Science Applications International (SAIC) 28 Mar 222022 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the SAIC Fiscal Year 2022 Fourth Quarter and Year-end Earnings Call. [Operator Instructions] Thank you. It's now my pleasure to turn today's call over to Mr. of President Vice DeNardi, Investor Relations. Joseph go please ahead. Sir,

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

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

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

and Joe, morning joining our call. you, Thank everyone good to

as dedicated the a ideals named our lead to on group and in our It growth using the the our strong in of is would focused provide fiscal results to performance our the evident with in my serve results outlook recognize our we for we SAIC provide company year both It what in like Forbes to being showcase is and sectors. our discuss our with best two recognizing to technology from in be strength their to speaks the who day. customer I exceeding culture protect million and last numerous improvement see we over of year level a execution employees it financial fiscal in of $X.X is It privilege we government hours contributions an volunteer for including XXXX is of due made years. expectations XXXX. delivered the charitable strong fiscal to value This values employee the country. of and XXXX, continues margins in support 'XX. on of combined year financial scores communities every strong is and contract such to dedication the evident to the Before evident our enables employer Veterans which And, our employees, employees satisfaction nearly customers and and very by evident expertise top in awards performance communities our and in inspiring XX,XXX their

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us our capital deployment the additional and shareholders confidence this. Our drive portfolio highest and investing an our in profitable provide to is Fiscal our approximately by XX% on outstanding. to business to priority increase to plan for growth, returned positioning sustained, our for 'XX the clear, to To just capital retire in have X% plans be Year opportunity and shares we of do

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$X.XX fiscal of revenue we the For XXXX, providing representing year to guidance roughly are at billion for midpoint. X% billion, total growth initial $X.XX

margin adjusted 'XX X.X% execution. EBITDA assumes year strong continued of approximately fiscal guidance Our

fiscal generate to million expect XX% compared of $XXX performance. cash to $XXX free the to We cash over 'XX midpoint, in the year our flow million representing at growth range

our improve. Before and in our expect detail, outlook performance have we areas call would performance more where results to turning where to over I the like areas financial to on excelled of Prabu financial to discuss reflect and I

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in want business further well, am I driving While clearly year on to expect long-term growth. where prior those come. years continue of represented to increase there our sustained the our are to have we means Fiscal areas deliver The that primary to acknowledge we improvement shareholder I improvement. relative in focused an performing are to and value 'XX this and years, to trend rate organic profitable growth is

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In program incentive with fiscal for 'XX we addition, beginning executive the compensation leadership. modifying our year grant, the long-term are

to of holding increased that our We higher importance total return relative to ourselves tied appropriate standard while of forward, have our I challenge by TSR. the shareholder impressed a the going company. increasing one and This is in one-third energy commitment the the reflects payout, substantially be a across 'skin to the such to will am game'. continuous and improvement drive commitment is we embrace. we It believe

headwind perfectly not represent year and our to things, 'XX. contract in in progress to fiscal recompete due transitions linear growth part been has most like a However, losses,

with and very opportunities future. submitted strong remains pipeline, growth drive in roughly to ample $XX stronger Our billion value of the however,

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IT approaching pipeline manner portfolio This focus allows accretive and development emphasis to outlined with innovation will win our capabilities and of a us including by on decisions improve strength, third with shape our to in strategy. our on we ability that engineering with our pursuit call, are our As and quarter organically our our aligned new markets sectors, together factories, developing an services. disciplined solutions business,

we XX% fiscal cash expect to Finally, roughly to market equivalent flow of 'XX free value. our generate year in

to take value. to a long-term shareholder capital approach call the to Prabu. continue will disciplined deployment turn now will over to I We maximize

with as our and you, financial some will then morning, well summarize fiscal reported line fourth XXXX in to improve quarter the I billion the are I for for our XXXX the quarter transparency performance as our the most slides recent in am disclosures We billion with $X.XX year the additional our pleased our fiscal in Thank outlook and year, designed and for performance of good discuss providing supplementary business fourth overall year $X.XX we Nazzic into quarter. quickly revenues and everyone. business. of guidance.

