Science Applications International (SAIC) 3 Sep 212022 Q2 Earnings call transcript

Good day, and welcome to the SAIC's Second 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.

Good afternoon, and thank you for joining SAIC's second quarter fiscal year 2022 earnings call. My name is Shane Canestra, Vice President of Investor Relations. to SAIC's business Prabu Chief Chief Officer. today are financial Natarajan, me Financial Keene, Nazzic Executive joining discuss and our results our And Officer; and of our XXXX. XX, the Today, ended results will XXXX that discuss second we quarter fiscal year July for you'll issued be where utilized with call. find afternoon, in at we can found presentation earnings conjunction our This supplemental which financial release, be investors.saic.com, also to slides today's evaluating addition in call. should our Form results be with to along soon, in today's to XX-Q be filed information utilized These our on outlook and documents, provided note statements known that Please that uncertainties results today's we risks statements unknown materially forward-looking may that to call. on made subject differ cause this actual make to are and could call and from on SEC of XX-K Form XX-Q. to a Factors for Risk the you Form these including quarterly of refer our report discussion section report on I our annual risks, and on filings

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

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

us all joining you Thank Thank today. you, Shane, good and for afternoon.

experience of relations very Before assignment several Those news be a a the the Shane an on I transitioning Canestra community in that public exceptional be our leading social function. investment of time closely you development. of I new have joining to company, Shane I in This moment Investor am focus growth many us talent to is you like will well. the in the our will smooth example wealth Joe corporate of closely for begin a Joe a next leadership a quarterly SAIC. Shane's to some our know great and weeks investment seamless excited and our ensure DeNardi, work past with you our role years. responsibility know update, and few into many lead transition bringing continued over worked of share within would with over of take as function, transition sell-side to and real individual who his investment the from also Relations Shane analyst. community. a will prior

to at on Now business the hand.

and well of outlook We SAIC fiscal to are second while our performed continuing shareholder long-term rest on strong quarter, value XXXX. creation. financial results updated excited for quarterly results the to execute year for our very discuss in strategy the delivering

the for was quarter, outstanding X%, line be quarter XX.X% in margin organic continued third normal quarter generation Free quarter another was all-time team flow consecutive organic of strong growth our delivered Organic the second after our with strong and revenue, margins last to During growth cash producing growth. record and profitability. quarter. increased revenue second approximately EBITDA seasonality. high Adjusted

and for capital share balanced a creation long-term allocate to of value M&A, accretive dividends. continue We purchases through mix

tomorrow. We while we are into performance a in strong and focused accomplishment proud future. SAIC the position of remaining ever on our vigilant is driving as our

strategically balanced and are business We of positioned with a capabilities. portfolio

digital and while delivery talent solutions these our customers to also engineering transformation, models. solution critical have our artificial and development in We newer enabling in in innovation intelligence technology, investment including acquisition accelerated and services areas, and procure

of discussed solutions. we quarter, Koverse, a creating artificial key For our step the example, in our intelligence platform acquisition last for

important an new start number we of as off encouraging seen Our Koverse are efforts great with opportunities. to business a have

intelligence and Koverse’s and excited customers machine the deep utilizing artificial through about our combination complex, mission technology differentiation of to our on bring are the learning sensitive understanding data. We platform can we unique

quarter, With repeatable end-to-end our proven able digital value of we suite launched the integrated of immediately tools to in are This cloud. cloud processes tools. another and the and with CloudScend, legacy solutions CloudScend, and systems unlocking suite technology systematically we of modernize customer's

with cloud, our with and success such seeing our customers. already from the zero are cloud and CloudScend digital components cost delivered we innovation, in a total areas applications in CloudScend. customer. XX our we and assessed, to We cybersecurity, lower our improved ownership modernized the SAIC customer, as for trust and continued to rebuilding value delivering Army application performance an and strengthened application work in a by leveraging of environment migrated cloud migrating where to investments are By significant Combined

through Our continued our deliver greater and adoption technology. customer's accelerate, tools solutions-focused needs mission emerging of and to investments secure

significant also specifically growing Health. made have our in second in the We expanding presence Federal quarter strides by markets,

