Amentum Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Good morning and welcome to Amentum's first quarter fiscal year 2025 earnings conference call. Note that today's call is being recorded. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be provided at that time. I would now like to turn the call over to Nathan Rutledge, Senior Vice President of Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. We hope you've had an opportunity to read the press release we issued yesterday afternoon, which is posted on our investor relations website. We have also provided presentation slides to facilitate today's call. Let's move to slide two. Please note that this morning's discussion will contain forward-looking statements that are subject to important factors that could cause actual results different materially from anticipated. I refer you to our SEC filings for a discussion of these factors, including the risk factor section of our annual report on Form 10-K. 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 specifically disclaim any obligation to do so. In addition, we will discuss pro forma financial measures prepared in accordance with Article 11 of Regulation SX, as well as non-GAAP financial measures, which we believe provide useful information for investors. Both our press release and our supplemental presentation slides include reconciliations to the most comparable GAAP measures. These pro forma and non-GAAP financial measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP. Our safe harbor statement included on this slide should be incorporated as part of any transcript of this call. With me today to discuss our business and our financial results are John Heller, Chief Executive Officer, and Travis Johnson, Chief Financial Officer. We are also joined by other members of management, including Steve Arnett, our chief operating officer. With that, moving to slide three, it's my pleasure to turn the call over to our CEO, John Heller.