represented X.X% organic X% the for total of quarter, roughly growth total For the and organic growth this approximately and year, and, growth. X.X% X% growth

with EBITDA execution, offset partially fourth the plan spend, good margin impact higher investment guidance. X.X% of program our reflecting our than adjusted prior quarter better of was by consistent Our

performance and quarter and year and points basis earnings of year-over-year of margin on to for the basis and by X.X% mid-point Our We full XX higher the reported per the guidance XX $X.XX of year rate. nonrecurring EBITDA execution our driven of for certain tax stronger basis a for the program due year performance adjusted strong benefit above with favorable a items. adjusted $X.XX initial the points share was

XXXX represents QX Our provision growth implementation the XX% Fiscal increase we roughly have full-year continuing amortization XXX of line that the and commentary December, of cash deferred. mentioned, call and, R&D Consistent Nazzic from as this flow into be Year assumed free with our good Year we million a in sight $XXX of in year-over-year will earnings Fiscal XXXX. have the Section

quarter the resulting were approximately in ratio X.Xx the quarter a in $X.X of year. and net billion, Lastly, for for X.Xx bookings book-to-bill the

X.X now of duration our years which Slide presentation. at on indicate nearly backlog XX Our stands we

guidance for and million approximately of adjusted margins EPS flow initial We $XXX billion, fiscal to of EBITDA of to $X.XX year cash are $X.XX X.X%, million. free $X.XX billion $XXX providing to XXXX adjusted revenue $X.XX, of

and to of factors and about well Our X X from are would to outlook which headwind X.X points assumes of fourth acquisition few make I a guidance tailwind Halfaker reflects points days on like from growth X revenue X sure of tailwind understood: contract the our different transitions and total working and our to quarter from new runoffs; business. contract points of extra

on opportunities of properly the and contract and transition uncertain to the factors impacts the we this revenue of fluid against continuing We and business these year resolution. range known to from grow residual slower face backdrop a of start the our XX given presentation. Slide headwinds outlays new believe somewhat pace summarized have the the We captures

on contemplated what of a and modest activity more had several incremental X months. view our to the Our pressure revenue contract the previous customer is next guidance below points transitions regarding from with X conservative over call earnings we pace roughly

remains magnitude opportunity the pipeline of the our both mentioned, of quality Nazzic in and As the work. terms strong of the

I us allow to were pursuits going that fair of I call, win on the making the one third than quarter referenced unsuccessful share will on we new our confident more While are remain our we larger forward. business investments

some contains Engineering pipeline I remind like our Additionally, and opportunities service course IT would to over year XXXX the fiscal our significant across that you of domains.

revenue of terms at total year, first In low and fourth declines and time, growth single-digit cadence this we second throughout third quarters in and the low in expect quarters. the the revenue single-digit

one-time X.X% on our we which margin XXXX year fiscal Our earnings QX This approximately call. XXXX year-over-year of margins. estimate added to consistent basis accounting represents year performance margin gains points guidance expectations with full-year in fiscal when is XX the communicated for comparable certain roughly we

the additional clarity, XX to on XXXX from fiscal margins we For for a provided fiscal presentation. guidance year of our have walk XXXX actual year Slide

performance. continue While our fiscal improvement to guidance we have and see to over performance time drive continue margin XXXX, represents to in steady opportunities versus initiatives for our comparable place fiscal year XXXX year

