Booz Allen Hamilton Holding Corporation

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

Thank you. Good morning, and thank you for joining us for Booz Allen's fourth quarter and full fiscal year 2022 earnings call. 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, Senior Vice President and Treasurer 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 and Chief Financial Officer. As shown on the disclaimer on slide three, please keep in mind that some of the items we will discuss this morning are forward-looking, which may relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results to differ materially from forecasted results discussed in our filings with the SEC. All forward-looking statements are expressly qualified in their entirety by the foregoing cautionary statements and speak only as of the date made. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. 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 fourth quarter fiscal year 2022 earnings relief and slides. It is now my pleasure to turn the call over to our CEO and President Horatio Radzanski. We are now on slide four.

Thank you, Laura, and good morning, everyone. Thank you for joining the call. Before we begin, I'd like to take a moment this morning to acknowledge the tragic events continuing to unfold in Ukraine. And share how Booz Allen is responding. As millions of people flee the country or are displaced, the need for humanitarian assistance and protection grows more acute every day. In response, we committed to provide aid through an employee-given campaign and company match. Our employees' engagement in the campaign has been tremendous, and I am grateful for their generosity and compassion. From a mission perspective, our teams in Europe and the U.S. are supporting our clients across a broad range of areas. They are working around the clock to deliver critical capabilities and insights to our clients. True to our purpose, they are working relentlessly to change the world. I'm thankful for their dedication, the extraordinary power of their work, and the difference they're making. To our teams supporting these missions, On behalf of the entire leadership team, thank you. Thank you for the work you're doing and the sacrifices you're making to serve our clients and the nation. It's an honor to call you our colleagues. Today and always, our thoughts remain with the Ukrainian people, and we hope for a peaceful and just resolution to the conflict soon. This morning, Lloyd and I are pleased to report our results for fiscal year 2022. In a year marked by exceptional volatility, Booz Allen committed to a new growth strategy and multi-year financials, invested in our future, and managed the business with precision and skill. I am extremely proud of the work and the impact our leaders and our entire team have made. Their talent and dedication underpin the results we share with you today. For the full fiscal year, bottom line results were excellent. Revenue growth was also solid, but below our expectations set a year ago. We remained steadfast to our operational priorities throughout the year, culminating in growth across all markets in both the fourth quarter and the full fiscal year. We adeptly controlled costs to deliver on both our bottom line commitments and invested in our future and our people. One year into our multi-year investment thesis, we have made strong strategic progress and are on track to deliver against our goals. Over the next few moments, I will set the strategic context for our financial performance, and then Lloyd will take you through FY22 results and FY23 guidance in depth. As we share with you on Investor Day, Booz Allen believes that the rapidly evolving challenges confronting our nation will accelerate the pace of change in our government's missions and use of technology. Five to ten years from now, technologies from 5G to AI and from blockchain to quantum will be ubiquitous across a range of missions. And because we have been preparing for this for over a decade, we believe Booz Allen holds a strategic first mover advantage. We have the opportunity to help our clients through their transformation to digital missions. And we are poised to convert this extraordinary opportunity into growth that creates long-term shareholder value. At Investor Day, we introduced Volt, our growth strategy. Volt reflects our ambitions and guides us as we build the Booz Allen of the future. In our next era, we will scale Booz Allen to an even greater level of industry leadership. We will be the premier partner to the federal government, continuously bringing innovation to national priority missions faster than the pace of change. VOLT stands for Velocity, Leadership, and Technology. These three words are the fundamental principles for how we are transforming to achieve our aspirations. We advance with velocity, investing ahead of emerging technology waves and expanding our market positions through strategic acquisitions and partnerships. We redefine leadership, investing in people with the right expertise to lead and scale hypergrowth businesses at the mission technology intersection. And we apply next generation technology, creating differentiated intellectual capital and property to address our clients' needs at or ahead of mission demands. Today, I am excited to tell you that Volt is underway. As we operationalize the strategy, two success factors are clear. One, we need to make decisions faster to accelerate our growth. Two, our transformation will require relentless focus and seamless integration. This is why, at the outset, we are taking an important step to address these needs. I am excited to announce that we have named Executive Vice President and Civil Sector President Christine Martin Anderson as Booz Allen's Chief Operating Officer. This