Good morning! Thank you for standing by, and welcome to Booz Allen Hamilton's earnings call covering fourth quarter fiscal year 2024 results. At this time, all participants are in listen-only mode. Later, there'll be an opportunity for questions. I'd now like to turn the call over to Mr. Nathan Rutledge. Thank you. Good morning, and thank you for joining us for Booz Allen's fourth quarter fiscal year 2024 earnings call. We hope you've had an opportunity to read the press release we issued earlier this morning. We have also provided presentation slides on our website and are now on slide two. With me today to talk about our business and financial results are Horacio Rozanski, our President and Chief Executive Officer, and Matt Calderone, Executive Vice President and Chief Financial Officer. As shown in the disclaimer on slide three, please keep in mind that some of the items we will discuss this morning are forward-looking and 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 disclosed in our SEC filings and on this call. 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 2024 earnings release and slides. Numbers presented may be rounded, and as such, may vary slightly from those in our public disclosure. It is now my pleasure to turn the call over to our CEO and President, Horacio Rozanski. We are now on slide four. Thank you, Nathan, and good morning, everyone. Thank you for joining the call. Before diving into the content of this earnings call, I would like to share some news regarding our board of directors. On May 21st, Dr. Ralph Shrader, our Board Chair, informed the board of his intention to not stand for re-election and to retire effective July 24th, which is our annual stockholders' meeting. It is impossible to fully account for Ralph's contributions to Booz Allen, to our investors and our people, to the country, and to so many of us personally. Earlier this spring, Ralph celebrated 50 years with Booz Allen in a career that spanned many roles, including CEO and now chair. His impact and his legacy will forever be ingrained in the fabric of our company, guiding us and inspiring us as we chart the course for our continued success. Thank you, Ralph, for all you have done for Booz Allen, and on a personal note, for all you have taught me. Thank you. I am deeply honored and humbled to have been chosen by our board of directors to serve as chair of our board after Ralph's retirement. I look forward to serving our company as chair and CEO, working closely with our newly appointed lead independent director, Mark Gaumond. In our new roles, Mark and I will continue Booz Allen's commitment to excellence and values that has been the hallmark of our company for the past eleven decades. And now, Matt and I are proud to share exceptional financial results for fiscal year 2024. The year that ended March 31st marks our best performance since Booz Allen went public. Revenue and earnings both increased more than 15%, nearly all organic. This outstanding performance builds on double-digit revenue growth in the prior fiscal year and solidifies our standing as an organic growth leader in the industry. Year- after- year, Booz Allen consistently delivers. This speaks to the relevance of our work, the soundness of our strategy, and the trust our clients place in us. And most importantly, our results are a testament to Booz Allen's amazing team of more than 34,000 purpose-driven professionals. This morning, I will describe how our VoLT strategy is fueling our performance and positioning us for the future. I will also address potential market volatility in the near term and share our operational priorities for the fiscal year. Matt will then give an in-depth look at our full fiscal year 2024 results and our guidance for fiscal year 2025. Let's begin with our strategy. Our team's consistent execution of VoLT has brought us to where we are today. Booz Allen is 110 years young. We are operating at peak performance and are as vibrant as ever entering our twelfth decade. Since our founding, this company has anticipated and led change for ourselves and for our clients. Today's change vector is embodied in VoLT, which stands for Velocity, Leadership, and Technology. VoLT has put us at the center of the technology transformation taking place across the federal government. VoLT powers our long-term growth in two key ways. First, we have positioned ourselves at the center of missions of national importance. And second, we have become a leader in injecting cutting-edge technologies into these missions. Allow me to take the next few minutes to describe what it looks like for Booz Allen and for our clients. One example of these dynamics is our increasing role in the Indo-Pacific region. As I have discussed previously, Booz Allen is deeply committed to the Pacific and has supported U.S. national security priorities there for decades. We continue to support INDOPACOM's most pressing requirements, from accelerated readiness to mission systems. We do so by leveraging technologies such as cyber, 5G, and artificial intelligence to deliver scaled solutions at mission speed. In the past