BAH - Earnings call transcript Q4 2022 | 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 Booz Allen Hamilton's earnings call covering Fourth Quarter and Full Fiscal Year 2022 Results. At this time all participants are in a listen-only mode. Later, there will be an opportunity for questions. I'd now like to turn the call over to Ms. Adams. Laura ahead. go Please

Laura Adams

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

about are of me Senior also and Vice Howell, provided and Treasurer on business Chief Investor and X. with Slide our and our slides have Financial on results Vice talk Executive Chief I'm Rozanski, Head Relations. financial President to And President We our Officer. President website Lloyd Executive Interim are presentation now and Laura Adams, and Officer; Horacio and

we required no the filings entirety X, or statements, performance with are on our Slide morning risks, their actual otherwise. statements results on to mind law, forward-looking, publicly forecasted that expressly date please forward-looking events are the of and as which shown Except All whether undertake differ update result any only other may that from or known SEC. cause events involve disclaimer in the uncertainties financial discuss the made. results as future will and or our our information, a cautionary factors we materially future as the relate qualified this in speak As unknown items obligation and foregoing future by and new to in statements forward-looking keep by revise some discussed of to of may

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

Slide We X. are now on

Horacio Rozanski

good everyone. joining the and morning, Laura, Thank for call. Thank you, you

events we unfold this take Ukraine, is share like tragic and a to continuing begin, the Allen acknowledge I'd in moment Booz Before to responding. morning to how

fleet In aid displaced, the and day. and committed or As need response, to millions every protection country for an assistance we company more grows employee acute giving provide of people humanitarian through match. campaign are a

They purpose. an Our with capabilities I employees' It's world. of clients year am of fiscal the areas. to and to teams for just the and talent has our our From you a sacrifices generosity relentlessly the They extremely you for and shared for proud team, serve results soon. multiyear the to thoughts and and made. managed work perspective, colleagues. compassion. the the strategy Thank people, are leadership report impact our our of team to new always, thankful a are invested year Booz across and call today. and supporting around the morning, the precision conflict honor power in the engagement the their and by true and our underpin teams clock skill. range missions. you're making and financials, doing our broad to our working and our campaign I been growth a extraordinary volatility, critical On are their nation. and difference insights our a This change of they're our work, the you. and resolution remain results the I pleased Allen hope have entire clients, XXXX. to future entire we you with tremendous, am we are business dedication, committed and thank work leaders these the with exceptional to the in the deliver Their grateful dedication clients the for Lloyd our in peaceful a behalf and making mission to their and our marked supporting to you for I'm Ukrainian Today, Europe are U.S. working and In to

commitments have bottom on both year the culminating For year. below made operational throughout One was fiscal and invested our quarter costs against controlled results on line investment future were all expectations thesis, the fourth in steadfast but and full across adeptly a our to progress track excellent. strategic the full growth fiscal line ago. our we year, We deliver strong and our to are remain in solid, our We also growth deliver Revenue goals. set people. both into year to markets bottom priorities and multiyear year, the our our in

the next our moments, results strategic you and the few I FY will performance, set then Over XXXX context will in and for through financial take XXXX FY depth. Lloyd guidance

rapidly AI the nation As confronting use of we years blockchain preparing been for of have in we you first-mover Quantum And across our will this for missions. Allen government's Investor holds a XX to shared strategic pace Booz the to accelerate technology. advantage. we ubiquitous and Booz a evolving because Allen XG from our technologies missions Day, and with believe over now, will be from from a decade, of range believes change to challenges that X on

Booz greater growth and next will as us of of our an level to Allen convert clients VoLT the long-term scale Day, creates In Investor build and opportunity we VoLT, even missions, transformation value. our shareholder their opportunity the growth guides industry ambitions through extraordinary our future. to digital have Booz leadership. this help that strategy. we we Allen introduced to poised At reflects We are into we our era, to the

acquisitions aspirations. to leadership change. our premier VoLT waves words our achieve than mission we the the how national We are growth to our am I advanced the are market technology, clients' technology transforming partnerships. for right and people and capital leadership, fundamental will bringing of next intellectual ahead faster innovation emerging expanding tell strategic And generation with three We redefine Today, missions, ahead partner and through for positions investing at federal lead needs at/or property technology. address scale the mission you velocity, government, be the demands. investing VoLT technology creating and the to underway. excited These of of to businesses intersection. to with velocity, We and we in stands expertise to principles differentiated hyper apply pace is that continuously priority

demonstrated our grow is civil develop transform strategy, we taking market, who effective businesses, Booz senior the As Directors has first seamless important is that manage and our talented address results. All leader to I’m to needs. delivering Allen’s the This Executive Chief Civil clear. X. a an step success require have clients help will are Anderson Vice Board ability named technology to Two, Kristine why transformation and the This decisions to excited strong factors announce focus Operating proven is June these opportunities President, and leaders, challenges. to Officer. and while acquisitions. our Kristine and as both at faster we are need operationalize growth. make In of Sector financial the outset, appointment accelerate she relentless leading amid perceives consistently our two by One, integrate integration. team Martin we health we President

