BAH - Earnings call transcript Q4 2024 | Booz Allen Hamilton Holding Corporation

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Operator

Good morning. Thank you for standing by, and welcome to Booz Allen Hamilton's earnings call covering Fourth Quarter Fiscal Year 2024 Results. [Operator Instructions] I'd now like to turn the call over to Mr. Nathan Rutledge.

Nathan Rutledge

Thank you. morning. Good joining Call. Allen's for Year Quarter for Earnings XXXX us you Fourth Booz Fiscal Thank you've an hope issued We had earlier release the this we press morning. opportunity to read

and provided on presentation We on have our also website X. Slide are slides now

talk Chief me and Chief and financial our Officer; Financial President and and Matt Officer. our results With about business Horacio are to Rozanski, Vice today Executive President Calderone, Executive

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

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

now on X. are We Slide

Horacio Rozanski

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

like you, our chart retire informed with Board would of not Earlier XX, news in continued our call, his in content our this and to course of regarding On the Board Before diving to of us a Board Chair, a we share years will of company, for the earnings and you I on us Shrader, ingrained into roles, May Ralph stand contributions investors is Ralph intention that Directors. impact note, some our is CEO legacy of Dr. Ralph's country be his Allen, XX, Allen, for our Annual to XX to reelection career for impossible His July spanned many guiding Stockholders' Booz us success. personally. our celebrated It Booz and now fully for to people, all and account to our you. the and to forever have Meeting. spring, so and this as including taught have to the which for Chair. me, many and personal thank you fabric inspire Thank Ralph, done the all for Allen, Booz effective

for the Booz decades. In Lead the values newly Allen's Chair roles, [indiscernible]. of serving deeply and appointed forward our Mark will of been to Ralph's as I to Board to Board hallmark our look as Chair our been has new Director, working that our CEO, our Directors XX have am by I Mark with to Independent of humbled serve past and after continue company and excellence and I retirement. closely chosen honored commitment our company

after increased organic. XXXX. fiscal double-digit builds and for nearly in to earnings Booz solidifies that fiscal March now growth on Matt performance than XX Allen's exceptional clients Allen This soundness Year in our industry. of The prior trust professionals. the work, our year share XX%, Revenue consistently to in the our went Allen's relevance and results This I our more of the And leader speaks delivers. marks the to all testament financial since Booz are purpose-driven and are revenue than best growth organic team year, more place both amazing year ended the our XX,XXX proud strategy an year, performance outstanding and And Booz us. as public. standing a of results importantly, our most

operational morning, in performance will the I market priorities VoLT us the give year year. Matt strategy will fiscal share fiscal will I full then for our guidance potential near year and our an This the positioning XXXX in-depth XXXX. results describe term, fueling how fiscal volatility at address future. is our also and and for our look our for

our Let's strategy. begin with

Our where team's young. to Booz consistent years today. are is execution of us we VoLT Allen has XXX brought

are We are our decade. for has at ourselves taking our place as stands which of vector our company founding, vibrant our led performance at change as powers and VoLT Since and federal velocity, XXth leadership has for for anticipated in key technology the clients. transformation change entering X involved long-term the is peak across ever operating Today's ways. VoLT and put center the growth and government. technology. us this

have at we a have importance. these of in become into positioned center ourselves second, leader we the injecting cutting-edge missions. And First, national missions technologies of

region. like our for take next and these of the our increasing example Allen describe is role clients. dynamics to Indo-Pacific me in it few Allow Booz minutes the One what to for looks

to As Pacific is deeply previously, have priorities decades. the Booz for national I committed have Allen supported security discussed there and U.S.

Into-Paycom's mission leveraging Mission most by We Systems. deliver accelerated solutions do cyber, from artificial We requirements support XG readiness so pressing to such to as and intelligence technologies at to speeds. continue scaled

Japan spent Allen's set have many government leaders as talent I peace and in U.S. the presence to region. to and have with in military to weeks, allied and commitment to and the Booz Hawaii. vital reinforce new area in helping maintain our X past missions. time and stability senior grow I support invest met broadening in the this of capabilities, partnerships continues we In

service the our optimizing is Department of veterans us endemic care VA, nation's to leverage support solutions growth work claims VoLT virtual and clients effectively to the the and transformation already homelessness It technologies we sector the private of veterans our act A to triage services. reducing closely with At power the our Veterans second of proven also enhance in substances. to the Affairs. of digital clinical example of technology FACT to the and from with meet associated of team exposed scale unprecedented allowed our has toxic care of to

have these processed following of business what over federal largely efforts Within roughly size for to $X.X manpower-intensive a to PACT health billion the shortening the manual X years These process. process helped important in along year review the the passage XX our helped health automate million with of We overcoming VA been have and payments would Act, X.X awarded steps similar $X VA billion of the claims last a in the months has in the over the and agencies, veterans. claims, portion 'XX. double examples, across multiple fiscal

example of third A intelligence. VoLT in artificial is action

the leading early-stage Allen Before build AI moment invested Booz the work now. public into for we to We and market in and a prepared and came position. ahead capabilities win are anticipated in the consciousness talent of

of as AI AI are XXXX we across becomes And provider as so government, leading report. Deltic's the recognized today, by federal the government services U.S. to the ubiquitous

nearly to of the over years. our next AI we $X In business and to couple million, this revenue FY billion aspire grew grow in 'XX, $XXX to

