Science Applications International (SAIC) 6 Jun 222023 Q1 Earnings call transcript

Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the SAIC First Quarter Fiscal Year 2023 Earnings Conference Call. [Operator Instructions]

Good morning and thank you for joining SAIC’s first quarter fiscal year 2023 earnings call. DeNardi, of Joe Strategic Relations is Ventures. name Vice Investor President and My today business Prabu discuss are joining to And me our Financial our Executive Chief Nazzic Chief and Officer our and Natarajan, Officer. Keene, results financial we quarter fiscal first XX, year for April of ended discuss results that Today, will XXXX. the our XXXX and we slides earnings where call release, morning, also find copy to will with you utilized a supplemental can conjunction be this prepared Earlier presentation management’s which issued our financial be in investors.saic.com, remarks. found of at today’s These be on documents, and be evaluating XX-Q in addition provided to results call. today’s our utilized filed Form to outlook our information should later with along today, in risks to call. statements statements today’s make Please note this are may differ made that could on call on we cause actual uncertainties materially and that and from results subject forward-looking unknown that to known filings to on annual including section Risk you Factors our refer XX-K I quarterly a Form SEC risks, these discussion the XX-Q. on and our of of for report Form reports

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

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

sixth on our stakeholders, After would to for and full financial to detail drive the to results we is, first recent our greater our why in results some positioning positive am Joe better call. we of and SAIC Prabu discuss moment good quarter, of consecutive spend the our us. my do our customers, initiated ensure work I the deliver organic internally we of the our and our outlook. our morning will a well you, what to growth, our partners updated delivered that results all in provide plan. joining quarter shareholders like quarter who values us I and discussing year remarks, Thank representing our of know employees, everyone we do proud

years, the worked For has of culture, over as missions. We of most thought innovation XX no-fail advancing trusted U.S. best XX,XXX SAIC our from a come government, where partner hand-in-hand outcomes diversity to employees. we across inclusion critical know a because foster leads the country’s our

IT solutions further coupled enterprise improving engineering which of over to ability to with reported to growth approximately to revenues growth. have total we integration, leverage strengthening both plan. directly have X%, organic on we past of of approximately first X% quarters. In the have and the we the of profitable continued competitive culture of contributed value, and $X our made focus proven on representing growth advantages in delivered leadership were our the systems mission, several results financial and and that quarter, and ahead we drive legacy progress our provide Our with The speed are billion,

EBITDA adjusted margin steady quarter year. was expectation our consistent through improvement First for the of X.X% with

continue a now guidance. progress recent confidence development believe company’s how is further organically strategic to increase earnings us would like evolving. I we increased the our success, as business coming brief portfolio sharpen opportunity quarter to our over the provide it the significant we in years. and of overview to I strategy our pleased business and with results, first speaks focus give see we are delivered revenue with the making. Our combined greater am performance I to

IT those highlight our sectors, to around our which two I Core, that our span presentation. our business includes continue customer-facing and shown and GTA as X want total capability GTA recent pipeline. earnings cloud, In within the fiscal the for operating share more roughly enterprise delivery. profit. than X GTA our and share We our on manage sectors, to Slides a define go positions technology capabilities integration differentiated as to and ‘XX, area systems and fair XX% focus activity us we of we of market-leading our develop to revenue growth While year offerings market our accelerants, of and key Key made capture have accounted a operating growing of solutions and secure we investments well greater believe our and to M&A

from for which the is reflected market one recent managed government services infrastructure managed services. United and implementation services IT share domains SAIC’s in at both Gartner, number and vertical States these within placed leadership revenue application rankings Our by for

to at our from GTA of expect revenue We X to the area growth margins. our portfolio business accretive XX% the next strong of years, within increase over this reflecting

fiscal Our Core XX% represented roughly chain. revenues. and of includes these engineering across revenue technical Total in year supply XXXX IT services, and logistics services capabilities SAIC’s and

transform our of a the portfolio to years, well. Core intend next as GTA we As over greater grow towards we share few

drive will centered differentiated our employees, markets with advantages financial in our the SAIC Our investing and enduring growing competitive returns has demand going for creating forward for strategic on experience allocating shareholders. capital remain focus improving where and most to rewarding

