- Earnings call transcript Q2 2023

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Operator

Good morning, and thank you for standing by. Welcome to the Booz Allen Hamilton's Earnings Call Covering Second Quarter Fiscal Year 2023 Results. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for questions. I would now like to turn the call over to Mr. Rutledge. Nathan

Nathan Rutledge

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

and on about Horacio We also Officer; our Chief Vice Chief the results are now business our Executive slides With President me Executive website and on and Calderone, have X. our today Rozanski, President and Officer. presentation Financial are provided our Slide Matt to talk financial and

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

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

Slide on are We X. now

Horacio Rozanski

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

Calderone, by begin at like Lloyd our two professionals transition this Booz track acknowledging the role, outstanding of morning, financial Matt to diving I Chief results into great Financial to the with Before from would Officer seamless Allen. Howell records

I on year especially, As Lloyd for XX CFO. Booz we announced XX. career Allen internal go I in to is communicate voice his investment Lloyd's term learned Under in month, as our I last on parameters Allen community. will position Booz our grateful with these Lloyd contributions leadership, long leader. tremendous six over years and do his know define relationship and discussions he December will Howell to the am future. advanced amazing his And greatly calls. Lloyd's our and with as investor an organic last earnings things articulate and retiring miss growth the

force stepped Calderone and for Booz an pleasure is firm’s have join driving continue his at personally of into record Matt Booz career drive am Allen to CFO. years Matt, us fortunate CFO, on to Matt for function. corporate of All those Lloyd success finance the been October experience exceptional earnings Officer. forecasting Matt a have XX Strategy with the our to X. our it has Allen Matt partnered with strategic and our Chief into caliber and I my role firm. old new Our and on in to went our and commercial Most launch direct has success. driving our transform and lead in step as function to planning these strategy same you have began in as He business, our leader development reality. our clients. served days calls. XXXX then making analysis to business role experiences my intelligence where Matt's that XXXX CFO the He to joined of prepared transitioned and was Matt Vision early began. And team on I serve in the the a recently,

Let's turn quarter XXXX. results second fiscal excited very for now share year excellent are business Matt the I of to and performance. to

this and year, we momentum in shared plan During our capture. quarter, and began the for growth hiring business mitigate half. increased in our continued our fiscal we half the we with When you strong EBITDA second to potential to accelerated both revenue build the first volatility and

will $X.X rapidly also This on our our in our strategy our to and our VoLT, order to means shared to not We through the meet to goals. operationally centered that $X.X also $XXX The deliver multi-year expect multiyear believe leadership financial is to it's goal billion year, we only million we XXXX. headline year our last we in track and for And year on strategy progress present. financials. today like from EBITDA fiscal our pleased growing but view results million growth strategically FY that numbers broader future ‘XX in this velocity, on cover we need technology, move of We fiscal VoLT, of to we impact fact, adjusted billion by implement in deliver Therefore, fiscal making Then, journey. guidance planned results halfway above to on this; year. are billion. are Matt with priorities and a growth are dimension. to But first, to focus technology the and some we year for XX% $X.XXX $XXX expect these revenue to I'll first would fiscal cover the part XXXX. time discuss to to fiscal this how now today X% our detail. to will on our take EBITDA I larger range operational be be specific range as frame raise our year I business to guidance adjusted fiscal the our

of see, for can quarter year numbers XXXX themselves. fiscal our the second speak you for As

we in geopolitical are have fears, priorities and ongoing budget operational momentum, is recessionary generated we remain, the our inflation, debates from conflict earnings against uncertainty making outlined call. progress While May reflected in great which the

summarize Let me to that progress. take a moment

strong Kristine And are months hires the Anderson. new the past Martin programs. competitive into employees. a recruiting First, the market. our Allen top hiring. result Booz grown of priority absorption transformative and also Client historically by very I to our These milestone be crossed XX,XXX improvements of am XX operational in under that of Today, billable our continues labor has have X.X% of seeing teams are concurrent share to COO, headcount over staff the business we work excited leadership we

Our at second priority is key to to continue high the and of technology. quality intersection win new work missions

