Science Applications International (SAIC) 5 Dec 222023 Q3 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 Third Quarter Fiscal Year 2023 Earnings Conference Call. [Operator Instructions] Thank you.

Good morning and thank you for joining SAIC’s third 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 third XX, year for October 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

Keene. It financial discuss supplemental addition, in presentation now information be Nazzic measures in we believe non-GAAP considered comparable and introduce GAAP. should slides The for and financial reconciliations In provide to will non-GAAP and to other our my substitute is GAAP measures include we not the useful measures. press our investors addition accordance with pleasure CEO, a measures financial for metrics, most release which and to both

reported XXXX. activity, year builds This quarter to us of fiscal today. fiscal year solid we development which which momentum plan to business revenue and XXXX Joe those reflect both outlook and and improved for as morning, welcome Thank enter of ahead third contributed the you, strong results, joining we further

watch growth Two GTA recent resource upon leadership JADCX one summarized JADCX are recent very unique is X-member growth: JADCX is SAIC our Consortium a integrator the area Sullivan, quarter, play as of that companies accomplishments as In in of JADCX are in can products I want continue of an we a and as a to our role a and recognition & of leader shareholders. successes the executing mission recognized well the X momentum, Relations relied value being SAIC position market. critical and member JADCX by a we quarter. for of services in presentation. many Katie role accomplishments offerings won integral JADCX the understood our as Infrastructure and Hammler, IT however, this of our the to review one national began as campaign, trusted SAIC recognition Slide related contribute platforms solutions and organization With our and would of an reflect towards the by $XXX upon Digital & is Analyst values effort to directly the support whose services. of practice our to Before of for long-term named only this in our unique I other strategy. September. customers. drive The two part ABMS our key of second, only a the played named in I October, by in three in builds on being on further and our which in Industry Frost to by the ensure both strategy to last highlights million was team proud recognize the IT security Frost company providers Sheldon and like our to continues the award important company executing provider She solid years first serve the Sullivan a related

Now, billion, prior on contract driving We overcome of financial X% to a compared with continued review $X.X approximately and focus losses revenues our to the year. business to as were growth able reported third growth. pressures a wins results. quarter We from on-contract new on of

the revenue our year, earnings the pleased solid year-to-date to on program contributes contributed Our to this execution am outlined XX increase for year-to-date, performance I with of our guidance ability presentation. which as Slide to in further quarter. margin year of with and track on to We expect fiscal full modest ‘XX our X.X% remain guidance beyond. fiscal improvement meet the in progress year ‘XX in performance year see margin and to margin

on centered be growth, the capital on shareholders, organic long-term positioning for best sustained business highest accomplished remains we improving focus value can ROIC. by deploying deliver based and to margins which our the Our driving believe

allocation Given the a spend to on to reviewing like few approach importance priority, we I’d a capital deployment. place capital as strategic our minutes

invest to future to for growth. internally priority first Our support flow is cash

to the long-term in in of of we continues our are continued ensure our expand XX refine our pipeline as XX, our that past We best shareholders. dollars markets on produce the have that will for to disproportionate GTA this to Slide our to investment represented strategies focus. Over area months, with priority and which growth return internal allocated process evidence see

repurchase M&A. then free amongst deploy options, that maximize long-term capital flow various debt generated, dividend, ROIC excess share our including will reduction With in program, the cash we ways and

returning last towards capital roughly leveraging be Over to technologies where solutions remainder going focused share the skewed more market repurchases. few with Based accelerate capabilities, or capital expect we add capital M&A through two-thirds M&A dividends and can the shareholders capital has we our growth when the to strategy. deployment landscape, opportunistically while competitive return of and to on towards our with acquisitions conditions towards years, more and current deployment

million winning as of a as total in contributor we this produced $XXX acquired is capabilities since served April Koverse XXXX over differentiation example in good acquisition have key value solution true the contract Our of and our transaction. closed a the in

value, over includes contract AI our Koverse of pipeline where key serve in current to we expect billion $X.X a as differentiator solution. Our

creation shareholder value our As release, allocation our in long-term is I capital said with focus. earnings aligning

and our commitment year-to-date next Our this to outlook results strategy. for year the reflect

