SAIC - Earnings call transcript Q1 2022 | Science Applications International Corporation

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

Operator

Welcome to SAIC's First Quarter Fiscal Year 2022 Earnings Call. At this time, I would like to turn the conference over to Shane Canestra, SAIC's Vice President of Investor Relations. Please go ahead, sir.

Shane Canestra

Good afternoon, and thank you for joining SAIC's First Quarter Fiscal Year 2022 Earnings Call. My name is Shane Canestra, Vice President of Investor Relations. Chief to results exciting Chief are and Natarajan, today business and Executive me Prabu financial and Nazzic our joining discuss announcement an our Officer; And Officer. Financial Keene, SAIC's year discuss will XXXX. the of April results Today, XXXX we ended our that first for quarter fiscal XX, be conjunction supplemental This slides financial afternoon, can to we with where investors.saic.com, be earnings our at issued in today's presentation call. you'll which utilized release, found also find

SEC the a on addition our In should that results to on on press that call XX-Q separate company's cause call. you could unknown subject Form addition, information statements and may regarding associates. XX-Q. the annual of made in quarterly intention in results forward-looking on Risk from half XX-K our today section known Form documents, to for are uncertainties issued with note along to we refer of this make report provided reports and Factors risks acre that evaluating today's we and our these risks, outlook be utilized soon, acquire to filings today's release to on Please I a Form statements including and be materially and discussion These filed differ our call. actual to

in to point addition, May some elect so. views represent subsequent the any future, as views statements obligation our cause specifically the disclaim at our change. do statements events to In of but today, may to and forward-looking we update the

supplemental It to now information our GAAP other provide non-GAAP the include will which we and Keene. CEO, for press financial introduce we is and measures. reconciliations slides useful discuss Nazzic comparable to addition, investors, pleasure In presentation most both my our metrics, release and measures believe financial

Nazzic Keene

fiscal of good for afternoon. year. joining our XXXX strong discuss to SAIC's and us start the Shane, outlook the you appreciate rest today year We to and you, Thank positive

Associates, share to public announcement health of into in good agreement we've a entered definitive have today, our news a market. that & exciting the including We lot expanding Halfaker reach the acquire sector to

often quarter shareholder like We will also long-term We've But our profitably continue The business talked growing for discuss long-term business further Associates in opportunities and value I sector about the for strong our executing health announcement. solid results start we public acquisition our interest strategic creation. on our with & exactly strategy the would of expanding development that. as creation. does value Halfaker in to market, financial acquisition performance first

year offerings EBITDA details, with SAIC's transformation accretive the the revenue Prabu cover over like space. will mission-focused is they skilled, the aligns Also health Associates and growing access I directly strong and founded government backlog, And professionals. in Northern Virginia, financial growth is headquartered years to XXXX. credentialed visibility with of Halfaker data and This and increase a X. our in slide in strategic And turn combination This strong mission-focused accelerating to gap IT that Associates expansion customer and and over digital and in here and public analytics. offer SAIC's immediately of market the in fiscal immediately now and revenue a health highlight capability acquisition XXXX services of revenue low will market. suite profile our and compelling sector very is largest to XXX attractive financial Please to four one transformation, frequently most X of in page with through presentation, supplemental home on and accountability SAIC's have double-digit discussed the SAIC digital focus modernization, will highly cloud Halfaker their would while & portfolio, outlined margin. strategy XXXX pure-play As IT our company. fills

health federal provider in important TX critically the of and several serve the vehicle. a on they five Medicaid of are MG a $XX Affairs, customers large the Medicare help Defense. also for and the Services with and top Department they Health Department Services, They IT Department Human where in presence valued in mentioned, customers Centers billion Veterans of I As serve customers

such the please Prabu, you analytics, the that Halfaker can services, the to continue investment and they see financial discuss We some from provide this details As chart, on the data today. remain in-demand solutions federal will cloud and cybersecurity our can confident customers. of you across services most government digital Associates of draw priorities as acquisition?

