Science Applications International (SAIC) 7 Sep 232024 Q2 Earnings call transcript

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time I’d like to welcome everyone to the SAIC Fiscal Year 2024 Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. Instructions] [Operator

to Investor over Please Relations like Vice Joseph go the of President and turn now to conference DeNardi, ahead. I’d Strategic Ventures.

Chief quarter Prabu me call. are Chief and Officer. year Investor DeNardi, financial Financial Relations morning thank results Ventures, for Nazzic Natarajan, discuss of SAIC's Good Executive and our Strategic joining and you Vice President our XXXX to Officer, name My second earnings our and is today and Joe Keene, joining fiscal business

Today, that today’s XXXX. of the our year today’s morning, we provided also filed be results be quarter second our will in conjunction supplemental a for in results issued you and along documents, can These and find in will utilized discuss to management’s ended our information remarks. financial today, to found utilized of our fiscal on where XX-Q copy slides at addition outlook earnings evaluating we call. should be Earlier be with Form prepared XXXX release, which later Xth, investors.saic.com, to August this call with presentation

our results statements Please risks, uncertainties to I are the could differ risks known unknown report these including our a statements we form annual and make of refer made on from risk SEC to on actual to XX-K. today’s this subject of call you and cause materially may note on factors for discussion that that that forward-looking call. section filings

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

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

CEO, Nazzic is It now my to Keene. our introduce pleasure

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

of both revenue X% Earlier quarter year-over-year, increase of basis improving another our organic XX ability margins which points margins at forward. deliver to and today, of speak X.X%, solid we financial of reported of growth an results adjusted over to strong EBITDA growth going with

through recognize discuss I the we again SAIC Before Month where financial have partnership This like past who September look Action the to raised Hunger at SAIC outsized do hunger our once $X.X and of end members America. campaign communities. decade. continue with team, results, would impact is on to at our in Feeding our our largest I over over an one their part million to help is to of having $XXX,XXX XXXX SAIC

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business. delivered review growth, on-contract continued outlook. Now, the a progress program solid strong up our and onto financial ramp of reflecting execution, driving in and results of quarter results second SAIC our our new financial

our our Looking profitable growth. drive innovating back our leveraging over these on people, on incredibly we’ve talented past and the industry-leading better excellent few shown to brand, solutions years, proud on of I’m progress building organic

employees. since and opportunities ability for convert calls ‘XX year demonstrating FY for updated a EBITDA strong revenue organic to our and into margin separation, guidance the value pipeline of highest Our of SAIC’s our best for opportunities growth shareholders

on us well our at investor outlined in ‘XX the Our FY multi-year day. we positions strong to start deliver targets

business model, substantial invested on accomplish margins our cash asset-light shareholders. increasing while to capital, true Importantly, and this return returning and we to will staying

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the years Logistics have & acquisitions deliver ability line Unisys of the divestiture sustained, market. we in the of including Management our our better Halfaker will Federal, actions and Portfolio and profitable or to growth Supply Koverse, business to taken recent Chain than with contribute in

will and on increased Prabu’s our you, Over Prabu. Following discuss my discussion financial briefly to results guidance, transition. upcoming I

delivered quarter good with focus everyone. we and outlook our I for continue discuss year. morning as to in financial intent. in Nazzic greater proud we detail and I’ll you, second the am of then our and Thank improved the results results execute the discuss

fiscal $X.XX minimal and on of existing FSA and Supply and sales. driven of IT prior year. Revenue and had One Logistics related We of Chain second revenue our in begin second-half DCSA $XXX increase an of when labor to joint revenue reported ramp the the the the whose strong in work business favorable the contribution quarter, billion, up year. program our from materials was from ramp to venture new the primarily quarter expected X.X%, Management growth results quarter programs, by We excluding improved in predominantly of is million timing with productivity,

driven the strategic was by margin in performance, of to program timing investments efficiency the an initiatives, year. planned shifting points certain later EBITDA Adjusted the increase in of strong XX and quarter X.X%, basis cost year-over-year

roughly diluted XX% operating an in our average EPS represents driven weighted the count. share a increase and the diluted in of performance year-over-year, primarily by X% of $X.XX decline quarter strong Adjusted

million quarter continue to and improvement working adjusted in flow, efforts. to and chain traction costs capital sale supply Free $XXX cash $XXX million transaction good on for our we see other was as our of related fees year-to-date the the business

the twelve in primarily year. the to be quarter million beginning we expected book-to-bill of X.X of where times a resulted and Due in timing bookings of times bookings a book-to-bill the Net to the awards, are basis. $XXX and had trailing our X.X on below at of month planned

under program, in the the quarter task in Consistent with from this $X.X quarter. to as second orders bookings practice, our do awards book which not important net billion protest value any our program. reminder, a we expect we cleared include second As T-Cloud receive our

the awarded approximately task over of This funded the we business. award new In IDIQ billion $X past fact, is is our in single reflected not which backlog any given three have beyond XX% in work orders years, in been year.

