Booz Allen Hamilton Holding Corporation

Good morning. Thank you for standing by, and welcome to the Booz Allen Hamilton's earnings call covering third quarter results for fiscal year 2022. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for questions. I will now turn the call over to Ms. Laura Adams.

Thank you. Good morning, and thank you for joining us for Booz Allen's third quarter fiscal year 2022 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 Laura Adams, Chief Accounting Officer and Interim Head of Investor Relations. And with me to talk about our business and financial results are Horatio Rozanski, our President and Chief Executive Officer, and Lloyd Howe, 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 third quarter fiscal 2022 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 gap measures in our third quarter fiscal year 2022 earnings releases and slides. It is now my pleasure to turn the call over to our CEO, Horatio Rozanski. We are now on slide four.

Thank you, Laura. And good morning, everyone. I hope that you and your families have been able to stay safe and healthy through the current COVID-19 wave. And thank you for joining the call. Today, Lloyd and I will share our third quarter results in the context of our fiscal year 2022 guidance and our multi-year investment thesis. We will also describe the underlying dynamics of our business and the progress we are making on our Volt strategy. To set the context, let's go back to our October investor day, where we outlined our Volt strategy and associated financial goals. As a reminder, VOLT stands for Velocity, Leadership, and Technology. It is a strategic program Booz Allen has launched to capitalize on our first mover advantage in helping the federal government transform core missions through the use of new technologies. Over the next few years, we look to grow faster by building scaled positions in critical areas, such as national cyber and digital battle space. We are in the early stages of this journey, but are already making strides and seeing strong progress. As part of Volt, we have set new multi-year financial goals that deliver both strong profit growth and continued investment in our business. Our investment thesis centers on growing adjusted EBITDA dollars from $840 million in fiscal year 2021 to $1.2 to $1.3 billion in fiscal year 2025. That's approximately a 50% increase. We expect this increase to be accomplished through 5% to 8% annual organic revenue growth, adjusted EBITDA margins in the mid-10s, and $3.5 to $4.5 billion in total capital deployment that prioritizes strategic acquisitions. Our expectations for fiscal year 2022 were consistent with these goals. Gross revenue growth in the 7 to 10% range and adjusted diluted earnings per share in the range of $4.10 to $4.30. We also said this fiscal year growth pattern would look different from recent years. with slower revenue growth in the first half and significant acceleration in the second half. As you saw in our press release, our bottom line numbers are on track with our expectations and we are reaffirming our ADEPS guidance. Our revenue growth in the third quarter was lighter than we expected. And while we forecast strong fourth quarter revenue growth, we're lowering our full fiscal year 2022 revenue outlook to account for a slower pace. Lloyd will take you through the quarter results and our updated guidance in greater depth. There were several factors that contributed to the revenue dynamics for the quarter. On the positive side, we continued to win the right kind of work and hire the right people, as reflected in our backlog growth and headcount increases over the last 12 months. Conversely, the translation of those positives into revenue growth was slower than historical standards, driven by a number of factors, including a protracted continuing resolution, a higher dollar value of awards under protest, delayed awards and slower ramp-up on sold contracts, lower staff productivity due in large part to the Omicron variant surging during the quarter, and lower than anticipated billable expenses. These dynamics impacted our entire portfolio, and some pockets of our defense business were especially hard hit, due in part to the number of large awards delayed and a greater proportion of billable expenses in their revenue base. Looking ahead, we see some of these challenging dynamics continuing into the coming months. As a result, we are taking a three-pronged approach to proactively manage through this environment. First, we are addressing those business areas where we see the greatest funding uncertainty. Second, we are continuing to control costs in order to deliver on our commitments to both grow adjusted EBITDA and invest in our business. And third, we are doubling down on areas of significant growth opportunity, shifting resources across the portfolio by leveraging our unique operating model and single P&L. In short, we continue to lean into growth while managing tightly in the face of greater market volatility. Before turning the call over to Lloyd, let me return to the longer-term outlook and the progress we have made in our business so far. As we look ahead, we remain on track to deliver strong growth in adjusted EBITDA through fiscal year 2025, supported by continued revenue growth, stable adjusted EBITDA margins, and strategic deployment of capital. Our confidence in the future is predicated in our belief that we have the right strategy and the proven ability to execute in both good times and challenging ones. And several accomplishments from the last few months underscore these points. First, we continue to win the right kind of work at the center of national priorities, where innovation can help the government transform the way the mission is executed. Our clients from the Department of Veterans Affairs to the Air Force are looking to Booz Allen for expertise in areas such as DevSecOps, AI, and the commercialization of new technologies to advance their missions. Second, we are making key investments that differentiate our service to clients. For example, last December, as part of our ramp up on national cyber, we announced the opening of our carrier grade 5G lab in Central Maryland. The lab offers a state of the art testing environment for secure cyber resilient 5G solutions. Similarly, as we advance our work on digital battle space, we are significantly expanding our footprint in Honolulu. This investment deploys into the Indo-PACOM region some of our most advanced capabilities to expand our support of several high-priority client missions. Third, we are successfully using acquisitions as strategic accelerators. Liberty and TracePoint continue to deliver the strategic and financial value we expected. Integration is going well. and we are extremely pleased with the upside these acquisitions create. And in addition, we continue to build our acquisition pipeline. And fourth, and perhaps most importantly, we continue to strengthen our team and ensure we have the focus and resiliency to support our clients as they too manage through a volatile environment. I am extremely proud of our workforce for achieving complete compliance with our COVID vaccination requirement. Our purpose and values are at the core of everything we do. So we believe that prioritizing the health and safety of all our employees is the right thing to do for our institution, our clients, and our communities. Furthermore, a fully vaccinated workforce allows us to better serve our clients supports safer in-person collaboration, and is critical to entering a post-pandemic phase. Together, always together, the people of Booz Allen are forging ahead with relentless focus on our clients' missions and our growth strategy. This is what delivers the consistent results that create long-term shareholder value. And with that, I'll give the floor to Lloyd for more details on the third quarter, the fiscal year, and our investment thesis. Lloyd, over to you.