As more AI we and in both invest continue AI talent integrated through more contracts, upscaling. and base into will is hiring to increasingly our

our is Booz We range faster. Allen's our accelerator. to are Without also a VoLT commercial doubt, as clients to with partnering bring a the technology and on firms a other of move dual-use working tech is team

all years strategy ultimate investment ago. we proof goals the is performance beyond examples, But X.X point set our of against specific the our thesis the in our out VoLT

in of billion guidance the fiscal at begin year we top our we of the trajectory, of $X.X issuing target our year final XXXX. to $X.X original X-year As end EBITDA are billion

of Over we will have thesis, more than the the grown period EBITDA by all organic. X/X, our X-year virtually investment

resiliency new gives strength and balance increasingly to outperformance we well an challenging in as market. look sheet organic Our momentum greater as us operational as opportunities capture

about which of recognize missions we contentious and are geopolitical poised may disruption, process. the of Despite to societal and and other potential way. budget bring the this, on service Looking a our we this particularly the coming cause at can uncertainty, their election there the every factors nation, Elections fall. months, serve clients we and fulfilling certain. are things focused are X are The step to we support them to

programs and our to mitigate seek full operational years, recompetes; includes operating the value in speed of volatility transform which deliver priorities for speed, prior number record our across must in will technologies. market increasing our and in do half. to will positions existing support precision and build all programs we execute to first, technologies we the effectiveness continue a business. and any As the continue to increased maximizing third, which at include in our new To the how year We to into advantage of proposal second the the implement 'XX our drive half second, full is of increase new and following: with our efficiency take and first we we people, functions; large momentum of this, fiscal investments pipeline, we to philosophy VoLT key of FY

and anyone Allen mission to our goal else. demonstrating than overarching into unique technology 'XX is ability Our FY further by Booz drive differentiate faster for to outcomes better

environment, our The remain awe outstanding center respectful clients, and are of for as Their optimistic and after I we of I company, prospects. and who growth passion in Allen our am about a continued of are while we the with, work skill volatility the and performance to exceptional. very they year is in the incredible the at the people Booz are impact have inherent summary, reason privilege on the our team our they market have they create of success. tested year. In the of

you us XXXX results And now and fiscal financial to to over guidance. through year Matt, our take

Matthew Calderone

innovation, deliver, quarter, our people This forward of Horacio, goals everyone. Allen's I've exceptional foresight, deal creates and compounder. thinking X each transformation. Allen Booz value XXX-year after year spent the is before. Booz and the ultimate you, building good and clients, a step good legacy year, of time morning, set and after our Thank Quarter we for driving recently we on our execution about always shareholders.

By was to fiscal our in this history. almost XXXX. In the we fourth an quarter, best complete any results metric, to extraordinary year year financial the fiscal continued delivering this spirit, in excellent build

significant operational and Our growth, and shareholder and we to again, positioned value. free VoLT XXXX enter We strong working. year Once momentum. flow organic are deliver robust is exceptional strategic, strategy cash fiscal financial with earnings

exceeded I then turn guidance. Please all XXXX of proud our now on our highlights, or performance, to fourth will start am quarter. morning, that This for XXXX Slide delve our objectives briefly to quarter deeper fiscal I fiscal the our cover into we and fourth by touching say finally, met X.

mission consistent We importance of and on the that of many highlighted calls, Total positioning trends continue technology, our fourth remarkably cover for building of $X.X performance, operating the enduring momentum build up future investing on in and efficiently at to intersection while the was national of the year-over-year. the and a recent Horacio and few I XX% resilience. highlights areas To company financial billion, in quarter. revenue delivering have approximately

was growth organic. this of All

Adjusted We over We to an book-to-bill XX% generated client XX% with prior the year-over-year. share, margin XX.X%. $X.XX million, recorded of added up quarter. expectations. X.XXx, per and of in staff our EBITDA adjusted in translated adjusted line EBITDA diluted a year earnings net This grew $XXX XXX to

through $XXX dividends in returned investors share million to fourth we the of Finally, and capital quarter. repurchases

company, Thanks closed work hard to than the fiscal our year expected. people stronger we across of the

increased fiscal full in across our XX.X% was demand, the fourth end portfolio year, year-over-year, the strong top exceeded our quarter. For year-over-year revenue grew healthy Organic billion. billable up billable and revenue $XX.X expenses excluding higher-than-anticipated XX% to expenses of total guidance, hiring revenue and driven by This the XX.X%.

broad-based. growth Our was revenue

in year. roughly Defense continued across year-over-year, also last accelerate. XX% about with to from Revenue double-digit Civil excellent, grew the most fiscal defense XX% business portfolio. up portions of our growth Our Performance was business

sector reported X now growth. organic of civil quarters Our consecutive double-digit has

the for exceeding future. Intelligence is grew our X% a year-over-year, on Revenue Our vector business strong expectations.