transformation for with role major performance taking Kristine primary in model, across our the years in accelerating her play firm Kristine COO, in will personal As from Vault, to closely of wide operational firm. and years. forward with more pleasure to for the role responsibility the with I business new leaders of a our her had I've working for look come. many partnering collaboration

in result leader An firm. we and Chief Civil own Rich to of is President. Rich the the position. who has accomplished are and to previously to leader led changing at a Kristine depth a scaled Growth health have talent I in Kristine's Rich of chance business his events. lucky account have Rich also Crowe, a Sector indication you'll market role, is As and innovative an hope seasoned right, currently its future been leading Officer meet our named of

of additional share Vault. we the on making building our on details intersection progress to and strategy me allow the are mission Now is businesses at to Foundational technology.

to operational believe our for critical aligned formally are to two April growth. areas As prime hyper units, launched X, we of we and nation business mission

have will community. and who builds security cyber, men of joint our inside make nested country on defense securely in superior to intelligence sector. the defend faster. the National the of Department By information digital is applying XG help technologies to our innovating space global the battle Defense are We edge, AI, to better learning, situational warfighting This and to sector position decision our where national decisions emerging element drive a advantage. awareness we other machine create have to core leading women our the mission,

that now extending trade-craft the across are have decades agencies. expanding these We horizontal clients broader for we for clients the set cyber cyber recognized is domain and not and a delivered of scalable to Department innovative into of civilian vertical. and Therefore, Defense cyber reach solutions our and

network on is focus operations critical protecting cyber and Our infrastructure.

businesses, With clear have of dedicated now the on team these launch aligned and talent technical a of deliver objectives. organizational the to mission-centric we set and two forward leaders drive

to time reimagine the agenda. taken also have innovation We our

scouting infrastructure our Susan scale created As best newly of the organization and mission client's leads needs functions Penfield. Technology integrated technologies by the own. April for select and to X, as This Office IT well innovation in led way our we a our new Chief into market as the

which investments We the Vault. fully to consistent growth as the cyber to the exceeding strengthening to of position March, in also our priority, months. to This of and the commercial we EverWatch, acquisition to X, of is of close in next-generation civil coming our April leading finally, we In market. We're digital edge Liberty Booz also accelerating in announced strategic transformation with into and to also the make hope expectations. breakthroughs. aligned small making continuing is continue technology, acquisition test access investments, acquisitions our national pending and And integrated Allen secure

words. underway. future both and more and can you see, Vault our our This critically is is aspirational the our strategy present As important. growth is is Vault than work

our acknowledging elections, strive of significant we now to capacity year environment. growth federal market and increased significant investment strong FYXXXX above the supported stable thesis unknown. current margins with top continue year conflicts, in billion investment environment, budget upcoming still U.S. deployment. government to expect Shifting the while EBITDA lines, the current fiscal by to and meet billion, we The capital adjusted growth fiscal beyond at volatility goal work all the to the XXXX, $X.X bottom $X.X the post-pandemic to As economy, are exist and geopolitical growth midterm rates,

need predict. fully tailwinds headwinds will navigate, we and to we cannot So creating

second the control the fiscal can in Our year in intended operational half. to of mitigate half factors four build the and priorities aligned momentum we increasing to are to first volatility

capitalize First, fully must backlog and hire we robust aggressively to pipeline. our on record

continue must track record priorities. our highest mission winning aligned of we Second, client's work to our

to over our the horizon, a When consider we the of with our we and of of and the strategic environment, will the increased continue And be while year fiscal manage what set and success. to towards importance spend Third, in delivering XXXX will our deployment I inflationary in I value acquisitions. business small direct looking our know focus are tightly, on talent must sides we on and an commitments. begin activities achieved strategic people to priorities, maximize capital continue midsize to heart line bottom have fourth, to my

and and and discussion unleash better As year for and that focus world fiscal we for our thorough we clients, Allen, the our fiscal execute you way Lloyd lead strategy, to for team to empowering a Booz future enter over our fiscal the to of on guidance XXXX, with a XXXX. our and new year potential year our full this

Lloyd Howell

everyone. Thank and good Horacio you morning

are full our fourth We year for pleased year fiscal to quarter results XXXX. and share

expectations as highlights business with across our growth fundamentals demonstrates exit XXXX, year we all meet and ability performance fiscal Our to business. of aspects strong broad-based our momentum our accelerate and

To results, our Day achieve you around by our thesis, at fiscal EBITDA growing Investor and defined want through centered investment walking dollars that I context Before will this our adjusted financial targets year objective, to through us. long-term is we the XX% of which frame guide XXXX. conversation the