As remarks family. upon moment I to out my appreciation SAIC reflecting sincere would I to like and our extend a to take the close season, my

season. continue everyday Your dedication contributions all turn SAIC. what to as missions, the in each you do is healthy for nation and and which with to wish guidance. discuss increased Prabu all that our thank taken you will call to participating work to And you I financial your and never take our call the of a demonstrated I you in today, to for granted. for now interest your over our in other I communities and happy engagement SAIC support to customers’ and live holiday and you in an results very your

in the Thank proud delivered shareholders you, Nazzic and results for once am morning our of financial third good we again everyone. quarter. the I

growth Our on new team’s resulted focus wins business organic on-contract revenue and growth. in X%

more to I an growth our FY ‘XX contribute our deliver to-date shortly. to in able guidance next working million revenue year. and will confidence cash to XX% margins from being results despite fewer ‘XX FY for in revenue over detail headwind organic free $XXX flow in increased our and improve outlook Our discuss days drive growth,

to quarter, roughly of revenue to our performance, point $X.XX a us stronger losses. third growth plan, sales recompete ahead headwind reported the on-contract we results of organic largely enabled which overcome of from billion, with due representing X For X%,

of roughly to flow Note protest. of Third do as new EBITDA business the $X billion, which of delivered were year-over-year. million repurchases $XXX $XXX $X.XX, in quarter returned book-to-bill earnings include and shareholders awards one-third a third remains We previously On this competitor’s a third a of approximately represent in via margin XX% resulting total which we following roughly EBITDA $XXX quarter million a share million XX-month in in the quarter quarter focus. are diluted quarter resulted X% adjusted this and bookings year-to-date One of the million dividends. our a X.Xx X.X%. of $XX of We adjusted and GTA of the of growth our represents trailing per that awarded of program, basis. in in awards customer not free Adjusted area an quarter reported on with basis, cash of share IT DCSA the

and with ability the without total encouraged development business in our by business. particularly on billion of million success strong reliance a roughly reflects and award diversity believe our growth quarter the awards awards $X representing are highlight the largest large $XXX We We to to drive classified the this contributed orders. space our that in

seeing in initial ‘XX, billion Slide indication Our few healthy fiscal on quarters, addressable remains the to XX, markets. pipeline increase of end at FY on submissions provide we in this year expect an a XX-month submitted of outlook good over are next over we Based we proposals growth a basis. expected $XX for On our trailing XXXX.

are the the of win despite translate million working and our sustained confident in strongest return we at the this the days by encouraged We a from the first an should for least historical is expected financial by Adjusting beyond that X.X% for expect recent This compared year. at growth quarter our be in we transitions norms $XXX We growth and contract ‘XX. the into days fourth business our to fewer believe revenue to FY growth in rates business to success paired X.X% to working to the fiscal approximately from contribute headwind, third headwind and new rates midpoint pressure the deliver encouraged can are with X and recompete quarter year. from X% should in capture. trend quarters performance the second providing remain when ability

FY reinvestment to business. other expect initiatives the improvement and to partially approximately from margin are see offset modest as ‘XX by mix in benefits X% into We

We further and progress to ‘XX SAIC FY narrow margin and between continue differential peers to again the to opportunities show expect and beyond. in see additional

a growth, flow cash FY FY tailwinds $XXX our million, higher capital ‘XX by and $XX a working ‘XX. having be planning. made focus These expecting taxes final in offset tax by are are continued from current We based on driven year-over-year on deferral efficiency free modestly our payment earnings of benefit cash to payroll million expected approximately

As FY based can on share market broader deployable allocate the cash conditions. interest expect cash ensuring flow to our in on the free of our indicated, this is We the Nazzic in currently adjust are majority and rate to environment program we that focused but ‘XX, changes repurchase generate deployed effectively. we

our one, for excess cash free the flow in informed expectations best Our view represents repurchase free versus stronger next end group deliver market the from our program our valuation; cash factors: have ability indicate belief and with market the in relative two, the peer markets robust and three, recent several flow is to and improved transactions, that by excess years; demand of durability. drive exposure that financial ROI for earnings our over we three which flow the performance will confidence cash private businesses our still

presentation, can significant XX flow you ‘XX us cash of our As to Slide shareholders. to on free earnings the expected of should strength our return allow in see FY capital