forward to a space win better providing and challenges, the strategy, engineering and expertise These are as see solve as has XX our integrator customers’ include program. We expertise awards, from program Recent this leadership we value talent on potential principally delivering key the fueled by over to mission-specific these has capture talented use in improved toughest technology for opportunities in great evolving to teams. legacy role a a going opportunities integrator. more in program skill believe examples additional of While long-term. which to Mark to unlock the SAIC’s technical confidence give expanding us our growth oriented solution classified and our been this help sets a

now in over call for ability and results to and financial our stakeholders. all execution to strategy turn create I the for our Prabu of value in our a confident are outlook. long-term We will our discussion SAIC

good discuss our at which Revenue quarter strong X%, We for X% fiscal revenues results with growth quarter, was I roughly X.X%, in margin first and of quarter pleased the Nazzic We rest improvement benefited planned our and the of We quarter good $X outlook more favorable our share X.X% from per meet billion, year. of revenue adjusted an in of adjusted and from reported year. performance billion. the into delivered of earnings of quickly through of timing results XXXX. expenses organic. representing in the I you, primarily will growth our Thank which am then delivered performance the the impacted performance quarter. in the our year sales with development ahead on margin total and full plan morning on-contract previously business benefited visibility bookings track expected updated the summarize the later remain with net to of guidance $X.XX, of of for with in solid the $X material indirect EBITDA everyone. timing by year

and with over to and areas aligned based business Our next still trailing protest, new value $X we roughly representing in billion recent few on our contract improve expect the focus. over of GTA squarely wins total book-to-bill competitive XX-month quarters in this is X.X

by XX% roughly end. to value of We a submitted $XX increase in continue proposals the to as see at pipeline evidenced a quarter billion growing

to pipeline our of within change higher roughly mix submitted at and the business new of proposals, year. this XX% materially Importantly, with time the representing continues now both value sequentially last

on greater markets of that share pipeline within within good metric the our to driving GTA, and greater and outlook a share revenue range for a $X.XX This the updated we see align be are an a at as progress bottom our in will guidance longer end results for our year, our of team. of priority also the billion as increasing We by X% objectives $X.XX discussed. term is by a billion. to quarter Nazzic growth represented with enterprise the for opportunities Based

declines benefit contract low working of inflecting to XQ XQ, certain and transitions additional in largely to growth guidance days. due in due Our low continues single-digit the to before XQ to single-digit assume

to focus is growth grow we on-contract in driving confident Our company so. our profitably do the and ability to are

of We favorable of and and certain margin by more mix new the X.X% led year, are a guidance second investments. the improvement of in timing maintaining our half the full approximately expect year

which We $X.XX, assume are of approximately $X.XX increasing our effective EPS rate tax of continues guidance by to to to a $X.XX range an XX%.

represents of free unchanged and you is assumes Finally, both million XXX flow results, in half the our working our guidance expected of the XX% impacted deferred. fiscal that cash to year would we over free fiscal in to quarter increase XXXX generate year expect remind second the cash XX% the an $XXX and which year year first the capital and for Based Halfaker half. midpoint amortization provision final at trends payments on XX% versus full $XXX XXXX it first and to Section million of flow I the that is related acquisition,

to after between $XXX $XXX as million fiscal priorities plans unchanged of our deploying year-to-date. not to this towards a the At with cash share do a having bias uncertainty the to million for capital approximately the of towards free adjust expect to sheet, to capital repurchased Our program. Section balance are prudent deleveraging we remain and legislation deployment our year and related committed a time, flow of result excess shares deployment repurchase plan $XXX million XXX repurchase we

this delivered we to forward sustaining quarter X our business reflects the our us our for our in believe well we have investing the shares drive and the to release, maintain position next in Q&A. I believe to the we of utilize to incremental to begin Board share our noted strengths, an of focus strategic plan the capital the over outstanding, we in investing shares, our years, improve intend our program GTA, operator core also structurally XX% As representing earnings authorized allocate momentum. market permitting. are to am million the executing results new Directors of over call ongoing authorization press our on while will confidence conversion. cash conditions in repurchase We energy which we I back now turn commitment growth X the a approximately to and profitable proud sustainable, and effectively