XX delivered an X.XX Our a of book-to-bill in resulting of record and leaders outstanding contract awards, quarter backlog times. month

are leaders business costs We're managing and well the bottom environment. delivering managing extraordinarily Third, our an inflationary effectively on line. the in

our and This and by capital growth. client to strategy example, maximum in investment, significant way As headcount total provides growth is key stakeholders future enables fourth, which we a in difference forward. resiliency evidenced, our must value staff versus And fueling for creates drives headcount the growth. that for deploy

accelerate earlier opportunities As excited month, VoLT. to making EverWatch achieving goals. next progress agenda We're hope solutions creates I also our are in to business. about this EverWatch. significant National moments, announced accelerate thesis we how we're Building us and multiyear innovation to the few contribute pleased and we to implementing this of backdrop, on growth strong the closed to Cyber our acquisition have the our illustrate, In investment on technology operational uniquely position differentiated

the need fraught these by We environment, performance. economic to the political technology, we instability, innovation an to help increasingly in navigate our our all and programs, while legacy environment. financial are a challenges and believe to use drive positioned simultaneously uniquely clients complex own global in at time pandemics live climate same new change for challenges geopolitical invest to pressured complex clients sustaining in increased Our and

an Booz is Allen's basic Two, lifecycle. knowledge scalability. mission success early Our believe insights and come on this waves transformation. excellent premise Department three in that digital for talent Booz approach scale One, helping to that new their in is the and approach centers to Veterans innovation example quickly We our requires solutions growing access can that Allen integral their beyond the three, in things. prototype to translate of our technologies supporting support technologies clients Affairs, amplitude an in technology role are its provide An base innovation integrated frequency. where mission the services. and requirements. our new plays and extensive of to of And cycles both full into

have leveraging acceleration. cloud. Through and technical mission help solutions deepen Over to VA have talent, expertise build scale DevOps, our we we capabilities invested our like and modernize, low gain the to Agile to AI, greater grow decade, acquisitions, code, the and past continued code, no even

anticipate it this the Following intersection, larger the continuously our business to to ago. Chief Technology our innovation Office. CTO mission More years The and comprehensive a of our evolve of challenged to as technology positions XX is approach was X scale us innovating VA broadly, role next part has over than waves. technology VoLT today reimagine agenda is at times the

in are Our already technologies ongoing building investments key momentum. emerging

in tactical edge. the integrating platform our the AI pre-coke cyber Threat are we example, For cyber (ph) at Hunter and (ph) for

of are an And We VA sharing a dynamic example. implications that AI spectrum Returning anticipating through sensing to quantum provide we are application. moment developing the the XG post encryption. for prototypes

emerging their to of in are investments technology central set Our requirements. next mission

are solutions workflow design planning rooms and using power the twin digital design clinical AI we and example, developing For innovate simulations. of operating to hybrid

our small or And give objectives mid-November. virtual generation take future accomplish We is many bullish for and earnings hope Helix, you this results versions is me year. of the the welcome strategic sheet, sampling through are when We're growth, call. center investment and for of growth. Helix closing broadly, physical thesis. Matt, becoming in-depth. all, we you more begin next real organic ambitious our future our with more us I in will outlined our about and investment them track positioning by strong Over Booz showcasing model that, balance to to VoLT on thought, to our team innovation today. Allen. our the us of opens this the the later financial a confidence to A exceptional the the of and am visit financial only All the how evolving solutions in above reimagined that agenda innovation These excited operating to are

Matt Calderone

be you a with morning, Thank you, pleasure Horacio, good speaking today. everyone. and It's to

generate Lloyd First, I'm Lloyd on of did way. world me. our results a echo lead to to our built has job continues to stakeholders. excited all and note, a He for and team, you And to Allen's want team Booz for an as with mentor leaders class great to sentiments. been value and durable true along personal outstanding a with the group finance of to opportunity Horacio's strategy I a a developed to engage that financial outstanding the CFO. work deliver friend

strong exactly up did strategic exceed that. growth. As our we that half to These with of investment ramping while fuel said you objectives. And original us of a results Horacio plan for come our to even first year us as gates half know, the year and investment in exceptional fiscal ongoing to wanted this we out we organic our position to multiyear put the on year, track fiscal back the noted, thesis this meet results

capital second to our markets of exclusive over of hitting by turn depth. earnings which per line, in start will X.X% particularly will of and in EBITDA fiscal $X.XX Slide we strong reflecting lastly, improvement greater after cover adjusted performance generated our the share. end. with please And grew details the business. margin This in now performance. our an diluted highlights Now a quarter $XX I as year quarter translated second quarter the Civil EverWatch our growth in the revenue million of in acquisition, At $XXX across deployed results. second top I I quarter, in our the EBITDA X, quarter closed X% adjusted performance the adjusted prior of million of discuss quarter, to the We XXXX the year of XX.X%. all

the Revenue mentioned, our our revenue of and revenue for grew headcount to strategic driven quarter, to business, results grew expenses billion. $X.X organic billion. growth year-over-year demand repositioning compared These quarter. the X.X% previously to reflect for staff another XX.X% by year's second strong of year-over-year growth higher prior As billable $X.X utilization quarter our solutions, exceptional ongoing excluding the