We expect approximately $X.XX, tax XX%. adjusted range rate earnings which in of to of per an diluted assumes effective share a $X.XX

million After fiscal our and XX% have million communicated QX is over expectations slightly an than XXXX. at million our bias $XX for our the approximately fiscal year to we $XXX to year higher dividend, $XXX for debt repurchases, the towards increase payments million deploy market free $XXX XXXX This call we cash million in Finally, on and $XXX approximately of depending million expect $XXX to with conditions. of versus represents a December. guidance between midpoint on flow

expect end leverage net year. by the to X.Xx of of the X.Xx We current

Reserve Federal is XXXX appropriately. year guidance six our for and increases fiscal and in four our interest expense between rate assumed have We believe calibrated

set. to Additionally, capital our Plan excess flow cash per fiscal in well improving per our as expect deployed we remain XX% against expect to $X X% cash count that to with free XXXX. improvement peer Nazzic to aligned diluted year. our share we by at mentioned, on the year-end returns over highest the around When least share We in we combined performance with metrics share focused against increase and fiscal this flow, XXXX long-term incentive that in to is generate place compared we our ensuring free support a year are ensure an decline year

As year changes our Return our grant, XXXX, effect become for of in Total for our fiscal will team XXXX to incentive year we serving believe will TSR which executive to metric previously, SAIC Nazzic XX%. Beginning program a modifier a and leadership as will compensation versus have the between the we with by weighting improve making indicated, alignment Shareholder be further the XX% increasing fiscal standalone the team, and shareholders.

further our for these addition, for with in fiscal made We team, In incentive and aligning value will combined incentive performance continued SAIC XXXX, and improvement shift year performance shareholders. units those believe payout the towards our performance-based requiring year-over-year basis. away the equity will in curves on executive team’s we more leadership in long-term with a from units changes, result time-vesting

XXXX Our investing ensuring aligned our in call over fiscal and will focus year on long-term long-term strengths, demand our company drives to sustainable begin with growth, strategy markets deployment our and and turn back shareholder the our positioning for capital is I Nazzic. now to value. competitive increasing portfolio

Thank Prabu. you,

efforts unfolding like this I watching Libya and the would including human This family. testament humanitarian our the take Ukrainians company my another early with To people rule, moment of of a acknowledge quality the of relief forever Libyans SAIC to I we yet raised has toll of announced through a partnership the afar and crisis match. humanitarian the $XXX,XXX due Ukraine. Red contributions broadly and weeks then tragedy members support the employee American to With Cross culture over taking our to Q&A. and is for I X the on ideals Russia’s in decades over is by many will protect call heartbreaking fighting years our appreciation and world. a democratic at of Ukraine our the to customers, invasion people spent from Stand purpose the in your to serve begin operator where Before ago, to and shared I ongoing autocratic questions, we the protect. are employees. SAIC appreciative know We turn Having are the SAIC and am and aggression. driven to our Ukraine, to to family from date, sense now

of Bert Instructions] Subin the Stifel. [Operator from Your first with question comes line

Your line is open.

morning. Good question. the for Thanks Great.

morning. Good

cadence XQ to XQ? And to and how Just you're single-digit heard appropriations? organic about XQ, noticed in a the that material this increases decreases of if XQ thinking year, to and fiscal be a solid? the in low uptick start, for -- have following you single-digit that affecting And demand Is expecting that? then that is it growth is the which, you're revenue that just that low note is I correctly, commentary affecting in follow-up growth you was

Hi. This is Nazzic.

trying to this and I me team on questions. Let of tackle part tag address Prabu will and your

'XX. government terms in have award outlays. and seen we We timings customer this We've as of year of fiscal a seen pace activity started slower both it

slower some O&M this about difficult But to our we impact see particular some it's delay our outlays, a could business. the well. tad we the infer as as what have year of had to a think outlays fiscal time kickoff little certainly, this slowness of the So, in we at

the So, we're move to award starting some see to right. timing

will And have that impact. so, believe we an do

dynamic more that 'XX this expect year. budget question, do now your to to the has there been Now, some we improve for in certainty

of 'XX on assuming little I Prabu our then. year, back half of in second guidance. And do as we will the let a Prabu an bit the of indicated, as think discussion so, we're improvement half the about

the 'XX months question. data statistically years first outlays, clear year been pace is And outlays last of has the I of terms of the the maybe GFY for that in the than -- terms XX TR the X it of from Thanks or slower significantly and think the in slower fiscal so.