$X maintain this This current dividends FY scenario towards While our to debt returned based end capital FY use down to Xx to and with shareholders of between market through just the conditions, flexibility the we adapt to result repurchase share repurchases will our ‘XX share and minimum leverage net million and to and trends is program. sustain a pay billion going on dividend, FY the ‘XX. allow approximately of rate interest in declining us our by ‘XX under to $XXX have of expectation remainder

rather revenue core be of pressure cash basis this modest expansion. to our offset the to of we cash flow to ‘XX tax years, is free earnings ‘XX. fairly headwinds FY X.X% Beyond potential provide good Slide our FY assumes ‘XX, expected cash ‘XX FY growth clear, To not cash but few roughly flow $XX ability XX, continuing despite growth. tax million over margin next view annual show between and visibility On roughly be the intended FY we total manageable with and increase XX ‘XX free in points guidance, an illustrative and into FY have which in

As cash ‘XX beyond stable fairly remained through FY on Slide mid-XXXXs. assets shown the XX, tax our

Before thanks wish shareholders. to their begin of turning over the want the customers SAIC my I to holidays. Q&A, for my and I colleagues to echo call at our Nazzic’s and dedication extend you all to to our happy operator sentiment

comes from first from Gavin of Sachs. Goldman Your question Instructions] Parsons the [Operator line

Your is line open.

morning guys. good Hey,

Good morning.

Good morning, Kevin.

What have slides. does in can that you And That’s the assume what to to budget? rate Appreciate a detail all wanted do the in of just years the you helpful. growth of visibility that what terms that of terms X% do the there? I X.X% does book-to-bill? next think really kind assume over few ask just or you in

for Prabu the Thank question. Gavin, here. you

delivered view of organic sort terms X.X% think of this growth we growth about year, way of rates total here, In growth. about our the we’ve X% about is the last

to includes recompete about X% losses. pace between, to let’s organically X% that year call on X.X% and somewhere headwinds again We’re deliver from it, this in

So believe like into a project as a and for out this. we sort growth sustainable year rate we next business of is that that, beyond, of

we to again, But low now. specifically. in that’s they expect terms budget budget In growing do more narrowly we’re right budget would up you’re some the that are of tight in referring remain improvement on single-digit to area, condition. the of the as things sort the not I the We of We environment, areas see assuming sort budget underlying see. do question, say depending what set as dramatic

So and right sort of assumption that burgeoning on baseline we’re a sort suddenly out budget in there. the that’s assuming have we of scenario not the front, projections the now

Got terms in backlog maybe that’s duration, then it. And of just expanded.

translate You’ve backlog of between you much more to a backlog level go the at such of on visibility, disconnect has growth directly duration growth. growth? led bit should a growth revenue forward a though, backlog and revenue Are got that to more kind that more

couple Yes. And caveats a of maybe I think there.

tended and performance our that of average years, of of elements the works as kind we we about one of depending grow has inside of period see programs specific and on to is last of quarter. roughly And think the been the X between of Our we the years, couple bidding. pipeline, the mix X pipeline particular the look the So that inside performance a period has you of were to over key

about sure of that quarter to I as get period a think but of we qualitatively too of inside are time specific the of lengthening period our a think over much concerned team as performance focus about make this a as the not is period performance to possible. to

through period the So a want revenue would that we to see teams the of that? been growth I’d performance think able the of stronger what’s connection I growth to deliver. translating to not would between backlog necessarily between that revenue we’re correlation on-contract and starting add have you and translation. But to direct the say are specifically the growth Nazzic, in

we been in it future, organic today And It’s that the the only give here on against captured in we’re feel working. that into years. strategy do on I’ll seven look we’ve couple and continue by the the look particular good the points out I under deliver operating reflect fundamentals core, I we we think thing we at into able the Prabu got believe the think to by sustained, I reinforce, profitable business, quarters, at GTA between balance strategy into looking the this growth, we quarter. future we’ve strongly pipeline, last back continue the we we’re the and think proof and coming demonstrating or a last well just to as of as to and is is looking sit execute and position executing of certainly And on be take, to the

you, Got it. both. Thank

Thank you.