Prabu Natarajan

Thank you, afternoon, and Nazzic, everyone. good

Halfaker materials XXXX be has good and four in transaction to will profile. grow rates multiple run providing next have future over contracts. XXXX and cash range relatively in single-digit to attractive generation and growth. financial expected continued that Margins of current the profile price attractive on mentioned, SAIC's upward see as They areas. slide low confidence times continues recompete are Associates X. risk backlog As additive slide the revenues double-digit can financial generated Nazzic the in years, SAIC's X, calendar visibility the with their that an revenues And time few you turn mid approximately Associates million their growth EBITDA has to in in fixed into Halfaker and Please stream progress they the and to high the role and entire being due portfolio revenue year. $XXX and to for high

Let assets. me including of revenue This rate, and free all-cash accretive per for million share about earnings under is is $XX fiscal adjusted the growth with acquiring XX cash overview times to this flow. calendar the EBITDA XXXX adjusting financial XXXX purchase to our acquisition tax $XXX assets. at adjusted an provide tax a in million, SAIC after business transaction price million $XX of

cost the model. We have synergy any not included in acquisition assumptions

continue throughout this and cash turn do have have With acquisition capital about We will adding year, our a leverage to we not increase expect impact to deployment of the modest expect any to flexibility. leverage, our to on flexibility hand only to to material incremental existing with we and transaction one-fifth deployment fund of capital debt, ratio. a this

make Unisys and will following Federal continue We have forward. acquisition progress our made to progress tremendous on going of delevering

We close to quarter approvals. regulatory the in including this customary to expect conditions, closing second subject the of year, transaction

For and $XX in incremental today. guidance purposes, $XXX million the we modeling year between your our included generate in million which of to not expect fiscal revenue transaction XXXX, is

We to it Nazzic, will update after reflect September our our you. this acquisition and call. guidance to closes back in

Nazzic Keene

Thank you, Prabu.

Let me discuss our for the briefly quarter. results

our flow in an adjusted and deliver today, excellent to team the was business press quarter first and for quarter SAIC X.X%, allocating was cash cash outstanding strong continues EBITDA capital margin performance value all-time and results and The SAIC's As high. profitability, Organic reported growth for strong first development revenue the strong board. reflect across flow, are release X.X% creation. delivered results. we

in responding investments from several We our by have a request. coming portfolio enduring annual With revenue the SAIC and proposed change. the we through increased budget positioned is third of the agencies targeted for allows civilian customer this increased are a long-term administration to investment nation. us balanced our remain that needs of well recent technology priorities customers, government to when federal agile

long-term the first details year. further and sustainable portfolio the our refreshed will to our will of discuss value this Prabu quarter strategy rest strengthened balanced outlook results financial by Our produce acquisition, bolstered continue of now for by creation. the

Prabu Natarajan

growth, and of performance strong and measures. organic alignment delivered our robust the revenue XXXX a year and future across contract SAIC development execution with for I quarter increased reflect the Nazzic, line quarter laid strong in first foundation afternoon, good you, financial business success financial awards, Thank free results all everyone. through flow. and for see strong SAIC's strategy. cash of fiscal being profitability

value with of billion, most first to book-to-bill X.X At Let backlog me quarter of disclosed and submitted the our billion, to down and quarterly quarterly contributions our was business a reflecting book-to-bill success development strong last in The the year for XX% growth a fourth from recompetes. results. in development of at quarter today. first Net a the nearly XX% start proposals proposals quarter. quarter, trailing and for At of contract billion, $XX.X of ago. the from our the $XX total quarter, from release the XX% of value first approximately continue end low were of press business bookings year future opportunities, the the for X.X. stood new submitted our relatively a significant business first $X.X SAIC's translating the we up end to bookings invest in of XX-month Approximately, are is quarter,

results Let turn to now the for me quarter. financial

existing US as contracts. billion to business revenues, reflect $X.X modernization incremental for approximately X%, of contracts of and quarter to Air weeks growth year of customer due revenues last the new revenues IT increased on Federal a units fiscal of first compared Force quarter supporting six primarily first Our