IDIQ that or to bookings award. our to approximately full contracts, tends one comes fact we time Given which None value understate to IDIQ that XX% backlog our recognizes of of continue need annual from this revenue to versus of from take these of our backlog. the practice away the an build is at partial sequentially and

our improve strong and continue to we year. XX opportunities the value a in pipeline second-half of and and of award slide the see on show both earnings award we of the to materially of presentation, submissions activity growing As expect

business In which fact, roughly new the is work, for of XX% beginning multiple since the $X.X approximately third of of billion domains. we quarter, have across won

are Based within these contract, in of Maintenance as Hypersonics support Included Radar the and support the program and Concepts Sustainment Advanced program, awards Service a Space Ground the the Navy, Fielding MultiVehicle Force. in known of GMASS,

value. played important our view internal investments these developed window, customary within clear to our Innovation in Favorable the wins shareholder our to Factory drive but returns these the programs long-term related highlight These want to feedback that solutions captures. customer role generate reinforces I from that protest the the Engineering need we

Please that for discuss have quarters directional additional year our our updated and fiscal now with outlook fourth to fiscal I’ll note we provided assist XXXX. modeling. for third guidance your

billion, to rate a We $X.XX of highest separation million $XX are in which our approximately represents growth our the of growth the since to guidance increasing $X.X XXXX. range X.X% at revenue billion organic midpoint pro-forma by and

plans We our encouraged are three-year start targets. by and FY reaffirming strong far against thus are our for ‘XX FY and revenue ‘XX meeting our

to continue revenue into impacts strong weighted second-half to make assumed discussed award revenue plan, timing our fiscal in have XXXX. contract we are transitions to visibility the cadence of While year the ‘XX delays from growth of previously and FY the likely

year-over-year & FY inflecting divestiture ‘XX. for our growth Currently, we be Chain first-half meaningful in flat FY the to Supply ‘XX expect pro-forma the Logistics of Management second-half roughly more to before revenues

this into our recent have We opportunities given and wins visibility growth pipeline. in

we our call. outlook more course, a ‘XX our earnings during FY quarter on provide Of detailed will update third

we margin to X.X%. range of increasing guidance a of to strong As year-to-date, EBITDA are result a our adjusted X.X% performance

to additional We drivers on regarding provided detail presentation. the first-half margins slide second-half XX of have of the

margins improvement FY ability to While ‘XX low-X% calls X.X% to our our year both in for increased target second-half, of in ‘XX of execution the X.X%. the other confidence plan of terms and the our program for our initiatives drive reach start to performance FY in margin impact margin

margin value. invest to balance our communicated, have grow and against and we company As long-term objective improvement consistently the and near-term our objective to profitably drive is

driven $X.XX EPS We guidance are tax range operating planned lower a mainly and improved of to adjusted a results ‘XX effective to by increasing rate. $X.XX FY

our our performance maintaining flow cash to and consecutive free range year. of year has in adjusted date guidance a for put us FCF transaction million grow to $XXX by We position a to good our XX% approximately a at third $XXX are million

of with and continue FY similar $XXX year repurchases expect ‘XX levels to Finally, this share we to million $XXX in FY million ‘XX.

her opportunities for ability shareholders Nazzic, Before recent to culture unmatched years. turning to and leadership is industry. and to the employees, thank in the her all across stakeholders, over an I Nazzic’s for call create want inclusive customers, our

Nazzic. will I over that, With call to turn the

the for you Thank kind words, Prabu.

transitioning I call, to stepping assume down special on role advisor October discussed at CEO. role of CEO last we will the X a Toni As which as and earnings on be Townes-Whitley will time quarter’s

SAIC I as years, three ability Halfaker. CEO. on for I of or on effective portfolio reflect took quickly then at Koverse, to and and of these our followed I integrated focus proud the integration accelerated team’s I a acquisition commitments am priorities earnings our you All the Engility. deliver on strategy. I by the stronger to As Engility first Unisys, to these our to and my of immediate past its moment on a SAIC outlined discussed transactions call look key few back commitments. made contributed effectively supported

organic focus I revenue on profitable, our immediate discussed growth. driving

value done a and consistent for our delivering career way and Our people. providing returns opportunities disciplined our team exactly customers in has shareholders, our that to greater to

the certainly least, win a but in I raised our SAIC strong talent last, we talent. down, accomplishing strategy any is And to the and position entire to feel of an aspect our paramount leadership not step bar war enterprise, exceptional I the continue with that have Across confident was for team. as strategy.

several also proud recognize a ability and SAIC to industry. SAIC. future ensuring delivered done. differentiation, Toni’s never what She priorities on leader over I our remains I am to confident in very am these but committed innovation is SAIC I through work advancing these has of is last our years, in the lead in

months to together recent worked smooth a for We ensure in will closely our to and all continue have order in transition stakeholders.

and thanking their and on at SAIC lead recognizing by to purpose our communities, for nation. each contributions close call to opportunities. Q&A. by their my focused friends our protect to company, so to honor purpose, been to SAIC our serve and united and It open want We can has I colleagues for other is a to an by leverage technology now mission, company clearly the our inspired by driven and world. to

[Operator ahead. question go Please of from will line Morgan. Seifman Instructions] the come Our Seth first with JP

Hey, it everyone. to much your I seems morning, Nazzic And wanted as SAIC also preparing good and ask… well. great success thanks company the and work at for congratulations, future job, very and all

Thank you, Seth. I appreciate that.