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

Your line is open.

good been Nazzic. CR. September, and watching Hey, maybe have through follow-up, probably a people volatility near-term Maybe in question, It expect morning. is to – and off in really more that hey, morning, one thing traction some to a we maybe some October. seemed good Follow-up August, the come saw good of outlays,

the your comment and October. customers saw fiscal of what could I’m opportunities? maybe ability capture as in curious on the from terms if through cadence in activity quarter to you quarter just Your ends you

Yes.

don’t wants then we here in see over of given little today, seen some add CR, the change general, the start Let elections, we either. given sit a we color haven’t But think future, is And always. Prabu future given or year me so. bit a radically and if I last buying different the that to course the as in the anything significant behavior in the very

There business pickups, normal always for usual. really been it’s some contracts do that’s opportunities is short-term and practice us, a as some some for but very to So much us.

I the So we really the anything got into it from months haven’t few anything that’s to months. nor fundamentally do see you’ve perspective, different seen next my Prabu, add? last going over few

Thank you, Nazzic. is trailing been has other add, only X.Xx. book-to-bill The thing was that our our Bert, book-to-bill I would XX-month our X.Xx,

And book-to-bill if environ, to to trend. robust, that rely does that demonstrating think that’s way are a large not in see healthy there. think this the in we that a likely think of delays overly I we’re And some probably on I you’re a you’re other healthy think large not I there on source And awards. relying metric thankfully, boat. awards, I is book-to-bill

Yes, point. good

you, Yes, or the I my appreciate for outlook do X% your the to we on group that’s you to there start year. on is for through Maybe range? narrow great you initial range all think can Prabu, Thank just just largest you where expansion to maybe both. relative color. closer to so? think that the think follow-up what the question guys peer margin as the about you margin XX%, next probably that when to are perhaps And the gave do get could color walk be is side, something in you to see going to you contributors that next us year

communicated particular that Bert. topic been we I between this do difference the that on are. and we see margin to peers that last where call continue the and story margin And Yes. a path fact the bridge we we way to on earnings between peers rate. us our thought do reflected to time over our think us are consistent the and our gap where see about I that in question, on for acknowledge we say We’ve appreciate and

create a over Now that, time, we make and against we that do target over this to substantial to as progress value having said time. opportunity shareholder do see expect

Our the early Look, it’s aligned view margins a baseline for for We backdrop over seeking from a next see always make margin business taking where days are we get our of are margins against to of incentive business. improving we improving improving and the of potential to metrics the margins And FY investment performance to year. the are balance sure underlying we against the comp ‘XX. that for that view needs wanted balanced time. to

striving that’s think, been maybe into the X a I of more think So factor. I’d the over but equation. years, has the inflation balance we’re least, not I always, maybe to year the bring to And X say last last

it impacted side. on While it we reality margin on bit hasn’t or a of hasn’t the seeing the underlying costs business, performance a of escalating improved is margin little it labor the check improvement keeping the are is because

So have view to all to underlying sort factors going margin the ‘XX you of And committed is margin performance for improving what that’s for see focus and these the if I we and there Nazzic combine for FY recognize potential our the of is team. and the initial be are baseline improve. that the together, business, do you to where of

Yes.

is out margin curious it is just this shaping know clarify mix to I’m because us it about I’ve load is the ask to before. I get you is opportunity going us be for of rid guess or there could is thing is overhead get an easy of something, to sort more to that I Do or opportunity margins asked one the expansion? Just portfolio think if I stands combination? better

know easy, I word we’re Well, I all say tell – will of would that above. that I but certainly the focused I on the can don’t use you that

exactly outlined. is as so right. you’re levers multiple And Prabu there

structure ensuring that We areas are spending that strategy sustained our our support continuously cost at our dollars looking of growth. we are precious and those in organic

part and conversations. absolutely lever continuous. And recognize of that to a is be so ongoing that has and we And

portfolio, we greater GTA general, about drives in think the profitability. As

where the in on-contract work So then the against opportunity solutions well. and we and balanced of the cross-sell growth, there GTA for even in current in existing drive business, the – as an look as our is strategy opportunities core, contracts some And see opportunities. that bring further those we current in the to mature as value higher we into

overhead very every needs our it’s idle and it either be think structure I it pipeline we is to where fair or where sit at is lever assume say needs look never to and be. to So we that our

profitable We are organic consistent at please always just at But with are looking we all sustained the to drive, opportunity those again, note that levers. looking our strategy, growth.