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

Your line open. is

Thank Hi, you good morning Joe. Nazzic, and much. so Prabu

implies think, down of remainder then organic guidance, the And think think its about year QX. for are growth of slowdown. So you some NASA it days AEGIS, X% X we the working organic losses the on the for versus Prabu, remainder The of some I the X% points. that cited when I

infrastructure on-contract areas? implementation the you How then And on number real business and contracts also about, So mentioned can for this you growth? I familiar might sales just your these is your and and that Core what guess, growing? position what expectations with GTA be business guidance, Nazzic services. talk What is managed are by are one in big organic revenues we

your Great, Sheila. voice. Thanks. Great hear to

couple a we in color, extend quarter did as opportunity, team think let foremost, about the the first are and how but of it take have comments you to guidance tell the to of some our and to I we proud and want provide we XX,XXX I the Prabu the that quarter. Just and in will the employees performance

key year. As you did a will opportunity modestly certainly component in guidance on to throughout a Prabu the give increase of QX and the drive to in tremendous us you allow some that continue growth The on-contract couple color referenced, to we that was of key and areas. that have performance

want so is a the we then? year. shaping guidance course little our I on the with of and up, circle on the back confidence the very and Prabu, we how color And how in over us today to year ability execute greater giving the growth GTA the you very, sit are will find do to pleased

Good Sheila. morning,

start So, quarter. itself, half time I about goodness I the QX, revenue outperformance the and the quarter in in strong I think with there good is would call the think what to respect performance half to roughly performance year, true

delivering had growth better internally. in expected quarter certainly we we even good the than So, momentum

contract to will fourth as and a QX the in Second going reflecting we QX. in help pulling good billion timing success the the the modest is And that right new we’ve in single-digit me, what of those in in QX, the QX our back business that of of QX and that quarter got of reality this awards the revenues new I in days reflected have expect transitions I than result QX pursuits. earlier improvement that’s wins some itself. say in outlook But protest growth the drives contraction is $X Obviously, the of to working data to remarks up think, about now then some where and have you’ll on to the in sitting modest to QX. of business not more those low year. prepared different probably are we certainly organic the associated extra be in fundamentally for revenues revenue QX point, for and cadence we in we terms keeping backlog. extent see likely to reflected year, that’s start To end with would quarterly

that So to good the QX. And hopefully, the with have continue And I’m year. intensity execution me, left dedication, year. over I’d start remainder say think executed X intensity months we of we the the which the a with a year, in pleased to the to really I especially chance in

I couple reask, if don’t wanted give color. to questions on touch me a let little And I GTA. but them on Sheila, And Prabu. bit just of get your right, Thanks, of

as the shaded of that’s slide revenue we a have We you have deck, we’ve and of report give ones less. kind what just ones today revenue juncture, color this to for those sense on to to should in in have where slide, achieved each which we more that to you can you are give you don’t on of but that specific areas, the which at a blue, less. those areas the we areas see So are what greater, numbers proportion in some

probably secure aware think to support One we cloud couple for so providing a the As you’re all Air a the examples, about is Force, activities. where it program a if relates of cloud one-stop shop Cloud migration environment, of the you

torpedo a in you’re be manufacturing area. test torpedo the would program, that that And delivery the the and that probably with Mark So of support great we of delivery example in provide then XX for integration systems familiar assembly, where and program Navy. the

a and on the help? type recent that examples we couple are aware work Does give that that those you’re of those in So of of hopefully areas. relationships have customers with some color you the

Yes, sure. Thank you much. so

you. Thank Perfect.

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

is open. line Your

Hey, good morning.

morning, Gavin. Good

of fourth of quarter for how it following reiterated forward moment, looks question is up then just year second, you Maybe like your the that performance. through mentioned kind third Core the is growth quarter rest repeatable Prabu, the in a you where rates. the on versus business of XX% the that pull And the and growth

change there is front? in assumptions on for is So that And AEGIS upside your contribution there year? for any some the

So part change I’ll program our That AEGIS take our the points. behind second No of in estimate is the question first. program. for

to about of wait and potential we over newer this caution for And pickups is as in we sooner much us the Gavin, revenue this just but get for there in say, to one say, or course ramp so. those programs. in comment probably months of there into some to $X on where billion are out out QX, contracts my business for are on the see implied new comments, some end those thinking a will associated And And I’d start protest a see what’s and is have modest don’t guidance, kind things just surgical we improvement laying extent I XX here implied going $X.X other. So the of one we’re we about year. programs. protest billion. always contraction some from of terms the QX than on And than and up, labor-based turned modest earlier in what’s with AEGIS I’ll to which the in reiterate headwinds obviously, the bigger is we practice, the next, as that will

up. earlier the to always ramp in time There materials program. is some some take does it So

to of amount we to the So appropriately. an on sort of initial we program the materials review have will get done that size ensure have program

implied well I’d some are going to the over guidance really as bit will right there here. go the the protest that to it’s quarters in and through we little than takes say So And are here have we But those in do chance year that course we’re to right the and hopefully, now. wins discover puts we be a of better what’s now. important a keep positioned