Thank you, Nathan, and good morning, everyone. We appreciate you joining us today, and welcome to Amentum's first quarterly earnings conference call. Fiscal year 2025 is off to a strong start with growth across several key financial and operational metrics. The combined strength of our business has quickly started to yield positive results, as evidenced by our performance in the first quarter with momentum building. Our integration and value capture activities remain on track as we continue to execute on our strategic priorities. I'm immensely proud of the progress we have made in just four months, reinforcing the achievements of our integration efforts and the bright future that lies ahead for Amentum. As you can see on slide three, we delivered a strong first quarter performance across the board, including revenues of $3.4 billion, reflecting 2% year-over-year growth, adjusted EBITDA of $262 million, up 3% from the prior year quarter, and free cash flow of $102 million. Our performance is a testament to outstanding execution by our entire team, and we remain well positioned to deliver on the commitments we set out for the fiscal year. Diving a bit further into our growth, let's move to business development results on slide four. In Q1, we had $3.6 billion in net bookings, resulting in a 1.1 times quarterly book-to-bill ratio. and a total backlog of $45 billion, representing 3.2 times annual revenue coverage. The results underscore our continued strength and capabilities demonstrated through contract wins that reinforce the innovative solutions and consistent value we provide to our customers across diverse end markets. I want to take a moment here to call out a few notable examples from the quarter. all of which use advanced digital methods to drive more efficient and effective outcomes for our customers. First, the Department of Energy awarded the West Valley Demonstration Project, a $3 billion single award IDIQ with a 10-year ordering period to a joint venture which includes Amentum. Under the contract, we will provide advanced technology solutions including unmanned robotics sensors telematics and digital tools to safely decommission nuclear facilities while momentum will not recognize revenues or backlog as a result of this award we expect it to generate meaningful earnings in cash flow for years to come When taking into consideration a mentor's proportional share of all unconsolidated joint venture revenues and bookings for the first quarter, book the bill was 1.5 times driven by the West Valley award. Second, we successfully recompeted the US Department of Defense counter threat finance program. a $248 million contract over eight years that leverages mission-driven data analytic solutions to disrupt and degrade adversary financial networks that support transnational criminal organizations. We take great pride in this mission and are honored to continue this critical work. And finally, on the commercial side, We have secured over $400 million in awards with Fortune 500 customers across key areas such as the deployment and optimization of 5G networks and critical infrastructure modernization, further solidifying our reputation as a trusted partner in the commercial sector. Looking ahead, we entered the second quarter with significant momentum. We currently have $30 billion in pending awards driven by the $12 billion of submitted bids in Q1, and we remain on track to submit over $35 billion for the full fiscal year. We have made a lot of progress in the short months since coming together, and I'd like to highlight how we're starting to realize tangible benefits from the merger. Let's turn to slide five. As a combined company, we are already seeing strong operational and financial performance, improved efficiency, and greater alignment across teams. These benefits are reflected in the form of accelerating growth prospects, advancing our technology enabled solutions, and progressing a strong culture underpinned by excellence and collaboration. Starting with our accelerating growth prospects, We have been operating with an aligned go-to-market structure and strategy in place since day one, and our robust business development engine is working. The benefits of our systematic approach, which was planned in the months leading up to the merger, are evidenced by the significant bid volume during the quarter. In addition, building on the success of both legacy organizations we launched a talented and dedicated enterprise capture team led by Sean Mullen, our Chief Growth Officer, to focus on our largest and most strategic business opportunities. This team will be instrumental in enabling our pursuit of deals greater than $1 billion, which based on our pipeline today, we expect will be more than 15 opportunities from now through the end of fiscal year 2026. We are now positioned to maximize success within our core markets while expanding addressable market opportunities in new and emerging areas that leverage our expanded capabilities and expertise. Second, technology and innovation are critical enablers of our competitive advantage and differentiation. During the quarter, Our Chief Technology Officer, Jill Bruning, launched the new Amentum Technology Advisory Councils, which will drive innovation and ensure Amentum stays ahead of emerging trends for many years to come. Jill also oversees Amentum's broader innovation strategy, fostering collaboration and knowledge sharing across our nine global engineering centers of excellence. Our technology strategy has enabled the creation of a platform to cross-sell capabilities across end markets, taking advantage of our breadth of expertise and the scale of our business. Finally, the foundation of our success lies in the strength and expertise of our talented 53,000 employees who are the driving force behind all of our achievements. Our teams have remained focused on our strategic priorities and are operating at the highest levels, fostering collaboration, prioritizing engagement, and encouraging innovative problem solving to help drive growth. As we continue to expand and strengthen our talent base, I'm excited to welcome to our leadership team Jennifer Wallsmith, President of our Intelligence and Cyber Business, and Darren Burton, our Chief People Officer. Both Jennifer and Darren bring valuable expertise and experience that will be instrumental in advancing Amentum's vision while positioning us for continued success and growth in the future. I also want to take a moment to thank our integration management team. Their tireless dedication and long days have been instrumental in ensuring we remain on track to execute a seamless integration. Because of the incredible work they've done, we remain on a firm path to achieving $30 million in run rate next synergies by the end of fiscal year 2025. This underscores the impact of our proactive planning, which has allowed us to avoid significant delays or disruptions while ensuring a seamless transition as we continue to realize the benefits of our combination. Turning to slide six, we acknowledge the impact of the new administration's priorities on our market, particularly regarding potential shifts in focus and a drive for greater efficiency in government. At its core, Momentum has a culture of innovation and agility, and when coupled with our unmatched advanced engineering and technology expertise, we are uniquely positioned for continued success. Momentum has more than a century-long history supporting America's most complex and challenging defense and national security priorities, including contributions to iconic endeavors like the Manhattan Project and the SR-71 Blackbird, as well as countless other mission-critical initiatives. Further, with an increasingly complex geopolitical landscape, the importance and demand for the modernization and next generation technology solutions Amentum provides has never been greater. There are countless examples of how Amentum is already advancing the future together with our customers today. To highlight a few, we are leveraging our integrated digital engineering approach, or IDEA, to provide cutting edge electronic warfare and ISR solutions to support the DOD's modernization priorities. On our ITeams program, we're advancing DOD goals in INDOPACOM through innovative C5ISR research, development, and engineering. And through our unique delivery model, which emphasizes efficiency at scale and leverages advanced digital methods and outcome-based solutions, Momentum is modernizing complex legacy systems for customers like the US Navy, ensuring they have the critical capabilities they need for today's challenges. Our focus remains on enhancing our advanced engineering and technology capabilities to deliver better, faster, and more cost-effective solutions to the US government. Our solutions are driving modernization and next-generation technology adoption, and we're executing with speed to meet our customers' needs. Amentum's scale, flexible business model, and proactive approach position us for continued growth and success. As a result, I am more confident and energized than ever about Amentum's future and our ability to drive sustained shareholder value through delivering long-term growth and strong free cash flow generation. With that, I will turn it over to Travis, who will take you through the financials and more details. Thank you, John, and good morning, everyone.