much. Thank you very

comes line Kahyaoglu of next Your Jefferies. from Sheila question from the

open. line Your is

growth XX. guys. how And Maybe over could then time. go morning, think good of you end if And on the are how your for and verticals Slide time markets to Intel different frame maybe guys awards, going had X back I – what’s you space sort thank Gavin’s growing, about budget thinking question, Hi, talk you listed the to the about Slide you wanted you in that? significant your about driving over

couple of comments. a Yes,

CR. headwinds federal and It’s macro which On on low think at in we will the well. more I some budget areas with some the inflation, assume than that the obviously, the challenges enter creates the little And industry we budgets, general, in growing the as looking early is growth tell. budget is dealing with at to level But a government same others. then and single-digit obviously,

for So that fair I stepping obviously, just anything our that. think, good view, But seeing very not And say, dramatic there good our as view environment. the in we in significantly we’re Sheila, strategy. back, will challenges happen, macro at the approach changes general, looking to that we navigate to to think it’s we’re looking the for industry. budget things any that that’s extent change extent not I the is To

to markets, see modest portfolio. we growth As across the do it our end relates opportunities

well some at level our DoD the the improves of and access of Intel. federal on obviously, the helps course, to balance as civilian obviously the then, So market, DoD, focus increased of programs

the as that we others. reference there growth operate about given obviously, it’s we’ve that any say, there verticals that – we macro we And business think more as of balanced is pockets some to to in. across as areas And out the it core. expect is relatively relates so GTA of the than portfolio, But with I would made

to to of the the we growth disproportionately GTA We look of out the add position and portfolio. to we but come across Prabu, expect anything? grow do want the the several company over part next our board, years, you

That’s perfect.

Does that answer question, Sheila? your

Yes. capital ask to No, stop does. get I back cash efficiencies, flow, working about going queue. that in I’m And maybe about then you free I’ll think how if I’ll greedy, there could and those? because being And the then

question, I Sure. appreciate the Sheila.

are So year. to look, on grow outlined about flow free going And XX% cash this flow, we cash we we’re year. XX% another cash by flow free grow that next we said to by free intending

on or level there for are assets inside could decretion, actually been As tax question are tax the you that and you just cash cash we tax side, on out to is specific over address better assets. the will, our modest think cash for think tax or on visibility view I on is we intended good if earning it’s earning worse, of over the a Chart a assets our not? of XX I the there see, portfolio. there And is on

from we’ve management that into the on prime out and our flow management contracts DSO growth to we things on conditions doing of continue much several improving growth DPO we couple about tends company end demonstrated this over to about are the next into working make cash free management with years of our less to the a X% grow are working offset of grew and management just the on the cash as there as we to be As had do and a to coming plenty the margin flow. to capital, believe XX terms of year specifically to years. shown if years, that is conditions the as offset us business and going think we in we from and free that capital of free year We that includes are and you flow subs X% benefit that capital tax driver about are everything we outer last assets to that between cash based getting next think terms of grow At of we to side inventory year improvement can. handful modest think the focus basis the on for the for this headwinds over working and free points. that a contracts sure cash potential day, the of our to flow, potential this there

able we flow think cash for very continue the not years. think we it, years, the next terms recognizing, over the effectively X very or with of assumptions, to cash set nominal then is a free the flow potential the next cash of think about grow as as directional can X we be So it to being free flow generate is we but caveat free of guidance nicely in for it’s to a this course, company view several the for deploy intended cash flow, where and this we

you Thank much. so Great.