by off from Our acquisition immediate leading are providing customers. by the customer leveraged of intersection access Associates and strategic entire well access capabilities sector vehicle and of start, Halfaker performing with enterprise. a driven Early successes and is and to the strategic brought Halfaker, contract market combined good the health offerings being to

retention our largest support climate-related to culture the critically of labor to challenges. a a ability We market the I also our of scale ourselves breadth Scientist in of to the cultivating the asset, of new recently strategy, Chief announced made Talent administration. attracting our SAIC further Health the our to note we for hiring, element industry-leading team solutions a strongest with critical now and to priority promotes our differentiate our opportunities advance in accelerating integrated a mission, full leadership am exceptional and in address one our of tight they deliver important a commitment SAIC strategic the in committed hiring and investing business have the Federal Climate of capabilities development as one to priorities. in this SAIC's accomplishments We talent, we talent. and customers important customer are pleased With Halfaker, pressing available is It and as market. to most that allowing teams fully to is remain

in the our underscores Our is technologies, key base continued commitment the actions our in of talent. to enabler securing a investing profitable emerging quarter differentiator in and growth second expanding talent taken mission customer and critical market. The investment key in

to We important will areas. technology as these make mission and in we updates share progress continue

what seeing now turn XXXX. market fiscal in we to of year me we as the last are Let the enter government month

continued planning customers award Our making decisions. future for the and

working under continuing with be year. budgeting it will While fiscal in is indications the leaders the a place process of government calendar that through XXXX appropriations likely very end our by year that the the resolution, are country's start could

this federal the budgets are to believe unusual largely more that also it President's environment. We but not in is knows Defense. While optimal, navigate perhaps not how of with and initially shaping the for Department and bit line requested favorable, a SAIC successfully request

is technological we While encouraged recognition by investment. the the the still process of are continued leaders from our unfolding, country's importance on

continues to new Of of return caution. to everyone's the in a at forefront normal. the well, operate cases environment, the course, of has Delta to pandemic but the SAIC resulted and variant the eventual to thoughts, a an be also forward continued navigating continues emergence surge in looking

wider approach for details with as talent This results area. open to our can to now our quality we for rest remote. the a Prabu well flexibility work aperture continue discuss at outlook second of our and providing SAIC while to will employees a is be required work continue geographical customer others hybrid some our This plan the or from quarter and workforce. talent financial site of objective attract aligns recruit environment, by to recognizing or retain will the Our for in partially are year. fully high

everyone. SAIC afternoon, of performance another Nazzic, across Thank delivered of strong good you, financial a measures. and variety quarter

the align long-term future. near-term to continued deliver shareholders, our while necessary to We investments to our in for to continuing the make

contract trailing start The business the for to quarter, total quarterly of continued solutions. contributions the $XX XX-month was billion, At stood and of from SAIC's backlog translating proposals $XX our strong release value the of year-ago. approximately end of XX% development bookings submitted up X.X are a today. demand the healthy press billion, pipeline book-to-bill at in the me $X.X quarter, were and by our Let quarter with book-to-bill over to X.X. the of end disclosed reflecting second our our from second for quarter last a quarterly At up second larger billion, $X.X nearly bookings Net a billion, results. a

submitted value half is new opportunities. of of proposals the over for Just business

me results Let financial for turn now to the quarter.

amount up for billion contributed quarter and due Associates, partially closed Our the of completions. growth by second quarter of and quarter. in early to fiscal new of existing July, estimates year reflect on X.X%, approximately contract a revenues which favorable Halfaker the and contracts, in changes to $X.XX ramp of revenues compared modest contract as last net offset second

divested revenues, and acquisition impact grew the by quarter of X.X%. organically Excluding the second revenues

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

Second across across amortization margin accelerated the acceleration very favorably on performance favorable off-market solid and of portfolio, quarter the off-market liability contracts. was profitability quarter estimates the and business from in the XX The $XX changes contracts of earnings the quarter costs of amortization benefited contract strong net certain of totaled inclusive the $XX the for profitability. basis liability per was second and Diluted acquisition quarter other million. points integration share and quarter or $X.XX adjustments a of million about contract for