X% revenue organic First, growth. to annual X%

and billion Second, in adjusted margins mid-XXs in capital. EBITDA stabilizing between $X.X and billion the lastly $X.X deploying

operational against teams' As our shareholder drive exemplify results navigated have objectives the execute you in past and to of couple long-term deliberate face superior over to years. see our actions the we value these challenges of disciplined

our year the growth from pandemic. since for highlights Revenue few a of with open me Let of XX% quarter fiscal result fourth approximately period our to compared before strongest the XXXX. represents quarter year growth prior

three margin in capitalized resulting consecutive all X.XX double digit signals quarter across markets growth points by exceptional of pandemic, reported of we mid We we people. EBITDA digit year record decrease with a to Adjusted maintained fourth for growth fourth in X.X% the full as single of allowing was four quarter savings strong on of a our approximately headcount in marks recognize growth an execution underpinned Specifically, of demand XX our times. markets, book-to-bill XX basis points though, in of the contributing our us This strategic basis still fiscal investments of the contract expansion strong business the make throughout and margin and performance. to year. quarter cost

capacity long-term in strategically our operating objectives. XXX% strong the This year. the prior adjusted in increase income, we quarter, growth our flow capital cash to flow of of free of Lastly, further conversion million XXX% against $XXX of delivered deploy resulted net an expands over which a cash

year full increased the $XXX line X.X% Please to grew turn XXXX Let's excluding $X.X now which to year X. Revenue, the turn revenue full results. contributions. inorganic for $X.X includes billable billion. year-over-year to to million our Slide from top also X.X% fiscal expenses billion, fiscal At

top improvements for demand staff by differentiated strong our driven supported line in sequential executing growth utilization. organic by Our on the successfully was solutions,

some Starting period quarter X.X% give compared X.X% for the by on the the year performance and level defense, grew the prior the year. fiscal revenue color market me full Let to for year. fiscal full for with

the in notable task mission client's digital solutions edge to be still differentiated history. XX.X% $X.X to and to battlespace our as eMAPS overall had this win pleased a investments building technologies, ways. in we enabler is several which single new In civil apply the specific, of including our the team's we meaningful to fourth largest by continue leading efforts order This platform work critical period closest our grew To have quarter our meaningful the in revenue to with the the to billion Although we fiscal quarter to for contributing our full for do, year we to turnaround compared fiscal on XX.X% year. are wins quarter, year. full growth company's recomplete, for quarter. a the improve grew prior Organically revenue demonstrates for and our and dedicating X.X% and XX% by and performance, continued

the Revenue momentum and especially new exciting positive the and DA. technical the fiscal double which $XXX grew over yielding hit work contributing the are Liberty's new win, the reflects which digit organic made billion In efforts to dimensions all further high-end deepens We quarter, have critical point. do for quarters revenue past Including a full want opportunities. to to quarter parts with in factorising inflection highlights XX.X% across several on, portfolio for the the pleased to is performance mission X.X% the of reshape results focus This and an growth growing exciting we the of year. Intel, the fourth of DevSecOps work our wins. which portfolio we we number the work across

period, the grew the resulted to growth for X.X% year. full quarter revenue year in commercial for the global a prior which compared Lastly, fiscal XX.X%

to of our Slide the X mission our market as the year. unfunded for extremely priorities. grew largest These demand signals, book-to-bill outstanding ability we X.XX align backlog Book-to-bill X.XX to times backlog a book-to-bill demand critical signals $XX.X year resulting a end quarter XX.X% and grew times. onto fiscal pleased exceptional fiscal performance budget ever are our grew results options with $X.X full is work, the execute to the Funded over highlight Now grew the X.X% fiscal on Total fourth full of of and our prior in win the price fiscal XX.X% strong year record, quarter for to and in details shape, year, on yielding to billion billion. billion. $X.X $XX.X backlog of backlog billion, X.X% of

With we the they on funding our place, priorities. clients in are closely with budget outlays their working as against align focused

our diverse strong new recompetes continue will win our to build to and opportunities. our qualified results that pipeline continuing sustaining optimistic of execute work for while by rates we are on We historical demand on

position successfully dynamics XX,XXX This approximately leader. year-over-year to increase as together, further XX, had an as a headcount of X,XXX market on of hire Pivoting retain X.X%. highly skilled demand and March exemplifies in our core approximately to these employees meet our an we required execute talent cement to attract, operational ability increasingly market. our competitive Taken or performance priority, growing to technical labor

clients are As and our this long-term we each the upon actively achieved clients have we to which objectives. discussed, the with fiscal success accelerating our the build to Equally we headcount evolve day we future to of alongside working work right the our and to important, talent is skilled continue do way shape fundamental in growth year. business growth