Excluding grew the by Federal the organically impact X.X%. first of acquisition, revenue Unisys quarter

a year. X.X% million, the adjusted and million $XXX Adjusted quarter First for integration of million after adjusting $XX acquisition $XX increase EBITDA from costs. EBITDA was was margin prior

First favorable year but the rates. benefited quarter business, benefit performance of from was of the non-recurring quarter the strong indirect margin favorably the from and the costs across indirect very and settlement prior timing

For and was EBITDA by per the for quarter, of $XX $X diluted first about the COVID-XX negatively quarter earnings of and impacted million. the million. adjusted acquisition $X.XX quarter costs inclusive the share million quarter, $XX for was integration first Net income

share the a tax adjusted $X.XX. was quarter, of net XX% costs as per of well these approximately Excluding amortization as intangibles earnings and in of our diluted rate

free down the cash the was of quarter. of from flow strong days generation end cash were quarter sales XX First quarter two days quarter a outstanding million, fourth the $XXX at and days,

dividends expenditures. we quarter, repurchases, deployed the During million first capital of through and capital share $XX

in voluntary continued of repurchases ended a X.X we quarter leverage addition, to repayments the repayment mandatory over debt We ratio under quarter. share times. debt prioritize with net In delever making just the and

our our shareholders dividend Board to of $X.XX record XX a in cash of on share announced payable Directors on has As approved quarterly July release of XX. July press a today,

of of our have the Now year the range, slides. $X.X million, outlook previous updated our impacts as COVID the from between million XX of for down and presentation estimated forward guidance to lower our our revenues following: approximately release $XXX our to lower billion reflecting noted full $XXX billion, Slide Based and $X.XX today $XXX in million. and first the outlook press raising to end we year, the performance quarter rest on of turning

impact. XXXX, this revenue Our updated X% in guidance revenue X% fiscal reflects organic to including growth

impact raising in and and earnings unchanged start seasonality change to year. at million COVID $XX concluding of due purposes, the the we with On our revenue you million million. modeling summer Free the to XXXX, our approximately our both consistent and I'd EBITDA top in to diluted to year. revenues range, in cash the where dollars, we our revenue the again, previous remind and between margins up, $XX the have the fiscal over X.X% bottom $XX to strong pleased remarks. second estimates. million lower performance. $X.XX of employee typically your flow of $XXX back see raising between to you like reflecting we QX our lower our share vacations. above QX $XXX and Summing million, $X.XX, EBITDA range, $X.XX for Adjusted Adjusted X.X% of Additionally, per strong previous end our solid profile, the Nazzic, down remainder with execution strong and of look forward performance for are in now end expect to from between reflecting holidays quarter

Nazzic Keene

and customers Prabu. through of optimistic Hopefully, Prabu you our that our employees for to a take year. an future. to moment and thank all SAIC, unique our dedication Thank their want XX,XXX myself. We, hear incredibly at both from are about you, to challenging I

new worked our in that We and campaign to energy branding Bring optimism have Tomorrow. on titled, capture

and drive support and can about we excited customers' employees our missions, value future for shareholders. the to talented We will and are our what advance do our

also what will not to future SAIC bring future. to but Our optimism bring the lies the will only what SAIC, in with

to are excited now we're Bring take Tomorrow. We ready questions. on Operator, to

Operator

of first Your Instructions] the question from is Kahyaoglu with line Sheila [Operator Jefferies.