defense, Our by of strong In number part half in across results In and beyond. markets. our grew the defense, strong all that throughout line performance account. year-over-year, grew we growth quarter highlighted will top X% year-over-year to we our health particularly said, revenue momentum hiring was saw billable due year a lighter XX% approximately expenses. revenue the of expect in supported for and good by meaningful of provide fiscal revenue approximately our back Civil, wins That in by

and strategic our building and VoLT reflects of technical growth. Our pillars civil technology, to the performance two accelerate mission power intersection strategy, and using the positions of acquisitions organic capabilities of at our targeted

year-over-year. shaping year. commercial finally, on grew in of this our clients Our X% the approximately revenue the past completed XX% non-core Global and grew portfolio region. solid asset. Building quarter, which business year-over-year. a I'm but the efforts, Commercial, a team's found we the divestiture that hiring home by of In for Intelligence pleased MENA, we by business our and And approximately in good in employees was

options Now book-to-bill demand signals. for resulting in of Total on backlog were details price not grew portions grew Funded ever of to our and billion. our Net demonstrate to backlog approximately quarterly constrained. backlog $X.X our results grew of to backlog. a once please $XX to for turn to billion Unfunded These $X.X a billion, X billion. XX.X% X.X% largest $XX.X which quarter we of Slide X.X the $XX.X again We demand all X.X% and translates trailing times. that grew are X.XX billion. X.X% XX-month outstanding bookings backlog in growth year-over-year, approximately saw book-to-bill three times

even to We our we the continue labor light employees outstanding, quarter, of to approximately had XXX into financial of right an was taking type Pivoting in strategic XXX now remains tight roughly market. meet the divestiture. headcount, in both work performance a employees with and client-serving our to exited This after of account our aspirations. second increase the what that particularly MENA win

momentum up in This approximately well term. our serving or continue line up client employees sets near headcount Our top us X.X% now the is to X,XXX year-over-year. very

I earlier, our $XXX adjusted an X% the points quarter is We of down the EBITDA quarter, mentioned million which which margin adjusted XX.X%, XX in expectations. is line, but the of year-over-year. As bottom slightly generated we basis of up at ended ahead year-over-year, with EBITDA

our a and X.X% net the the strategic fee million, margins slight management year-over-year interest higher benefit gain diluted cost earnings generating XX.X% share expense, from from ongoing from Based earnings sale performance the higher strong shift towards level income offset period was to our continue and on million. $X.XX $X.XX adjusted share up XX.X% contract from our prior increased execution, income efforts. $X.XX. to Adjusted MENA partially business, Our and Diluted $X.XX year per net to strong of mix work $XXX X.X% year-over-year. operating increased per increased to $XXX by in

revolver. of This stack, with We $XXX quarter our us including capital the to $X of a continue Turning generated the to the of million, weighted result closed September, we $XXX sheet. our second capital activities amendment of balance the expenditures. maturity from cash In closed the operating million allows and a cash optimize less on average quarter untapped to billion balance was ninth agreement. the credit $XXX million, our Free increasing debt. of for cash million $XX flow to

Turning now to X. Slide

the Net X.X net $XX second our we was shareholders of quarter billion, leverage quarter, second debt was approximately times quarterly through million dividends. the in at cash million to $X.X of ratio repurchases During and returned of approximately end EBITDA. capital share and $XX million the $XX

after previously strategic of end, This the quarter of acquisition and model accelerator bring us to to mentioned, will prime acquisition EverWatch. clients. allow is on closed As example technical that a business a innovation our we

team We are the EverWatch aboard. thrilled to welcome

be national critical Our that better expand work this opportunities intelligence of accretive transaction to to with eager this them year. security our serve pipeline deep and anticipate We market to team is fiscal missions. will

to expense that due inorganic turn guidance be second on moderate We year will to between momentum between half Directors quarterly At record will a on Slide revenue for for half to compared address approved our last payable X% I the full November high the fiscal anticipate the seasonally of we are mix. which December built. today, growth is billable and X% per to increasing the includes performance, XX. dividend and and growth of pleased X. first well top as has as I our that a Finally, XXXX. now revised of line, Board our growth that XX%, guidance which as to to our am team X%. announce slightly strong year, included $X.XX revenue This in of Please stockholders fiscal hiring X share bookings has

We $XXX are Similarly, very EBITDA business. are with of our our momentum billion. a million in to guidance we underlying adjusted the pleased range raising to $X.XXX

typical increases fiscal growth. the more We adjusted now are our outlook, XX% drive are our to in in revenue we anticipate and seasonal low the our also sustainable increasing the spending intent EBITDA to range. outlook organic on invest margin back These will half margin which XX% of year patterns heavily and be high to based

We our increase This be of range ADEPS by still $XXX $X.XX we ADEPS in in are to a a expense. expect interest modest by to operating range of strong our capital results, to as driven in guidance and offset increase invest is infrastructure continue also the to million partially We $XX million increasing technology. $X.XX. guidance to expenditures in