side pleased both and are demand momentum side the business. We supply this with in

Finally, disclosed of revenue our business, represented fiscal global year in previously the was commercial down year-over-year. reflecting which divestitures. X% XX%

relative its we going not Given report size, results commercial will forward, small separately. our

was a we with of and year of X.XXx. on Moving up bookings demand XX X.X% $XX.X Total $XX.X Slide net picture fiscal book-to-bill backlog billion X, ended the of XXXX trailing billion, XX-month as March to year-over-year.

accelerated the year opportunities our robust, our as across recompetes $XX.X XXXX includes pipeline is in higher portfolio civil qualified much year and defense year. upcoming XX% the of exciting Looking ahead, new as place aggressively start of in as ago. a standing in a billion and possible number fiscal election well the September, at as some or This through than work capture working federal funding businesses. advance With and fiscal are we government to

we and necessary momentum pipeline short, backlog, future the to growth. In market have drive

Turning the supply now to side.

Horacio year As than XX,XXX with the more noted, employees. we fiscal closed

Our up year client us setting well staff headcount for increased X.X%. headcount X.X% was XXXX. year-over-year, Total up fiscal

Our at but our just pay also application in Booz employee low relentless experience headcount focus dividends, numbers. culture the continues not growth, on and referral in attrition and strong and to consistent our Allen

in XXXX updated the fiscal line. XX% and at and guidance range. year. adjusted Moving bottom billion higher now EBITDA fiscal for year earned This end to the the our of is in we $X.XXX than top

and expectations. our top operations performance Our This growth adjusted year-over-year, disciplined margin approach line investment. generated flat profit excellent growth, our was with line of contract-level XX% EBITDA a to strong and by was in

business to technologies continue solve has in challenges, continue partnerships investment us do the get our transform very leaders corporate in to things allowed X needed well. scale simultaneously, and to functions This operations. the manage and Our emerging key increase to talent, mission

grew income XX% include share part the per These by significantly fourth year-over-year year-over-year our income year-over-year. Adjusted rate share $X.XX. was results to $XXX quarter. offset million. earnings up XXX% to share, XXX% in the tax P&L, down lower-than-anticipated interest earnings the higher net ADEPS diluted for grew million, year-over-year. Working Diluted per increased expense $X.XX Adjusted fiscal a to $XXX net per XX% year, in higher

the of ended the debt months. to X.Xx year leverage We net adjusted balance for fiscal on the ratio billion million cash and sheet. hand, $X.XX of $XXX now net a trailing EBITDA with XX Moving of

disciplined continue strategy. capacity ample have capital to our We executing deployment

excludes flow $XX million for less result $XXX of cash million activities, Free that $XXX cash were Note year expenditures CapEx. fiscal CapEx of the of that from the accrued free $XX described by in operating of was paid million this million, XX-K. million perspective, to flow in further cash cash tax early offset which fiscal year related outlay XXXX. assessments, tax $XX From unanticipated was DC a contested is our this an

growth and strong outflows year, business. for were consistent Collections our fiscal with in ongoing our remain and investments cash the outsized

will performance in remain of events, area year forward. improved Excluding cash onetime this an focus fiscal XXXX and going

million to in price of share to capital quarterly year of deployment fiscal repurchases This as included Slide in an Turning In share well we on million shareholders. XXXX, cash at per capital as X. returned million dividends. average $XXX $XXX $XXX $XXX.XX

made venture we our of strategic $XX Additionally, million through investments corporate capital program.

year, our as While scale. of and we at acquisitions completed still strategic part no speed are important acquisitions strategy deployment we last bringing mission capital on fiscal focus to an technology

We to pursuing pipeline healthy a tuck-ins. small midsize are of

long-term As a value firm, through capital shareholder committed remain allocation. maximizing to we efficient

bringing also as our available share, $X our billion that Board of be Board our to dividend note authorization, as I'll The which increase on approved June an will XX. payable to repurchase $X.XX has million a per of approved XX stockholders record Finally, to quarterly share March $XXX June of of XX. of capacity

through now turn our Please X. take fiscal year XXXX you I to guidance. will Slide

year our second more with a we aligns plan typically half. fiscal and strong for first cycles, funding Given a half uncertain government

control. we We fiscal are this and about with are societal continued the budget the this geopolitical fiscal controlling entered the In doing upcoming can We momentum, conflicts, environment, but year. disagreements election we cycle. uncertainty significant same on year next from what this possible and anticipate focused

our to We business keep are driving positioning to forward, growth compounding. keep for continued

drawn federal to headcount we takes and fiscal timing including the out variables, start potential win walk of the XX%. revenue and the account now and into extent This line, to expect top Let's gains. growth XXXX the budget guidance. work, for pace which our negotiations through year of range we organic At X% several

growth again are for targeting We fiscal mid-single-digit headcount the year.