appointment by the Board of Directors is effective June 1st. Christine is a proven leader who perceives opportunities amid challenges. In leading both our health team and our civil market, she has demonstrated the ability to grow and manage technology-first businesses, develop talented leaders, help senior clients transform, and integrate acquisitions, all while consistently delivering strong financial results. As our COO, Christine will play a major role involved, taking primary responsibility for accelerating firm-wide operational performance and the transformation of our business model in collaboration with leaders from across the firm. I've had the personal pleasure of working with Christine for many years. I look forward to partnering with her more closely in her new role for years to come. As a result of Christine's changing role, Rich Crow, currently Chief Growth Officer, has been named Civil Sector President. Rich is a seasoned and innovative business leader who previously led and scaled the health account to its market leading position. An accomplished leader in his own right, Rich is also an indication of the depth of talent we are lucky to have in our firm. I hope you'll have a chance to meet Christine and Rich at future events. Now allow me to share additional details on the progress we are making on Volt. Foundational to our strategy is building businesses at the intersection of mission and technology. As of April 1st, we formally launched two operational business units aligned to mission areas we believe are critical to our nation and prime for hypergrowth. We have nested digital battle space inside our global defense sector. This is where we are innovating to help the Department of Defense securely drive information to the edge to create decision advantage. By applying AI, machine learning, 5G, and other emerging technologies to the joint warfighting mission, the women and men who defend our country will have superior situational awareness to make better decisions faster. National cyber, a core element of our national security sector, builds on our leading position in the intelligence community. We have delivered innovative cyber tradecraft to these clients for decades and recognize that the cyber domain is horizontal and not vertical. Therefore, we are now extending and expanding our reach into scalable cyber solutions for a broader set of clients across the Department of Defense and civilian agencies. Our focus is on cyber network operations and protecting critical infrastructure. With the organizational launch of these two mission-centric businesses, we now have dedicated leaders and technical talent aligned to drive the team forward and deliver on a clear set of objectives. We have also taken the time to reimagine our innovation agenda. As of April 1st, we integrated our IT infrastructure and innovation functions into a newly created chief technology office led by Susan Penfield. This organization leads the way in scouting the market to select and scale the best new technologies for our clients' mission needs as well as our own. We also continue to make strategic acquisitions and investments consistent with Volt. In March, we announced the pending acquisition of EverWatch, aligned to our national cyber priority, which we hope to close in the coming months. We're also continuing to test the leading edge of commercial technology, making small investments to secure access to the next generation of breakthroughs. And finally, also as of April 1st, Liberty is fully integrated into Booz Allen and exceeding our expectations. This acquisition is strengthening our position in digital transformation and accelerating growth in the civil market. As you can see, our Volt growth strategy is more than aspirational words. Volt is both our future and our present, and the work is underway. This is critically important as we strive to meet our FY25 investment thesis goal of adjusted EBITDA growth to $1.2 billion to $1.3 billion. supported by above-market growth rates, stable margins with increased investment capacity, and significant capital deployment. Shifting now to the current fiscal year, 2023, we expect to continue strong growth at the top and bottom lines, while acknowledging significant volatility still exists in the environment. The U.S. economy, geopolitical conflicts, the post-pandemic work environment, upcoming midterm elections, and the federal budget beyond the current government fiscal year are all unknowns that we will need to navigate, creating headwinds and tailwinds we cannot fully predict. Our four operational priorities are aligned to the factors we can control. And intended to build momentum in the first half of the fiscal year, to mitigate increasing volatility in the second half. First, we must hire aggressively to fully capitalize on our record backlog and robust pipeline. Second, we must continue our track record of winning work aligned to our clients' highest mission priorities. Third, and of increased importance in an inflationary environment, we will continue to manage the business tightly looking to direct our spend towards talent and strategic priorities while delivering on our bottom line commitments. And fourth, we must maximize the value of capital deployment activities with a focus on small to mid-sized strategic acquisitions. When I consider what we have achieved in fiscal year 2022 and begin to set my sights over the horizon I know our people are and will continue to be the heart of our success. As we enter this new fiscal year and execute our strategy, we focus on empowering our team to unleash our full potential and lead the way to a better future for Booz Allen, our clients, and the world. And with that, Lloyd, over to you for a thorough discussion of fiscal year 2022 and our guidance for fiscal year 2023.