Sheila Kahyaoglu

of and Good evening, everyone. Shane, Nazzic Prabu and the course. Thanks time for

your on profitability good your guess, was I off core quarter, really the X.X% EBITDA to in start margins. So business,

is high get million here $X QX is seasonality? why worse does year everything outside of full basically, the for guidance Your from

Prabu Natarajan

Sheila. question, the for Thanks

XXXX. settlement I get and So as overall to back well as sort the our for rate my that's of were spend to of that's X% step FY line rate. roughly we those there quarter QX at operating prior And rates performance run quarter. prepared QX. indirect the but of I'd sort specifically the on in favorable year margin an items that say you of mentioned high the with under as first some indirect items, as in kind where adjust our remarks, benefited non-recurring ended We of operating we in in referred

first in margin that's imply that roughly the line so is that, mid here EBITDA there's in say X%. would behind with year the for the what of I'd quarter I'd rest So rates, say, us.

quarters We risks And as is for view rest the today, and I've I'd left. ahead the opportunities have a the said, guidance say, of balanced often of team three the us And year. is our performance start I of to And poised we're do of strong year. good really to better course a think we're incentivized the the the have the to with And year. hopefully, over the pleased year.

Sheila Kahyaoglu

come in we And revenues it Yeah, then terms the in out was Okay. a business proxy. BOP? $XXX to incentives just million of in health for some the saw of the those make dent enough in acquisition,

Nazzic Keene

a... make Yeah. the I missed to part enough last

Sheila Kahyaoglu

you $XXX Is that sort health in the No, of Health actually mentioned, think scale? enough in with terms that Nazzic, build to I million a in remarks. sales, your business of acquisition,

Nazzic Keene

– and very will right SAIC, We that, couple of right modest It purpose-driven vehicles. it this some health a is business, take mission-focused, a it my customers is very as position cultural when contract a at with take is organization. very very give key price. we strong at strong time acquisition well And our perfect in the Yeah. fit us marry to our an was extremely the as compelling

opportunity excited very company with we're So this acquisition pleased bring about SAIC. and on this very the into to

Sheila Kahyaoglu

very you Thank Okay. much.

Nazzic Keene

you. Thank

Operator

Stifel. of Your Joseph with is next from question the line DeNardi

Joseph DeNardi

contract TXNG substantial of a portion It Thanks. the Good acquisition. that one on like that business. is evening. looks Maybe just

Is of And being do talk you thesis current contract you do the can time? all larger dynamics from Halffaker do able the of as affecting with couldn't you that that what expected Should be market contract all? over own? to So you to we expect than about their that the part in kind well? market health result that expect right think on now share greater

Nazzic Keene

important of couple that made – exactly TXNG are very contract, so Well, in health particular right the the contract – Organization. the you a The on. comments serving Veterans a that that space, is

So vehicle, for us, that not have obviously. we did

for be was access vehicle. important the sell allows us So thesis great a the of and to SAIC several into to that acquisition it very – able next services part cross-sell years

that great solutions SAIC's great domain, companies great well and got breadth presence. They've And together we So then this to layer really But believe as when compelling you a our solution services. that us market us the was the opportunity very that access, we of in in of sales relationships a as the creates believe two position capabilities important part and acquisition. well. for coming domain, and Halffaker has it expand the

Joseph DeNardi

to two? few weren't probably are an able to you're of do just on quarters Okay. terms you as past in know, or time I what to That's next then are about Thank maybe that the don't market. extent year you. and helpful. and thing labor the of And the your employees there seeing sort off take expectations that maybe over productivity that Can what able talk they for

Nazzic Keene

Yes.

a productivity as and as We looks So the we're out We're this noted, a we backside things. hours. be the optimistic. come great did very folks particular a couple in all what very you've to and future lot have And pandemic time are employees in. Any all of we extra a -- are cycle of at are we're and we're looking come off seeing put shift what lot the I'm we're of and hope like, leave of would expectations But the in appreciative in of our behavior. very into normalized we we seeing more pleased to for last any seeing But things course guidance the that put have and already that. back a did SAIC factored not that to this over year. environment significant of

it and normal our falls business, across as employees into to guidance off as well. tends holidays And more an our QX be to For again, that's for cycles. time opportunity vacation factored take

next course performance the pleased over months. look of employees very the of environment we're the more a So, and the normative many with to SAIC forward

Joseph DeNardi

Thank you.