Of course.

of from comes from Strauss question Barclays. David line next Your the

open. is line Your

morning. Good Thanks.

morning. Good

grow relative to So X% little a peer that do like X% beyond How bit sustaining that will growth the you’re talking group above you your group? do you plus grow X.X% maybe ‘XX, group? implying think can you’re X.X% you’ll Does the it to think sounds think you to underlying – about that Do budget. you’ll to peer that your above growth? peer outgrow you translate

Yes.

that take let me one. So

nominal think We of X.X%. sort next we as like. year about looks the it’s for picture big said what very about So midpoint, view at the

a think working year, to the we next but about X% days for the If that X days fewer overall, fourth you in rate X adjust growth it of translates X.X%. quarter, to

they think two where restore our assumption. key key recover win That’s there back one, to I and continuing probably recompete were. to here: dependencies rates are a

progress good the internally demonstrating on are we recompetes. think I

our So I percentage encouraged are in higher business of winning by I seeing pursuits two, and think this early both are are regard; that trend, year. new we we a Nazzic the trend that

that continue trend. I think us for to it’s important

the think basics really I effectively. are working

look, the We the peers some about for that relative and out think see as as we this we the there our – question, budget think well of game. peer as the a get from there. projections question out models As I that are

there I organic X% circa could to think going in And X% no I the right it healthy X.X%. and good be of is sort to mix to rates that pipeline to It of a this are mean that X%, with underlying growth business reason X% X.X% linear. we are think investments that execution, tied targeting generate not to doesn’t that is growth.

it. be Let doubly clear me on

You have you cause a a way, new that bottleneck will will always along the growth. business will that recompete a extra creates win have and

to a and So, targeting we progress on of to we for the but losses execution. we there one by wins step this have our we intensity step business, and the and back recompete we the recognize of are the and level and wins business at I time, is are and that noise made, an sort this quarter encouraged is up from have rate the as keep growth underlying of losses, me, new aside

forward they terms do us talk rate the Great. color. where the rates And on the trended? Thanks win up have how recompete better of recompetes, just we for of – in you of going then mentioned how the What for kind have recompetes. trended are much level pipeline about set reason win Can you recompete? you is

in but in those what’s of is no Vanguard said XX% outsized be business. would always And in impact year. see that’s given [ph] seeing next year depending have what nominally in they up on portfolio a percentages, from level to have the recompetes, the of on are general, XX% different to mix. we of to recompete for that. Obviously, comes I we say, going timing we Our some is the lumpy PVMRO this and tend

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

line Your open. is

Yes. for the Hey. Thanks question. Good morning guys.

Good morning.

maybe of there? just I do that focused look to remarks, less on And seeing In extent focus. it’s there that wanted market smaller to sort to expensive, are are mean you are still at? some in of going like are you about of I it specific think kind ask are would sounds a assets the areas deals, the areas talk about And you comments more prepared more you of there or the bidders? M&A. be your you what Can

Yes.

Let tackle couple add then can some color. Prabu those a of me and

general, continues the to market in active. think I be M&A

are come certainly that look obviously, some. there market. the seen rates, at some market, We look M&A at volatility Interest in We to certainly of don’t So, assets have we it creating to-date. haven’t but the potential some.

being part the what I market in say So, have SAIC’s think pretty seen be that the With lines would highlighted. of focus most that as GTA I of last years. for it would have the couple the interest, along areas said, about we we is much the of

anything not as those types process very, good we to go selective employees, remarks, we to to my we it’s would the us. our be interested M&A also organic growth bear But interest asset if to is we areas at in but of were Obviously, make sure portfolio an So, be intense do, be profitable the drive would ability mentioned I very in of we as for believe those best our that company through very a that prepared our grow. come would interest right shareholders. in our where accelerates, that now. be we we Those to in would assets looked and have the and of to decided, for in just

you Okay. Great. up know maybe any how see if kind big Thanks. about guess opportunities that to was I coming and demo is But big market you want could market? I the potential that of other then of kind ask And in about the I there talk Counter-UAS. day.

Yes.

is We I relatively believe there in the call, it’s was sit believe, It stuff. it show got we have well. that see the two last to we and or really is our down it developed, a month last And the And as chance is what actually, course being had it we that to particular new. a set market. you years. is of this solution. have as We an area opportunity highlighted today, With been last I very exciting – solution a many several we over as ago said, very was, months week. of the in the here about are But services excited I providing over compelling

with DoD, position close very working ourselves. are We to the obviously,

We recognized the point, to by are very it’s solutions. solutions proud Army is. early – one would three the end-to-end providing are of too this the say at fact where market as solutions, of in that But we holistic we what I tell think we that

well, just the is which in And set market as work governments area in our especially It opportunity a not do space. But us a today. is U.S. see grow. an great It clearly, integration to assess small for support it believe that. access. as is the is other we of strategy, doing are it a systems an consistent government, but in with We we there of to revenue lot relatively

So, come proud today. by has on as and sit to how But that’s accomplish happy more, the of very here what it excited to there. more team more it, we very to but share and learn been we able

you. Thank Great.