EBITDA the XX.X% prior fiscal year to year was up period. line, bottom Moving for the million, XXXX from $XXX adjusted

margin expansion points prior mentioned, year. of basis I our As XX.X% adjusted an reflects EBITDA of XX over the

year following For benefit fiscal from margins four XXXX, dynamics. continued the to

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

management, prudent spend. from Second, benefited and which lower unallowable cost discretionary

strategy. These fiscal a were repurchases tax partially year capital And by with rate in the to earnings were deployment GAAP lower Both over year. of prior share fee was due planning to Third, and $X.XX metrics our expenses initiatives timing higher anomalous for market, tax increased strategic a lastly, offset expenses fiscal and due within count adjusted billing billable largely expected non-GAAP $XX a intel which diluted contributed return than an share X.X% continuation million what up of made the for income $X.XX share XX.X% income $X.XX year and from to in by prior XX.X% a Adjusted XXXX. $XXX net year-over-year. the lower share X.X% Full million, increases in interest our $XXX higher impacted to year. prior earnings fiscal in effective line Diluted $X.XX. period. net year to to decreased from year-over-year per decreased the million. And was

million Turning the year. operations to XXXX cash. million, was up $XXX prior approximate Cash from $XXX year from fiscal fiscal for in

last to we sustainable strong working we performance. capital that management continue consistent our quarter, discussed and operational aligns As with focus on

capital with our strong our expenditures free approximately supports $XXX $XX fiscal cash fiscal rate year were quarter conversion cash approximately XXXX income, Slide of Please resulting pleased the million, sheet a priorities. balance flow and Capital We flow prior free and turn continue of net to optimize X% our already operating X. efforts over laser cash are million for our will of XXX% year down fourth in adjusted sheet. balance with and which to deployment results strong focus

flow cash $XXX capacity strong maximize Our in maintained invest million. us the shareholder our value. a share business repurchases from XXXX, and approach allows throughout of balance sheet We operations disciplined and patient solid year leveraging and fiscal growth to of

Our regular million approximately investments of $XXX for million, and acquisitions our of strategic in recurring company’s capital deployed dividend a history. $XXX and record

become will June M&A optimizing around on priorities has the our part of objectives. of dividend of record levers to our Our are XX also we quarterly per June stockholders Today, along $X.XX integral share XX. achieving an a Board on with pleased to long-term other that payable growth approved announce

to X. Turning guidance. Please move to Slide

For EBITDA fiscal centered billion. $XXX outlook year adjusted million growing and our to XXXX, is guidance around $X

from objectives. and our Achieving incremental which includes business achieve fuel capital make EBITDA to million in margins and expectations between inorganic mid to deploy investments strategic our step the down long-term business $XXX growth by our flow, to we an the in billable high as X% will fuel And between to adjusted delivering need our X% growth. normalize Tracepoint. unallowable we and achieve revenue this and to contributions the which and X%, reflects in operating expect range, to XX% $XXX cash in investments to We which margin for make Liberty expenses continue spend in million and of seek long-term generating

shown Slide significant expect guidance This volatility expectations tax As reflect year, experience. our the on given, to XX. payments cash does not for this we

$XXX XXXX taxes approximately cash taxes, flow million $XXX will be fiscal in includes million. to of our fiscal year total XXXX, year million and expect XXX. which $XXX Inclusive for approximately operating $XXX between in we million we cash associated Specifically, Section with anticipate pay cash

on Additionally, bottom in XX. depreciation related $X.XX to per This as an contributions, And amortization the invest results, million, shown earnings we operating $XXX at remain range million inclusive to diluted expect expense share and expect continue of thank adjusted the mission, and line, the our inorganic the team to investments strong to expense our between want we in to our $XX $X.XX incremental on Slide as range of in reflects we a and to rate interest navigate range infrastructure, meaningfully This million outstanding, way our finally, an shares expenditures in the million and million deliver our technology to dedication, their for in XXX I challenges Allen to while is relentless capital value weighted XXX tax average throughout of effective assumed entire XX%, year. and In tax an $XXX of $XXX a XX% to us expense interest Booz closing, a for higher higher fiscal of our to helping infrastructure clients guidance the that technology. based range came rate. million. continuing

We and in I our and objectives quality we value. our open and markets. vision of we long-term confident business. across And fiscal the enter driving the on of have fundamentals strategy offerings have that, Laura, With believe our team, growth of let’s solid superior I strong questions. XXXX, built lines place our for to execute strong right the the momentum shareholder organic year delivering premium am in as

Laura Adams

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

Operator

Thank question Sheila you. Kahyaoglu Jefferies. comes first Instructions] [Operator with Our from

open. is line Your

Sheila Kahyaoglu

Good the morning, time. for Horacio and Lloyd. Thank you

So inflection like the congratulations growth. in revenue on

it was growth a drove together X% XXXX terms we about recompete to You business growth, the guys civil now, that same and how awarded few time, being eMAPS or in it for about have the contract do that? of strong quarters at things for segments what like X% been It the revenue seems the all verticals? whether came think talking