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

XX and $XX of were Second solid approximately quarter of million, generation the days. quarter outstanding day flow free cash cash the a end quarter at was sales

quarter. Second quarter year modestly the generation prior below was

from tax $XX CARES by last about benefited year’s as million payroll the However, Act. afforded generation of deferral

and capital share of deployed capital second the Halfaker $XXX we repurchases, dividends closing quarter, of the the Koverse and towards expenditures. million acquisitions, During

we ending of with to X.Xx. the addition, leverage quarter repayments debt net continued In making and a just ratio mandatory under delever

running our targets of this are on due front ahead performance. internal favorable our We modestly to

debt to continued in the repurchases repayment voluntary over quarter. share prioritize We

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

release the end Now, lower previous performance Slide and turning year, million Halfaker of of outlook Associates the than impacts for updated billion, million, the X of estimated $X.X Based and approximately contribution anticipated ramp our second rest earlier in the guidance previously and down on Associates. between lower and This to for range full-year portfolio slides. on following: we our billion the the our programs million of Halfaker our adding addition and of $XX by $XXX the approximately somewhat from new noted $XXX $XXX raising anticipated. forward million COVID achieving of outlook from press $X.X reflects quarter, and as have to presentation and the revenue today our to

quarters. few trends, Given the in our continued recent COVID we to chain see next pressure over portfolio expect supply the

our per challenging the solid fiscal reflecting up to of between higher strong earnings $XXX growing of from to are top with between and to execution million between strong Nazzic, to strong without our range, we our any investments second the remainder business. bottom performance, diluted up, X%, back XXXX are unchanged performance. first anticipation you. half performance million. range, this recovery reflecting flow $XXX team of both year. we increased from in previous costs focus pleased the impact EBITDA our with raising unchanged of However, in and to and continue top we at indirect bottom previous the and COVID to Summing our the our have raising and on but in $X.XX and year. $X.XX, the prior Adjusted expect over year-to-date end half Adjusted QX end or estimate. margins the portfolio continued look cash and X.X% our On profitability Free dollars, in Halfaker forward million EBITDA of share $XX of increased and

Corporate Before would like highlight XXXX to recently your taking published I SAIC's questions, Report. Responsibility

to us from multiple making diversity, focused stakeholders, better strong heard statement who very our equity technology our It are is corporate is to take difference world. you've and core change, SAIC protect climate a power the governance venues, advance questions. are in on tomorrow. is and creating in As we our environment for reflected to committed we communities. are to of and and a ready and to serve From innovation inclusion, now to purpose we Operator,

Cowen. Rumohr [Operator your the line question Cai from of Instructions] von from first And comes

is line Your open.

you very much. Thank Yes.

that it we So COVID first, Halfaker. your we correct? organic if and second growth take half. essentially take unchanged guide it's And Is And out imply like your that if in the like out so, the numbers why? looks looks decelerates

Cai. Thanks Hi, question. Prabu the here. for

for the We're it. maybe with right performance our to In of months terms of year. six guidance, just the very jump I'll [year-to-date] pleased the

of I balanced as year, line. topline I range. end really We topline view at the think a of bottom six bottom our second would the as followed We first risk the year. well quarter us this as point the the led a call of guidance first both to quarter what and good to that on derisked, months guide the increase the in

In addition, year, the the that top-end, form is on up out us of continue have second do ramp half there. also and SXI have the of ramp of world talent ensure get we the in the we right we ahead the going to to on the restricted work in

XXX adding upped on of say, more little I'd the quarter balance, given in we end XX second a Halfaker. to sort muted lower by So impacts added the and of and maybe COVID then Halfaker it,

you question around to see in the in seasonality softer the as this QX. In of business, the half, the deceleration terms of second we of part tend know, second sort

actually on second the you productive have fewer days math the half. the run working first second versus number of four we the half, half the first actually If half than days in in the

extra million. or occurring, half guide approximately of to so on you But top-end for the the million number the $XXX if to is our that of first caused that at SXI us annualize [X.X], do if and the sort to of days range $XXX [X.X] second half you don't So that, sort in year, have took that get the reality sort [X.XX] about we be about of the have revenue so. is effectively four we ramp

of So that's the sort math.