Sure.

it for might I fiscal the seen, and would changes assume forecasting you And you outlook, for what growth know, a -- I the ’XX we know, at look at wanted company, we've you be opportunity strong there fiscal ‘XX, if course. budgets ask to so about the lot that, more there. like, given and that know, ’XX ‘XX. you're the looks Of

for level of how So might you and can be it what a take little that us at tell think now, and you about you should growth know, we look faster? to you for for that bit right kind what what keeps

morning, the It's Seth. Prabu here. appreciate Hi, question. Good and

in are know, couple job quarter end of ago. into that the more to And, indicated done of year-to-date, strong a as expecting the book-to-bill And as couple you fiscal of here. year, are so places script, next expecting year. some on with growth we the difficult to Obviously, to, we of given this a trend we fantastic of start on performance we've going look know, budget You delivering conditions this that, a of continue about you year. the then know, base trajectory recognize And or are and growth good but the higher maybe along had we to than comments in on couple real exit you team's the, you the a off we grow know, to flat year projected a of operating that year. different know,

to committed that's so know, with we're the execute trajectory, to confidence the are ultimately demonstrated what the to go at now. to keep the internally to we're months X% that than right you we've can X% have recognizing harder me, of signs And the that us gives we first good, six team But, the we going but of intent growth push always year.

Seth, thing Yes, you know, still. early the is, one add it's we're I'll -- days

they're profitable tell for that's So our of organic into outperform, it's budget indicated your best quarter look and way team we share but continue the into challenges closer this opportunity you performance will and we consideration those the sit you the laser we're and more certainly engineered. is updates. think to to earnings sit view that as growth. we today hear our Prabu here and we'll We'll way just and best taking That’s recognizing focused giving best in to Prabu in always we'll they're call. provide what some today, have next wired, Toni we've the the as consideration of the one driving I get interest interest from as And take we that, today, had. believe and on you visibility where we

that see you book-to-bill you delays mostly real in Great. you'll terms when anticipating you ahead on things were conditions about talked expected bit you're this growth. impact there? or operating Are the awards? you, is environment you. you've just Thank that The talk just of and maybe Can about a to awards these of terms more you've little the delays we in described, follow-up know, delays more there and behind are are that, timing the And difficult speaking topic on of about, quick.

Prabu here, take that I'll Hey, Sure. one. Seth.

QX to terms we in think second-half expect and as followed on the to fiscal environment, sort year. as We've hill. we budget well I the of QX into you here, tight all expect, our on dynamics the of know, persist that the be environment the of hill

resolution have but second-half appropriations the some a remain will presuming recognizing we side. with, and tight topics, of to hopefully So the cautiously things get into are those of the done, budget on right legislative get we year, proceeding on now, operate the

quarter, the we which and script, as On end of the the won the approximately front, backlog new is we business billion new since the pointed for work, out $X.X second the us. actually in of of roughly XX% work

for that and T-Cloud. the wait the of in continuing cautiously along things are, one, year. Obviously, to have the is of very protest. other second-half haven't hopefully growth signs partner just is this from AOC that early we're that have got DCSA the get but to We'll of recognizing. grow GMASS couple cycle We've with cleared will of a starting to next quarter therefore, plus. And We protest all customary through over proceeding ramp to here

is in in presuming are therefore, picture, going quarter the be So with encouraged to second-half there's would cautiously year, and converting I bag, the big line to strong. obviously of the be And the awards up the team year, Really top that delay and revenue. the get what actually that's much proceeding and to how environment execute a the that large, I to another year, difficult well relative view recognizing outlay in is implied we committed we're the it's harder been awards chart, doing. that plus. the of the for in PowerPoint practice, challenge things where won't as easy of for into but by the cadence for what's some second-half And by as in the to team's ahead are environment it is know think just to hopefully around but going first-half therefore, we the as those and has growth given

very you Thank Great. much.

Seth. Thanks,

line go the from come Jason Citi. will with question Gursky next Your ahead. of Please

have I'm in wish I it. best Nazzic, start. may retirement. sorry, you let Probably missed congratulations, and wait, the Yes. I me

Jason. you, Thank

Sorry that. [Indiscernible] Yes. about

hear didn’t I worries, you. No worries. No,

Yes.

have may missed it. I So

bit than We'll at of first-half. You of the a on first exiting a be adjusted gave little EBITDA we here generated year revenue in half year. margin the in next expectations the lower color

bit could margin a maybe So in trajectory 'XX talk little you well? the about as

good be. And expecting the think, Having investments shifted appreciate year into and I I the stellar, obviously, year months things in HX. that, have the year look, from question, indicated us we've the Jason. and of are in the insight Sure. the we to that where is additional X.X% that first material, at performance expected really first-half second-half six a supplemental the gives in was sitting some said into HX of of some

is headwind be So business. performance operating likely level the the of to of modest that going to a

the always to relative of around performance. half you for leave is now that I'll factors was And course, second with. there's -- in year assuming first-half performance, what the just this what I'll stellar And right we're of

little As at earnings metric generating the we growth as as need team. comp, key comp hard we is the incentive improving to recognizing you for our And are going of look that for to that incentive growth more margins, push about part a push allows additional are delivering relative investing where upsized the meaningfully to near-term. the now business future think the balance more right to us in temporal may we between be in a margins

of that our are we on multiyear over about we to multiyear updated about couple work best the a have doing we're recognize thinking as journey. the top quarters, current we that So right balance right, committed recognize are can, of the journey cut and us for a but obviously sort where of out our we next this to we're of near sitting get but trying guide is end now but X.X%,

quarter, rates in earnings question to margin of FY ahead I a position us want and call but start, of the March and I'm get relative the 'XX we've have see first on targets, actually next and job, get next strong delivered, transition 'XX, we'll year, good around done to calibrate our of got here where the the and we've next a recognize we do recognize to those work we're the you that next as your with of guys for year, off to for obviously in our to of of as proud us ahead latter half year. well good appropriate incredibly And it guidance and we've for margins we really just call a really performance puts wouldn't and I Toni part to