six weeks, I have spent time in Japan and Hawaii. I have met with many senior U.S. and allied military and government leaders to reinforce our commitment to helping maintain peace and stability in the region. Booz Allen's presence in this vital area continues to grow as we invest in new capabilities, partnerships, and talent to support a broadening set of missions. A second example of the power of VoLT is our support of the digital transformation of the Department of Veterans Affairs. At the VA, we work closely with our clients to leverage technologies already proven in the private sector to enhance the care and service of our nation's veterans, from reducing endemic homelessness to optimizing virtual care and clinical triage services. It has also allowed us to effectively scale our team and technology solutions to meet the unprecedented growth of PACT Act claims associated with veterans exposed to toxic substances. Within the 16 months following the passage of the PACT Act, the VA has processed over 1.5 million claims and awarded over $3.8 billion in payments to veterans. We helped the VA automate important review steps for a portion of these claims, shortening the process and overcoming what would have been a largely manual, manpower-intensive process. These examples, along with similar efforts across multiple federal health agencies, have helped double the size of our health business in the last 5 years to roughly $2 billion in fiscal year 2024. A third example of VoLT in action is artificial intelligence. Before AI came into the public consciousness, Booz Allen anticipated and prepared for the moment we are in now. We invested ahead of the market in talent and capabilities to win early-stage work and build a leading position. And so today, as AI becomes ubiquitous across the U.S. government, we are recognized as the leading provider of AI services to the federal government by Deltek's 2024 report. In FY 2024, our AI revenue grew to nearly $600 million, and we aspire to grow this business to over $1 billion in the next couple of years. As AI is increasingly integrated into more and more contracts, we will continue to invest in our AI talent base through both hiring and upskilling. We're also partnering with a range of other technology firms to bring commercial dual-use tech to our clients faster. Without a doubt, Booz Allen is a team on the move, and VoLT is working as our accelerator. But beyond all the specific examples, the ultimate proof point of our VoLT strategy is our performance against the goals we set out in our investment thesis two and a half years ago. As we begin the final year of our 3-year trajectory, we are issuing guidance at the top end of our original EBITDA target of $1.2 billion-$1.3 billion in fiscal year 2025. Over the 3-year period of the investment thesis, we will have grown our EBITDA by more than a third, virtually all organic. Our organic outperformance gives us greater momentum as well as balance sheet strength and operational resiliency as we look to capture new opportunities in an increasingly challenging market. Looking at the coming months, we recognize the potential disruption, a contentious election, and other societal and geopolitical factors may cause this fall. Elections can bring about uncertainty, particularly to the budget process. Despite this, there are two things of which we are certain: the clients we serve are focused on fulfilling their missions in service to our nation, and we are poised to support them every step of the way. As in prior years, our operating philosophy for FY 2025 is to build momentum in the first half of the fiscal year to mitigate any increasing volatility in the second half. To do this, our operational priorities include the following: First, we must take full advantage of our record proposal pipeline, which includes a number of large new programs and recompetes. Second, we will continue to transform how we execute our existing business. We seek to increase the speed and precision with which we deliver key technologies into programs and to drive efficiency and effectiveness across all of our support functions. Third, we will continue to implement VoLT at full speed, maximizing the value of our increased investments in people, market positions, and new technologies. Our overarching goal for FY 2025 is to further differentiate Booz Allen by demonstrating our unique ability to drive technology into mission outcomes faster and better than anyone else. In summary, while respectful of the inherent volatility in our environment, we remain very optimistic about our growth prospects. The Booz Allen team is market-tested and exceptional. I am in awe of the incredible people I have the privilege to work with, of the impact they have on our clients, and of the outstanding performance they create year after year. Their skill and passion are at the center of who we are as a company, and they are the reason for our continued success. And now, Matt, over to you to take us through our financial results and fiscal year 2025 guidance. Thank you, Horacio, and good morning, everyone. I've spent a good deal