billion. We expect $X.XX dollars adjusted $X.X EBITDA of the to range in deliver billion to

noted, Horacio end of our investment range. As is the this thesis high

entirely to balance future. performance, expect almost for this We significant organic the achieve capacity through creating sheet

is adjusted about fiscal XXXX. year fiscal on full with margin par The implied EBITDA year XX%,

between year, adjusted as to in fiscal effective prior assumes rate per increase We interest and and $XXX million. of well an of the as $X.XX the XX%, share. $X.XX marginally This of higher range between a expect an expense from million ADEPS XX% tax $XXX

of expect cash around in of of between $XXX $XXX $XXX fourth flow flow expenditure XXXX. spend from between and paid and CapEx previously shifted early that $XXX year and we $XXX free operating was fiscal Lastly, million assumes quarter cash million. the million, and million, fiscal including million accrued mentioned This the

want we to into great our proud XXXX a X-year how a fiscal year thesis. finish am I year momentum strong we The I of In translates and investment delivered. closing, guide just the built reiterate to for outstanding

is of Booz testament is a continue we Allen. to our strategy power real enduring of our stakeholders. to people and all VoLT to the working, deliver Our value and This

that, With questions. open let's for the operator, line

Operator

with from Instructions] Our comes question [Operator first Bank Mora Mariana Perez of America.

Mariana Perez Mora

increased Biden like new of recent will is opportunities how this AI any So as think officers actually a on Chief seen question those mandates that agency Officer. about those are things? about come and have each strategy, cases appoint that all my thinking Have AI administration use to you through? forward and about memo these memo that their demand the put the Or AI you

Horacio Rozanski

the question. for you thank Mariana,

it. is think of an the how part becoming integral about federal Here's how AI government I operates.

it more and more couple over seeing We of last years. are the

now from scale You've the heard projects me talk entering phase. demonstration about prototypes. to things We're moving

to growth for investments that and now and AI so these the take advantage they're and it these agencies, that difference. making [indiscernible] this correctly sense makes several of done, it the poised resources Allen's a agencies years. managing And sense in and officers, against has in some AI And it be governing AI been of Booz makes

And our talking know from popular. been you it is before we've growing. business this about became think I

we million looking a in remarks, are the I prepared roughly at business As mentioned now. $XXX

years. that across alone are We work seeing of I leading couple being the more a recognized lot a that we clients else that procurements. billion thinking able will a externally And doing and that we reach And position AI opportunities AI look differentiator AI fact a $X inroads. business that we excited as Trust, making a communications. are cyber, AI somebody think also become is Booz have and significant position really is really AI leading to we're for doors It's and. we But see we're very that in it's of and think, that importantly, AI Allen we're It's our our as Zero AI forward, we and opens do, have and where space where about.

And to to continue to that only years of result going differentiated a so Booz come. as I and be think increase and Allen's in to expand ability the grow is to

Mariana Perez Mora

recompete So AI risk or win? and also for towards like stronger having you around is what Could a a please these some position you these skills that color you think as you details you how give the us contracts have differentiator. mentioned like IP recompete?

Horacio Rozanski

Sure.

me conversation frame ways. Let of in couple this a

is ever, everything we guiding our balance an both than earlier, We're with VoLT, velocity, to election year while faster uncertainties positioned. else. with FY we're off a the our of [indiscernible] strategically, and we for portfolio in we as X are well ever this entering in And and really momentum is we with our investment momentum. coming entering year before. lot said that we're right? resiliency, strategy, and best sheet, we're of first thesis, the our And are can our year top end our year recognize 'XX and And bring, The working. VoLT

bit our And that of on our will year, business. reality XX% contracts. X-year a billion defense contracts, health at you the get over last a little we've billion there's years, average portfolio gone XX of of recompeted it are our contracts little to business look our almost of of This part from The now no business a the plus is every or Recompetes if year. those concentration significant it is, X in and in business. a

the by well a all close are pipeline positioned delivery, As offerings our do. quality we work wrapped inside a by And pipeline, that is that record I uniqueness billion $XX at look really the of those, this and of by to we the of our is of opportunity.

looking focused, scope opportunity. with winning capturing presents recompetes increased that and fact with these we're but advantage on of our year no work the We're very a at ceiling, new laser-focused taking also optimism. the of number which recompetes and increased So also come

Mariana Perez Mora

in the And and congratulations congratulations on Ralph retirement. to appointment

Horacio Rozanski

Thank so you much.

Operator

next Our question with Research. Melius Spingarn from Robert comes

Robert Spingarn

I a with wanted growth. I couple Matt, you to on had of questions you, the but start, for

headcount a You've order high talked the hitting high growth. about X.X X% X% organic organic to X.X that to book-to-bill in and growth around year full for about growth and to single-digit hit single-digit

bit above Now you're that. perhaps guiding little a

already this You've mid-single-digit that you growth headcount anticipate said year.