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

open. is line Your

nice Yes. results Thank and you again. so much

Thanks Cai.

– maybe us IT you on PVRO? are bids we yes, color do One outstanding evolve, come maybe and more some could could the So, up the when the pieces, many protest of you give Where how the like bids with some

Yes.

with process. the IT So, customer, their going the back One is through

protest with the So, and it’s out back it protest, come the the formal of customer. window is

timeline than work So, much award I that. process. will know really their don’t will they decide and more They through the

part Vanguard and how some right they we opportunities believe year. strategy color. our a adjudicate award. let develop as us – into the way are in I next the to of procurement next year. And to to of low will We procurement more we going as they But now. that we to add the get Prabu go are and is clarity continue through cycle or certainly, more change any the get they going going year, believe will As first evolve I it for as into will to their risk continue relates advance their we it’s relatively certainly that

comment One that’s fully which are some take they executing before quarters was Falconer, contract of DCSA Cai, on we to quarter the from a protest fiscal end only our what clarification teams underway on do under we will And IT ago, there. to now, AOC and need there. perhaps it two is and year. do the then expect we other or the

good impact has So, One momentum biggest we have the got on on new some would IT potentially got say FY probably ‘XX. business front, DCSA but I the

see be Great. in second fallout the half And compare. of comment of that growth then to you Thank year. I you which am suggest stronger kind five-day made basically fourth much. correct you tougher quarter, a very the that in would that’s the is the the going And the that, the

So, maybe quarterly walk and factors? those through pattern some of us the

the Appreciate question, Cai. it. Got Yes.

see And sort five the of sit QX headwinds if of days this from So, all greatest NEX QX, year year. recognizing working today, for that brings turns health warnings potential likely of end are we QX, you relative for having rolling out, next with the we QX of growth the is is It some still QX. calendar the that, of headwinds NASA from on of QX as we fully see year, course, at here off. potentially company. see next level we where the fewer of to program this us. and where to will,

the us As grow, up has incredibly for I this at What better year, of contraction there be team just and are growth. and of intensity. go this we maybe and and has level done we small out is year QX sure start keep the can will that and do we quarter done every work QX sort said of would Nazzic QX of of and QX then make a that proud little the to team bit estimated levels this

here, we of this to course, for of left bunch have got months three the year. as of have year, estimate our but whole got a that’s end And next sit So, next to we year. recognize we

sure year continue So, and we doing ahead and that’s opportunities are sure we but can to of us delivering are to smooth as we shareholders. as that for will internal and focus we making truly much making delivering risks ensure are driven a on plans, our we

answer. Good much. Perfect. so Thanks

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

open. is line Your

some you if wondering your ranks was your describe I space give business us color vectors. could in – Thanks. growth your and possible where

think kind across I space business? opportunities said how to you but growth Nazzic, would the characterize overall the relative portfolio, you of moderate-to-modest

GTA and opportunity a areas about as us a certainly part combination mentioned our is of the think before, our business the for that it’s the great focus if dimensions. we is we space intersection expand growth we on, to with have Space both in of strategy. great And areas,

area, they the integration to especially systems opportunity space we as more in the that in see are that certainly, drive the well. whether as delivery GTA, So, go to we opportunities the mission and see mission, Obviously, applications, cloud, there that space.

is strategy, I it space reiterate of and an It complementary important and that growth So, is would domain our GTAs. directly our just interlocks for with us. part is very