To echo John's sentiment, I'm very pleased with the results in our first quarter as a combined public company. Financial performance was in line with our expectations and resulted in growth across all key metrics. I'm also excited about what we're seeing in our leading indicators. In particular, the robust Q1 business development results provide a great start to the fiscal year and help position Amentum to deliver long-term value for our stakeholders. Before diving into the details, I'd like to again highlight that while our GAAP results provide an accounting view of Amentum's legacy business, excluding CMS, today's discussion will focus on our non-GAAP results compared to the pro forma results from the first quarter of fiscal 2024. These figures offer a combined view of the new momentum business and provide performance insights on a more comparable basis. Let's turn to slide seven, which highlights the strong Q1 performance John mentioned earlier. Revenues of $3.4 billion reflect 2% growth and were driven by year-over-year increases in both digital solutions and global engineering solutions. Adjusted EBITDA was $262 million, reflecting a 3% increase year-over-year and benefited from a 10 basis point increase in adjusted EBITDA margins. Adjusted diluted earnings per share was 51 cents, up 2% from a year ago, with strong operating performance more than offsetting higher interest expense. Moving to slide eight, let me provide an overview of results for the reportable segments introduced on our last earnings call. Digital Solutions, which provides advanced digital and data-driven solutions primarily for the U.S. federal government and commercial customers, generated revenues of $1.3 billion, representing 1% growth. The year-over-year increase was driven by new contract awards, partially offset by the expected ramp-down of historical programs. Excluding the previously disclosed impact of SciTech, Digital Solutions revenues grew by 5% on an underlying basis. Adjusted EBITDA increased to $100 million as a result of the higher revenue volume. Global Engineering Solutions, which provides longstanding, trusted engineering and technical solutions across the globe for U.S. and allied nations, generated revenues of $2.1 billion, reflective of 3% growth. The year-over-year increase was driven by the ramp-up of new programs and on-contract growth. Adjusted EBITDA increased 4% due to the higher revenue volume and improved operating performance. Turning to slide 9 to cover our cash flow performance and capital structure highlights. First quarter free cash flow of $102 million reflects a positive start to the fiscal year and was driven by solid operating performance, disciplined working capital management, and favorable timing of tax and interest payments. Our liquidity position remains strong with ending cash on hand of $522 million and no outstanding balances on our $850 million revolving credit facility. In addition, net leverage improved to 4.0 times from 4.1 times at the end of fiscal year 2024 as a result of both cash and adjusted EBITDA performance. We continue to believe our balance sheet strength strong liquidity position, and robust free cash flow profile will be fundamental drivers to creating long-term shareholder value. We remain committed to prioritizing free cash flow to pay down debt and to achieving our target net leverage of approximately three times by the end of fiscal year 2026. On slide 10, let's now turn to our fiscal year 2025 full-year outlook. As a result of Q1 performance, continued business development momentum And with 96% of fiscal year 2025 revenues expected to come from existing or recompeted business, we remain confident in the outlook provided in December. We are reaffirming guidance for the year, including revenues in the range of $13.8 to $14.2 billion, adjusted EBITDA between $1.06 and $1.1 billion, adjusted diluted earnings per share between $2 and $2.20, and free cash flow between $475 and $525 million. The underlying guidance assumptions remain unchanged, and we continue to expect sequential increases in all metrics as we move to the remainder of fiscal year 2025, primarily as a result of newly awarded programs ramping up, as well as from 53rd week and the fourth quarter. But we acknowledge the situation is fluid and may change in the future, Our guidance includes a revenues impact of approximately 1% as a result of the new administration initiatives. Further, we expect cash flow will fall in normal seasonality with the majority generated in the second half of the fiscal year as a result of fringe benefit and payroll timing and as a result of expected strong collections in the fourth quarter given our alignment with the government's fiscal year end. Wrapping up on slide 11. We are pleased with our start to the year, which reflects the strength of our combined company. We are well positioned to meet our fiscal year 2025 financial objectives and remain confident in our ability to deliver significant pre-cash flow growth and long-term value for stakeholders. With that, operator, please open the line for questions.

Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. will then hear a prompt that your hand has been raised should you wish to decline from the polling process please press star followed by two and if you're using your speakerphone you will need to lift the handset first before pressing any keys please go ahead and press star one now if you have any questions first we will hear from brian giswell at raymond james please go ahead brian yeah good morning and uh really nice execution in the quarter

I wanted to dig in maybe a little bit on what you're seeing from your customers. You alluded to it towards the end in terms of shaping the revenue outlook for the year. Can you talk about maybe areas where you're seeing an acceleration with the administration priorities, but also areas that are taking a slowdown as you look forward?

Sure. Good morning. You know, MENTIPS core business, is focused on executing well-funded enduring programs of national significance. And of course, across long contracts that we've talked before. And what we've seen is a pretty stable environment across most of our long contracts. And where we do see some impact is probably some delays in awards due to executing with the government, executing guidance from the executive boarders. But of course, our long-term contracts provide opportunity for on-contract growth, and we're not seeing disruption on our general business. Like everyone, there's been an impact to contracts focused on foreign aid. Ventum had a small amount of that, but it's really immaterial, about less than 1% of revenue. and uh so it doesn't really had hasn't really had a material impact on our outlook of the business as you know about uh 80 of our business is focused on the us government we have 20 of our businesses foreign governments commercial so zero kind of concern about what's happening with the federal government, and a vast majority of that 80% of our business is focused on national security agencies, Department of Defense, Intel, and those customers continue to move out in terms of awards, RFPs, and we continue to see strong demand. I wouldn't say we've seen necessarily a shift already in how our customers are procuring, and with respect to the types of procurement. I think that's too early to see after just a couple weeks with the new administration, but I'm sure we'll start to see some of those impacts. But as we think about it, what are some of the areas that we have heard are priorities by the customer? The border, immigration, space, cybersecurity. These are all areas that we have great strength and are currently providing significant support to the government. And as we see further priority on these areas, we would expect to see increased demand as well.

Thank you for that color. Maybe I want to talk about pipeline. I appreciate the metrics that you provided us. Can you maybe just talk about, you know, when we think about that pending 30 and submitting 12 and then 35 for the full year, can you give us some shape and context between, you know, how that fits between digital solutions and your global engineering business and really how we might think of that from a new business and a recompete standpoint? Thank you.

Brian, good morning. Travis here. Yeah, we were really pleased with the business development results in the first quarter and saw the strong book-to-bill of 1.1, excluding the JVs. As John noted in his prepared remarks, we also had a nice joint venture win, continuing the great work we do for the West Valley project. And as John said, on an imputed basis, 1.5 book-to-bill, including our unconsolidated JVs for the first quarter. So pleased to see that. And then as we look forward, That $12 billion of submits really demonstrated kind of the business development engine is working, propelled us to that $30 billion in pending awards at the end of the quarter. Roughly two-thirds of that is new business to momentum, and it is well kind of split between both the digital solutions and global engineering segments. And actually, we saw a book to build above one in both of the segments during the quarter. So really kind of pleased about the momentum there and the potential outcome we see for those results for the remainder of the year.

Yeah, the bookings looked really good to me. Maybe just pivoting real quickly, and this will be my final one on free cash flow. You came in better than my model. I commend you on executing during the the integration phase here. You talked about big fourth quarter collections. Is there any seasonality we should think about in between Q1 and Q4? And certainly would appear you're tracking towards the higher end of your free cash flow expectations for the year given the start.