So anticipate what book-to-bill? should for we

to recompetes And you year there should that thinking that then about? coming be up follow-up as have significant a this that, we are any

Matthew Calderone

that year Thanks, I'll the year Rob. them the the some we a of demand as going lot demand right anticipate about want guiding to is headcount said, give with X.X%, we're you supply And on reason Horacio to part year which take be. organic we quarterly on the where the in growth the Look, comps. of then growth line the feel do Yes. robust by little with to sort above side. but we're growth. target with Starting how side, mid-single-digit the last a play which on turn. to year, supply headcount is X% maybe of basis we in of and To about side than X.XXx, profile historically, entering the be talked side, quarterly momentum, XX% that we've is a the both a for primarily driven on strong, out, year-over-year even expect more so

where what grew a the similar patterns saw XX% our where year. book-to-bill. up to the than to had we pattern end to It stable we not for on we'll more year. going first margins, start year, see we're half. similar I'm they're in And last to call You a solid recall going last historical

on particularly really demand start, good So the we've had a side.

were really this we've as where that, robust part are from said, at year. of Horacio It's up a Recompetes last pipeline. we point got XX% but

growth year, which medium sets term. we've I we're over the the for a So headcount think, or obviously, our of this about robustness we're how pipeline, typically gives fact next growth our for the you talked book-to-bill thinking backlog feel year, that mid-single-digit and up targeting for about and us

Robert Spingarn

high then throughout cyber Horacio, next a for just And you question things the forefront you've you, at level, to you XG, all and the along. leader, how but bit to like -- a think the growth and Okay. did talked And we where in like we the want call, and about AI, prior major X forward, XX been computing about of quantum be encryption? should years, curious think trends in of terms things post-quantum you

Horacio Rozanski

I but question, approach. few feeling here hit continued our about the singles, a a over we the hit mean, last think sitting really the on things. I so appreciate that's reason a is few business missed runs, decade, home I also good couple, we that we've invested part a of Rob. of are and because number And

intersection cloud, So edge to well and that in we why us partners are building both technical edge, AI and through position the be position and with a lot We trying that well at we're now we and the think of edge, technology AI edge Trust. is the Things think that's a together significant a we our of our computing really have fund that our about on and bring stacks how cyber That's that. Zero is market. you on front unique lot AI actually of venture investments very why technology us some of that. made challenge, which really

And quantum -- position then leadership we we as [indiscernible] PQE. have I already and you a said, in I think mean,

going are continuing mantra to is, that importance. continue grow. these to focus Allen let's I believe on And those I going of is fields Booz are because I our think missions national to build all think be to

Let's bring And clients these help let's make sure we the prototype. solutions our missions. at make scale sure can create our to we beyond can technology

on at be what ultimately on and so the end focus clients why sort need, think all prototype of changes this focused I that's short the we're our scaling.

Operator

from comes Our Bert next question Stifel. with Subin

Bert Subin

comments just remarks. to of and I some in follow prepared wanted question Horacio, Mariana's your to to your up AI just

hosted based event, the in FY AUSA think, on were for that you and when sounds in what the you range your sales of, So year, I 'XX midpoint million. came last noted. It guess, to looking $XXX $XXX AI I like around you around million of you

said $X have also billion ever imply the you're pretty to next remarks, looking your couple that so get significant prepared in You growth. to in years, would of

function Civil awards guess in for side? Or changing I So to Is that to skewed growth? more what's that more my been the internal see in growth investment question driven? of 'XX 'XX acceleration to time? that you and function in is AI contract is FY a shifting is, a of DoD And taking Or it the Intel opportunity? has it

Horacio Rozanski

question. good really a It's

cycle in this in the AI I federal is government. the where is think

complex. a a think successes talk start on I the of trying and We you out And new out, of and set a -- then the [indiscernible] of the you Pacific rationale we're vertical think at set then we of increasingly a becoming missions to That scaling. there's phase. there's this threat. The early cycle lot cycle go the about challenges I of these experimentation, just beginning sheer scaling very vertical posts are of get is whole [indiscernible] there scope. just missions

sort it the half about INDOPACOM like region. world think that or you of something of If surface

our understand humans And help, really important but is augment intelligence, to and through so actually how broad-based. coming us when for they is for capabilities, that, at work artificial these clients for understand start it it scale that they're to look you you as to support

it AI. on said, months were I more down have would really If question DoD path cloud starting Intel, ago, agencies to in focused go asked you'd me civil the than this and XX migration most was on prominent that was

that has really I think changed.

key advantage I the data the now, help that. to their positioned said, board, I is drive integrate think well are into as on of other across and the particular, it in taking to technologies everybody to to into cloud we're right that And AI missions.

powerful own of And do for part I much bit AI because a it, while we're interest integrated. of really think part us, is little highlighting what's there's everything we -- so its of is on

accelerating AI and AI on is cyber, AI needs. AI I and and the standalone that come an ingredient and AI you by buy cloud, AI always is going a is space, as it's not think thing power itself. So in And where to CX. that's mission

Bert Subin

Got lot it. Matt, makes I of for have you. That a a sense. follow-up

everything as to sector, growth, growth, assuming would in FY XX% margins faster for from putting it margin? into to think XX% a growth the potentially You're from AI guess you in what cyber longer term, flattish I an go take 'XX. this margin Booz your civil