Okay, you're great. what and kind is bidding This labor, of labor general in to kind of and availability your seeing are just just to wrapped all rates quick what's success competitive costs And environment, that's years what then book-to-bills. the having and just into and cost passing of to maybe escalating But of and just a doing been one up that follow-up. and of you the the the reacting few those customer? on that you're the how others rates

little me Yes, about a and labor, then macro provide environment on bit some Jason, the talk let color. can Prabu

we ago. than here think sat as a sit different year I very as place a it's today, here we

to labor so hire. in some And great seeing our we're market the progress ability and

compelling as we I value a think we've hire employees. got proposition very

Our higher time. been rates than retention in are they've some

we've course the seen the year. a hire certainly So increase And we've in and to rates. turnover ability of reduction our over our seen last

posture. help and new our position about I some that. to We've very things tools internally feel advance several implemented practices So and us and our good

on and ensure to as not contract pay headwind attract that at I a the broad retention. some year side, escalation, in we're the we certainly, probably and and our looking in have continue as I confident On some We're can significant navigate at it and attraction, certainly, -- to best say, much and we color. just seeing the and retain was always but market category better industry. talent the Prabu seeing ago, base, more will cost labor than and we can would our provide But minor hiring I the of a labor here sit results place a

want add to color? you Prabu, some do

skill you. sort to certain little that to assuming was X% range of of in what Nazzic. a we're higher we That employees merit is end Jason, pay increases perfect, that the believe towards Thank more. that going for X% levels that think have of range, for require are us I categories to

calibrating So to that's it. how me, we're

reminder, our of cost-plus. a is business As XX% approximately

costing of up, in to costs years. factor but So the us labor if over problem, will actually has XX mix while margin last catch pressure we've on some our inflation that as We've maybe had math. last inflation working XX, has somewhat that a couple years, also the been last higher the couple you XX, of At the will, effectively not of labor-related from of of we've the infinite point, managed basis That's cost. pass favor contracts couple pretty years. estimated company, over over points the allowed

investing margin Things front we're dynamics, growth looking in improvement the and balance and And better some really the therefore, recognize front. as now are where of in picture. we labor the with margin around that's rate look versus endure environment, labor to on business, benefit that on would the for inflation big rates, we comes improving expect drive laser-focused additional to investing but the ahead and of conversation to the

the of if allowed of manage cost-related the includes our in we've our last costs a of number other if will, overall That sort over things and costs years, have really benefit rates, facility we've room running And competitiveness. undertaken we're us to really in fixed the margin in for all significant rates. rates that got we've you we're see initiatives of And indirect focused delivering business. that candidly, the this wrap starting is of of we one will, the the couple has and to on you

a to pressure we're continue and efforts calibrated. stay a naturally costs and balance we to pressure expect and to tailwind of the equation recognize that going those little to around labor But again, to here I assertively, the would the trying is therefore, our inflation be bit effectively margins. manage And sort environment of extent turning

you Thank much. great. That's [Indiscernible] very

Of course. Thank you.

Jason. Thanks,

Your David from line go Barclays. next question will come Please of with Strauss the ahead.

Good best congratulations morning, and thanks wishes. and Nazzic,

much. you Thank very

run just of work the period? and what through the year landscape be you've done over to how rest Thanks. forecast the of kind the as you the well, of recompete current on the looks Could recompeted side, like kind year-to-date, balance of updates

Yes.

me Let touch a couple on things. of

we some So as year have recompete we -- the discussed ago, probably we seen in challenges a space.

the think has exceptional underpinning our the team I metric and improving that an focusing overall done on of in job of the business.

I So are I lose business, confident where Clearly, would recompete very -- some win that ago. X.X government the going competitors years say I'm always the we at new much than we better feel with a lose nature acquires the as we're we we and and But year, that the rate. opportunities. space step in look some into were just our a we're of to way it's in recompetes. way

as that to sits anything We really certainly, reasons competitive as that much our else. Department aware the the the State as it deal significant go everybody being significant Vanguard, deal big But Vanguard through transitioned the on is of for pieces is moving don't evolve. of is portfolio

something our out. all to And through portfolio. It's probably will And sometime that It significant how is into part plays process. so that aware that is a as we're year clearer next become going of of. everybody that

As a work taking multiple putting NASA they of pockets reminder, and award inside of it different are streams. into

expect share But delivering, and want don't out In always win miss and what to sense work. to mission is fair we the on a shout a laser-focused a But us. to Department when the certainly that's customer. distraction most team of because supporting the that's that take makes the to of this State that it's innovate beat we looking meantime, our for to a continue and the position there's delivering of delivering And our I activity. this so lot at and ensuring team to procurement just we're -- -- accelerate