Yeah, we were really pleased with the cash flow performance in the first quarter. It obviously started with strong operating performance and the contributions from EBITDA. But we also saw DSO perform really well. Actually, on kind of a year-over-year pro forma basis, it was down two days and a little bit better than expectations. So off to a good start for the fiscal year. Obviously, it gave us confidence to, you know, reaffirm our $475 to $525 million target for the year. Maybe just one thing to remind you on. There is some normal cyclicality, as you mentioned. One of them with our fiscal year aligning with the government fiscal year end, Q4 is always going to be our strongest quarter from a cash flow perspective. But also due to the timing of the interest payments on our debt, there's semiannual payments due on our unsecured notes, which is roughly $35 million in the second quarter and the fourth quarter. And then we also have an extra payment just due to the way the months fall on our term loan B in the second quarter and the fourth quarter. So that drives a little bit of variability as well. So, generally speaking, we'd expect to see Q2 likely be the low quarter for the year. And then, as we've stated in the prior call and kind of reaffirmed today, 2H will be where, you know, the vast majority of our free cash flow is generating.

Great. Appreciate it, guys. Thank you very much.

Thank you. Next question will be from Toby Sommer at Tourist Security. Please go ahead, Toby.

Thank you. I was wondering if you could talk about your – commercial business, you cited a number of awards. And I'm wondering what you're seeing there in terms of demand and how the awards that you generated in the quarter would translate into a book to bill if we looked at it on a discrete basis like that.

Hi, Toby. Steve Arnett here. Really excited about the momentum in the commercial sector. We've talked about that even as the companies were coming together. We've had a nice trend of growth on the commercial side. We like that sector of the business. If you look at the customers we're supporting, these are market leaders. They are blue-chip commercial companies that are market leaders in their own right. We have good bookings in terms of a few specific areas. One that we're very excited about is we are increasingly helping some of the hyperscalers with being able to enable a next generation of AI. There's a lot of great kind of pioneering work, really, that we're doing with them to help enable the dramatically increased compute intensity associated with AI, and we're really doing a lot of work both to enable and bring that to lives who are excited about the trajectory of that work. In addition to that kind of leading-edge work, we are heavily engaged with some of the automotive companies in their product development and product testing, helping to bring some of our RDT&E technology from the aerospace world into automotive. And we're really helping not only get better results in product testing, but speed their time to market as they continue to develop new products in their portfolio. And then across other industrial leaders, a big move around, we're going to call it smart or advanced infrastructure, where we're integrating advanced sensors, 5G technology, advanced control algorithms to really improve the management and utilization of their assets. So we don't have a book to build to share with you, but what we can say is if we went through and tried to piece that together for the recent past, it would certainly be greater than one. So we're very excited about the continuing trajectory of the commercial work.

Thank you. I appreciate that answer. With respect to news that's just you know, kind of come out in the last day or so. Have you heard anything from customers about increased operations expected in Gaza? And if that were to unfold, you know, using history as our guide, would the company likely play a role in terms of logistics support or some other capacity? Yeah, I mean, we don't actually get down to that level and talking about what's happening within kind of specific programs or customers. But what I would say is this, and our history is replete with examples where we have supported the U.S. government around the world in some of the most important complex missions. Of course, the world is a dangerous place. We know that. There are escalating threats and challenges that need support by the U.S. government. And, you know, we will be there to support the government and that whatever they require, we have an advanced capability, I think, that is recognized by our customers and has been one of the key partners to our government, both inside and outside the U.S., and we're ready to support them in any way necessary in terms of whatever that strategy the U.S. government intends to pursue, whether it's in the Middle East or anywhere.

And Toby, I think it's also important to know, just as a follow-up to what John said, just to provide a little bit more clarity on our guide, when we're tracking a lot of these potential opportunities, some of which could be short-term in nature and really approach us quickly, and we're actively having discussions with our customers about today, you know, they could provide upside as we move throughout the remainder of their fiscal year. We haven't counted on any of them happening to meet our guidance expectations.

Appreciate that. Travis, if I could, I know your DSO performed well in the December quarter, but I'm curious, how are payment offices functioning here in recent weeks? Just curious with some of the Doge stuff in the Treasury and so forth. Thanks.

Yeah, we've seen no slowdown or impact in terms of payment offices and processing.