a up is to think going quarter. the of got to see way conditions I think I the in to your so, which it, times implied the revenue a I start of in part flagged GFY FY out as what's for amount see think second about half we've to guidance play that think is, built we we're in going and the And year is as the some second contract that couple there. -- And cadence going pace of a contract, 'XX fair the we're there second question, terms from to guidance. out instructions on in the the we're or of pick third new the we've business And as out seeing got of into year, we

start to sort in and to in you'll of start year. for that through it. so some bookings the so, piece the see And the cadence revenue the revenue of of cadence come that’s

Prabu Great. and Thanks Nazzic.

know for higher thinking army, one I question where navy DoD. at it How are growth you Air sort you. think do me, lot customer, the Force? exposure? that Or air Force? is maybe maybe fedCiv you think highlighted. least a Do it in of tailcone Just do client about tilt of is going be you opportunity shifting Thank you're in put appropriately you think the you to is level. out follow-up and the of the greater? of have that Navy, you Historically a force to And seems contract like terms then terms Air toward

Yes.

of that things the are a SAIC very we of is diversified very one proud have we So, portfolio.

very of as the presence the government strong community. DoD, the across So, part as civilian got well a the we've intelligence

direct obviously, question the the to on Force our strong as necessary, Navy well and a with if in as and based have Air dimensions Army. those both of position the your confident very ability feel pivot, we national any priorities So, very to in

ability of all a across services, to very deliver engineering services comfortable there IT those I So, and deliver think customer base. great have

I And our So, customers. confident -- if ability very pivot. to by needed, and market account to we do and feel to by in to go adjust

are very our have good insight sound their their working with directly and we exist. mission priorities and on very relationships also where the So customer solid, and priorities

you, Nazzic. Thank

Welcome.

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

Your line is open.

I Hey, what and drove some could thanks. of you losses Good sort think on the if exactly morning, that. wonder of you comment contract everybody.

taken that like lessons more like your think it protest Has agents pricing? a sort at sort from competitor win away the those going forward? I prices. blow of any you've looks was apply for been mostly looking Or your you can of

Yes, Matt.

bit a provide little color. of me Let

So communicated, headwind obviously, relates fiscal is the certainly, done walk for -- as the year. we as relates -- contract into transition we've it largest And it the as this [indiscernible] in to that loss. coming you

We the analysis losses, received can [indiscernible] the perform looking consistent And but that. these losses. you looking the in have rigorous And that at the at only a I a feedback and tell key a we that customers support is not win. theme there very very win-loss on basis, also from the common not we've

we required all these And in to competitive We our be win. the the invest to are the market. to very confident competitive continue that differentiate to ability a areas do very in solutions improve talent continue have ourselves and scale, and we to very further

don't are a all to in our more you new do We overcome. to We than theme. challenge So, price, contributing incredibly recent protecting we that question, anything to as business to a directly the not don't referenced we we there successful piece contracts. isn't the see that's both win area, or our lose I answer our that future. but Unfortunately, have fair ability -- see share sometimes, we a weakness winning theme. be and in certainly well, your think we We a that in have any believe

in of any should up it. could just Thanks. terms for? you And have there watch if Are I remind recompetes in we big ones us you 'XX. Got coming guess

primarily Let executing of PVMRO through Vanguard customer but there's me [indiscernible] it's their cycle. the FY big And on here, take that And as Those that impact one. going cycle procurement. you course. the for in year. the I probably aspirations in we're that's revenue recompete would obviously, portfolio. complex the for are we Vanguard, and would out say that top program as are they of the and recompete not well the a on lay supporting know, And those 'XX,

XX% thing pretty to recompetes other I in and that to it's year. for is the range, Maybe in it's pretty that XX% tends normative year add are us a a a it -- normative would range the

All Got you. Thank it. right.

Your line Cai next of Cowen. question the from von is with Rumohr

Your line open. is

Thank you very much.