what a As is the need consistent of but six important performance with us. pleased remainder team year, in has next on is what to six go months of know you business the incentive growing It we go basis first of the in the know, to got of months. comp metrics the our accomplish the therefore, six months over really We're the front get to part and it we've here. obviously we

positive So be a we would performance at that continue view to a we one here. of take time go we the hope to quarter able as

Right.

organic negative. mean, just the So I look at I one, at – growth look if was last year, I the one last if it

So a COVID difficult it's have down is and year-over-year. you not like very comp

growth else second trailing at least So happening? little mystified I am second the book-to-bill, a in something would basically there the X.X-plus still XX bit half is why with And given not organic quarter. to a equal

Right.

So the Cai. we get question,

here, we QX, and go have we the as I sort some hope got risks seeking second as I but conversation here we're in December year. have said, what And trend I positive, through run in after there in that performance do around want the wouldn't I there's are think year, but amount but come of know view we to walked remainder math, be. a business. the the six in we've a out to of do next ways we've and transparent again, another I of math to some go really might always But left the the the the work acknowledge to to dynamic six with with months, quarrel the about the offer still in in way pleased still balanced the in COVID fair talked we're And we to with the what back implied half and of because the being got rate lines of a team, months. the

Yes. Nazzic. Cai, this is

– said. with couple that start let’s Prabu things a Just of

ability a still Prabu accomplishments to we've the as on look, we a in of deliver pleased, first as the mentioned, got feel go. the obviously, is going I confident business. good there trajectory So I year, our and and But to mentioned, the for as we are believe with year half half

still year adjusted we guidance set believe this metrics visibility, there that the Halfaker, is as again, so And half a incorporated Prabu is topline, derisks risk a balanced very go. and but of to provides mentioned,

and really always that optimistic, point, the to how risk want make good Prabu’s business, we we we we're elements there's to into it. we feel about look play it sure So about holistically. of at come And that's but that think

Great. very much. Thank you

Thanks, Cai.

comes question from from next Greg your Konrad Jefferies. And

is open. line Your

been of are mean, question, X%, evening. – Shane, you one-timers just you to the the profit where think down in kind looking opportunities looking some has that called at Good help guidance at side, he of adjusted to on on bridge work you’re And congratulate QX. for kind given those, out of a just But implied I goes EBITDA Can following still higher HX investments. in up and just I above at wanted midpoint with. pleasure last even to maybe and the X% the the

Got for it. Thanks the question, Greg.

there quarter of in some prepared also you my quarter. the had favorable, items second in materially the mentioned the in number I As second I adjustments as them in impacted first profitability favorable we that were quarter. significant a remarks, call And recall,

we a happen. margin Now business in see in sustain business of to One, half invest continue to to and expect math up costs and think that we to second starting I a would of have two, spend the will to line. the first low-to-mid spend half. X% EBITDA relative of in expecting in the rate, first are the the year we And imply the we the the growth couple to half have half year the in and things back rates actually the are half second the underrun some also ramp relative indirect we indirect that

XX.X%, from the so a So second notion to sort us in took it to sort call quarter about, if drove script, again, I of mentioned I'd of basis call X.XX% in that I points quarter. let's of we it, that as adjustments, get the to, XX large profitability bridge you back go the second probably that offered

So quarter, rate we X%. make gets going to implies of of that the a the to we the really back of little which it to a business. is, low-to-mid elements good I to planning margin you we're performance at going then the this grow investments, form a sort that – question, I'm add then to And respond out sort out in we're out sort then this we're but back it a half about couple second take you quarter in executing pointed but over time if of of additional of X%. to responded way I and while what one years prior look, three for do business, have and profitably sure the go quarter in know a just

we So It do. profitably what an for know to the back of we're need part math. understand ensure is the teams go the that business. an half to metric incentive important We us growing

forward So again, drivers are about the and thinking having I'm but we’re the looking performance to conversation broadly of EBITDA those here. how specific sort

