Science Applications International Corporation

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 fourth quarter fiscal year 2023 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you.

Good morning, and thank you for joining SAIC's fourth quarter fiscal year 2023 earnings call. My name is Joe DiNardi, Vice President of Investor Relations and Strategic Ventures, and joining me today to discuss our business and financial results are Nazik Keen, our Chief Executive Officer, and Prabhu Natarajan, our Chief Financial Officer. Today, we will discuss our results for the fourth quarter of fiscal year 2023 that ended February 3rd, 2023. Earlier this morning, we issued our earnings release, which can be found at investors.seic.com, where you also find supplemental financial presentation slides to be utilized in conjunction with today's call and a copy of management's prepared remarks. These documents, in addition to our Form 10-K to be filed later today, should be utilized in evaluating our results and outlook, along with information provided on today's calls. Please note that we may make forward-looking statements on today's call that are subject to known and unknown risks and uncertainties. that could cause actual results to differ materially from statements made on this call. I refer you to our SEC filings for discussion of these risks, including the risk factor section of our annual report on Form 10-K and quarterly reports on Form 10-Q. In addition, the statements represent our views as of today, and subsequent events may cause our views to change. We may elect to update the forward-looking statements at some point in the future, but we specifically disclaim any obligation to do so. In addition, we will discuss non-GAAP financial measures and other metrics, which we believe provide useful information for investors, and both our press release and supplemental financial presentation slides include reconciliations to the most comparable GAAP measures. The non-GAAP measures should be considered in addition to and not a substitute for financial measures in accordance with GAAP. It is now my pleasure to introduce our CEO, Nazik Keen.

Thank you, Joe, and good morning to those joining our call. Earlier today, we reported strong results for the fourth quarter and fiscal year 2023. I am particularly proud of the 10% revenue growth we reported in the quarter, which exceeded our expectations due to the intensity and focus across the enterprise that is very encouraging to see. As I've done in recent quarters, I want to start by highlighting two SAIC colleagues for their contribution to our inclusive culture and the advancement of values which are the foundation to our success. As you know, March was Women's History Month, which we celebrate at SAIC through our Women's Employee Resource Group led by April Winn from our strategic planning team and Sandra Dorsey, a cybersecurity specialist here at SAIC. The theme for this year's Women's History Month was Celebrating Women Who Tell Our Stories. which we embraced at SAIC through several enterprise-wide initiatives. In one of these, the SAIC Women's Employee Resource Group partnered with Girls Inc. of Greater Washington, D.C. for a book donation drive and collaborative panels in which students and SAIC employees share their stories about women and efforts that inspire them to be strong, smart, and bold. I want to personally thank April and Sandra for their inspiration their leadership, and their related accomplishments. Now on to a review of our financial results and recent portfolio actions. As I mentioned, we reported revenues of $2 billion, representing year-over-year growth of 10%. After adjusting for the benefit of five additional working days in the quarter, we delivered organic growth of roughly 2% while overcoming approximately four points of headwind from previously discussed contract transitions. Our strong close to the year, combined with recent business development momentum, both on new business and re-competes, gives me confidence that we can sustain and ultimately improve upon recent organic growth rates. It is important to note that our book-to-bill, backlog, and revenue results in fiscal year 23 do not include any contribution from two strategically significant new program wins, DCSA, which was recently re-awarded and T-Cloud, which remains in protest. Combined, we believe these two programs can ultimately contribute at least three points of growth for SAIC once both are fully ramped up. Given the still uncertain timing of these program starts, our fiscal year 24 revenue guidance for roughly 3% of pro forma organic growth does not include any material contribution from either program. We look forward to being able to deliver value to both customers once these programs clear the typical post-award process. While our margins in the fourth quarter were modestly impacted by dilutive material-related revenue, I am pleased with our program execution, and we have solid visibility into continued margin expansion over the next few years, which is reflected in our fiscal year 24 margin guidance for 50 basis points of year-over-year improvement. Contributing to this, and as announced, we signed an agreement to sell our logistics and supply chain business to ASRC Federal for $350 million in cash, which we expect to close in the coming months. While the business was not a significant contributor to our financials, the transaction aligns with our strategy to focus our resources and investment dollars on areas of the market where we have a strong right to win and provide the most attractive long-term return for shareholders. The sale price represents roughly 11.5 times prior year free cash flow, which we believe delivers an attractive return for our shareholders. Although we face a period of somewhat heightened political and budgetary noise over the next few quarters, we are bullish that our disciplined investment decisions and strategy position us well to best meet increasing customer demand amidst a very challenging threat environment. It is only through the dedication and commitment from our employees that we are able to deliver excellence to our customers and value to our shareholders. I want to thank all of my SAIC colleagues for your contribution to our strong performance this past year. With that, I'll turn the call over to Prabhu to discuss our financial results and improved outlook in a bit longer than usual discussion, as there is much to cover.