Matthew Calderone

Yes, broad thanks. hypothetical question. It's a

generate much technology First, the really invest organic infusion let market market. with of And talking where compounder, other and in ahead how of years our to saying, we're has guiding. changed with to I'm of got demand. couple over with and you've we've mean by dynamic about kind talked was to the the be right, the AI the a pleased we've profile consistent Horacio generated, me growth is. market past about start I how margin

it deliver strength really been able we mid-XXs remember, couple transform we've in to So business. speaks margins past margins guiding our record so and to years, XX% our over invest the volumes at were business the thesis, of levels and original our that investment about of really

the differently. get need probably in impact to want we call margins on to to order and continue do still experimenting think early this some able in thesis. our in as It's the material of it's scale much business? being we clients differently to parts nowhere investment How But to having to market. I'm the or will sure your invest, a contracting. outcome-based our will We're answer its but we invest of near continue selling Talked do compound? about different forward. But be ourselves, for around really threefold. topic stages. that a question, point out seeing next we're experimentation We're buying I our inflection Can going be quite lot our to

Operator

question Seifman JPMorgan. next our with And from Seth comes

Seth Seifman

excess of a M&A guess, It's the sense? a maybe year from deployment see I bit wanted And more year? of expect to after how we on repurchases if in sheet, bit if the at million talk should maybe cash environment this not, valuations could $XXX you cash I CapEx about coming do Are years. to ask, right $XXX the last in coming little million, balance a probably capital share XXX-ish make deals there share now? that you this year. the pickup little

Matthew Calderone

You're M&A entirely us right. hit to the of leaves and by But lot spot. preference. room is able we've performance thesis a the We're a right? of deploy. in priorities through going I'll top good start on our end disciplined. investment organic Strategic saying balance almost been capital our sheet deployment We're our remain changed. have to patient [indiscernible], to approach our That

transactions. were pipeline. what our year. last assets I'm more year, I Interestingly, didn't provide but we we're ones. seeing, opportunity, acquisitions I the about this actually think, some of few really see. a really are any There a by I make [indiscernible] carve-outs out challenges well. number in encouraged And good We disproportionate So including high-quality really feel -- I market, some am which some as

Board increased flexible. appreciate going of we're value to has the to ways. repurchase flexibility us gives share return I our that which different But authorization, lots And the stay in also

Seth Seifman

Okay.

of follow-up, for clarification just And more Okay. year. a maybe the Excellent. the as about outlook a

little the is But -- for but think, back maybe you budget. there's start more would to planning around about the okay, going then the so also talk half, be about is half the talked faster and that way lead strong to that uncertainty first in aligned. You then a you maybe bit the growth the comp in

expecting the thinking and that growth with some half through you uncertainty about be see with should back election? to the and the in the well, of as XX-ish kind percent year even that of regard we you're happening this budget X%, the So

Matthew Calderone

of , in I terms over of think that's what the roughly profile flatter line we and with both margins growth year. year-over-year anticipate the percentage in a course

Operator

Securities. from next Tobey question Our comes with Sommer Truist

Unknown Analyst

are sort hires of come what percent trends hired? what in the how scale? workforce what are of to This has upscale is of historically. to you've far speak tactical terms are than of evolved be ones sort sort sort how sort you the recently for percentage in Jack hiring of Can I spoken of on And Wilson Tobey know technical more new with of Sommer. about

Horacio Rozanski

Why don't on I start this.

but has workforce workforce increase more broad-based importance, we so I that percentage bit. little the both in -- like a we missions both our a technical hiring to that that shifted of also a have hire much the the every externally. of technology around technical mission have Pacific, we our I upscale general, because become we and missions internally don't we of year, think know injects we in firm those national expertise into specific do

but frothy on that is a We the the investing years little good lot importantly, our down we couple of or would XX,XXX We a lot [indiscernible]. attribute a internally attrition -- culture, I take years on our of to significantly done of think market couple it thought ago, built less a to is people, couple them to a a it of an is opportunities, trends internal AI frankly, magnitude. and more our took of have important us I think it year-over-year. do than binding was to their people workforce. giving train work whatever, We it on training quarters us,

we're that work the industries and on this to across to what's from really feeling workforce. are want across to train absolute that also us upskill retain, missions on And country, allowing key is to about national very, our think requirements. So focus our in underneath from top importance ability all of I good very bring national to these talent

Unknown Analyst

the region are follow-up, then you're seeing that activity? of a of maybe regions INDOPACOM And there high other any as sort outside levels especially

Horacio Rozanski

in [indiscernible] everywhere. before, of We, as presses active around there significant right Well, and Ukraine. have working to our and now, in I've about the is, spoken support nations Europe just world

in presence have We [indiscernible].

significant technical that on look middle differentiated, a lot we But at Booz as even and and growing the a of and infrastructure the right in is the outside active modernization presence of DoD, and are federal investments have across that. extremely government, you of health significant INDOPACOM. Allen of if nation really of in We also public entirety There's before. I said in making is very the --