follow-up that. quick just And then to

raised given and any offset or Is for You changes unchanged the EBITDA. kind topline an some is cash the why of of acquisitions? there the fact

look, yes, in saw EBITDA proud of On primarily execution we're adjustments of as on second we as year-to-date the cash, the our So I term, would well topline non-cash. EBITDA. some cash are, on what quarter

a year. earnings So without corresponding this they pickups were element cash

our hasn't that's cash part in changed. So why diet

actually of this in go of we more cash the And about cash last a important the the in basis on on second we an for year-to-date on I if if cash. higher back in adjusted you factor just first first XX% we we're of seasonality have half flow, the of deferral. know to the if that deferral you of you got about it versus the operating think of the lot basis actually what apples-to-apples, about half do therefore, year, on the XXXX, year an cash think cash second if business collected half. And think payroll payroll and half first the you the the gets for is adjust a in XXXX comparing half

cash cash on believe a we a of good rest over lot basis, on a of the said, really we're on to converting of convert a we're really on have longer-term year. working in cash, there's but going So basis. to I form into strong the important always go hard income on I’ve And cash again here, think because start to really the keep it's to off opportunity net cash do And DSO. that we to EBITDA collect

work essentials the the I'd generate is the to moment, to going say long with we're collect back we the long-term, flow. operating opportunity to structurally where we're the for So this in with cash the good to comfortable continue some over as guide half but as cash do

Thank you.

from Seifman JPMorgan. And your from Seth question next comes

line open. is Your

good very Thanks afternoon. and Hi. much

afternoon. Good

the was rate? if contract. you AEGIS that topline talk in accretive the could whether the – wondering it was the did on the how And factor is I also to and view into if NASA about that factored to that that extent margin

Hi, It's good afternoon. Nazzic.

protest, likely as aware, did GAO the dismiss to which drove protest. decided year. protest as result you're the file a has this a earlier So And NASA that to action, we of corrective take

the status where So today. that's of are we

for our As to, do course, the so. to of continue power it that maintain continue in to do and continue support and to mission, their to our ability work customer, relates we'll government to perform everything we

line the we the As holistic and guidance, we knowledge that to a risk take adjust the it we based and our the have bottom relates on as with topline contract, any view, forecast today.

element the that And have we based there at that an factored that of so in point. on is information this is

on out at as the topline were of quarter about And played result the business still you business, sounded this guess COVID yet a some then could things challenges as year. that logistics the expected it we Okay. there impact of in how then have and saw maybe fall. far and I And in look COVID talk if the as you like

the expectations? business growth and maybe it's what headed of are and your in that sort where takes puts So to

when between week. chain And squarely certainly $XX.X that back of signaled to start closer probably supply we're week. in of look in business to I range say, a we've and midpoint and the we’re to say million a this in recovered The million to to at But we're tends respect is any range point, operate think seeing with in And million a business, where that in March, So that we that $XX is business $XX business million of $XX the the midpoint of see sort volumes to of $XX business was better it it COVID. maintaining sort it that worse probably rate million, not not QX, the QX, sort at effects weighting last than I'd at than any seeing range. back still the was run of of I'd here.

I impacts of we've we're the quarter, as estimating think million and the the script. from offered that in of COVID year. of annualizes about tell sort to the we're $XXX we of what can million that $XX the COVID you running are $XX in And impacts provided, a about for given sort some to data million at

I'd at So and say are item fairly business. a volume for it's in But time. that's it's here I'd that stable time lot we a watching weekly obviously, us. where this watch say spend of We

Okay. Great. Thanks very much.

Thank you.

Wells Akers Matthew your next from And comes question from Fargo.

is open. line Your

Yes, good Hi. afternoon.

Good afternoon, Matt.