Operator

from is question next line Your Fargo. of Akers Wells Matthew with the

Matthew Akers

deal. Good guess, of I either forward? I then on any Half also kind Were of mentioned, here? hi potential competitive for the up NG or afternoon. this other there price other process of big big that you we on guess, drivers should got Acre, deal? to watch And that the guess, kind coming going I are than growth there Yes, are wanted contracts reasonable bid I Looks a here like that TX guys. you any on Congrats pretty bidders of ask, any kind it. recompetes

Nazzic Keene

is This Terrific. Nazzic.

So, it process. competitive a was

most pleased couple Acre selected by our in of space. to As on Half things. touch a go have to forward. are very sales, very, I'll acquisitions And most we're Again, been

addition met at is pleased very of with always we the organization. In cultural with fit but And is privilege also which culture, the to and heavily important the consistent the cultural of price, which is business, the important, SAIC. a meeting a had with the CEO. look I the team. so with senior culture very services very fit again, purpose-driven mission-oriented culture, We've in it's

happy to pleased and very they've selected with us continue their very, very So that journey. that

As my alluded contract. – revenue critical NG years And I in remarks, is about obviously, relates X mentioned a in to the as it in TX we or my backlog. of contracts, have I

change profile answer significant about of business. would good questions? there any change recompete So that material the the feel cause really position. very Does any in isn't your revenue in -- of that all kind And our near term, the

Matthew Akers

COVID the impact great. more, Thank guess, to guess, could revenue. if I And you. I That's on Yes. I one do

million $XX million the you in So, quarter, I for guys year. $XXX impact the think had

still go there's implies left in. guess lot a I to So,

in talked out you up, half think, the still that about of first wrapping has little way bit? or about right mostly Is think the guys I think your shifted have it, fiscal that I last year. a that quarter, to

Prabu Natarajan

still I I'd and get way week. mean, think uncertainty levels. buying that I'd we these about that's right say Matt. when you I for across think And previously, of quarterly I see to we sustainability is of And about I'd think the probably would portfolio. the risk to prior say, where the $XX the element prorating is a provided than lower the at around the But of some about million, of was bottom notionally in it this, talked say quarter within I million, expectation not Yes. of $XX business range. some chain few And revenue sort there still guidance about I impact range updated number to taking $XX the million think in the first the of this patterns obviously. there year range, while million were think over we still supply near $XXX are thinking weekly quarters, months we a $XXX right little middle a back, now the million. the we that

So that seems ahead the this a full have but of still one it I'd to what is the range caution the of as step of year. here, us to to an And at far top virus we return, like. go to way appears think say about a get gives element us

$XXX year, So cautious the about year. we've about way holding but that's still expectation about we're lowered for million for it. full our we're And the thinking we're why

Matthew Akers

Got it.

Okay. you. Thank

Operator

with next Your Sachs. Goldman line the Gavin Parsons question of from is

Gavin Parsons

afternoon. Good

Prabu Natarajan

Gavin. Hey

Nazzic Keene

Hi.

Gavin Parsons

comp And The growth diminishes in your the X% your implies year. forward. organic the updated toughest of If X.X% guys. quarter, midpoint to the just rest X.X. the trailing was COVID bills Hey is book going for this headwind guidance of

or the any the year? drives this you what the items had guess, were quarter? that slowdown organic I in pull-forward of one-time over And there So rest