Good morning.

fourth quarter better, Prabu, of you year-over-year indirect guess, a negative year to bit favorable compare of for EACs. prior please? both settlement your profitability us, release those rates I the in and So, of the help talks impact us quantify a of Could understand items

day, about stuff, So, Cai, XX-K you the QX in think it's -- get I of net million in the on as of EAC see FY QX filed will EAC terms the over $X at that 'XX. end the

other unexpected question, a or typically end we either not at not at favorability the year. rate probably respect of year. have indirect the With material the So It the rates is some the unfavorability driver. to up of for end us degree on rates of to true

fairly is this So, routine.

In range. had flagged high little of sort some for settlements, we expectations, the X% than just QX, of of sort that better out year. for by margin mid which a was some our And did upside guided to terms the these implied primarily a was overall there, of what bit we in guidance rate offers driven we

I we our around calibrated, So, year. of sort expectations the think, execution for

an initial of of about guide we step of is provided which comparable I performance. 'XX, way we about into X.X%, thinking think sort FY year-over-year as our

margin. So, nothing say, implied certainly items, any that of the if in I'd partially, compensated, on least at not within for mostly, I'd was the QX QX unusual guidance say and

the conflict have defense have all that’s on we going And impact on to obviously, I us assume some Ukraine now. then would And Terrific. business.

result Ukraine in sort Prabu, seeing conflict? it terms business? of impact you outlook have think do as of of And today, your on things are Nazzic, see might you As the you any preliminary of change a what any your signs

incredibly we you supporting country I morning. our saddened and Well, excellent vinification. there. of as on rising of or see some impact that the are that business certain first job business all an any they we mission focus to changes as employees I are and but know Good on execution and Cai. We’ve classify to enabling to portfolio. we foremost, really what heard, by we as continue focused do Thanks, Yes. And really areas, demand over in not our seeing changing signals related pockets date Within are revenues to seen any of would certain in it's material. increased the Ukraine,

So, we to just and it and customers, will color? its add to remain want purely if question what resources focused to we us, point. impact. the answer and any focused as be at country you we on supporting the and from Prabu, long-term absolutely relates broader this our always additional that’s But require our do they there on are

I And not Cai, think that our we situation guidance. safe it's to specifically in incremental in to guidance upside respect are say assuming any from

you Thank much. great. Okay, very

of line Colin with Barclays. is the question from Canfield next Your

is Your open. line

Prabu. Nazzic, morning, good Hey,

guys For the terms are you can FY in you assuming guide, of 'XX about talk just what recovery? logistics

that say So, say as see the recovery that extent call, posture may I'd modestly the into we logistics relative in 'XX be so. a performance not basis, terms inflection on readiness improvement And the continues an assuming are maybe is the fair some our that I'd business. on a side, we business. year-over-year on guidance, upside in spend said for a higher than from to currently we to basis, on that are but to of December the that that is But we assumed the in as of material improves, materially not FY we it head there there thinking business that towards say is

the Got as of as moving of comments capital then intensity about XX%, between within FY some of improvement margin the working pipeline? And we you're cash it. growth, kind can capital well contemplating if split and your you discuss that free the improvements flow just 'XX think pieces, sales

see I XX% call, are in 'XX our we increase comfortable Sure. to say generate flow FY we December 'XX. which cash would on into is with stepping ability we a free the said FY about what

said to way Two, So on pretty the rates the consistently the is also of grow comfortable I've working always [indiscernible] we've said capital over but here to business. X this time, margin months good that that's and capacity about for improve about generation a focus cash think our there's business, opportunity side.

aspire from, capital we -- we as combination working PPO I which flow think improvements of subcontract addition that side, will it's and on [indiscernible], into is So, where And margin it of the comes have and think 'XX. initiatives share. the the tailwind and side, in some our all on that, side, to about what a think on to to growth urban provide underway benefit the I consistent cash the line improve going we to, is generate incremental top DSO

that So, we makes that do see if 'XX, multiple ways to get to XX% target FY for sense.

