Booz Allen Hamilton Holding Corporation

Good morning. Thank you for standing by, and welcome to Booz Allen Hamilton's earnings call covering second quarter results for fiscal year 2021. At this time, all participants are on the listen-only mode. Later, there will be an opportunity for questions. I would now like to turn the call over to Mr. Ruben Day.

Thank you. Good morning, and thank you for joining us for Booz Allen's second quarter 2021 earnings announcements. We hope you've had an opportunity to read the press release that we issued earlier this morning. We have also provided presentation slides on our website and are now on slide two. I'm Ruben Day, Head of Investor Relations, and with me to talk about our business and financial results are Horacio Radansky, our President and Chief Executive Officer, and Lloyd Howell, Executive Vice President, Chief Financial Officer, and Treasurer. As shown on the disclaimer on slide three, please keep in mind that some of the items we will discuss this morning will include statements that may be considered forward-looking and therefore are subject to known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. Those risks and uncertainties include, among other things, general economic conditions, the availability of government funding for our company's services, and other factors discussed in today's earnings release and set forth under the forward-looking statements disclaimer included in our second quarter fiscal 2021 earnings release and in our SEC filings. We caution you not to place undue reliance on any forward-looking statements that we may make today and remind you that we assume no obligation to update or revise the information discussed on this call. During today's call, We will also discuss some non-GAAP financial measures and other metrics, which we believe provide useful information for investors. We include an explanation of adjustments and other reconciliations of our non-GAAP measures to the most comparable GAAP measures in our second quarter fiscal year 2021 slides. It is now my pleasure to turn the call over to our CEO, Horacio Rosanzi. We are now on slide five.

Horacio Rosanzi Thank you, Robin. And welcome to our team. We're glad to have you on board. And good morning, everyone. Thank you for joining the call. Lloyd and I are excited to announce Booz Allen's fiscal year 2021 second quarter results this morning. Our firm's performance in this very challenging year has been truly outstanding. And we are proud to discuss the collective accomplishments of the more than 27,000 professionals who work every day in support of our clients, each other, and this institution. As you saw in our press release this morning, we delivered excellent second quarter results across all metrics. The numbers support our three-year investment thesis objectives and our growth plan for this fiscal year. When our fiscal year opened, only weeks into the disruptions of COVID-19, we recommitted to flawless execution, even amid uncertainty. And that's exactly what we have delivered. Strong growth at the top and bottom lines, a profit margin that is above historical norms, strong cash generation, and continued success in recruiting talent, building our pipeline, and capturing opportunities. Our growth in the second quarter was fueled by continued strength in our defense and civil businesses. This reflects the value clients place on our offerings and on the talent of our team. Our intelligence business has stabilized in the first half of this fiscal year, despite facing unique challenges due to the pandemic. We have a new leader in place and feel confident about future growth. And finally, in global commercial, we expect a modest decline this fiscal year driven by overall economic conditions. Looking at the first half of the fiscal year, our financial results show that to date, Booz Allen has successfully navigated the complexities of COVID-19. we continued to execute against the proven strategy, made operational adjustments as needed, and supported our people in new ways so they could focus on clients' critical missions. Our unique combination of the right strategy, operating model, people, and culture created a first-half performance that exceeded even our own expectations. And so today, We are pleased to narrow our guidance range for fiscal year 2021 revenue and raise guidance for full year adjusted EBITDA margin, adjusted diluted earnings per share, and operating cash. Lloyd will walk through our performance and updated guidance in more detail in a few minutes. First, I'll talk briefly about where our management team is focused, both near and long term. Let's start with the near term. Since our fiscal year began, we have talked with you about three areas of uncertainty in the second half. First, the course and impacts of COVID-19 in the fall and winter, and especially now as infections are spiking again across the country. Second, the potential for funding disruption after the current continuing resolution expires December 11th. And third, the outcome and implications of next week's election. These macro variables are major sources of uncertainty for both our country and our industry. But based on our operating and financial performance in the first half and the strength of our balance sheet, I believe Booz Allen is well positioned to outperform our market despite the potential turbulence in the coming months. As I noted last quarter, we believe these dynamics in the macro environment could create opportunities as well. This year, we anticipated and planned for increased volatility in the economy, financial markets, and federal budget outlook. This allows us to scan the market from a position of strength, looking for opportunities to build our business, forge strategic partnerships, invest in capabilities, deploy capital, and so on. As always, the overriding objective is to maximize value for our firm and our shareholders. With that as a segue, let me shift to the long term. Here at Booz Allen, our work is never done. Beyond the excellent operational performance of our team, our business leaders are making great progress on several future-oriented initiatives. For example, We continue to shape our portfolio of business towards high value work where emerging technologies meet needs at the center of clients' missions. Our strategic review is progressing and we expect to share results with you next summer. We continue to develop and deploy our option value initiatives. We are constantly evaluating and strengthening our employee value proposition including making good progress against the race and social equity agenda we shared with you last quarter. And we are modernizing and investing in our IT and financial infrastructure to support new ways of working, new business lines, and additional growth. Taken together, these efforts are designed to make our firm even stronger and more successful in the years to come. Staying focused on the future while at the same time managing unexpected disruptions and normal ups and downs of business cycles is the job of every leader in this firm. Having said that, none of this, none of this would be possible without the entire Booz Allen team. They deserve tremendous credit for our first half performance, our position of strength as we head into what could be a challenging few months, and our continued progress on strategic initiatives. So before I turn the call over to Lloyd, let me close with a few words directly to my colleagues who are listening. You'll remember back in April, with our Pandemic Resilience Fund, We made a safe bet. If the firm had your back, you would have the firm's back. You would give Booz Allen and our clients your very best. And in the last seven months, you've done that, and then some. You invented new ways of working practically overnight. You continued to go into critical client facilities with masks and all the right precautions to make sure important missions got done without interruption. You came up with creative ways to connect with each other and build community. You showed courage to both ask for help and to give help to those in need. And you executed all business functions with great precision and skill. Truth is, what we've faced together in 2020 was simply unthinkable a year ago. As problem solvers, you have risen to the challenge. You have persevered through it all. And as great as we knew you to be, you've exceeded our expectations. So on behalf of the entire leadership team, and in front of our external stakeholders, please accept our gratitude. We are in it together, and our firm is better for it. Thank you for all you have done and all you will continue to do.