Prabu, do you some add color? want to

updated Thank growth the And the this That our in posted rate the noted was we business at I Nazzic. that would of growing the add. what since here's perfect. we've X.X%. We're separation. guide is about remarks, highest organically prepared midpoint you, as David,

recompete mid-single-digit the we'll rate. let's of call the QX, we in from we're out loss, the growth which cycle headwind spite approximately, are of notably, in assuming So portfolio it, Oms delivering beginning

the project quarter, have, into of Oms will of portfolio growth that the last the program with at laser outlined year. start is exiting are X% cadence timing some biggest that delivering the work, we've but Since timing for to X% loss and of recognize the that but probably backfill we recognize the to sliding Day, what won the worth we out committed growth is new also new Investor the portfolio the Oms revenue consistent rate we consistent the to the work but which that the one the impacts calling

and an that's annual a at a And the X% rate we and think, if on nature recompete something losses, of just little that's basis business, doing. are you to X.X%, work really is the about to expect cut with I from got this committed X% growth X% just next for growth higher think but for growth that set and about our year, us what the impact and is performance this looking business, year, the peer where right of recognize than in solid would we've the line out is, bit team really you

second-half ’XX? capital your just on Thanks. an slight tailwind working Prabu, the color. kind That year of great and what update embedded drag, for Thanks. of see cash, fiscal that of update think the kind a been the on year-to-date, you get was an I it's working I wanted capital on what's to and have And embedded there, then you

question. the Appreciate

And actually last of last the of year in first-half QX cash year. $X collected and good QX began year. the single a was we at the quarter or than of business more to we First-half in And year. last really the billion as performance to momentum of relative reminder, see that a of

XX% more momentum to XX% in flipped. So pattern in to was about, more collections has back, lot year to collect -- that We the cadence think five it, first actually let's here. years continued into HX had more if the Historically, in maybe be half year. is call than you historical HX. the of collect three tends year HX. and the a actually actually And to relative normalized this Last HX to actually of

into there to have guidance we actually happens big now, DSO, of our we worth range of So a be as midpoint which really our getting sit good $XX is picture. about but range to recognize the that visibility day's million, guide

year. I'm pleased full-year ahead just but cash a of perspective, dialing an months within down about. we're expected for be performance So we got to with have recognize day is more six of what internal worry our plan of we is disbursements where the first-half we and be. really the to we've It the to But where collections are forecast of to going from

we process capital I taking have if and headwinds 'XX, on working a picture, down laid wanted seeing system Really we're we Section continue of of good in XXX we the 'XX. from per level continued what you working us that see to ago, the we are to could big performance off we to that's capital. at working traction can that $XX approximately in the and starting FY free big managers 'XX obviously, we've the That's cash that's burn comfort But and addressing first-half see really of the in out and FY capital will, picture two individual gives the dilution, program from $XX at FY right now. share the get in flow we dialed the exactly had level program opportunity, for here. slowly we've targets the recognizing Day, The 'XX to of where level years see that perspective, responsibility year and accretion Investor

opportunity and here So the of multiyear a I second deployment half as 'XX. capital that see to continue as FY sit we in

Perfect. Thanks very much.

Sure.

Thanks.

Your next come line question with ahead. Wells of will go Matt Fargo. the Please from Akers

luck morning. good and question, Nazzic for Hey, Thanks the good [Indiscernible].

Matt. Thanks,

what is the to kind like guess? been just some large Is curious the and it kind that Is kind Are wanted think you few -- than mentioned in that, like of driving it just think sounds kind sort to award year-to-date, I given the just what and protests it's of of driving into is that slower on more the on environment? it you of lift? bookings half, of back of I budget you a you a shift customers And do thought, little dynamic? of cautious commentary maybe delays sort follow-up XXXX. bit

of Yes, provide comments, let I Matt couple and Prabu detail. I'll then some

and my On be. would it the was certainly below we if I different. where in be planned, wanted give to it here little prepared today But think look it was book-to-bill, context Prabu had bit as a And where on mentioned we planned having different we very for I things would to you remarks, that. call the of

business books recompete versus bookings anybody of have as or indicator growth. IDIQ, book-to-bill, indicator, all multi-award the on how one into there And of impact we into that the new award can that are how their of an business. them, as touched is Prabu performance, period it. but single an going book-to-bill go which not well, much know, for many So is so components is

So aspects don't and a that in itself. that there's metric of captured so get in in just go many

had said, for being that a anticipated planned and higher obviously, we Now book-to-bill.

could As mentioned, the this happened Prabu had a the a very month what again, world last it different if should, different bookings of for And in very of conversation. quarter, we've also incredible metric, quarter. a first

do they'll close, things will hands. can, there's that different in forecast protest with this good, is as Delays anything in that's the a is cycle. and to course, So in the when hands. That's think don't the customer's absolute our delays. better much not systemic much our of diligence how of ecosystem as clear operates. of But part best I is We we when

look would delays, future. I weigh with considerable believe all believe But to has a business anything new Obviously, strong that's Prabu coming systemic portfolio there's and healthy that anything said, difference And as we've cause cause CR, the our as this doesn't I'm anything of with customer's some I and with don't me at pipeline. people's minds. concern even very these and in really got alert we book-to-bill, mentioned, a online, the even -- least in don't an have I behavior. or on the budget issue. don't being around there's buying that headwinds So I see that's big sure,

Prabu make So address can sure, that's but it, my the of want view I to some of specifics.