Horacio Rozanski

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

to and to going that’s year I’m and maybe take a last want back into if this to step it. is sure add okay frame beyond me and year Lloyd Let

we went last year. into think I

our having that, We’re the results don’t captured with volatility I a but in obviously, ago. of in pleased was that a fair amount guidance environment fully year we very there the said think

And thinking and we this year into that making so doing that, we’ve are beyond. and sure been about that that

look all markets we that work and of sequentially, began into you our posture to to on really As expect well. won XXXX. of clicking have. years the hired continue We FY throughout sure needs lot really the that a them And we for growth

at If you we’re do that this we’re we will of trying is to guidance, year saw two things. XXXX One not year. look fact the environment that FY trying in to the be respectful volatility abate last the

all have X% it. our And organic we so X% so on I to that our more talent capital the it multi-year the together we deliver first organic manage at we’re growth to across that maybe the of rate, make because and our before, and because expect organic need we momentum be year growth base, make to deployment If not half To continue other this need priorities to question the versus answer reward can focused cost able and to part actually sure on can half need work, into the future. resources we’re hire, focused is are really to my And somewhat so acquisitions win on on really growth I the growth the all mentioned we’re in volatile. retain that markets, what reach we and we to we to to we then investment growth are we wrap look will this – one track thesis, need propel the decisions, on of to we second and really need the smart our say, we to be talent. this to up

Lloyd Howell

the for question. thanks Sheila,

said and As well it true focused momentum pertains couple to a on is to wanted we our were stay on guidance, adjusted dynamics on. We positioned. we’re we we EBITDA wanted what October to One capitalize And to that stay the thesis. last wanted there to investment true are dollars. was we strong

bit done. that them, Horacio for we’re that account to elements a broader we range we previous historically quite $XXX notice billion than not into as we in at we million what the us And to when the also it’s to XXXX, identified didn’t exited on mentioned So get And take those ranges says probably attempted our all have that but look right. of that $X components, years, you you track. each little of impact. We the

to So XXs, as revenue my organic in the high a reflection objective is of that being that The of mid to the returning perspective in said leader been the X% past. more comments from X% in to to environment. the our have growth we is margin returning sector in prepared I really a normalized

October. the more Cash, billable generating the that are operations highlighted a business probably solidly. being we of shifting Some in invest dynamics with headwind, and last bit, a the expense, with of same unallowable costs the areas to opportunity

XXX million, and do. to taxes going tax expenses ADEPS this range just the tax are tax with give of be line have why the and to rate, legislation. reflection reminder, a diluted outstanding. higher shares interest then to $X.XX expense, up in Section also $X.XX a bump And as this lastly year that what to $XXX is really need higher impacting tax income tax our million with to feel really And And excluding cash payments So be our we’re a timing some we is to last is million outside dollars. focused us recognized $XXX things EBITDA issue. it we bottom of the going we rate $XXX to flexibility cash adjusted that the do effective control. of a million rate, $XXX really year that going we’re to I We mean, for going were on

track. and So with we we’re on investment think It’s a consistent off guidance to the good start. our is thesis

Sheila Kahyaoglu

for both that. you Thank

cash it one Just going that do What seems in the of $XXX taxes tax one time cash to normalize of follow-up terms in Lloyd cash taxes, million nature. rate forward?

Lloyd Howell

Yes. This year the us. suspect come its it’ll headwinds. the we’re point back in have at that to We going future to

to revisit have everyone bridging it So we so today don’t for we in that felt the future. it that

sort see the dynamic of is. what You’ll

bit of crystal to but of terms trend normalize, a in an will – So actually the it it. ball certainly Sheila little upward trend upward where a there’s

Sheila Kahyaoglu

Thank Okay. you.

Operator

Thank you.

question Our Parsons Goldman with Sachs. Gavin from comes next

line is Your open.

Gavin Parsons

morning. good Hey,

Horacio Rozanski

Good Gavin. morning,

Gavin Parsons

if Lloyd, you few a something years Could I driving exactly it given, tax that just few little almost looks that’s you years? what is I minute is on the for a like there. more next underpaid cash could last are just taxes mean, over or on GAAP the rate. double that stay for detail you’ve that bit the your give prepaying

Lloyd Howell

Yes.

In we back underpaid the to right. my past, to exactly answer to come expected and You’re back. Sheila again, so

So had strategy We’ve comparatively last strong taxes due timing lower around years a tax really over and implementation in our were the payments strategic the years of a the to it’s pretty initiatives. issue. two

So do our initiatives the benefits ongoing from as are recognized. normalization expect we

Gavin Parsons

it. And cumulative the a do bit know I it's the to a you some still amount you have Got this of underpayment? ball, go you Or of is think said crystal in but future?

