

spike, based to we valuation. I the in haven't opportunities I'll well point, mean science, what spike an balance know, auction, from with elevated we mind, cyber us a having emphasizing we some up better capacity, insulated seeing the areas in strong opportunities small software as M&A you analytics, terms to into knowing cultivating relationships, based mid in in should ways valuations growth particular has broadly we're strong keep on on seeing sheet some in to the valuations seen these mid-size we're have and think go but more opportunities. and job it not we the security, start in still also with We're but -- this see of industry that I our a continued we're data system development we and doing our do in as of functional and that are the engineering areas

Colin Canfield

cyber at scaled update the your scale And of it. and business terms in back you Booz us you your of comment in just start where terms Allen then of scale stands areas. Hamilton kind Horacio, going mentioned Thanks. on Got and where most to matters the underlying

Horacio Rozanski

Sure.

growing. all think I the we've areas heard I portfolio. strongest work continuing mentioned, largest growth prepare standpoint, base intersection talked AI example, ourselves growth. flexibility innovation we to I strongly a believe XG our scale the and really work like lot And to for that us past. really both the remarks of XG AI, our a invest be. all in asking gives this is Across about throughout workforce where last these positioned footprint and the from, been you to and deployed we've areas players it's these of INDOPACOM me as go the I'm in and we the having of looking another drive wave into focus DOD doing America, like going breakthrough the are in you've we of, of and about as we technologies in the will some say three in ready actually which before And major cyber to that market we've really of as we're North from areas days talent a this our spent to agenda the actually key decade. fact positioning on cyber, the

forward country. So, to that there We're example, intelligence. also portfolio that well strongly. and we for our for continuing Lloyd And look domestic well very to we the we civil in the in growth defense pursue grow is to while mentioned on agenda very aligned

Operator

Thank you.

Akers Fargo. from with question next Wells Our comes Matt

is open. line Your

Matt Akers

Thanks looking the that back? businesses buy potentially Hi, Why everybody. of you're and are Attack? recent out there are to are question. Booz outside off of for of of other sort your your Could you good those any just and morning, Snap on parts [ph] Mozi spin touch business

Horacio Rozanski

manage a going and to I the thinking and portfolio start, to both I Vault I'll back how Sure. this we our forward Velocity, and of directions. about honestly, of think lot that is in want notion go informing

I acquisitions we growth the those we asked but same take they're and some excited and the and point. pleased, and And portfolio the make we're created partners have a this entire do ourselves frankly, growth, not the commercial to is businesses into the we're playing think Intel growing partners, growth in markets solutions minority defense So unique by as investor to about returns those Liberty getting better, involved a at we out IP. again, We markets to that in the civil core if the IP to as are learning with our they're and faster of remain and that how those Points, base financial with minority with we they're where token, areas, bright and in them with created for positioning on then accelerators just owners we we lot entities above at the our in frankly these two of grow that that we future made and looked were very fast and and driving we advantage would the these strategic our that with that really those and came believe front. player conclusion on to because us in good venture businesses of we're By all drive right are we positions how with expectations allowing. both, take and market Trace different capitalize ourselves of investments that see will that the

Matt Akers

I change the but maybe guess know just you you there? that Thanks. top not Is the collections more any I great. more for kind or detail That's and of then, of a free line, kind think just on the I timing is guidance could different. EBITDA Lloyd, once cash give lower kind guidance thing, it of And kind flow dollars of mentioned

Lloyd Howell

lighter but lower had was headwinds some Matt, Yeah. definitely we revenue, due to we about around talked of specifically the collections. cash in cash,

disbursements had funding revenue celebration Some higher due The of we being payroll same expense. near just that QX. was little time the bit delays, to a falling lower and

incremental that's some that operational heard we're year of from this. context, acquisition being we're increase made. you million I the following of the offer laser kind said, focused and of said And still the added also issuance on improvements expense. offset we June Liberty impacts slipped year. well conversion And as being as collection of interest in for remarks, on payroll prepared sort as we've XXX% the this had about that a the bond $XX my So, cash focused the That in

these improve of We will. headwinds, you work expect through sort near-term we going to if forward as it

Operator

Thank you.