Slide now on to for tax partial in flow, Finally, $XXX prior the we taxes and tax our we initiatives. expected between excluding to planning be due Earlier as our million $XXX a million. cash XX, profitability, shown refund this increase received month, strategic operating expect

of As cash dedication million the and let performance echo paid our work am strong this made decreased million during say full net only possible $XXX $XXX year for has million, again the employees. me our hard now to by Horacio and to XX,XXX fiscal a $XXX performance This including the tax our our In and was taxes I both for the brings impact inclusive of year. of closing, quarter. taxes a and second proud how cash Section anticipated result, rate fiscal of to flow XXX. be expectation operating normalized This between

target open objectives, to our financial we With to and operator, Booz execute result, strategic line let's allowing create superior a remain the for shareholder value. questions. on continue to against As that, Allen

Operator

[Operator Parsons comes with first Goldman Sachs. you. Thank from Gavin question Our Instructions]

is line Your open.

Gavin Parsons

Hey. role. the Good morning. And Matt, new on congrats

Matt Calderone

you. Thank

Horacio Rozanski

Good morning, Gavin.

Gavin Parsons

You seems Can ways about any like resolution if last looks talked today visibility, first year, little about into first continuing year, bit quarter? you like CR half into uncertainties the sorry, talk the a relative improved environment what little to was we're a It of the and you a have right -- of now. disruptive. kind that second half particularly

Horacio Rozanski

strong There's feel guidance, pointed half our CR. we we at plan of mindful to But first the great in at of strong the in half that that, of guidance. year. demand in beginning entire of half. Sure. we trying strong, you first And XX is very -- do I of numbers. question. we of continue the a and and outlined volatility that -- consistent Thanks second We're those factors. Obviously, first our If about we're at days closely build you our out, quarter we the you second for with the It's as under results the built that our in that's and election. underneath momentum for in point, the We're the second the a away full expecting from an anticipation this as some see very potential saw are, work into to half. look all get year and

here been a Our Allen me been the a have and and quality long would talent of growing is people. it talent we're years accelerating of ago, base unbelievable is but to here the milestone I've few XX,XXX this exceptional. nicely time, Booz

really the growth We're the all our horizon. to well of VoLT have across we And look under positioned. of business. is future could elements investing the the which invest what's our against is will are on we I capture at you. all we commitment momentum thesis, strong We to things organic to in growth If we see investment near-term deliver beyond made we're we track said way the

very the So But environment now, as close good. I said, attention. in we we playing understand volatility right we're feel the that

Gavin Parsons

evolved initiative our I then conversation which these years investment the technologies ago, on. lot call a think lot new I investments. in conversation, And today, it's new and focus And towards of technologies terms more of little around bit couple option you a innovation in a Great. a more think gave of some Okay. of detail

strategy about talk you little bit just can evolved? So that how has a

Horacio Rozanski

react A to of over value into in the the AI a and excitement were or there particular both we the we integrate to the and doing track. is we're at create that. exceeding years, I working of places is as upside. we optimism weeks our ago, the clients, When set around saw technology Rec.gov about in tell think of solutions, really Sure. lot four five we And other mission a is expectations. bring the watching talking things on through learned we're information like presence, us strong of see edge technology called call. right of When was there number technology have I innovate to a part and on intersection, what that really potentially the that, great years, the XG was to technology and I place last lot partner some of to gave you initiatives environments. What progress. about part I a challenging strong this best to learned as ability that doing driving and mission option I working of our program we frankly, for And me level we clients new in into is couple a some we've really AUSA. people that the Rec.gov know where we VoLT of talked at I was for

right prime and the And in intersections at so and pour in investments, that National that we DVA these look it you health everything years key our like, moment. think to growth. are take that over few is our last digital path you investments we hyper really were when when prepared evolution remarks, the technology mission battlespace learned our Cyber into the look of for that's and at

Gavin Parsons

you. That’s very Thank helpful.

Horacio Rozanski

you. Thank

Operator

moment. One

with have question We from Jefferies. Kahyaoglu a Sheila

open is Your line

Sheila Kahyaoglu

Horacio and those morning you comments. Good Matt, welcome thank Hi. for and

Horacio Rozanski

Hey, Sheila.