Congrats to all your help. Shane. Appreciate

Yes. Great. Thank you.

wonder you touch could if I on environment. hiring the just

and was sequentially need the sort out in to release. labor are okay? just on Do headcount in based I flat just seeing you grow what is And you market? of guys think your of that kind number the there headcount

Yes. question. the for Thanks Yes.

tick well labor for market seeing now, right employees across couple that for about of coming conversation you're a the slightly and obviously, and there pandemic, a So the tighter we most as acquisition some have XX,XXX our includes industry right, is grow. of And the around Halfaker. certain certainly opportunity to industries attrition out that's One, reasons. up of as probably we're and

– had already the in we hire, we able well offline very pandemic, time, that we height remotely to the the so mobilized to Now and the during use with we that us to said, being do that situation, continued interview, into manner during we well that. as so served exceptionally recruit went of had pandemic performed ability and an

in opportunity We talent whether customer result the focus lots for to employer to of the the leveraging from comp as as and flexibility, of so ourselves to obviously, traditional the company aperture own government flexibility ourselves differentiate with opened our by also, be an of to And we have as us. continue geographies on well hire that increased flexibility inside then to investments choice market and drive methods. the benefits a

And certainly as to that believe it of is we go in hiring play, and a our tighter and and reacting and can labor relates retention being of as those things certainly held so staff. hold into ourselves all well But set own of apart to ensure our that proactive own we're have cognizant there can market. market we that we very as

you. Thank Great.

Thank you.

question [Operator Instructions] Your next Parsons comes Sachs. Gavin from from Goldman

Your line is open.

Hi. Good afternoon.

Hi, Gavin.

Shane, on the new role. congrats

Thank Gavin. you very much,

if fast offsetting visible about revenue to Or you're the or can into but cautious the implied that just risk up growth is and wins back that in you don't being of on you the the to risk have risk headwinds half Guys are on grow? deceleration elements ramp touch back headwinds, half, have visible talking that visibility the have how that you sense? growth, you and in the on makes wanted about. headwinds, is Is what offsetting necessarily you actually unknown

here. question. take Prabu Gavin. Hey, I'll the

into AMCOM all indications said on the the to growth ramping quarter. growth at half. We good actually ramp on of SXI. start SXI track We half. we're visibility well the RITS said second portfolio on some the We year are And up would ramp Army second in starting in through the the have half year. the that second of We in back will saw Army the RITS

standpoint certainly have from visibility. the we So think visibility, I good of

portfolio and impacts we're think be that we higher you a dynamics contemplating. the I can what don't around near-term basis have within specifically COVID and don't, people the see the could if what potentially most on than that

the market have start say I'd to but place the these we it where a cautious to the to is headcount a ramp, also in get tight us do see is labor go on So We element for guide. there ramping programs.

what it's half the So we experienced, deceleration be year, the way those causes cautious year. last thinking severe us at things given we're QX to of around back of combination that QX a was at about perhaps which of probably the

these lived to at the painful top that back half but done. we're think we we're having call, results means to cautious that some get we about have of at hoping call, sure better as lesson, actually I topline the want And the to of the again, go year. said have make on of QX how we So growth about the things

the just That and trailing sense. is entirely helpful of how contract this impact the rates? strip Okay. from that what's run specific about accelerate if that be business year, to you bookings on to the and the impact last do to year right forward? This detail Or think might kind That's we as have that? difficult were you but do, still growing makes your this well. of out do going near-term Or COVID

There are of question. this it. think to a Got ways about couple

say one, the at at I think, of this X.X% you certainly second business COVID impacts could year add a and here's quarter to organically the the growing X%.

QX think that here's you business you get number to the say, the That you about on the momentum a year I half the And way and lesson. inherently think organically from build that's in COVID second apples-to-apples, eliminate that's then basis. about I'd this, SXI of think to at? start last the business way this think there's of just important what growing is is is which into to ramp. X% encourage range impacts But that math about fair will low of this there's an we year. before program the say probably apples-to-apples to in I'd to And another the sort comparison as I where an think percent

lot COVID XXXX. maybe again, target there on $X you're created still a just the on track for lumpiness XXXX for cash it. original of too, billion Obviously, but Got flow. question And last and

If of you there's XXXX, that deferred were to payroll we similar? still to around repayment of impact period, forward the roll think include XXXX the lower I the realizing should including taxes, two-year some higher, or is there, COVID think

we way some will strong of to it]. that changes I've there's always said us from that said we if So cash. better a [learn is this in that opportunity also DSO make business allow to the structural get generator I've

our guide this it really going We're metric So at but to FYXXXX say to we're certainly getting is important on for not to it point, to on way that cash suffice better us. cash. a

higher our given this fact, year. we've long-term In in comp starting incentive weightings plan

we go cash. have and that to to generation over are solid going we're next And to know do what of we cash, look, on going So years. we keep doing few the

Got it. Thanks, Prabu.