Thank you, Nazzic.

here, take us one Let going add level a couple up to color and up. I'm me of

we the we about -- as laid business And going to think to I the As to growth where positioned we midpoint, out multiyear to say this about pipeline, think the X%, objectives we've is the I'm that's start. I about X% And pipeline relative certainly, a billion. at X%. have hopefully, $XXX then really circa me, think where that's

to of to much have pipeline and qualified much way how then submitting a then are fraction how we pipeline. is of where We that our from as is it the work

down funnel, have way this want objectives some higher, the we've that identified. we to pipeline get volume go We've sufficient growth work that we folks seasonal. submit got to As to prosecute reassure our is to I of listening the our

timing, some year. is Some this of that and of seeing that we're

do micro, some therefore, And put with which competitive pretty I the our have is therefore, our of are up and it front. actually I and pipeline over about And on we new submits business to enough time, that win think macro rates impact recompete book-to-bill. the the higher, losses, get we as me, as

so, award rates the the has got I we've as the up, that years than good some in overall to me, reality We've to in we've tracking last that a that call. we the that that's have our and of but recompetes activity get macro win feel months, list tracking volume the new together. we pipeline submit on is the there's earlier historically. transitory, portfolio to XX are enough -- think holding about X.X of is of and programs our to they last the sits, the just But micro the share are don't over here of recognize new I a won higher or shared the through little And lot but slowed bit need go been business and where first-half and the but year, said Nazzic

color. I quarters, but in a on assume how couple the calculated sizable kind then Okay. And up. over Great. kind given you've see you That's of T-Cloud to pretty to guidance wanted I program guess of how been program? of and that's next I fast that ramping ask is helpful the fast

methodical. nominal of -- next are received higher this going At after. ramp that is design ramping than than gates is first X.X% sales we of to we are of convert get year But a some amount Sure. contribution the expecting initial task to X% to I'll point, through somewhere X% for assuming fraction take one. from T-Cloud. less We've working our program, year actively. this that contribution guidance customers to point, At guidance to this hopefully, into what expect the enterprise and probably minimal a We've the and that the reflects And order program of with that got think ramp. year. do amounts be revenue is of sales One way we are that that our in to year, assumed we between one-half about it very ‘XX. this there but FY the to on is

you. Great. Thank

Sure.

Thanks.

Stifel. comes the question ahead. from Please next with Bert of Your go line Subin

I And Hey, morning my Nazzic and my question you. actually, I'll first good congratulations. for have echo

maybe your through reflect you -- time tenure. on of at sort question, As thinking a high-level just your just

you view at just you your what time in growth we are has time you the think the that to sets you as do sustaining well Just increase where evolution as we up to profitable organic And reflect think into changed that think in toward in at future? SAIC, the SAIC your mentioned? your in company growth that

Yes. Thanks for the question.

look I lockstep look and what in I believe so growth. Toni it as like are at I on today much on forward, I organic profitable forward, and focused as looks going on I the reflect and and So company so

company forward. well this think keep drumbeat do is positioned the going I to So

all we organic could could than we of less as or you DNA And Now I have company at board. ingrained on any X%. juncture driving across focused the think quarter, But have profitable the really it you the is this given see know, the X% in growth.

levels and organization, we our significant growth a certainly my have Over our ensuring leaders we of the have work areas us. have changing that done mindset, the course the at we organization, and have differentiate go-to-market the of that in leadership mentality done substantial investments in growth tenure, a innovation work that the organization sales out

news does what The very able is, I'm I'm So of good heavy lifting day here team team to the stepping every although the accomplish. is day. that the been has every proud down,

and focus and accelerate energy continue will Toni's that mindset, that that even under leadership. so And

done, it we the with measured as what where confident in every and and this company day. focus underpinning feel gets of as gets very each an what sits I gets So today done

the how would that today, So of your accomplished around I do have what I the and highlights answer look question sit think question. anything? that forward. that's how we And how does we hopefully, Bert addresses if

it. that’s no, No,

Sure, thanks.

And maybe Prabu. a you for for just as follow-up

company given comes a have just you great when If just dynamics, on business. to favorable outlays provided noted book macro through what view the towards company the current we're commentary You retention some thinking the already the setup of hiring, you for trends? your is growth and broader it what having work contracts current and or success pipeline where the within on

that these of something be you guidance couple And how contract on that quarters? potentially do towards the levels higher much of a levels Is the think you of growth next tailwind looking at? in can you're pushes

couple sealing oodles signaled we of go I for company billion deliver appreciate and with the a backlog, can question, we've of $XX now a there's that billion on. years Bert. for growth And between $XX left of

the ceiling that have things the is filling the because focused rabbit, chasing or One of last we've of of shiny the the couple any of on on front focus let's over instead things that in P-win that right on the is up been P-win ceiling laser the years new business far are ventures than us new on any out greater of there. sort

sort when through contract there's growth. of than has It to to way recognize business a that's of years. are maybe a last therefore, new growth, win to over characterize balance initial X% be dynamics between source X% more less way of given you for year. work new by rates And plan expectations the business of that competition proven tailwind couple your any the to that focus. of the And always So your higher. our me, I and in offset growth between would as tailwind the on I been higher organic

of team is does to that a that, growth of actually fill focused laser you're on you better ceiling, commitment create go out the pretty what our deliver we on have top that and dynamic. you contract the Again, beginning because ceiling on it's ahead that's to favorable need And organically doing.