Operator

And comes TD our Rumohr with Cowen. Cai next von from question

Cai Von Rumohr

looking that, But Part great, been specific, a but your and have Booz to also moving strong industry, hefty your were think If AI, threat are these seems is are bringing where putting that opposed China thinking others I the good folks of numbers to experts, with pretty we're you from 'XX XX around, what's it budgets. as of that was on, your And So and did Intel basically Horacio, really about X period peers that basically, up obviously, FY some for we kind a kind can flow-through digital with budget, I of of the is XX numbers. growth? bigger what what's they higher. the it [indiscernible], a we're ago, de-link from total industry but in you're not some chunk of what's as think shift the at we're Booz if focused with like O&M kind upward looking today, the your the significant your sector's budget, R&D of seeing maybe was the years transformation today you're about were technology budget? expertise to level and Because budget, more taking and look as what of at supplementing secular customer where you.

Horacio Rozanski

speak I bit. -- let about little a us me

and was you in majority of -- it broadly, I funded the I in well, really think back, innovation point think at look it you the started really I if when making go business, vast Cai, government. you if were this this

mean inventing would sector XX years, You then go the program things I that was adopt. space private back

back go was diverse adopted. DARPA the program right? you I mean of Internet, sector a If that the that this to private

government flow strength. I the American really other of you every an the can way And now direction. funding at in that If provide year. think that's private sector The work for look is now, innovation things the innovation the outspend the

I good that thing. actually fundamentally a is think

context, And [indiscernible] that partnerships take secular of so lot we have I years. talent continue makes a question because trends think advantage the Booz early right technologies to particularly grow, you to started Allen the of sense. these we think over described in is of I that your positioned logical because base well because

at we to has as budget success to But very the the obviously, to And speed, be positioned speed. being against cognizant of places I at and but fastest not this optimistic. the are, know, the linked to we're market. the I share that can to you that, in to is given also not this be in our key year, to we is long need the by in think budget the well the election grows overall, in just same any the we think of And potential be every grows areas market we continue not of where to extent But year, turbulence. every take of market medium the part part term, growth definition. an do

Operator

Jefferies. And our next question Sheila with comes from Kahyaoglu

Sheila Kahyaoglu

Congratulations to succession story. great Ralph. A really

about -- your business. terms of to In I ask wanted first health

You and type some with work are technology billion the PACTs said What have? you from of health other implementation and doubled going in you runway $X see it VA. given opportunities act? VA there forward competitors And to recompete do with the

Horacio Rozanski

So story. our success health business true it's that is a an extraordinary has -- business

contributor XX, you the a XX was really years, not back significant XX, If to it go portfolio.

pride, bringing real $X missions. source Booz of X the years these demonstrating priority Allen's proposition to technology reaching in really Now billion, it's and national doubling of a and

the be look and arises. veterans acceleration coming transmission our support we system emergency, forward of digital of of preparation as the health complex entire country or VA health the for of think it I the our to very information really across this arises, health if the public infrastructure in to into years, the prepared the and transformation when next better the from to it

doing. overall intense expect work. that And around. grow. is centered very work because work missions And And That that it's is competitively we is that excel important to it the work. are we the good really it are work to It continue we we're is at. Those

concentration of so in there's much so part work fact early. little going so good through end and calendar, we a of it's are we're ceiling and the the work performance that that it's they're doing some recompeted in getting the this actually the programs, the As a before that period of I Mariana's long with of of recompetes year. in part questions, these said earlier business It's actually

for of of recompetes work, and recompetes, makes almost insights all and here's new and because like work think And is sort to at another the work technology we're so sense place these us where a yet new of bringing recompetes. and the I time. position all both procurement, new recompetes bundling the as quality government all between these work that characterization, new it the well our divide are we it's but the much same the

for long with that scope, There's new it's really is X increase there's good it's good recompete followed actually a make whether tactically $X we're of full uniquely a $X and into we of ceiling, win in expanded to us are we things sell time, when new clients there's a find opportunities contract we our life program, the that you've that becomes think because and and so billion at over scope, whether opportunity, work, the at of increase in know sure of the get access. billion sealing I that work how

Sheila Kahyaoglu

-- in you see in just of can 'XX? growth portfolio And in double you digits other talk maybe the the expect fiscal terms to half of there? Okay Civil, and of can the do then of drivers about some you

Horacio Rozanski

to whether Allen of agencies entire are where and it of underlying whether these this positions fraud story. protection areas -- and bringing about leading efficiency in to you a a entire whether again, doing, And asked I'm digital success some question the glad Booz certainly We're for detection, domain. AI the so it's transformation exciting and treasury the actually we grow. our of is that This work it's much is about of some work These But excels. talked the of in because .gov Sheila, such business these our portfolio. portfolio cyber the has because we're rest missions excited health effectiveness, continues it's

federal that And agencies. also portfolio the exciting growing our enforcement the law of portfolio is our is other with part and

opportunity hold, clients those of are and growth some we in seeing see too. been We've investing are taking there, now a while, there. to these good and investments for We expect