Lloyd Howell

Probably more go but in future, is is it some to it now. right what the

Gavin Parsons

sequentially the assuming in growth on you know XXXX? helpful. why in you. could discuss That's And then the grow but Thank XQ and headcount is I what you're hiring quarter, strongest for typically growth. headcount headcount maybe didn't fiscal quarter Okay. if not maybe

Horacio Rozanski

in in our costs hire a that typically all, shift to sure that's area and priorities the thing of growth costs We'll as don't we you growth other in But when the mistaken, this and meet against there, make quarter in what people if and that numbers non-billable strongest Why the you throughout other that top some the growth staff we're requirements. to do as first thing feel and staff doing at happened thing FY is headcount is, hiring retain to numbers, right as XXXX. same business. very for well get XXXX. mean, not obviously, operational I is The And QX we're down the over the more not manage – always We headcount we're to our our start? one we we I'm I attract to pointed the organic mid-single-digit control quarter. area. from year-over-year continue the there's out, X.X% in started billable we don't the doing – see right

Gavin Parsons

Okay. Thank you both.

Operator

you. Thank

from comes William Louie Our next with DiPalma question Blair.

open. is line Your

Louie Dipalma

morning, Good appointment. Lloyd, Kristine, congrats, on Good. and Laura And Megan. Horacio, your

Horacio Rozanski

Thank We're for about very you that. you. excited that. Thank

Louie Dipalma

eMAPS to in original expected the And the XXXX? is the ceiling For the double was contract ceiling? end recompete, previous

Horacio Rozanski

to greatly. expanding to but precisely, ceiling and done at ramp the expecting in expand know, there. think and we The work the math the the as the billion you of need to there's as continues clients least it's be ceiling in I our scope we're I were mission, want earlier up $X.X is impact haven't done but of year, makes poised frankly, new there this more, our

we've financially of I is are think but the and driving type the And this it pointed it. business in to obviously into again, both order And it missions core that. underlies priorities I are task history year. to the of because of we're Allen, largest it's want this is that out defense about At so going think need by work be mission are this be to why excited the we transformed the the important, confident our Booz strategically center of single we key growth technology may also mission, do. going important and

Louie Dipalma

in you're area. investing it significantly And seems Horacio. that Great, this

with progressing. successful Army, You initiatives your how Day data as Rainmaker Reveal. you AI established DoD. was such And are Analyst project broadly Synthetaic your how also during highlighted the was with the programs and and progressing with I Thanks. I co-developed renewal, following that your partnerships Advana platform all your the this other with highlighted you've are wondering wondering you of analytics

Horacio Rozanski

Thank we about with such Investor Louie. at for what talked remembering Day clarity, you

to I'm appreciative Sometimes we of going we really to attention about, of to talk everything people all so hard remember tell your this. are it's – if

that a Rainmakers, to the fabric falls doing all supposed A data perspective. warfighter digital to need we're that to investments And connects all tools, we're to Advana the real-time. IC a headquarters the around in this the think of on make of small that, systems data and battle algorithms that's valuable what doing how the and you under from rubric in doing are go lot then are want I to has position DoD really that in fabric space we're the is of warfighter technologies, the knit make have of notion this on would the resources, that commercial allow us described of systems in scanning AI in headquarters work that the building edge. IP we sure what's and a sure the to real-time. give the the decision into rubric, data we play and they work creating new top the that that the legacy unique gives make digital that the is that information that and what to happening that, markets, that is thinking department we office new do the of the to of that technologies And building CTO make speaking, couple A more of of are a new advantage. generally sure access these work all space, to we're all battle the

company about So all know, to a as can and the data you algorithm edge so that them because, we need train you we're compression synthetic the and models actually like. these to push faster does talking that to one build that that

we're talking for XXXX very So of not beyond. the on that about one growth obviously for just XXXX, This bullish hyper that. and XXXX fuel is but VoLT we're well will areas

Louie Dipalma

Horacio. Thanks, good. Sounds

Horacio Rozanski

you. Thank

Operator

Thank you.

Fargo. Our next question comes with from Matt Akers Wells

Your line is open.

Matt Akers

are that not Or big kind you're business And walk guess morning. size a the Africa the on was? can Good possible I the verify, more you the East, yet? guidance say revenue Thanks to just And how of for big including I EverWatch, was? Middle to Is for you? South couple in how Hi. year-over-year. that it then guess question.

Lloyd Howell

East shake there. confident mean financials small. not much I'll we that any Yes. we're I the way. in you until I It's get today to the in that I start. guidance included business, and give not watch. up going more we the to close on it's It's can't remain really going never Middle kind I'll of provided earlier.