And record that helpful. lot has thing still pipeline, quite the then one you grown that That’s struck Great. have about pipeline. the me asking backlog a maybe and is just a

of how we of how talk go kind growth think about you can revenue backlog should work? So to deciding addressable can forward? of as the about much pipeline pursue pursue end timing is to that more the market maybe you And conversion expanding we of the market versus you versus to

Gavin. you Yes, question, I’m glad the asked

it’s pipeline; us, really period focus a quality for about the I time. tangible been two, have obviously, to growth visibility years length in the that funding has several pipeline periods I the we the Nazzic pipeline. enough so company’s of in the the we levels long especially, and And we right – have of over have ensure performance, important it now that really with think of the for and backlog into the to think this actually

So size pipeline driving that presidents the goodness within increase attribute of sector BD the the our in I’d teams, growth business. would I the say to are our fundamentally, from real

a fundamentally, hill. budget of budget out of the seeing you’re is the the associated an driving I’d with all of talk So markets say a it’s We increase driver There always point. this less – that’s the little end the element probably bit, pipeline. broaden in out at but on what’s most see

a actually value a resilient we to part on thing where consistently. we that the NASA and was put have quite perspective ensuring pipeline are point, a and we it’s right top in big I and of are been we execution, have the I last basis. from deliver so accretive the back to kinds solid proud top teams And say just our can of We’re very AEGIS would Facebook, this the ensuring consistently company impact bounce loss continue portfolio, of lost say shareholder on at how line we the I’d just bidding Nazzic X% line. grow the and that of of the seeing things that the grow not returns and the I pipeline.

I what that’s alluded. So

you. Thank

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

line Your open. is

that need guess Hi, to pieces that how for And different pieces may inorganic of organic of also, wanted And think question. two the I the kind the the mix way maybe those parts follow-up good business margins then of you any I versus add? how Thanks on is two of could morning, be? between you shift. guys. in much think kind capital to there how those GTA is intense of are to sort and of also the do

Yes.

some me have well. some color that tackle Prabu and Let of then provide as

as talk So just of we GTA, a to about the couple things highlight.

time this that first the this last over strategy referring we’re acronym in has the on we’ve in years. it the of been to of the Although been part for of call, couple development

continue years. to we be we that transparent certainly way so with of you see the course about the more all, be we We – what next let maturing to couple talk you it. on refine we’re the focused And how want of over all and know

journey that on. – been So but has the we’ve it been

goal back that the we’re strategy. is get sharing our couple part back. complement of If numbers organic. to predominantly aspirations, greater to with percentage the It going to was The last a of circle referenced the in GTA to acquisitions, you, the you organic the and is that portfolio you of I’m to think

of we portfolio but we those that new at in your opportunity be to the than the sure at in the solutions, capturing and accretive the portfolio we capabilities. bit investment can, are looks part key of make in that we differentiate disproportionately commentary little a to competitive have areas last have the as margins in to to the look ourselves the our more provided want more Prabu core, business, greater in drive pipeline, And the portfolio. pursue we for on not core part also expensive grow our to put question, so that areas, we As we fact, market, focused as pipeline, of dollars

details that wanted then and So some color, I around to the provide specifically bit that. about Prabu little of of let speak

for Nazzic. you you, Matt, the Thank thank question.

view business. than As said, XXX about of points basis margin to expansion organic as of of the the the we of And think is XXX Nazzic in this the margin business higher business. roughly capability this tend Core being our rates, part terms to

actually to low was do margin work. think a the end as implied on for can important. And of PowerPoint business. chart, a capital-light what’s view the margins if source increase GTA we to for requiring the have model. We becomes a driving than as of source capital-light bit business pipeline only greater company, the this double-digit just a the revenue kind the But in We you I get tend margin you up the So expansion. is higher. as expansion see Recognizing share math and then it of very the we of still don’t and little touched in this EBITDA something as not predominantly change a success margins effectively this although

ensure good are the capital investment shareholders. We our a to that for value proposition we remain business watching our in

the to of are say change capital programs. these a deployment in seeing I it So relates we investments as would production fundamental of strategy some not that ahead

change say we’re how fundamentally, no significant impressed. is So I’d there

for Okay. Great. how was the payment this, helpful. I guess then the missed in that may I impact And Halfaker That’s big you. quantify cash you have cash Thank can quarter? but