Yes.

incredibly is I metrics an lot you about attention important passion area but voice think add one a in is, the of that there can Prabu which hear is, an from the noted talks thing see an I and is us that. as he we'll his can of compensation, of overall focus the when it, one area to benefits I and that – he know probably put he where it's this and and

Thanks.

from And Securities. your next question Tobey comes Truist Sommer from

Your line is open.

you. congratulations. Shane, Thank And

maybe a to stepping they then You’ve will in it I in projects performed making in and material services isn't be role. a the like diverse fulfill from you're changes perspective, for of continue but looks been we've needs this superior future, way really to sure your in a more that kind internally back. studying, the in your foreseeable dealing procure they be and that fashion, done? to longer-term are perhaps And changes seeing client's and where about with you'll to a way perspective from ability I'm fashion DC-centric? perspective question allow that customers work long-term we as your and staff different from now there next a Are COVID, do wanted ask

are Thanks, on and let those. substantial areas Tobey. me Absolutely, I in pretty touch a few a change seeing think we

it's it whether with and more common to talked It willingness certainly workforce Board. seeing as commercial the or themselves the or been them ability in of certainly some have And either industries asked whether different about working but that they work you to offshore, way been now. – one been do government, of we're relates we're remote, differently customers of like part federal of You us probably in the seeing nothing for engage they has the business, our one to across how about it fashion, it's it's them has in but work.

stage that pandemic it's and a But customers know are what so allowing remote well So say a – of permanent, past as are don't permanent I seeing our office I different I'll a doing this whether will with do as particular for we means. endure that change believe an partners. geographic their as employees work they're city, flexibility whether both their it's in with own many

with And way. that. that continue be we’ll so – I we'll do able believe There to some positives continue are enduring that come that, operate and is that to to

earlier, talent I cost be cases the individuals allows, in the more in It the which in it labor ability there reduce at more As a areas allow ability parts some some and – hire to recruit, hire retain lower labor able to different to in being in does might cost. country. flexibility hire our mentioned of of

And to some the we to be access in benefit greater market geographical just a the it areas allows also where cases tighter do to see in and talent. so labor tends that, many

a that our that's enduring think create seeing enduring. this opportunity I I to so think as do is customers, And of We're permanent and business. way will many

work the some that obviously, there, that that ability we'll talk of it lower and provide benefits a but standpoint. government insights to investment you've will certainly from real for plus, as estate XX% continue of we're and we make at to an part the other that's looking just our then and And competitors and also being and footprint. obviously through structure, about portfolio that heard reduce Now, cost guidance opportunities decisions from us as the different well, the of potentially cost allow something gives our is

well we that, that will that enduring something is as look believe be as So we forward.

On my financial you at are to we're changes, And at you net in discern into impact is able at to follow-up. these which Thanks. profitability not be an level or isolation. going the within looking both real customer basis, the whether dilutive? to aggregate accretive went company the and Are estate implications, point of this

about predominant on I'll say this parts take that a in really plus cost balance, would given in cost ability one. way that the important to think out this. and reinvest is the that mix some business take need I to investment portfolio the of right now,

want cost going that see balance, So grow in to but to on business. to we're continue reinvest reduction, the business likely we'll are we to some the

be the rate margin invest that will but financial in to significant flexibility not investment. a So driver long-term, for need you areas I'd company perspective, say a to profitability over say, this it I about additional the as the from probably should think

very Understood. much. Thank you

Shane closing will back turn call questions And for remarks. I this further at now to the no there are Canestra time.

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

participating. call. conference today's for you concludes this Thank And

You may now disconnect.