Prabu Natarajan

here. take Yes, question, this Gavin, thanks Prabu for the one first. I'll

say, if revenue and weaker with holidays the stronger QX I'd of the you in here. So to seasonality say, along within tend in QX, be one to clearly about to be quarters. QX primarily quarters, those due quarters pattern QX think QX, there's the I'd tends our

total get $X.X to would year the the saw would careful year the was a little a billion. say, four of But through we quarters thinking QX I it, as than I'd annualizing number for across to higher COVID the So that side. say immediate on number we're imply on impact a

in to So the year. we've go say reflected as continue the see the guidance. I'd we some we updated rest that through progress of

well in flagged, the As rates of early see both quarters in some got rich we've there's now Army second year, see half a call fair say QX. this I'd of associated I'd in half we having amount the primarily we -- We contract. now as in ramp ramp that second the our with we as several still the But go occurring year, quarters, SDI as be love them previously growth in do the do of but of here AMCOM, the year. over course so. some conversation to would say sit variability next to three And the right still the we've contracts

Gavin Parsons

Okay.

COVID? like drive some end of low variability So range still that there's the it outside could of you the sounds to higher

Prabu Natarajan

Correct.

Gavin Parsons

impact. Maybe margins, change in great. adjust the year. COVID you similar the by asked margin given one-time out the assume quarter; Sheila the the Okay, earlier, benefit of what only guidance of maybe question I But raised that's first the a to for you guidance didn't on but

rest that imply expecting? previously the for worse the does a margin were you So than of see you year

Prabu Natarajan

some forecast the basis. we the Well, of is year implies margin the say benefit rest a our don't or for indirect We so under-run on say mid-X%. occurring that we full the booked the this in actually on year. a the in in I'd I'd earlier It year expect QX, of ended rates than that indirect rates up two was what for quarter expected. rate to

do actually up. trend So expect to back we that

think margin recover, supply than as chain And portfolio. fact it rate margin lower in rate. brings align the on with we if a the pressures that to rest the continues you business, as the about at So of that

holding the why end. rate XX and more increase back the about pressure to year, to together, up all a put you margin little with the now the in rate half we're basis guidance factors right that's So on those at points low end margin as of you

Gavin Parsons

one Got could. quick it. more And one, I if

pipeline XX% call-outs business. or heavily year in is were mentioned has the recompete Do new release how so just recompete pretty won tilted? of much over new what the last for submitted You a versus have been press you the you've that the sense since of

Prabu Natarajan

So referred say yes, the recompete now. I'd and win of call, leave there probably last on typically, rates it high to I I'd for sort levels of

good, disclose rates Our but competitive win and them. are we typically they're don't

Gavin Parsons

Thank Okay. you.

Operator

Your next question is from the line of Tobey Sommer with Truist Securities.

Tobey Sommer

Thank question the do number utilize accurately? group. not singly quarter in planning your to the just seemingly you. good that use tool and for more about Thanks. the forecast or ASD, what ago, has sort decade it I a you and a a can ago, growth that a long have it to in is was revenue been time we of but modeling that decoupled, forecasting you future book-to-bill. robust A and so very very relationship forecast use How more

Nazzic Keene

Yes.

right. is to absolutely not and be informative an But growth. that. in an the can indicator, of dollar-for-dollar and period certainly, you reasonable it, you're of it dissect and future you as the Book-to-bill performance indicator you're things assessment like a as So around a indicator it get leading bringing is about think it's bookings

And book-to-bill to on like We on move And performance in can contracts it. We of correlation it. longer, in SX especially a pay but some attention been obviously. bookings, some seen that look your rate. growth report where of of the the But so absolutely things our doesn't a period way. they've we direct very it, with a necessarily very material on we've there's do to have sizable

in indicator. is as analysis assessment. to backlog pleased we not with very last attention again, confidence So your something But book-to-bill. is of really done. very our I heard the and strong agree your contracts is and it certainly with totally gets part book-to-bill, It and got we've you've sustain ability roll layer until But that indicator, off, have it good the strong you running as pay an your all And just indicator. pipeline, We're in a very year. the to an our strong that

Tobey Sommer

looks could able in use for try the outlook margin to of that recent And wins, going what to bid get forward? the and Thanks. to sort a including you. I in to just pipeline like color I margin wins. AMCOM sense be recompete want inform profile the the Thank

Prabu Natarajan

here, Toby. Prabu Yes.