going the have kind for you discuss sort then versus of on that scale know back think the [indiscernible] there you IT but of you question And guys, there do for the in the final it. comp better competing Got last IT after some you one of contracts? a isn't to of kind contracts scale if go way to think larger that that is about Or business? strategy, really about Matt's bidders of we in on view your SAIC, to modernization price. one it. Can just services? strategy I Got you're right

question. Great

time guess, layered of federal I capabilities sufficient performance the modernization in we I this the years enterprise IT ago, across, got enterprise several the in of at capabilities and have we’ve absolutely And bear, capabilities have would most past area. continued the say after with we of units ago, the aspects performance a that brought to X.X a -- X large scale So, all and of flies, And go contracts. again, the to we confidence including government. SAIC this -- years point,

very in modernization feel I a So, leader difficulty]. arena our ability in [technical be to the confident the IT for

you. Thank

you. Thank

Thank you.

Your Goldman Sachs. next Parsons Gavin is from question with

is open. line Your

Hey, good morning.

Gavin. morning, Good

Good Gavin. morning,

peers your unknowns. uncertainty lot there's outlooks. a appreciate longer lot of of budget a few have still I and But of term growth a

willing market was I right wondering on SAIC growth any you? to end for like what looks medium-term or be of So, market growth thoughts share kind you'd the addressable for rate if --

in been as to not we're we've a share So, position at this discussing, multiyear juncture. targets

support We the position strategy truly And we value. long-term the are calls many laser shareholder we've focused portfolio last shared of to that our [indiscernible] on a over to the have course maximize that.

to time. over can that produce areas growth will make continue portfolio those produce rates of investments We in higher the and of

view think of longer so more looking that us our something quite we term on to it look opportunity a not the future. We and talk call. a growth. prepared and the for would believe, I I to And draw we on hopefully, in portfolio And Prabu hearing we do our linkage, at really targets, last to do the a business. to powerful insights thing our leadership commitment provided about is, from But creating bit very is your interest sustained so benefit. we're when that this there's know that around incentive compensation The tool. to is to And demonstrate that substantial changes, the attention the continue shareholders the I profitable to delivering pretty changes benefit will

comp we result. but that incentive to it to add focused, important more peer plan sort would I not made thing make one is metrics our one it changes was the Gavin, the just of And of make to

teams suffice So, comes sense is challenges But its challenging year-over-year that are we I regularly own of steps to of of [indiscernible] a every It terms or its think own our growth rate aspirations. and And internally with say recognize opportunities. execute targets. year communicate to in what on those job the basis. go be to our above recognize it at we their peers

a perfect the So, probably guidance this for conversation. long-term isn't venue all

We sometime the having with conversation will of over course look forward year. a the the certainly to street

Quick That’s think buybacks. thoughts helpful. I sense. on are makes scenario? the upside the Is count to X% towards what to That to share buybacks XX%. allocating more that clarification it M&A? by on relative an And be says the Reducing your X%, deck that Thanks.

would to say, the look, consistent specifically increasing the this we we implied justify the as business in we year allocation, the always that purchases. see discount issuances return we think X% we stock it's want the have We other. each market capital as said deck to therefore count. not Good to we share question. shareholders. so was they're say more out see in entirely a for And have buybacks we ways a our rate that dislocation in I'd have start at to And think can effectively market because way is our we of to I And that price meant conviction does that sort it for with therefore, believe allocate the the value. and chosen believe to refers here, consistently value we grow invest that equity we at about the good capital the total a shareholder purposefully us that a in we in equity. are little

year, we we long out start we repurchases guide as aggressive repurchase not that’s there, at we've the we lower is buy place. in in prices typically and And going grade the surprisingly, and more as got is share the So market as the do and and buy on we a higher remain dislocation front are the prices. at less to what implied

just of recognizing we a for so see how count in X% 'XX. the target reasonable in is And terms of out. reduction by share the us But FY year plays have to end

Thank you both.