Yes.

if flow, last year. to half control-related payments for there change to was there of in last good bonus this tend then $XX last always two of on earlier the primarily our including QX remainder call working cash from things was to free I to change, you compared of and as I year year’s $XX would were QX modest capital think math the year. bridge those the it employees. higher was million. So payment of about million And do a actually acre, Together, predominantly to payments. One

that normalize $XXX but things, we as those basis on with year my flow about up circa with normalized $XXX we million sort on I end in how cash think two to of it. that’s free a million So for normalized,

That’s Great. Thank you. helpful.

Your next line Bert from from question of Subin comes the Stifel.

is open. line Your

morning. good Hey,

Good morning.

walk leverage how SAIC’s in is be of to you end you buyback Prabu, the the think us Can how higher aggressive relation through leverage industry. you on can your towards program? about just the

Yes.

So our leverage right sitting is somewhere now. around X.XX%

Our points now, we points consistently we we’ve we be a circa communicated want in X.X%. at in higher. we little and time, even may expectation, lower which be is fairly may time, said at would that And to that be a bit little bit in

the grow shareholder based sort it about phase is the ability free out, cash blind pointed and on That’s bias general as buyback we grow mentioned on And Nazzic program. question to ways confidence As underline business. our we’ve that relates not on consistently consistently. based And have really we stock our flow to capital the maximize business and deployment of our how to share fairly this received. in now towards skepticism reflect valuation are we deploying repurchase consistently have our of it, the tends value. can that view I That’s that in think we

as view our on repurchase So attractive offering an capital. on return returns the program we

SAIC. shares roughly cash the at shares share there, the incremental of bit with we’ve implied So of not larger the out on little as and the therefore, out also we showed chart the what’s ones, in terms supplemental authorization or That’s about so. capital this on prior think excess I’d that of an count one deployment. the at And annual as than X historically million out it, X I tune X about basis. generate years capital And repurchases of been history million context think a the we the of in deployment but about think where we is roughly of about data in say

we So do we capacity generation able and organic to of we believe, business capital, there of excess fund here cash the this the repurchases in way. think is to a be the for can, out us leverage-neutral in

helpful, Thank very That’s Prabu. you.

and organic Just to the and to a ‘XX still about to comments have that’s larger just follow-up one that would road? earlier to some business, thinking is recompeted is something outstanding Vanguard your takes seem which a multi-award contracts, impact down puts the And further on contract, of your case? mean the that I of supposed one is largest on of that’s the into of items I growth going believe called the or is be any Is it’s contract be that Evolv. going FY the

great on Evolv, is are are On Sure. to not we of. it’s middle watching. – we recompete We the recompetes. comment in that tend It a so a deal those

I think right. we have slide seen some programs in to the

We year. like FY watching this the anybody’s pushes consideration out it’s it becomes everybody guess space in impact time not an that are could the It else FY revenues ‘XX for and here if watching have whether extent ‘XX track. just or ‘XX, of I procurement to And happens to think it on here. on candidly, But line FY that again, the a process remains as revenue.

the watching a are mission It now. it doing and and is fantastic team is executing just just So everybody we’re a there we right complex procurement the job like else.

color. is clarification GTA or that the a that above X.X%ish segment? answer, question Just the quick Thank above. XXX is you XXX for earlier to margins on Is said your you above for an core bps average the

– above low core to above and mid-X%. is of It is core the the as it think

So, it’s that. bps about than XXX to XXX higher bps

Thanks.