Our next question comes from Cai von Rumohr with Cowen.

Your line is open.

Cai von Rumohr

Yes, thanks much. so

probably the quarter X% X% know down about for was you as So, the to [indiscernible] itself.

about that they of this those expectation are seeing are slow, be any protests? some are adjudicated? been So going How secondly, in any that things environment what big bookings so and, that's And way. changing any are you signs to

Horacio Rozanski

can Cai, I start.

the defense our if on I think some we, have protest some seen our as along, backlog have Having slow business, as that, mentioned we that the clients do I contracts, things an under are down some booming or On we will, therefore urgency. high. the protest amount some you is to not all-time backlog, right. at is in slower moving said, said ramp-up and overall in of our

defense And that, I of has time, the about closely CR and so to degree. but by PTO that I inside and again, frankly then the and the that of drove number we normalize, some have expected than would I over these affected Omicron a of the the fact worry will watching mission business impact the, Allen. worry share-on think about a, more compounded Booz COVID cases our the, we're record certainly a

underlying that All through, fundamentals. that I are is us of take we the but talking the to back volatility

They our clients Book-to-bill on the is are people. our is strong, we're our focused months for right on. and things are, focused are strong last the We hiring XX the backlog

over we're on continue will that of some the to believe we and we these going normalize time, things focusing control. can So

Lloyd Howell

add XX quarter is last would signal. X.X, consistent, point. to nine comparable feel that months I for pretty year is most and this And at this strength demand Tracepoint. times just in is what the We our pattern for to Cai, trailing plenty Hey Book-to-bill X.XX saw of part, we

all incumbent are place, going traditional procurements work they the resolution though, come continue volatility to at impact of timing of to XX%. is these Book-to-bill. going over XX%, moving is to new But our grow work which still some protest as through, We larger depending see pattern to winning upon the certainly we're

we, So, X we're the signals, pretty still good. feeling demand on

Cai von Rumohr

Thanks receivables, the up about make sector basically you at is That you in bad days. What -- now and of what it And it you get? can think end so to were high is one improved better? XX – high. doing I implemented a spiked you quarter, your where the that much. because they do They on do and first system. the the And why what DSOs the think, to ERP are you second

Lloyd Howell

Matt's see I it focused think going environment, volatile, the collections; disbursements. Yeah, It's will really really it out in balance with on and getting that we we down. forward. improvement being continuing we're question team's on this diligent disciplined And be to to our function to, a Cash but of expect current on, it.

we'll So, going on we'll, better I expect no that excuses we're do it. And forward.

Operator

you. Thank

question Stanley. next Matt Our from with Sharpe comes Morgan

Your line is open

Matthew Sharpe

morning gentlemen. good Lloyd, and Horacio

any current either shorter of business deeper On the, Liberty models sort XX disruptions. the your the backlogs fared acquire given mix this cycle has the or with M&A somewhat there in budget acquisition and business longer in and just to desire then in cycle the of relatively related COVID nature to Is surge how CR IT in Companies that, front, the environment to sensitivities cases?

Lloyd Howell

said, we're for I So, with focus XXXX, on can and looking with things accelerators consistent we looking a it's things that that at M&A billion strategic between $X.X Vault our $X.X the and have us. now I, think to strategy, all billion and deploy with be between

positions examples there are space, things building COVID really of cyber good well. where beginning teams CR. have very a around of diligent in from the it's that It's, done, in and good, going other develop we assertive are together, working a technology Liberty priorities. we're either well technologies, is going faster very Tracepoints mirrors be of intersection Liberty mission a unique of that integration were battle terms health and acquisition. a The to their we're our lots digital expand unique very both pipeline. portfolio that. markets the touch, to it's faster, points found And to parts a generating And of of core accelerates is and since national move that really that really around either on opportunities So opportunities or technology pipeline to especially or our across