Matt Calderone

morning. Good

Sheila Kahyaoglu

that's ask about EverWatch, I it quarter, completed great. if maybe so you've the could in just So

about think You continued maybe can you As you into thinking Health that? discuss mentioned having you're growth, strategy you're the long-term your at it M&A & and your Liberty. also about how drives success how

you if strategy change about elaborate thinking in you. could Thank given the how you're So the just M&A CFO. on

Matt Calderone

question still strategy. Thanks, as no in view an We change your Sheila. The M&A accelerant. sort is, of answer to

I same think We're Liberty we as M&A months much but a And organic of returns is watch really on just board very see great example quite is catalyze in seven time, the new vein. excited over brining into anticipated to and something fold, get how ever the growth cannot clues, none Horacio capabilities the after discussed. us are signing frankly, which of team early between just positive.

together team greater their accelerate Our how take with their technical it that's through can value to clients, going organic we and think innovation and and ours us, combine and team model growth. business bring are to working to to

to going a We'd pipeline. patient playbook, and to So that disciplined. but we're follow we love remain have strong

Sheila Kahyaoglu

much. so you Thank

Operator

you. Thank

next Our Louie comes Dipalma from question Blair. William with

Your line is open.

Louie Dipalma

Megan. Matt, Lloyd, Nathan to Matt And Horacio, congrats morning, Good and Lloyd. and

Matt Calderone

Thanks, Louie.

Louie Dipalma

and do is you view Horacio, an state dedicated local for and and view underpenetrated CyberSaint established to you? For Do critical scheduled agencies? you of of opportunity as to There government have of infrastructure seems which been more pursue part consulting government cybersecurity you protecting the market government local stimulus, state for dollars aggressively how trillions partnership. the to

Horacio Rozanski

and fact state years. of in channels. The is a does ton local Booz have expertise few we of Louie, and the every the go matter of to not local back Allen question state

intersections clear mission there, Tracepoint the understanding we a And bring time of double but a that. the type Our can clear see presence, now, where impact a spend that Right bringing wide the a where you really seeing scale. to think that's the It's what of show getting conversations team the amount prototypes. is in client as going to just mission to mission sort don't as Booz have of major what long, chance prototype work is have down that technology think not does actually We're are is, on point technology. Allen, and doubling missed and technology opportunity. ability the opportunities if we're to we'll a become. are then I of to make lot this not that Louie, new is fair ton see space in into we major real. continue we key I of AUSA, down can But you know And as road. technologies very we, at I challenging these technology a

And so are opportunities in and to probably there we're what of opportunities and internationally intersections. places, all while of that. state oblivious there's other designated local, technology in focused not creating number now, Right in is we're and a hypergrowth some mission

Louie Dipalma

Great. demonstrated much quarter. the hiring of How Is half during the there for robust And you second guys year? for seasonality additions? is sustainable the that your headcount

Horacio Rozanski

So there's always seasonality. And QX is always a strong quarter for us.

and in the this because sort the strong think include both And bulk hires. of hiring sometimes actually experienced was interns talent. summer quarter college QX particularly our numbers was this I those of

the So important really talent I critical with these resources value of think our so business. that robustness proposition pipeline speaks our and to are our that to

that we're not mean demand give an me the we about example. fact constrained. talk Let always you I

end So intelligence fall. probably that significant next to is a contract we scheduled have

the at of the may as across in is much what's that Intel, reqs other number work. at doing think, to have driving I of and that, open this at growth classified That's we to about. vehicles talent beyond. we the we talk Intel everybody exquisite is that actually September these And move not now is talent, our don't vehicles a And talks work being opportunities unique the rate that core really we -- to growth. for I have point, a But the which in do realm the of is timeframe. this least that technical able vehicle demand clear other know hold. lot some talent availability, for limiting in mean that step I work we to example, talent fill is to vehicles, for look deploy so other

and process I the our right we've We're good. proposition market feeling to feeling talent there will challenging value on The we're like numbers still so fluctuate, out track. are made but changes we're It's sustainable. quarter-to-quarter. the recurring that our And to a employee think

Louie Dipalma

Thanks.

Operator

next you. from Subin Stifel. Thank Bert with question And comes our

Your open. line is

Bert Subin

morning, and both Good Hey. I’ll congratulations echo my Lloyd. Matt to and

Matt Calderone

you. Thank

Bert Subin

Thanks the time. for

primary So next about here? for expectation margins however, over to be guidance. be you are raised the one seems with to from tailwinds margin highlight what this your pressure, materialize medium-term talk to margin that, previously, the doesn't really you the Can business to to it just impacting two years, some which and year seem expected headwinds

Matt Calderone

Absolutely.

driven factors. margins think One mix our couple is a business. are the by I of of

So be higher than our type. And work civil correlated, of exists. our where a tends Intel. little price that's That's more contract business margin in highly to obviously, security fixed to

in cost within is expenses, that on really call EBITDA factor impact if front, And EBITDA rates. margin, general, billable calories, then they well not the do third itself. both management, we're we and is on empty unallowable Second the but which side and doing

Bert Subin

Okay.