Louie Dipalma

Got it.

debt Okay. And fiscal in up interest a then I XXXX. little bit guess just on

a of guys variable little bit have rate debt. You

going chance versus that hedging we're interest rates a there forward fixed here given moves on is or debt of rates seeing. the in some Just change sort maybe thoughts your in of variable a

Lloyd Howell

at No, fixed it's certainly XX%, part movements and top interest it's future Yes. floating. be mind it also in midterm. Today, our of and it of financing the the in sure. will about XX%, looking rate We're near how light for of to we think

Louie Dipalma

Okay, got it. you. Thank

Operator

you. Thank

next comes Cai with Cowen. Our von Rumohr question from

open. is line Your

Cai von Rumohr

Thank Yes. much. so you

Could CACI’s us if it like up about you quarter? trends continuing looks give book-to-bill also some backlog as was, pick to are the out starting color pretty seeing and not go the the demand your as one-four. was acquired book-to-bill into any was and current seeing on take we anemic, as you you're So things bad trends now, you're quite funded to

Lloyd Howell

certainly I'll Yes, Cai. start,

even been solid. not we've the the have quite As like it demand and pretty been overall felt saying have signals for I may though previously, some time, market

I think program we see slippage. did some

others in But season. think I pretty RFP a seeing talked place, with too. about that the robust we're budget

pretty a robust, Allen, they'd both Booz in work also tasking dialogues Then XX% pickup pipeline year-over-year. see up the holding do in which but also is for As price And recompetes you and satisfaction going like is we with you client can also XX% our robust. rates to see confidence what in lastly, tasking a backlogs with new still indicator to at clients leading future about the XXs, for saw options, are forward. as existing their extremely our our win our low our disclosure,

all we that. feel so of good And about

be In five of a side contract the clients sort ebbs about a average bit, years. think about and their unfunded, and of mix function years the terms of over sort priorities really maybe of and flows of that as and And funded timing. it's little shift tends to

large and technical work. larger got we've – so increasingly larger And

that I think we're of X.X, so question. be nailed and you're strong to you but pretty good around, of trailing demand close just we've see signals. internally to and look We in that XX really times north going the got bump us it's months at tells it at to And further some we're opening if feeling X.X

Horacio Rozanski

billion we of in we something my us so been both XXXX not a we're fast is on Yes. and If as and directions approaching take pretend and we're $XX focused try saying, for a so then And you – in generate, in to from we've approaching demand for Lloyd while, We day prepared that in just which I good in aspire always is And what of backlog to able we're fact we're the the priorities it leadership under XXXX. the organic this about talking to the why the making was a perspective, half are really first constrained. appreciate long. changes, I growth environment, we on remarks, the of that create XX,XXX can speaks this couple the to reflecting that build have growth organizational building some people, the XXXX investments in And on volatility ensure XX the we've that growth I been continues other number through into saying is that year momentum. to fast acceleration Vault.

Cai von Rumohr

so much. Thanks

headcount, was up, sequentially. your up far it but how the was was head down it I organically turning mean, So count and

demand trouble constrained? are you but so not So mean, And supply said constrained, are I hiring? you having you're any you

Lloyd Howell

Yes.

I thought a given in our that said pleased market. And that, true have think tightness remains we're into tight the in it's organic labor X.X just and We growth headcount. the consistently with we market the today future. very

have As sequentially. also that Horacio of but a staff some we said, down synergies nudged actually departures, that was deliberate of sort did part cost it

candidates and sources. the we reaching an employer culture out overall pipeline been of choice. We're because The recognition it, seen and as growing a got our gotten to has program. increasingly are and of because what aggressive of very doing referral are So widely, we've our non-traditional of we traditional about

fiscal labor single-digits this get So we're But remains still going we year remain to mid that it optimistic to targeting to that market. that. tight very back a closer increasingly

Horacio Rozanski

dear to you Yes. we're it is heart, this say, things, near my talent three topic Cai, I of as laser would has know, there's always been. focused and on.

good to our a culture, way. things about flexible more has our work we to office said, it labor in part been are we're a in I type makes and retain a in to here. doing the to people to a that that the invest makes to little our today, the proud reward culture open that. Lloyd we keeps really ultimately, three, to return as bit we're Booz in continuing always now the in And controlling the able people we and hearing are U.S. that people, us about very happening doing come our of have the to resources environment are to of on costs the people compensate That's tight again, in the make one, differentiator. to working the that it government the of We're makes wants first people people Two, come Allen sure it much large market. The And call be to work here, those support want talking what's Booz but work Ukraine. proud, people on missions. Allen to

Cai von Rumohr

Thank very you much.

Operator

Thank you.

Barclays. with Canfield Colin from comes question next Our

is line Your open.