in backlog most they're so as us dynamics difficult diligence, recently defense. pattern rest again, we're they and question to right at your but cycles, oriented, we're have to when variety to looking of acquisition more more they we in a And I I a for pipeline see us seeing they're, are the, the areas the, the ride we of -- to forth, they a But short great of they're obviously saw to of don't business they're through follow. it's it. due you name and dynamics more talent, doing sort for positioning, team. because continue the civil of the that civil the opposed think the, They're some the market, much around reflect great add, a term - they're

to strategy, what investment sure, on it's integration to It's talent adherence with it's but But strengthen updated we're for on have their Tracepoint, confidence does still, looking Company leading So certainly is we're achieving and upside thesis. on. and list our and Vault of the on our that. yeah, it the in not goes mix, at do a

Matthew Sharpe

step or, beyond trust. significant the days and that then modest touted you the or for, do just a contract in booze trust itself for on while it; zero for like forward recent zero as with, prototype. had prototype seemingly for was win certainly fairly does and touch forward that award path there thunder I is to look a the program the Got with What want environment this

So itself, it. with that and zero on path more the forward it's contract in and then just thoughts associated broadly any on trust opportunity

Horacio Rozanski

the, to context, pleased want very driving, it win of And with work and we're it right, intersection where ahead. edge we're, obviously, a, at it, to it's put hits and the leading the of right think the, think both opportunities do thinking capabilities. I of we're type edge I we the in the leading

across into translating trust federal portfolio. markets. and that the And demonstrated zero both is have leadership We across commercial our on wins our

allowing where to more places of to not the we but in, to our, see it that that want are expand beginning traditional We excited just further. work, that we're

what has to of about. and opportunity And what said for government the we're use kind to technologies. I on the do. all broadly department I, top That's that the to, us we we forward as of call, intend more great and this the I'm new that's federal the to through help missions at go transform strategy, winning are work So expand, we're of

Operator

Thank you.

from comes question next Morgan. Seth Our Seifman with JP

open. line is Your

Seth Seifman

very Thanks morning good everyone. much. Okay. And

what was so in break I, in, And, think revenue of making kind what I to QX. the much I contribution that saw I Liberty out was quarter. and quite appreciated versus the was ? was how Can from out QX the went you acquisition what Tracepoint hadn't Tracepoint maybe

Lloyd Howell

than a added hundred million was XXX, of probably million. a less our Tracepoint Liberty little Yeah, annualized XX of XXX it's over ahead north Tracepoint

both integrations pleased Companies. So new head already we're with really with of how pace, work winning well both great are integration going

So, those outcomes things I to are think and seeing. definitely we're financial contributing the contributions

Seth Seifman

Right.

New think are an back in assume a in if acquired the here Okay. and then have CR folks it we place some half we, to implies have, up to at still quarter size for decent including the but a situation businesses here if in those some the fourth of that in see quarter, disruption. it, similar a those starting a And pace the, office, in and, come York, still this I sales, still excluding in step we'll have

target? term XXXX as initial and think about guess, term we for, sales environment versus the the you rate in And given for a what, the we what near maybe that growth, gives chops of, the is so kind be going for about growth to I just fiscal base of then, should longer think versus confidence about the what the how 'XX

Lloyd Howell

get a guide normally the factors to updating Yeah, think And challenge into I mean, when that. of a it I I'm contributing obvious because it's of this will do that me giving Seth, at guidance, narrowing we're are but guidance not volatility I it. we're 'XX, pretty the say I it's going think year many for to to

to talent end headwinds utilized So that is what we're on seven to May, really going the need that what let it 'XX going but feeling build this get those articulate guidance continue as in as we that QX, that this And the as carry and five, feel to is seven point confidence at the to 'XX and gives possible. me which to to on, into year. that to we're fiscal fundamentals that think we focused it's that pretty to of And us in we for we're getting be be up fast them is with good going we're confident to range working, range. over range our I in the points two bringing to back with going momentum in about