In terms of… I’m sorry go ahead.

Matt Calderone

investment short we're with the the and EBITDA reason we business X% an There's there. EBITDA on dollars think in But year-over-year. perspective, We're that a really chose dollar demonstrating on our growth from track really run, thesis margin. we based don't we we're happy manage

primary obviously, that's So margins objective. are the important, not but

Bert Subin

relative mentioning seems like were No, set to was outperforming expectations that Yeah. it you're I a maybe guess, I the little there bit, I what guess out. were

Matt Calderone

that's Maybe -- we our this than And guidance. that thought in doing reflected better year. obviously, slightly we're

Bert Subin

that performance comment follow-up strong on just the And civil it to quarter. was then really Matt, during a there to

DoD I think be least coming this really into would strong. side. intel I at that you was And an the expectation, intel quarter saw on that think there

the doing setup least think of perspective. start things continue the a civil to is similar the we on side at forward, the sort you're there, outperformance and to As you drive from look sales do health growth where of some

Matt Calderone

no. and Yes

to even expense think XX% I see are we in bit. accelerant growth some if near-term come not, year-over-year Probably perspective, still growth pull range, numbers, Civil down some not going stronger. XX%, on of that growth we're year-over-year. it will but -- synergies in although, a working though still there. Liberty seeing much in off it's from We're not comps really the organic it's it's the that showed factor, the in of underlying, X% But billable was driven some you defense, back, a by

think excited business the as do So the ongoing three our Civil markets, performance bit I see of going to across we're well. very and little but a normalization with you're Health a of

Horacio Rozanski

sort let build me that, of market level. on strategic the And

in built commercial over they're technology of challenges. bringing look all a and all between and need you it last as opportunity, technologies, AI in over do and how just technologies lot we're intersection invest to climate a at way at to agenda in order released, defining the the -- decade. climate bring U.S. again then the and But this into use of The China came that IRS, security where we to position to business long-standing think focusing I the health, have speaks and is just The these competition. Booz that, are strategy National national has speaks you a of of where well the out aligned tremendous we're of we that ahead public and kinds increasingly, Allen Security on domestic administration's can If where as we shift strong of we decade when And mission that sometimes -- a technology to patient for presence a the and have stay and modernization the we in and strategy investment of lot and scalable Defense the things really side, to question. was those competitor new government these very and a unique the National massive to once the upside. the technology

the of Matt as strength positioned the are and our we're across markets. have to that I time think fact so reflect all And going well numbers over said,

Bert Subin

Thanks, congratulations. Horacio and

Operator

you. Thank

Cai We have von with a Rumohr from question Cowen.

Your line is open.

Cai von Rumohr

so Thanks and much Yes. welcome, Matt.

So we outstanding bids for that understanding -- in of bids looking they what terms that could And September. the favor? the to book-to-bill last in decided? are you my of in had quarter? potential decided were week expected Did first be X get if those bookings Were your in in not, is billion

Horacio Rozanski

you're exactly that talking are about. Cai, sure are things we not some procurements I'm that under which There want protest.

our know number both billion say record a puts significant second at that place a traditional to XX quarter then and the very don't What which a X.X month will really quarter the in numbers. robust puts I around specific is question. strength and dollar book-to-bill also is orders of returning, answer book-to-bill sales task plus your I this, backlog So tactical good

actualize in risk of So to at really into all for the are to opportunity not we order the we sounding us continue revenue. to that onboard like broken The demand a make sure that record, right demand constrained. is talent real

Cai von Rumohr

from to the organic Great. And B, that you took for if you to you earnings? and for I much the we at EverWatch, EverWatch. one, us more is in numbers is growth divested numbers the are both And is you some you added which divested two that going in -- out assume to one revenues added EverWatch could terms MENA, add one correct? second look that on -- expect of color in how the give and change A,

Matt Calderone

correct, until for probably on specific next is That hold Cai. We're quarter. numbers giving going to EverWatch

it mentioned, case. original projections just I ago. business through synergy teams weeks closed As going The in are two

So we to on But we'll next numbers. overall the built you back in that quarter. get

Cai von Rumohr

Thank you.