Matthew Calderone

FX, X% I in with loss probably agree even of year broad-based the go this entirety [indiscernible], growth our look is intel health. you mean the business. say, able ever I as would in the I if mean business, been. think the fact they I our that this strength to outside speaks you the to has the grow with as underlying at of portfolio, [indiscernible] to were this, it

an the So lot very spot, we're just them. and of all that of interesting sectors in -- just it's There's through gone review Christine a optimism, of a our and having underlie with accounts the broad-based. it's

Horacio Rozanski

That's XX% our this grew business I Defense a point. year. really good mean

our that Defense business I it last its size. think time the of maybe grew XX%, was X/X

So it it the that this was year. entire year, [indiscernible] that grew

fact and situation we a are, close advantage we're of going very reason, say that to taking year, the for on, of we're cognizant something is And we into year we're, election keep need So and that have. all momentum good feeling to is that's good. that eye the continue this why as an a the government the we budget I next fiscal

Operator

question last And Blair. comes William DiPalma with from Louie our

Louie Dipalma

the level impression Secretary was DoD she Battlefield of you And, you playing first she at symposium, prepared for JADCX AI LinkedIn an February, Horacio, Defense, a to platform? major Deputy the last JADCX viable you're when to comments. Were INDOPACOM in Okinawa. on Kathleen Hicks, INDOPACOM trip your role in there. your to you the under in minimum your connected discussed time highlighted and development into for role month, outsized a and has indicated attained and role the with the remarks, your your China that alluding then recent I'm counter that

is true? involved you And there? deeply that So are

Horacio Rozanski

say is is INDOPACOM broad-based. can growth I that what in our Louie,

very accelerate I all in time areas spectrum, an deeply involved electromagnetic all call, these how between very businesses of The is in said I've bringing thinking theater have fact focus. clients, about across -- particular I making can across in in Hawaii. of challenged a all of And could spent the investments. of the time conversations area I mission. focus, area we're amount time communicate Japan. CX we're perspective, portfolio what and that The in platforms, As support obviously of about time sort to of to in spent be my a speed, that these you our from Taiwan, this are important spent we those the fair are in technology

so of And things more and the to that think come. those are we about kinds

Louie Dipalma

recruiting attribute would strength historical generational employee you And Matt, been Have tech making the recruiting your Great. been to anything structurally like to And has has positive utilization excitement pace? to? grow a your you above and for and improve allowing hiring changed standpoint? you And improve your investments AI that's what from onboarding?

Matthew Calderone

really sense We've answer about of employee entire expedite of to they not them, doing joining meaningful. Booz proposition. including for we're process But work, to of find just better want power using they're talent as question an are me of here. that well And careers impact because really made pathways, your from the the Allen employees recruiting enhance broadly come is number able referrals, exciting and on yes, gives of remember, technical offering the talent to portion them want have you think and a we're particularly and Louie. technology them mission-focused to X/X our our just people be that I the joining improvements, find because value and cycle. which a The We're as they to our

levels. not seeing above I [indiscernible] thing only we're and utilization The historic

be. our utilization it's But should where fine. is is I it think

a we've on job that of goods. driver better and It put work has want. kind that's to we retaining attracting and we're -- So a that of really obviously, been hasn't not of -- talent the got been to people doing

Horacio Rozanski

years saying, specifically really I'll use saying right language that vibrant Allen now. by I young. simply to environment add that And a we Booz internally, Yes. we're mean it's we're XXX because inside

are that talent a work optimism work that's we magnets. X in doing, clients people for are doing the uncertain are another, And it, attracted gives for we're and feel looking I environment. that future way we're what the the it in all the to people for, which Our And think, it. us an job with

Operator

remarks. you. Horacio to back you. Thank At I'd for Thank any to over time, closing turn this like call the

Horacio Rozanski

morning. this for for all your questions joining us and you Thank

at our are was equally excited the about future. so history we Allen, just I Booz proud As saying, and of

give where this talant circle, in our working that great strategy again. We investment, opportunity over simply our virtuous which Performance are our cycle performance, all attract drives drives creates opportunities us and

effort our and incredible work an highlight Awards, we Just which And this and Allen to celebrate security Excellence have our is we're major veterans, local that Booz stories our was to the cyber week, hear efforts both our national we the do. they helping supporting amazing how the closing our vulnerabilities, this opportunity some communities talent attacks. held to internal to how we're troops American of protect stop that and

We had pandemic we're health a through for and any to future a the emergency. the helping country on global we get country chance how prepare how help reflect

XX am just amazing most work I it and And to our day, and the has this nations fact Booz for you, morning. Have Booz always listening years of all team, do you're us years, do, people do, excellence. you do proud really for you what thank again this deliver highlight with XXX It's day. For great and it's supported that we Allen have with excellence. continue our we we so Thank We Allen a and we just the clients the all every not company them. if to are. joining who

Operator

Thank you disconnect. and conclude you the may have This day. does for program, a Everyone, great now participation. your

Booz Allen Hamilton Holding (BAH) 24 May 242024 Q4 Earnings call transcript