full-year as execute it the way to to always next do. upside in the year of would the as we've hopefully, up team hopefully got say, our I for done first continue going is we've well. deliver and of intent year the to that's real and some that's And in with step we the actual team's good, remind we've But and half And we it done. execution what internally, dialing chart the the -- focus work first PowerPoint but just and here

years question. on-contract even on the is on sat enough, oddly It's growth color ago, I areas of a new. because focus I and where to think we we that a Yes. that look two or today little relatively on where great actually as the want and I sit add reflect that's one back three

we we paramount. the portfolio have and talent, on that ensuring at to drive this at so our was people, again, the organic the culture strengthen opportunities program, profitable to the leadership can look, level that looked focus And really the ingrain as the for growth

done just so I've think years can fundamentally ago. Again, earlier in actually is your believe lot few than I is better it has Bert, But we seen that an of I that's to success been where the a focus an on. around That area and absolutely a area was changes. different question, to growth. And work to it's accomplish great area continue an on-contract

Very Thanks again, Great. and helpful. congratulations Nazzic.

so Thanks much.

the of from Please comes Cai Rumohr TD question with next line go Cowen. Your ahead. von

everybody QX beat are I'd Nazzic, at I high. to O&M kind done. well an your job not funds of a Probably and join again, certainly, horse, historically, unobligated And like Yes. Thanks book-to-bill so but much quarter. think is a dead all-time to biggest

And been have outlays the strong. so

you got and bookings. -- you $X.X of So mentioned billion

a for book-to-bill looking So we as what range are in this quarter.

be in window. certainly this should the got $X.X that billion, quarter? -- is bookings -- -- not was protest in all under in looking for of What You a book-to-bill we the still

Cai. Yes,

that, order a So a going at growth and one response the little a Investor quarter which recognize And that let to to always expect support the question, the as control at therefore, team. this the aspirations there. but objective is on differently. that QX, to we we we at or It's in be but be great start we're over to book-to-bill X% X.X. earlier navigate want any we X.X. a number QX, X%, timing We're time, book-to-bill organization, I in answer better would one recognize to try it for comfortably bit be out of don't Day, that in it over protests of average, me Maybe may but X.X That's outlined time, things quarter. not over indicator said want just to to good comfortably to be really off like

fourth the Okay. third you've so quarter. And then laid pattern for the and out

fewer five quarter, quarter, third the in would than actually, -- have million get you impact consensus at first And is I and the the we a And look third, recognize so revenue had from big $XXX the that and number building Oms So days. not by fourth. if sequentially? sharp? million. But your revenues help guessed. very drop with off I we on severe would third stepdown big from have IT $XXX beat a I second drop then higher would the out. with You mentioned us is the to understand One of that why you drops the in kind such T-Cloud How I have is mean, sequential assume Oms it you

the give roughly Right. for you in today, the And important think to was appreciate think look, question. signaled in second-half sitting rate I we QX. Thank we've QX approximately you, And and on how out. I growth mid-single-digit perspective to play Cai. flat it us a all here

quarter. now that right very assumption end the will of at portfolio the Oms third the is Our exit

the big predominantly Oms-driven, QX me, So to obvious bridge from is picture. into QX

revenue is typically the the given just The not seasonality, the productive hours quarter in that year, just calculate days, in of tends just be also but weakest that second component working to QX labor variable we a this QX.

those job. very been to So performance the the has two year-to-date and stellar a our has done to me, variables. team us, are Again, pleasing probably

unusual And that or try are and really we interacted as for the to we me can two that transparent flattening bit about we with the some as see year, that we half a color second about rolling of the year it if important, important of for little as here additional three important, talk transition into with And this given for we have to quarters. you sit next or next into starting was to thought second-half half us first Nazzic typically, just forecast as is even we give be out as to see the It's today, us. but here. trend, more which know not those the

on now going how months we're when to about things year. is a from HX next we'll the up of me, but make important performance that's recognize because to where So QX we to velocity give of hopefully, are. exit recognize keep year an drivers inform earnings we of we stellar, versus been and this the update momentum the QX of couple our more think the want sure call, sort QX, you has And that doing the out year-to-date on we

Okay, you thank very much.

go from the next Tobey Sommer of Securities. question will Truist come ahead. line Your with Please

quantify but of And levels was pre-COVID acceleration retention I of retention of actions, what how the also broadly? employee to snapshot growth does if you. some to the that, -- the internal in growth. it's around figures? of organic labor could compare and wondering course, context contributed that current the have is some has in in I changes market changes how Thank mean employee and impacted you some

give Yes. Tobey, I'll view. you the macro

So of memorized. the specific you don't who today, numbers I'm I was have was tell at to certainly me, give ability will But front ago, in probably here them may sit least the in better we I employees, our have actually that take, is does. retain of opposite the probably is the certainly is and what a year or line points it with it couple much rate a more than which as pre-COVID. turnover what's

to so ability in new on movement hiring focus certainly, helps talent. impact then just retain for our or people, base any new and roles, us our retain to allows And