And my last question is in terms of NASA kind of hasn't really been in the news with respect to Doge and a focal point in

the initial phases of the administration.

What are your thoughts on the resilience of budgets there and the company's activities?

We feel very good about the work we're doing at NASA. We're proud to be engaged across what I'll call the high priority missions within the NASA portfolio. We have to date seen zero impact to any of the work we're doing supporting the agency. As many people know, one of the real strategic priorities, not just for NASA, but for the nation, and in fact for the 53 nations that have signed the Artemis Accords, is to return humans to the surface of the moon. There are certainly exploration objectives there. There are strategic objectives for the nation associated with that. And then also, that is a key step in the Moon to Mars program, So we're excited about the Artemis II mission slated for early 26. Our MENTUM team working hand-in-hand with NASA at the Kennedy Space Center in Florida. We're processing the majority of that spaceflight hardware, getting ready for that flight. We're excited for that one. Artemis III to put humans back on the surface of the moon. And I guess what we say, Toby, is what we know is the Artemis missions are – the only solution that we have that can safely and soon return humans to the surface of the moon. So we're really excited as those missions continue to accelerate toward execution. But larger than Artemis, our work continues. We're excited about the continuing trajectory of that portfolio and so excited to continue forward in the future.

And Toby, the other thing I would add on would be that space superiority is could be argued one of the defining strategic objectives of our time. If you think about where the battle space is focused of the future, it's in space. It's information and kind of both offensive and defensive space. And I think NASA has a direct relation to that mission and ensuring that the U.S. leads that going forward, both from a national security standpoint, which probably is, in my mind, the biggest element, but also space exploration as a matter of the future, if we think about where mankind is going. The other thing, I'm surprised Stephen didn't mention this because he always talks about it, is that the NASA work we do also supports the commercial space industry. Without The infrastructure and the support and the capabilities of NASA, our nation's commercial space industry would not be where it is today. And every day when we go to work at NASA and NASA goes to work and we work side by side, we are supporting not only the nation's space program and space science programs, but we are also supporting commercial space across all different areas from space obviously launch, but also engineering, how they operate in space from a human standpoint. So there is a great relationship there between the two that is critically important to America's superiority in space. Thank you very much.

Thank you. Once again, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. Next is Ken Herbert at RBC Capital Markets. Please go ahead, Ken.

Yeah, hi, good morning, Travis and John. Maybe I wanted to start with a nice first quarter, fiscal first quarter. When you look at the digital solutions and global engineering solutions, the segments, how do we think about the margin progression from here through the rest of fiscal 25 at a segment level, if you can provide some commentary?

Yeah, Ken, good morning. We provide guidance at the enterprise level, not at the segment level, but here's what I would say about the margin profile and trajectory of both of those businesses. As you can see, they're both around the upper 7% margin range today. As we execute the strategic priorities that we laid out at Capital Markets Day, execute on the integration plans that we had in place day one, progress our value capture activities and initiatives, we do see a path to where both segments can have nice even a margin accretion over the medium to long term. And we would expect, you know, some slight accretion as we move throughout the year in both segments.

Okay, so nothing in particular in one or the other that you call out is particularly sort of needle moving or an opportunity we should think about through the rest of the fiscal year? No. Okay. And then just as a follow-up, you've given some great cover on obviously the activity level You did call out earlier in the call, I think it was 15 opportunities that are north of a billion dollars that you're pursuing through the end of 26. I'm just curious, as a point of reference, how does that compare maybe to prior points in time? And how would you think about capture rate on those as many maybe different from sort of your typical pipeline or how that opportunity set could potentially evolve?

We are excited. I mean, we talked about the submit volume in Q1, so I think that's one of the early integration successes is getting the BD engine rolling, so a lot of energy around that. On the $15 billion plus, the majority of those, to be clear, the incoming businesses know about, but there's a minority of those opportunities that absolutely represent kind of coming to life, the thesis of the merger. These are large, major opportunities. They tend to be high content, advanced engineering capability that the newly merged momentum is well positioned and has the right to win, if you will, that neither of the incoming businesses did. So those fall across defense, intelligence communities, some big, major opportunities. So Really, the new momentum is in a great position to pursue some of those, and they do represent a minority of those 15 opportunities. So hopefully that helps.