Thank you.

line of with question Sheila from Jefferies. the is Your Kahyaoglu next

open. Your line is

and Good time. morning for guys. the you Hey, thank

on-contract, two topic And So, and X.X% to growth. off, Slide my you business I favorite X% bridge. about talk questions. guess is the XX, start on to revenue new

thinking already the it's it's an out, President's about budget, step the came at and Just budget initial X.X%. that

what X.X% to business growth I you come of? And new that X% do basing forecast? markets So, are you that end up off how with guess,

first. take one will that I Sheila, Hi,

to things from already that incremental of sitting 'XX, had bridge where out and there. year. what's opportunities the are that So, go amount think [indiscernible]. provided that set just the have in out in backlog teams an backlog. It 'XX business $XX the reflected and broken of in from XX% FY I implied beyond into greatest the we growth, terms about the near-term books, with start last would the intense we the say, rose is growth of And let's guidance new There about focus billion on-contract between we in for is we as generate come,

good provide source growth. So, a we revenue that of comfortable year-over-year will that, are consistent

particular two fiscal On the this year. new halves tale a business front, in it's probably of

slow also pick start really to likely was is We that half pace mixed 'XX, expectation pace first as slower do CR that again. to our the fiscal given government, GFY It outlays. of The expect a in up. start we for we're the year the

a in view little that said all think given we've just has December from I our months. had market is awards what's the we become bit little conservative with in seen changed X the the remarks, of as last conversation a over you prepared what more So, our activity the we

as the it, aligned will but always be. the into going But that accounts effectively I environment see we are be like portfolio, then where in we to the to spending spending spending within tends think with accounts to to think this captured work that's we about And on the if we plus think and portfolio, there. O&M, tend what's patterns. those is we as about and X the flat So, [indiscernible] in sub customer the we primarily the a decompose

Based switch around to on my going that, question. I’m Okay. second

think with pipeline going new fairly you and on where your of the think I when of And turnover. end quality your has by recompete and your market? in where portfolio the the guess offensive you your being by after you been pipeline in when you're or overall, terms most working are So, of it, say wins customer I keeping I Army just defensive -- like do we AMCOM of think pipeline strategy about portfolio terms and business guess, depends

Yes. Sheila, is this Nazzic.

little of So, to a I want provide as color well. bit

proposals remarks billion navigate new prepared watch we that, great the we that half -- in referenced About award. color of have we we certainly, Prabu to that. and or waiting continue give of submitted $XX So, gave business. award, is take, on And [ph] the that pace

defensive go being to and the amount able as obviously, offensive posture considerable a the as protect, well posture so, of And both secure new business.

give So, around a you couple I just that. of metrics wanted to

the that of cloud opportunity the as for that of pockets government, the ago growth. we migration aspects across of and the there As related is we area are focused well, couple consistent modernization, pockets there with the that’s in questions all are areas we and growth, a and it federal past what some our about IT we’ve opportunities do been talking Certainly, about we as well. we've see considerable greater are what portfolio not. that aspects we the driving the see of In in the on. been see growth space portfolio that an market, And certainly, all portfolio, then think

and and aspects those of have we say portfolio, we become much I so, investing wouldn't that the over confident are while areas of growth, organic growth. we those that drive disciplined drive the we last years And will the the profitable we believe in can more course ensuring where of certainly that are diminishing but disproportionately investing couple other

some some have the those on And it. business so of of about the color. are will those of aspects you well more how the let think I we confidence, as wins certainly new in proof Prabu, submits are we We points. provide do some seeing and as

Nazzic. you, was That great. Thank

new business this period, kind said, it as business. went half and I I over so through about of a back And think of we over just mix. comment, cycle Nazzic recompete is a think step on XX-year sort as Sheila, one of other

We are going through recompete on PVMRO.

to going compete We Vanguard. on are actively

AMCOM through and cycle our recompete just portfolio. -- we SGI so went And on

pipeline and that So, And opportunities couple I’m ahead of gives us from us gratified opportunity it the what takeaway set recompetes to is behind franchise is super about program years, a an us. for as see of the think others. I cycle of next in back where SAIC business to step

I portfolio. that a the share successful, taking is now. important more be to actually going inflection away for it we're me, market an So, super this one us right we cycle is large think to positions our are going through because through And [indiscernible] in

you. Thank Okay.