And that has and retain so mentioned you to the drive mentioned, new ability really in some the attract can. to, where great -- that, I as us a ability our things revenue opportunity of coupled hire, given to to folks with we earlier

the And bring so that talent that's strengthen we're some certainly so been some base. key can a component business our of which talent to areas growing in in in we new

specifics? really it talent. the any general, basis, we a work new retain turnover done labor track a combination we and In of turnover, able positive we Prabu, attract sign. and as some industry as our and the being that to see the below to as on able add and regular this company of well being have that the is great hiring our retain But across very have that the is and teams

head signaled to seeing, up one headcount factors time Thank you, Organic labor probably across is from quarters for conditions Nazzic. in that for quarter-over-quarter. tee the labor the are count conditions aside months. increase XX are improving. thing to all over maybe higher macro the is probably will improved I that organization. little inside The better It comfortably is, about we of first contributing a three directly the business, now two driving We've

companies, extent that is needed ways difficult that thing doing of finding talent is the other have fruit other really The are some parts is to redeploy bearing is we in we the team to recompete challenges, that of grail the the inside a better job of we're now has been for years a holy capital ago, couple than it to team. This business. we human did always kudos doing the management and

that So higher-end in we to on holding talent programs. are we effectively redeploying critical other are

come the much much and starting we the we're investment with and the programs, that's that see we've and some ceiling, seeing inside to better drive to of and organically instead inside talent, redeploy have So doing headcount better an themselves. so and that were benefit numbers holding area with backlog getting that a a retention can we company more on spent enough company that for to at, go headcount actually we're headcount job headcount, time our and of opportunities where in

heard an profitable together me you years, Tobey, one for now but environment. growth guys and more thing creates I'll words organic have these string add, several

So opportunity in the area the of does people, several, mentioned but growing to have of not and exciting or programs of a and probably like area with create I we've programs programs growing And part only are you business, be types to the it so won, the winning these a because or organization. some hire people you're people new associated but want that in mission-critical. company of sexy to cloud space be that are of

a great So entity, to an that for good being areas for are exciting be the addition the organization think and shareholders, I goodness in especially in it's new. to growing

prospectively Vanguard, the Outside into then. sneak years? could procurements follow-up could a over apart I there of any be couple are that next contracts If multiple of of chunky sort broken

the recompete. up X XX%, or most and mentioned, the Vanguard any is of visible, Prabu certainly give given year, largest for portfolio take, our is as was

we the have on of to continue deliver and things Vanguard that is the have until nature fair would that business. again, win But the just X certainly we'll But that's expect impact. to biggest so program share And could our change. and

the the IDIQs as signaled billion X.X data not years. $X we fully last there's just point in about we've to of reflected that backlog. the here, one X is over last And That script, in won

single IDIQ In are last couple probably if the wins of that as of not multi-award just number, part over bigger. award the years addition as to are IDIQ that, we big

contracts, budget few the I focus in you So growth if the likely if the for environment on think outsized you organizations of the environment driven labor ceiling improving, next task contract ripe difficult. be being over are to growth that's inside years filling to especially contract order the the that backdrop think on about think about deliver somewhat conditions a of and out work

pleased about think sitting labor as context, think, I on me, that's on we're right to So doing I in front. we're the with how But the we're the the now. environment whole,

luck, Nazzic. you. Thank Good

Thanks.

Thank you.

question will of line with from Please next Blair. come Your DiPalma go Louie ahead. William the

better place and also congratulations left than the at additions were which Nazzic, you great tenure a Prabu, and team. on to the started on you in X culture Toni front SAIC, much when your hired company you Joe, the

Thanks, Louie.

referenced. takeaway talk from for can your Prabu, win Force ground Nazzic other And the mission either in exciting space its Northrop Grumman for Space are radar it's the services protest significant about or balance contract may opportunities between window, has pipeline? just And that IT know you you in shown and nice Nazzic there the services, but I so be still SAIC limited,

part me let that. of Yes, tackle first the

nail the So the as you hit head, the still in is on it window.

win. always whole book I we're What to a But formidable than will is just because to near to a going in business, we we're say I'm expect not to going is process. the love very not excited, be love and And that win to from we able lot. we're through the more always win new lot say this, say thrilled So the going with to But a hopefully, we competitor. term. it

-- be that's really it's it. to about talk is -- able this great to So

What this of example, I -- provide talk the this the is some a is and will on color great space on call we about periodically strategy. our

programs to critically able to as important we strategy, proof in to has these mission fundamental space points. great being the expand our you navigate our footprint work the being it's and that broader today, domain, been referenced, so And see to have able

absolutely the opportunity the the our those those talk announce your and about being your greater in question to of And course to able couple of look we forward space-related pipeline years. -- to latter of over part next and is

So your strategy. being of to our overarching engineering strategy ability our It's our of programs critical part it's part -- to programs very to player. your of a question, as on important well mission deliver is a first as IT-centric diversified

is a so proof And point great that. of this exactly

and solution. showcased on demonstrations the U.S. with areas? previously systems Day there to SAIC deployed to City other and for Army? New the Great. progress geopolitical at its in York And also in in the make the hot system counter be Analyst of UAS continued front, the Ukraine And Huntsville, opportunity Has SAIC is systems mission system in

ways would pleased of with just don't this they very civilian still the I think broader But we're I DoD, as And are very counter solution. not are continue specifically see tell can we in to customers, that And position proud the to We've Yes, the context. value example, looking with can't and and question. posture Great many advance in good this. certainly our to great as UAS as customers. in to able Army of Ukraine. demonstrate business we that well getting have. an be been DoD the speak I you certainly in that traction

stood very to have conversation we this powerful government take how is dialogue the specific we've solution, parts, The where us and need to unique the U.S. for lack an has better of a as and our built to word, customers. integrate allowing something end-to-end it has nature out of that tune with of continue been we best-of-breed and to solution the it customer

for Thanks. it That's me.

Thanks Perfect. so much.

Louie. Thanks,

we questions joining. We thank time. and have all meeting. will no gentlemen, this That further Ladies for conclude you at today's

You may disconnect. now