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

is Your open. line

much. very Thank you Yes.

a And weak March. bookings was there the got quarter for quarter? of past momentum the momentum? this some your think kind of on as seeing middle sector. are are And throughout I going that momentum thought budget basically booking in So, would you into And entire Could color us give pickup the you saw of terms December a the pick very we quarter, lifting, the you was with up. COVID

Hi Cai, it’s Nazzic.

of me can well. provide on little bit as a that Let touch then Prabu some color

some saw certainty, I Certainly, the of that been significantly think budget that anything you out process the see I has industry. the normative. fairly but think slower, think we We is with throughout ordinary. helped, didn’t probably heard QX was have and outlays I

we but I as positive normative. that in we see do So – environment. and environment, operate fairly would a characterize continue QX to

we $X billion do of have in Prabu mentioned, As over protest. new business

process the And fairly to as swinging I But normative continues Obviously, one so things anything partnered I was things would we the keep a quarter on as as those it for clear through would towards rest if way up, it characterize say close that the could you will really it relates bubble we obviously, year-end, or of execute just don’t certainly as get strong kind see so. next on characterize as and with normal we the relatively government to quarter the bookings. but or of eye just some us. would I And going their other QX, that forward. a budget, of

not Thank say would into you, I by the said, question. Nazzic. broadly translate basis. And Cai, thanks environment, month-to-month for a that are seeing supported as we the Nazzic outlays necessarily on higher

maybe the year, XX XXXX. months the government for at looking the has cannot pace fiscal the years, candidly, been six in think of except fact, a the outlay I where of last In last data year slower

in to to some at got not at the But labor that just a harder data, system. amount revenue, awards It’s the converting out data kind bit recognizing seems to it least And see we we the fairly see year, And the into therefore, little right. getting system implies and quite – of it of way seen up the that in just some think typical a in coming the mindful watch are a the time outlay, market. fair backlog have I it. of And quarter. for are goal April, timing. remaining going a the pipeline and that’s in we months we not the cautious of take that do the likely exactly reasons key have and here but what’s left one back bit but and win [ph], a about been the we for normative year So, as the slowness on looking just pressure build have are but I of key is are sit guide higher to the and also we think the revenue in tough continuing we likely are we outlays, slowness that a in few of little the pressure in are

think… I So,

that it Yes, something think reinforce. on Cai, we earlier touched also touch on to want I I

of In reported, have would are with normal that I in which addition seen tremendous course we as focused have to the to And consider ceiling over numbers, we and you have execute. very happened bookings what on driving growth. business, on-contract our we

are business, in clearing business, booking job what some blocking contract tackling in good the of revenue is an growth, seeing ceilings, call I new executing And so of performance. to protest our we will new and some doing the winning really and of and addition periods, our team normal retiring on exceptionally that

have Thank follow-on And one helpful. I you. on Very Vanguard.

that it’s complex. it’s there are various an You mentioned pieces, re-compete. but I know that expanded also

I us be you not mean should the one like expect you but could And case would bigger? watching roughly, what size, the them? ones when decisions the are all assume some I ones? – are for? win, we are best give pieces you that bigger if of that equal So, color they it’s on And

certain are try I am I best but of Cai, color. give to I can, that going It I very you a open procurement. love a as my to active can’t you is answer, am not fairly lot going to answer

to very fortunate one as the incumbents of be portfolio. do are this they reposition We

solicitations The right. value that all is are nature. greater You absolute come will in out of the

business aside. small will set Some be of them uncertain

those will that Some strong we of of believe all our position, aren’t and be very are for work streams I we strategy of quantify win, a with really strategy. absolutely still can’t to are absolutely you. permission them our long-term being together have some share. said, the kind that in and solicitation But it fair our They that we in will process putting win their

So, is a of lot unknown. there

some believe that really can’t can strategy of portfolio. we to at a can customers. small you can where part probably may to we where pockets deliver that set our differentiate we this be our aren’t So, you aside give juncture, business But and going will are be or answer. of just excellence there for we I parts even aggressively an win those can the I we tell business pursue

tell I best can this point. at the that’s So, you

Thank you much. very

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

open. Your line is

Hi Tobey.

turnover morning. new rate get update those then Hi. hiring Any does you the that Good how thoughts are want on good? [Technical I aspect described it? rate. would be frame however sequentially, and initiatives, would new your workforce filter rates And trending Difficulty] like to to year-over-year those your PTA and

your something – question, Tobey, about you I lost PTA. just if last the could of sentence

describe of are target and could you if sort you employees? of implications And the hiring Sure.