Colin Canfield

investment see X.X%. out, need kind this to Thanks. organic to the of you multiyear organic a your sort discuss need mid do in cadence? target previous on period, you're of Hey, above you growth what but think of track hiring good just year's multi-year Can you're accelerate or we underperforming hiring context guide? the the on morning. organic what you of of target to growth as that for guidance Then objective, your You said the accelerate of sort do

Lloyd Howell

in strong at to We significantly is backlog think on of the very mid midpoint solidly exit looking a of of that conversion Cai's able if organically, Yes, space. the bringing us terms we're And hit we're in our talent. XXXX. X% X% to north single-digits range the our puts of and question, which to

put as believe in will those to continue momentum is I ranges. operational to signals we we earlier. make onboarding mentioned our the building, demand We're priority going So which us, about and recruiting good feel top

Colin Canfield

targets, Got the you're contribution of placeholder in capital's you strategy? your a it. to about Day talk the framework period should we Investor with think looking inorganic that just terms about little be if or And you think to can your about at payback EBITDA? what's then growth of this for year, valuation inorganic out bit respect X% deployment a there kind good considering Is updated adjust the

Lloyd Howell

the Tracepoint. Yeah, as as has our is of past on well April reflection commentary been fully Liberty M&A. as a integrated of X%

this saw of we about from overall million $XXX contribution those performance. to year guys So our

obviously a accelerate on going we're but the looking our go-forward So is financials, M&A basis our to at strategically priority growth. around

great do strong sense. and have get where Tracepoint, cultural case then alignment were we and studies We there case want to the both make Liberty financials or be. of how the of in those as And we to

Operator

from Seth JP comes question Seifman next Our with Morgan.

line Your is open.

Seth Seifman

Hey, good morning. Thanks very much.

Lloyd Howell

Good morning,

Seth Seifman

to little we Lloyd, look the into bit put this going which tax XX% aside, And rate. because stick or in can like that's it if a year's like payment, issue morning, putting I doesn't behind tax then nobody GAAP. not, that it's this Good aside tax R&D the around dig but lagging cash significantly if knows more let's been I issue, a cash even look the when payments XX-K about the tax think have

north it moving where And or think a level like, more? go help elevated Can it's seems I still forward? to be like or that, you going should so going you something bit And like when about there little maybe, guess. it us set

Lloyd Howell

has of range. you our put strategies in Yeah, XX% the timing tax us past know, the XX% to

of end to expect we the that forward, upper it Going be at XX%.

it tax years, of direction. long seeing the the past we in and to other going for that we're pending were managing term – successful our legislation in So down, taxes drive rate sort, the obviously in able the and having things

effective push back pertains these additional to in bit the on XX% it XX%, tax but that up. The to dynamics as legislation rate a is take little I we've more it So the bumps that got XX%.

Seth Seifman

Okay.

would million, taxes be the if million the aside that? like cash Just we without rate, $XXX cash to understand $XXX if let's tax issues, would be taxes R&D put – not

Lloyd Howell

Correct, correct.

Seth Seifman

Yeah. Okay.

pretax Okay. or something income so? like million $XXX And was

Lloyd Howell

million to expect. what which are got operations terms my $XXX $XXX would operating cash remarks, we've Yeah, back indicates of that to we've we us got the prepared to in really million our solidly generating

Seth Seifman

Okay.

the XX% or really taxes flow if cash to that your cash And is no might or on statement inflows out should different. outflow we be think cash no the be GAAP line think be would so there the if should in taxes rate the on we changes years, – tax the showing and or

Lloyd Howell

Yeah.

think I to I we've going true. that to got come But also had. right. our you we're mean, that us it things given is strategies some back see

also, and able we're of dynamic to that of the is grappling wanted sort payments you that understand to we So And to the see you're with. it you really we it. timing model that really disclose that

Seth Seifman

much. Thanks. great. Okay, very Thanks

Operator

I'd for Thank turn call remarks. back we you. have all like the that's to the to time questions. closing And for any Horacio

Horacio Rozanski

last Thank hour transforming for strategically you to much. well able under you insight this Thank doing we morning questions and you I gave us. we're the your be joining vault. how you all hope need and very additional in to the both delivering see for financially

strong around Booz Top everybody Forbes today. that. values. And particularly our being attract Booz of us very change. what employers experiences you perspectives, We described are world, it diversity The in retain the exceptional live to We're doesn't number best our and values always that recognized talent. diversity key I I and us XX,XXX empowering maybe diversity, ideas, Allen is for and among and of of Allen top Lloyd our out for achieving enables reflects the And that to almost and about three, a values, XXX it part, workforce, meaningful. again, with undergoing believe And are to thing our once visions you the for get day. But day, Allen. because and experience I us loud. in the And every the that to our not is a and and large lot great thing people each and as by first-hand the of of and quality change being the Booz purpose have the other so change I'm optimistic to and at passion change are future thank extremely of each committed today and plan important I now the and people makes as to to our about as am closing, that proud also of talk does

Operator

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

now may You disconnect.

Booz Allen Hamilton Holding (BAH) 20 May 222022 Q4 Earnings call transcript