Operator

you. our with And question from Seth comes next Seifman Thank JPMorgan.

line is open. Your

Rocco Barbero

This morning. Rocco is for on Seth. Good

Horacio Rozanski

morning. Good

Rocco Barbero

thought Day? your levers the How environment current one Investor rate process does at ago around versus year affect the

Horacio Rozanski

I'm I The mind bit. broke little question it? repeating not a do sure. mean you up

Rocco Barbero

year Yes. How Investor about ago Day? your at leverage does versus thought rate affect the the process current one environment

Horacio Rozanski

rate not current environment, heard I was was burn you. got sure I it rate. I

remains said, talking when Matt about We're you're deployment so for were interest we unchanged. discussing rates. the M&A, Okay, our as -- strategy moment capital

accelerators our to VoLT thesis strategic growth. and actually We organic looking investment accomplish allow that for will us accelerate are

at We hope acquisition, the the We Number past. great growth we have the deals When It's sequence, is examples And people. the this that first raises drive we that the pass make to another we organic not numbers example cultural have us. that be look of three, never EverWatch our say, fit question. an that make opportunity look And the the some of in will good make sense. that at for the we two to as number then But to and In connection we one, two, term. obviously, on number that long forward. of it things. where honestly, with and no, in third most to three bar. rates look rising

Rocco Barbero

a growth markets. quick end follow-up, other Then muted Thanks. sort than shake has defense of the might What loose? as that been a bit more

Horacio Rozanski

and I'll I'm by our masked It's quarter. defense that little So bit want Actually, fact expenses EBITDA. than a lighter billable as will business that had lighter the they've in billable little good been, actually margin expenses Matt we think always add. they to expected. start, as a because sure were say, than very But profit we very little calories we about carry

the people So talent, good over by produced we And Matt real acceleration hires, there coming momentum organic sectors. the if you our and that, new the there as see there. is for pointed with underneath quarter look revenues there's strongly in billability growth other last we think out, in new as

Matt Calderone

Horacio. high-quality really right, work some won That's defense. We in

been has loose. So shaken I it say would

by a our little you'll it business. mentioned, expense masked in year-over-year of comps. that But this half see momentum quarter year was some defense had Horacio the the strong As there's back over billable

Rocco Barbero

you. Thank Great.

Operator

question comes Research. you. our Thank Spingarn from Robert with Melius next And

Your line is open.

Robert Spingarn

and welcome Good Hi. morning Matt.

Matt Calderone

you. Thank

Robert Spingarn

to a has little things. A with hearing the out the Back of bit? for rates, couple just that. We've M&A been equity rates, of quick backed and higher sort of private minute a interest market

M&A.? So competition less for them from

Horacio Rozanski

let going to that. I'm Matt take

Matt Calderone

I market. equity particularly the large market, are much our say factors really backed. it's relationships would volume has a buyers, think is are that there given transaction private mentioned, the that think of you're And as Yeah. rates, that all world equity the our not regulatory describe fewer auction seeing where uncertainty we but plays to and I lot know this sellers as reputation decreased from mid-tier backed in macro private I cautious a the a Horacio processes, to matter. interest environment. and out, more just Certainly, we strengths. is in what And would

and If you Tracepoint, to the know for criteria outlined. Liberty, did not but we really targets them look we the Horacio make thought that outside was processes, it EverWatch, at we they're get they the how right for us sure were met that them. identified of took to just we time all And fit,

So I'm I of different not just strategics, think lot you're that of private of having of a sellers. and see going personally, seeing a with but buyers relationships set more that. to more equity

been experience. I no, wouldn't our the equity say are the private firms of So hasn't out That market.

Robert Spingarn

X% on switching increases. in go count the how earlier, little then And it. just talked measure I We or head don't you're X%, depending so a Okay. you year-to-date about know, up, headcount to it gears bit, back

organic mix way double top to an bit that And Horacio. Your producing this in it? basis. talk a a line does even more about growth just Is that is wanted on the fact increase? it more higher than Is is little revenues? dynamic, that that incremental of the any I headcount reflect part

Horacio Rozanski

client we've drivers been we've managing -- one look out, client can is, a that as costs up sure been inflationary and headcount The staff And -- to think at total headcount, the manage we between make an Matt staff if I of difference X.X%. rates. driver you pointed here. in our head key there's couple count is environment,

to to growth. always create one. need and is investments room We time secure under do like growth. a client it's this good, sustained the About are of in our growth over staff prudent, market continue being future is we And of above and X.X% market kind to growth really sort VoLT that we especially the

That evolution the all on The getting bench, process but smaller us that, drives little one for finish somebody focused the going -- take too and over mean, look the long I of get a of doing speaks number the not an talent, that the the our frankly, Kristine which significantly. as allows I Booz second which revenue dynamic, we're at process our near hiring the Allen used And we to at term success and is -- then of that us grow, prepared to has hiring, ability a really market from things invest ability billable, to of the just remarks, the we've which think bit drives creates of I that's us on I circle And one virtuous what Booz at a in and on key fully think that internally. talked sustainable billability, with few has is people on a again, a is XX,XXX shortening in I'll years. to with driver we're a bit talent last had Allen, exciting that's about which here. to on is more and --