And this is a point in time data point in that we're not stopping. Over the next two years, as we go through 25 and 26, our objective is to qualify and add additional opportunities like that to that list. I think it just points to the strength of this business, the competence of this business, and how the customer perceives us as a leader of delivering complex, large, enduring, long-term contracts. And it's a legacy aspect of both of our businesses that has only been strengthened bringing them together.

Perfect. Hey, I appreciate all the color. Thank you.

Thank you. Next question will be from Trevor Walsh at Citizens JMP. Please go ahead, Trevor.

Thanks, Maureen. Thanks for taking the questions. Appreciate it. John, all the color around these first few weeks with the new administration was great. I was wondering if you could maybe touch on how you think specifically the changes around personnel and manning changes, really around the headcount and some of the efforts to reduce headcount broadly across the government. could kind of impact the business. I would imagine there could be some potential, I guess, silver linings of that in terms of that potentially frees up people to come work for Amento and then kind of add to your, you know, what is effectively a very people-centric business. So I'm wondering if you could just kind of talk through the puts and takes specifically around kind of that piece of what Doge and the like are doing.

Yeah, it's interesting. We have the conversation around what's happening and just in the last week I was at an event and we were talking about this, the work of the U.S. government, its mission, and what it has to do on a daily, monthly, annual basis is not changing. What's changing, I think, and what this administration is looking at is how we deliver that scope of work in a more effective and efficient way. So we absolutely support that objective and understand it But we still have to deliver that quantity of effort that the US government's responsible for. We have to operate a military. We have to operate an intelligence community. We have to operate all the other services that support the citizens of the United States and Homeland Security. Those things aren't changing. It's not like we're going from 330 million citizens to 120. We still have to deliver services to 330 million citizens And doing that in a more efficient way should create opportunities for companies that have the ability to deliver more efficient methods and processes and technology to execute that level of work that still has to get done. And so I understand and I fully – it's a noble effort to try to look at how we run government in a most efficient way. But we see the opportunity going forward very clearly that companies that are innovative and bring a century of knowledge of delivering those services can help the government execute the delivery of those services in a more efficient way. So we're excited about the prospects to dig in and help with the effort in terms of what the mission of this new administration is trying to accomplish.

Great. Terrific. Maybe one more for Travis. You mentioned at the end of your prepared remarks, Travis, the 1% portion or I guess impact from the new administration that's part of the revenue guidance for the year. Could you maybe just dig in a little bit as to how how your thoughts are around that assumption, and then kind of as a secondary or follow-up to that, is there something that you would see as far as a change or I guess the ability to maybe remove that 1% impact if you see certain indicators or signals kind of coming through as you progress through the year?

Morning, Trevor. First, I would say, you know, obviously we acknowledge that the situation is fluid, but we did believe it was important to quantify and be transparent about any potential impacts that we could see based on the information we have today. And as John mentioned, fortunately, the potential impacts are minimal. They're really isolated to work funded, kind of in the Department of State, focused on foreign aid and assistance. And we were comfortable, based on the Q1 results, what we're seeing in other parts of the business, to reaffirm our four-year guidance, even with that in mind. But what I would say about our thoughts on what could potentially change that, and I mentioned this a little bit earlier in the Q&A, We haven't factored in any potential upside opportunities that we're actively having discussions with our customers about today that are aligned with the new administration's priorities. So as those things become the light, become more real, as we progress throughout the year, that could change our views of things, and we look forward to keeping everybody updated as we progress.

Great. Thanks so much.

Thank you. That concludes today's Q&A session. I will turn the call back to Mr. Heller for closing remarks.

Thank you, Operator, and thank you all for your interest and momentum. While there's a lot of work still ahead of us as we focus on the future, we are pleased with our progress to date, and we look forward to continuing to update you over the coming quarters.

Thank you, sir. Ladies and gentlemen, this does conclude your conference call for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.