Okay.

labor of if relates And we it no height market, the turnover tight. market seeing well. increased to labor rates the There certainly, our to is the as question. compare certainly, we as are turnover is So, COVID,

about and just think all industry. everybody our I industry As in technology

are said, And there – ability into very being is that successful a I our we as remain have company. the with package. think together in benefits a been value the to in we have And have the we things. – great employees, hire competitive some value ensuring talent that we our that we So, slide very creation done think the deck we for about focused on put

We that doing model situation and positives are became for COVID came customers the flexible our same. of the the our of work base the are one that out employee reinforcing

that messaging to of strategy. in continue investing employees make are our And creating day. and workplace we a part certainly choose are is SAIC So, in at our environment to every sure employees, where we stay an we that to

an absolutely is strategy corporate people our strategy. of Our underpinning

chat but absolutely So, that just outstanding. with think like, consistent we than are seeing would say industry. I our is to I over And hire, greater would ability we

something opposite. I it’s to, undue to we the actually something it’s – attention probably but the not think risk pay I that So, organization, don’t causes

very As of can In the same relates it’s engineers, software be to on mechanisms, look people. people, The over can sometimes cloud be that as mechanism, cases, the the different. But focus we we type engineers similar we labor different. of work which some the the solutions, type engineers, slightly cases, contract it for services just people the slightly in many deliver GTA. the delivering skill the way in The are sets. oftentimes

sure complement we as hire our of make ready that. And portfolio. we that so our also expand workforce got we internal as then we to is some have doing individuals part look are training to well help as that And

in radical today. labor the great type workforce we So, a the I and build of type view it don’t have it will of the shift as people, just to on that continue

those are where biggest any in Thank workforce, competitive you environment crested pressure still or And would are say, with have whether the labor of most question sequentially sense of wage just stable you. signs on mobility, sort there that do seeing we or in another any have for and you let’s like some observe, we received? pressures the even either were maybe the

I an you opinion. will give

think that companies are and major be I doing could some States to are that to think are message common may talk some industry, players, other hearing industries, the do I for that need commercial view challenges already crested we acute have United is in As we technology technology. Certainly, less the you the like And and that good even the they us of colleagues hiring. some that that, in all I technology hiring. of labor less a seeing across there

watch it’s opinion. think this that. I data an could we the again, juncture the too seen better. support at We it’s think But just We that I tell. to crest that’s opinion based this But early some not one every month. have getting We to So, have his statistics. conversations, maybe have the don’t watch on and

Thank you much. very

you. Thank

comes question line the from next William Blair. of DiPalma Your Louie from

Your line open. is

Prabu Joe, morning. and good Nazzic,

Good morning.

in increase observation when Space the and provider Engility, a drivers demand key was SAIC services. in geospatial/earth of that of Nazzic, a the Reconnaissance geopolitical to Organization. for acquired It services, key and are to resulted those seems exposure elevated have conflicts Force one the National you your the sharp increase

I So, GTA that area? you for your a for space the strategic very it focus in wondering, outlined, was seems growing of because category one is areas Thanks. you

Yes, yes. the answer Louie, great simple observation. I absolutely is – will

it space I strategy, part So, a our the in that’s not of spans out strategies. is critical many And of own called one these. its think of box reasons is growth our

we many So, the support Cloud integration also do missions. enterprise that many, work systems or space IT Secure or in an

portfolio. I would of say, space the We our have see And so those areas opportunity sellers. seen good we continued in of growth in absolutely, our growth really all spanning portfolio, space

margin? you And XX-XX GTA XXXX helpful. have as you targeted, one versus what is implication your that’s split and for for the Core achieve the on X.X% if in Prabu, Thanks current fiscal your

tens rate. of be The our of points improvement basis would margin that of short version to

X%. a as our course, that on over of than comfortably And think chart. aspirations always higher So, are what’s PowerPoint of

and avenues at grow many this little have for And in left percent to improvement a bit do a us be improve hopefully, again, really of So, tens margin would the we the improve But of that. I we to on a to attractive to flagged, time. of across rate. margins and happens as chance margin the company, company one one better it’s say same

That’s for Thanks. Awesome. me. it

for some at no are final there back the I this And Joe questions time. turn DeNardi to over closing call further remarks.

quarter. today. Great. us you Thank you, speaking next look for you We to Rob forward and to everyone joining thank with

call. for Thank This your conference concludes you today’s participation.

disconnect. now may You