Is you pretty can with reconcile externally which focused do a much out multiyear kind existing seems external. and that extracting portfolio growth as just of at some steady focus less of on as strategy, positioned the and and be internally the growth industry on what in how portfolio X among there in more your growth follow-up, driven years, to of revitalizing organic sort strategy years, sort sort years? of juxtapose is of a organic and your you want risk be you contract competitors My period X the of end in of and of as X won’t it that any

parts a market. Hi the But amount business. And take we sort way rates that the amount onto it’s invest is and non-SETA of our growth. to is the how work, space growth of think We restricted last in the gives the of the legacy work. this fair that, we what’s is business us And course work the us work as side allows to space the here. grow of has Maybe of is it the side on buckets, us about the inside that overall, It having than kind business growth there. hopeful Prabu that for is of Part a year two us the think market side, of SETA in development work company. of the where have sort allow business do disclosed do area that’s in we of The about of space has continue non-SETA non-SETA gather and allowed the said work in And share grow the of we SETA we take market capabilities business higher we are the by government. business, solution-based also or to are work, not we is we space at our offering this to And to bring on market I as how other non-SETA would and share. we a continue grow fair our over SETA SETA good not sort and can to will question. I sort won real not to way these that about so, to of it our there development that a SETA the think positioning. work SETA restricted really think potential surprisingly. part the of we of the space have about say the legacy work some ability where the impacted the our therefore,

that’s we about So, positioning how the think portfolio. the inside of

the next all the will in be development and to where that see course the proof’s over folks work, Now think have we and peers to it that’s of the the going several ranks relative I pudding, that XXX% years.

Thank you much. very

Sure.

Seifman question JPMorgan. of line your Seth next And comes from the from

Your line is open.

good Hi. and much Thanks very morning.

Good morning.

overall expectation. in bit quick little this underlying market ‘XX. pace, low-single the you set I about think look a ask about of growth digit grew I that to the kind at we just just kind than wanted faster talk budget, to one, the of growing that like at when one level And

it’s decent that in will chance month, the faster there see out Congress We grow than what is to ‘XX. comes this going of but a

growth is guess your those range whereas the based weapons the budget environment? in kind view of that lot closest overall peers this end particular is the the So, – budget robust is of digit headed I of markets low-single view, and digit of within your accounts toward your more a on that of growth sort low-single fact that that

Prabu way nominal about sort fair way in through of a sort budget our the of that budgets is it. the are would there rates working and here. think Yes. say increases ex-inflation. Seth, the growth real I other dynamic are we to That’s in

budgets towards that harsh way services these we way And a to the that world about well real terms, in qualitative view sort we as that being of right are tend there at recognizing of where the as directionally, as for side higher, demand bias as on so growth it, sit to think would our least way. here to low-single now. the side. growth of, describe system is services in nominally, quantitative I the it’s that’s element some a In of but certainly would say, just bit seeing trending a a as hardware reality you think more underlying rate, or of view go tending digit the the are side we side, of And little it’s sort mentioned. an is, we But than probably the amount be also a services budget incredible

Alright.

Okay.

will one the as earlier. is impacts government touched with we thing Certainly, is, think on add I of inflation well. I dealing the this of some

can tried have early that know And the to to So, down. the are we we opportunity or up that. further change into forward in some And reminded all the I that. call, March some look continuing develop in Prabu guidance that to things we next certainly, early there watch to are of us but year, guidance but provide

Prabu some very out, pointed great but that are opportunities. there always, very, As

ability demonstrated last of great our that couple grow, to we supports to have the We low-single to grow in be the pipeline years have and digits. able

more think view timeframe. dimension next we that certainly early we an put to the we to as we color So, will on get wanted like, March forth of more what and provide but looks year

anything this mentioned follow-up, the they to period, about high the performance Okay. ago because maybe year release some or aware in in particular Thanks headwind really a there contract be you think EACs. Was there I press is were very quick that period in then year-on-year, much. as And Prabu, of? exceptionally were any

question. Fair Yes.

negative it I related for in the has X% the Most was quarter. performance about we ended. of EAC think of adjustments single had period a program where to

but these So, of I had a would it’s adjustment, up process that not recurring the in we the that it. thing, but things say cleaning was

Thanks.

much question. very for Thanks my Okay. taking

Sure. Thank you.

you. Thank

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

the you, joining us Great. Rob. call on to Thank Thank everyone for today. you

questions, great feel reach free further to If day. any a out, and have you have please

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

now may disconnect. You