Matt Calderone

Horacio, I add. just And can if

mentioned those see the two the and the growth seeing most go to The you contracts, third we our can We contract up, cost as XX% T&M When of wages That's through. for of were that than every revenue more base, and for headcount past. year. part factor plus the have have we and And in our salaries increased. this our well. driving that pass certainly we're year utilization,

Robert Spingarn

just hiring. that with And note on

the Does Just freezing that you door? talent with the hiring, help Amazon, the services and tech Microsoft companies like web in area. in D.C. especially get

Horacio Rozanski

lot talent not conversation A a materialize I of now maybe last From -- hiring. about seeing that that not really, of challenging. my less perspective, it's announcements we materialize. is there did seeing The there's know We're environment couple we're tons about the years. environment. of significant hires over challenging were

tech talent One going have shortage a of decade. things last the ourselves said probably is to we that a we're to to under VoLT going was

of rethinking processes environment can time and constrained so successful spent lot hiring that we be over people in And horizon. a so our a we retooling the

Robert Spingarn

it like looks much. Well, Thanks so Okay. that’s working.

Horacio Rozanski

Thank you.

Operator

And question comes with Canfield Barclays. our Thank you. Colin last from

Your line is open.

Colin Canfield

we wage towards for well impression roughly and slower headcount that of margin $XXX accelerating environment? was talked about that hiring mid-single And Thanks. versus kind wage we about think of target previous with 'XX the Matt. EBITDA think the plus of acquired modest placeholder we that million this growth kind algorithm implied million digit how a then I $XXX and FY EBITDA Could growth as Good low-single as growth to an quarter, growth just do Hey. organic and setup inflation inflation organic level of Llyod EBITDA. digit morning, from perspective an the congrats set us?

Matt Calderone

question part of first I'll the your take first. So

I think that model is the one we're following.

of As at you like, inorganic piece playing it's Horacio not for I out thesis, and track we the we out, think on if are look just investment aggregate. growth, how it's the the expected. But in organic parts playing said, how

I consulting be, see second in we year-over-year growth With the understood want articulated. the that we it's and to and part, sure model track on I'm with staff business, X.X% not where think right in that's I momentum you question. On the headcount the with line the

Colin Canfield

inflation wage And that it. what we of within should Got considered? Okay. sort construct, be

Matt Calderone

that So we've and range than said X.X% to that we than which X.X% we're in probably down is higher higher significantly this in the expect within end, inflation not higher past, years a year wage but little the honestly years bit past. towards

Colin Canfield

it. Got And just last one question.

guys just more versus and scripts. how driven? price You of kind mentioned bit Mission previous thinking Tech capital more acquiring talk intensity exposure about about than are headcount you fixed Can you a little

Horacio Rozanski

our We're really scalable technology focused clients have to problems. as focused their on that solutions they on ensuring need and what solve we're mission intersections,

of Some people products have solutions. amazing and partnering that is technologies, that with

adapted that a environments. be own. Some different into bill even of base shelf unique a we're something on make lot that of for or make is may sure And the make it talent that that take mission, developing actually can and commercial the custom across a our bringing on real is and it things that government

continue really in successfully, not this this or we've help forward. We look point gets spent the our bring And and there's get be some that. value. over real over the hear value that. ensure that And so focus. that because we'll with you speak I the we we decade, us no think created. forth, risk they That's but I for me last and think value quarter half, to player of to money the numbers, to continue are is about a we that when get And trusted become talk of if market, technology, that clients job can to to that will just you're always A from And the infatuated going is and gets clients do really this new at technology bit our lot our done our to value buzzword. fact that becomes a real this

Colin Canfield

Got the color. it. Appreciate

Horacio Rozanski

Thank you.

Operator

other you. closing call Thank the there's no to questions the in management any to for like And queue. I'd back remarks. turn

Horacio Rozanski

your you Thank and we're operator. and Thanks, the joining Matt hope good a questions, I business are excitement thesis. about certainly look we're I optimism now, our confident all the our investment making on for our clients, and for for us. on job XX,XXX that you, for for the did keep of ahead people everyone, the I this opportunities conveying strong progress our feel at VoLT and strength thank of with for we the firm, future. We back, investors. and coming and our about

of bit to about how can and critical emerging called nation's of place, if about applied for And we many website. this new in talent close me a and it's published mind. many thought role our some leadership you advertisement, Let the technologies with empowering it, Velocity. and more. challenges Earlier our innovation don't the win race point, an of biggest to Booz publication, technology available It's the and you'll a revolution, final our how Allen ecosystem week, from on hear the experts be about digital

Difficulty] again, continued with So your [Technical you reading you'll And I interest. hope give with thank and And it enjoy will that, feedback. it, for us that

Operator

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

disconnect. now may You

Booz Allen Hamilton Holding (BAH) 28 Oct 222023 Q2 Earnings call transcript