Horacio Rozanski

things of the control. I we Yeah, point would the come on we can back Seth, to that fundamentals are just the focused if very the, and

opportunities trying areas where We to are the growth there. drive are in the still strong

costs. the on to we're implement investment And drive right positioned to I hiring people, we're and to the hard against growth. managing winning drive are are well thesis our right note we Vault. continue are, think working work, to we that to We And ultimately committed we're

Operator

you. Thank

Spingarn Robert with Research. from comes question last Melius Our

line Your open. is

Robert Spingarn

Well, $XX pressure, morning. a fiscal the you $XX take Without maybe another about in Lloyd, I'd delays CR about for full I thought but fiscal or million the goes QX guide we fairly said proxy If this, angle asking that good of to the is extend, 'XX, funding down, were year? good I'm a happens the assuming pressure. what that annualize if million

Lloyd Howell

bottom-line growth prepared is on this they performance. we're on on of that can. it investment I'd hard believe you and to that, great the share as is focused dollar move, get the did great fundamentals as we strong part -- EBITDA that think I pointed as that a we or we're could remarks that, track like isn't pulling to half, speculating what in playing a over wish I that. growth us and at we're growing that I giving we second we've if the can but last what on we away really We are see stay out are on to deliver we and back this learned of and and, I then it remind successes. the our two team thesis, it's But had anything, here to chipping top are the for years, also and that do everyone's game wish

Horacio Rozanski

but desire are while back and to on we the better from drive. work than on driving volatility not that we And are our in that'll focused it pulling I'll Obviously if doesn't, if Yeah, our the, through we single focused stomp to would accept manly driving clears the and it, making is the just this business to, growth. we're -- Lloyd ability and market CR we a we are going point growth are be

Robert Spingarn

Horacio note. about there, you get plus look that is Booz's up took them? Well, we while a the on imagine, plus ups and but from finally going how to Lloyd, and for benefit for And you NDAA I'm I those we either close for accounts the or little think maybe the do for than at when [indiscernible] this while investment greater

Horacio Rozanski

AI play to in at they if think and elements strengthen of that XG, you that there's I a look ability even our strengths. lot I, it, our Cloud, of to will to, deploy that Cyber Quantum.

in don't we we So coming wins back And, is we find built and these keep position the that fundamentals believe strong. ourselves sense leadership all demand at are we speed areas are where this a support them. priorities these when unique why constraint that of to on the, excited then the beyond we near-term that, which can of get key But, to them we department people but challenges are against the look the put where contract. the with and And reside. aligned you

Robert Spingarn

that it, Government Is quantify, of what try piece and or can Booze either the to $XX for overreach that billion, community an out access? you me services ask to $XX of billion,

Horacio Rozanski

specific work sure our integrated in that really way core support our these it on can we that, that of a is I'm And It a our, lot doesn't sit not line that around and item. one the as look are missions. work do on are that there's highlighted type point doing I, we that convergence those. at and of the if both are we I fact the winning, again, the, would of you that great missions the, that of being to is

Operator

the no turn Thank back this And for to Rozanski closing call questions I'd there to remarks. Horacio time. are you. further at like

Horacio Rozanski

and long-term goals, confident a how our we be we this are deeper dynamics And a them. in questions little understanding that are financial for by your Thank believe the I'll through morning hope as can the us you because and we near brief result, deliver managing performance of are that's over I you we strategy. and gave for time. this a discussion both that joining three and have we why underlying things went right we driven all

again, record and track a and great most do team we thank a safe have day. We importantly, you have stay have with performance, and of a great

Operator

you today's concludes participating. call. Thank conference This for

Have You everyone. may now disconnect day. a great

Booz Allen Hamilton Holding (BAH) 28 Jan 222022 Q3 Earnings call transcript