So And importantly, in over period see rates margin new curve of performance. with it, in new pipeline here. the as and is I such up we that, has we ramp bid I'd rate with in program the move in line the the margin It are and think development we we in early the to the period work. to the we're to associated period where that about especially think with that business work a on always striving tend lower performance now. is of start we implied we business say, in continue differentiation Having the create bidding rate way what really said the to right

upstream of So, But about say our we question, margin I'd to our rate. of BD think contract. we to life continuously it on your us I'd would driving sort a the say efforts over directly and be pipeline expect

on So, go as accretive we we're work more on. taking

Tobey Sommer

you. Thank

Operator

JPMorgan. the next question Seth [Operator is Instructions] Your from Seifman line of with

Seth Seifman

much Good guys. Thanks afternoon very everyone.

Nazzic Keene

afternoon. Good

Seth Seifman

I was what's wondering guidance you of about the into have year? that's the if that the could talk to Afghanistan level exposure for baked you

Nazzic Keene

Yes.

in minimal We have very Afghanistan. exposure

nothing So, material.

Seth Seifman

Okay.

at look with opportunities the would putting the you opportunity reasonable and you for year, to when aside see now? the the then backlog And than exit remainder year – I acquisition pipeline you larger to Great. right guess, the Okay. a have reasonable of

Nazzic Keene

Yes. with Yes, would agree that I assessment.

We have a very strong pipeline.

combination got of We a business. recompetes good as have and rates -- as secured win well we've strong we've decent new

with assessment. would your agree So I

Seth Seifman

much. very Thanks Great.

Operator

Barclays. line the from is question next Your David of with Strauss

David Strauss

Thanks.

looks So budget we've comment bit to go a from got it's process. But you perspective I and the a on you guess, here both how agency through thought a still can and for the markup I know DoD little all? early you days civil perspective?

Nazzic Keene

Yes.

we So some would conversation. as the see on trends. don't this certainly being days we put We that the budget, in you impact for pay forward juncture, attention is see to noted, are say I obviously business certain. the positive material our early request any from it at

is an arena, still, being positive O&M, As and believe, federal modernization work it the In on government. the has continued certainly, as But around this SAIC. we of IT conversation material that's juncture, for the that example, that early, And is accelerated a is we seeing focus across not impact. you sign and we're us. positive for a the said some indicator very believe, a anything at

David Strauss

you kind expect the question a was Okay. prior And standpoint? target I I give go deleveraging given talk repurchase here? share of or to us at your guess, how think deal, Prabu, the the could we of end Xx could you should from

Prabu Natarajan

Yes.

for the say ability our higher question, Xx. buy the to comfortable in market ratio bit to David. at material impact running a thanks we're low don't our see that shares. leverage I'd say, to getting this We as to in be to continue committed had about we rate So, environment, interest needed. I'd leverage a ratio little a point, to

our this turn, of cheap, incredibly mentioned, as leverage mentioned. we by a acquisition it's X/X As particular and increases I

comfortable pretty it is it running say where I So, right now.

do and to get in to just quickly. no terms notionally plan roughly earnings than that better of say, to I it FY to think delever, we'd in grow way I'd Xx XXXX, sometime the

But there. of half So we're sometime second XXXX. probably in I'd getting committed to certainly say the FY

David Strauss

Where you now? re-compete last up were Okay. does talked XX% The revenues percentage year. that had. And this one of that about I quarter that I last for think stand

Prabu Natarajan

that would And bit in I'd call still It's that's re-compete frame for that's expected one there's a there material. is now. XXXX pretty out more say, It's it NASA on say little summertime and I look We that's year. that NICS. NASA be, the have one. FY clarity to this the now, is I'd lower

David Strauss

very much. All right. Thanks

Prabu Natarajan

Okay. Thank you.