Thank you.

Your of JPMorgan. Seifman next Seth with question is from the line

is line Your open.

thanks Hey, morning. good very much and

morning. Good

assumptions resolution September guess, Just all, guidance first or your, a and the from fiscal into I for questions of and 'XX. about continuing head into as does I in fourth assume on? maybe revenue the XX we of -- later quarter a couple that 'XX I year, guess, guess,

it does. Yes,

Okay, great.

Okay. head it days, And when then looks number of to like look as to as growth at we working do that 'XX? this a year, headwind elevated think fiscal about we in the we

to FY the -- last time so XXXX. in in few of this days, would a 'XX. headwind in terms happened it extra I technically represent -- So, working would say modest

everybody picture I the Okay. Thanks. on think Yes, hit big stuff.

Thank leave So, I you. there. it will

Seth. you, Thank

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

line Your is open.

comp effect appetite would TSR if respect With you. of more acquisition company's next and remain? to how on repurchase, or over focus incentive the the is the describe how and year the focus the Thank share on the of in this that market you will posture

So, thank question, for the you Tobey.

for is towards trading with where times, buybacks of investing that us viable I the [indiscernible] excess think at. we've every the capital the said focus this couple to a remains organically is capital year. we equity a generate excess becomes respect currently given way towards allocation in on repurchases And our capital simply on to business. sort And the of allocate

Halfaker primary I'm good or diminishes capacity capacity that we for So, our will With to team. raise capacity need that, respect management if debt, an tuck-ins, that that have get well earnings yes, say to to to the the things that as recognize or cash, do accretive, in to markets the incremental the have has the I we don't deals think are raise. following. important and thinking like then good go focus it's have to us is I we find good whether exposure say impact that returns, to as would generate the really M&A, the we I'd M&A for

our organically that out be M&A. the therefore, capacity but of for And levers terms for the X have question and X.XX, appetite, of we specifically. particularly think believe to or give may we And But what's I M&A with are repurchase shares that's near-term, a Our in M&A this [indiscernible]. large between it we there is diminished just desire targeting out take, the is function obviously, year. by of don't

year budget. about fiscal for the question federal following A you

of back fiscal periods final your higher a sort CR in op been but fashion, when there's bit a perfectly had? than military a tempo. be You CR to you engagements, little better and get NATO budgets Historically, on X-month done, tend responsive federal where assumed Does active wars, the quarter. you said of recently government at timely the sort maybe not more we look

a I that less be think in suggest when through do it to you an in that budget need able the tends comes partisanship a there's to to to predict one being to would for referenced of Prabu, there get argument there's -- there national would that partisanship certainly something, I when less happen. times be of support to some appetite could through. what assume can you should priorities. But tell if maybe comment. getting so better and a I that would But things you wouldn't or want want

bit potentially is CR other starting before months the there longer. CR data would we with up an pickup right say as on it's X in now, customers be Maybe the would I we operating go outlays get because seeing are the more to next perhaps picking a assumption little would that were spent a point again. that Therefore, be little our money

a benefit put [indiscernible]. energy tail there's [indiscernible], to the about we X-year since know, from you As

to So, for QX offer GFY that will they we funding support we 'XX is have in QX. expect that incremental almost to that a have in may of guidance, for what's continue brought implied [indiscernible] some the which

Thank you.

questions further back this no now to turn at Mr. the over call Denardi. will time. are There I

everyone Great. all for Brent, forward you, us in thank you day. Thank look with a you, Have joining and speaking again We today. June. to nice

Ladies you and for participation. your conference This call. gentlemen, concludes thank today's

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