Nazzic Keene

you. Thank

Operator

Gavin We with Parsons from have question a follow-up Sachs. Goldman

Gavin Parsons

Thanks.

ask talk are on we up, to to full ramped wanted drivers? CCE still Just at the three or the an time, update those those Have contracts rate? used run growth all EDIS, contributing FSG XX, are those and about

Nazzic Keene

to exactly they're all up, this ramping don't capacity at they're full I that. yet. juncture, think think at track on and do I

Gavin Parsons

RITS. and rate there dynamic or – a before, had the amount run slippage confidence of probably you then for in Is pace of And the do the or a guidance with the SDI of in there half ramp-up the of There's Great. a the have to those? you cushion ramp-up that, the depends Okay. right. second that any mentioned I been mentioned on good contracts, the as in of

Prabu Natarajan

a mean, want execute It's that the Gavin. process place. I lot sure in plan require think day question, things we do starting if there's of Yeah. especially a can that really from we have will a hiring to be ramp, one. about we plan way a We to good the the thoughtful about that make is

rest ramp year. say, I'd the these the way possibilities time for therefore the encapsulated scheduled this with fairly we're are range of the of for the So out and we've around programs comfortable

Gavin Parsons

Okay. Thanks again.

Operator

how Your next name, to pronounce from von, Cai of sure I'm and question the is last not the line with Cowen.

Cai von Rumohr

try. Good Okay. Thanks.

I bit So you little if joining it, awaiting – give the apologize gave but you could you a decision? late, again bids could so

Prabu Natarajan

billion, $XX.X Cai.

Cai von Rumohr

– And then much. billion. you Thank $XX.X very

Prabu Natarajan

year-end, from had news, but – Down in bit a we that's Yeah. from because of little QX. the

Cai von Rumohr

seeing should like to Are for have two going normal going look Are – And the delayed we see next bookings kind are the we quarters? Obviously, number What a complained and then the of administration sort seasonal bookings. pickup? you of folks to for of quarter last the we Exactly, flush? of super you had on basically about next the for? exactly. transition What good a

Nazzic Keene

mean, normal anything what seeing really overly just or aggressive. I a seeing that's anything today we're environment. We're flow is that's not overly

of of normal processes cadence RFPs, space in customers. a of and and our awards seeing we're So our

Cai von Rumohr

above look yes? I QX, would comfortably normal, in If QX and I at say, one history,

Nazzic Keene

to -- before We're we've to last and going not the four been we're appreciate able this give book-to-bill. I'm and quarters bookings book-to-bill Well, that a the with actually that. out very guidance pleased not

So we're business development I'm very, very today. with pleased with and the where bids. pursuing we sit performance on organization of the pleased very

As we lumpy. book-to-bill know, is all

that anything so past comfortable ability and as we But at at going very pipeline, maintain tell outcome a we you at look quarter at schedule. hard because really our I'm a look that it's that And strong the book-to-bill as submissions, I level of to as the performance, the we the look becomes to will customer's with predict forward. decision our

Cai von Rumohr

in I or were other you the you the lost protest, either end then contracts comment two protest. you any think could four specifically, you had you of toward year. protests And win side? those Great. And the And the of have on offense protests? do on defensive Did those

Prabu Natarajan

It's the this was since say I'd update nothing watching with I'd sustained. but Cai, So else, year-end. only one probably was where the we have we're unusual. of competition everybody protest again. There a say cycle back into I'd that's just say

was protest worth them of sustained. One

Cai von Rumohr

very Thank you much.

Operator

like I to turn back to it remarks. for closing the any over company And would

Shane Canestra

your XXXX much SAIC. fiscal call, for This for call. in Thank thank earnings we you year interest the and your you first concludes SAIC's very participation quarter continued in

Science Applications International (SAIC) 3 Jun 212022 Q1 Earnings call transcript