of time recently thinking about Booz Allen's 110-year legacy of foresight, innovation, execution, and transformation. Booz Allen is the ultimate compounder. Quarter -after -quarter, year -after -year, we set goals, and we deliver, always driving forward, each step building on the one before. This creates exceptional value for our clients, our people, and our shareholders. In this spirit, we continued to build in the fourth quarter, delivering excellent results to complete an extraordinary fiscal year 2024. By almost any financial metric, this was the best fiscal year in our history. Our VoLT strategy is working. We enter fiscal year 2025 with significant strategic, operational, and financial momentum. Once again, we are positioned to deliver robust organic growth, strong earnings and free cash flow, and exceptional shareholder value. This morning, I will start by briefly touching on our fourth quarter highlights, then delve deeper into our fiscal 2024 performance, and finally, cover our fiscal 2025 guidance. Please turn now to slide six. I am proud to say that we met or exceeded all of our objectives for the fourth quarter. We continued to build on many of the trends that Horacio and I have highlighted on recent calls, positioning the company in areas of enduring national importance at the intersection of mission and technology, delivering remarkably consistent performance, operating efficiently while investing in the future, and building momentum and resilience. To cover a few of the financial highlights for our fourth quarter, total revenue was approximately $2.8 billion, up 14% year-over-year. All of this growth was organic. Adjusted EBITDA grew to $287 million, 24% over the prior year quarter. This translated to an adjusted EBITDA margin of 10.3%. We generated $1.33 in adjusted diluted earnings per share, up 32% year-over-year. We added 364 net client staff and recorded a book-to-bill of 0.82x, in line with our expectations. Finally, we returned $194 million of capital to investors through dividends and share repurchases in the fourth quarter. Thanks to the hard work of people across our company, we closed the fiscal year stronger than expected. For the full fiscal year, total revenue grew 15% year-over-year to $10.7 billion. This exceeded the top end of our guidance, driven by strong demand, healthy hiring across our portfolio, and higher than anticipated billable expenses in the fourth quarter. Organic revenue was up 14.5% year-over-year, and revenue excluding billable expenses increased 14.4%. Our revenue growth was broad-based. Our defense business continued to accelerate. Revenue grew about 20% year-over-year, with double-digit growth across most portions of the defense portfolio. Performance in our civil business was also excellent, up roughly 18% from last fiscal year. Our civil sector has now reported nine consecutive quarters of double-digit organic growth. Our intelligence business is on a strong vector for the future. Revenue grew 5% year-over-year, exceeding our expectations. We are pleased with both the supply side and demand side momentum in this business. Finally, our global commercial business, which represented 2% of revenue in the fiscal year, was down 25% year-over-year, reflecting previously disclosed divestitures. Given its small relative size, going forward, we will not report our commercial results separately. Moving to the demand picture on slide seven, we ended fiscal year 2024 with net bookings of $13.3 billion and a trailing 12-month book-to-bill of 1.25 x. Total backlog as of March 31st was $33.8 billion, up 8.4% year-over-year. Looking ahead, our fiscal year 2025 qualified pipeline is robust, standing at $63.8 billion or 38% higher than a year ago. This includes a number of exciting opportunities across the portfolio, as well as some accelerated recompetes in our civil and defense businesses. With federal funding in place through September, we are working to aggressively capture and start as much work as possible in advance of the upcoming election and the new government fiscal year. In short, we have the backlog, pipeline, and market momentum necessary to drive future growth. Turning now to the supply side. As Horacio noted, we closed the fiscal year with more than 34,000 employees. Our client staff headcount increased 7.4% year-over-year, setting us up well for fiscal year 2025. Total headcount was up 7.2%. Our relentless focus on culture and the employee experience at Booz Allen continues to pay dividends, not just in our consistent headcount growth, but also in our low attrition and strong referral and application numbers. Moving now to the bottom line, we earned $1.175 billion in adjusted EBITDA for the fiscal year. This is 16% higher than in fiscal year 2023 and at the top end of our updated guidance range. Our adjusted EBITDA margin of 11% was flat year-over-year, in line with our expectations. This profit growth was generated by our excellent top-line growth, strong contract level performance, and a disciplined approach to operations and investment. Our leaders continue to manage the business very well. This has allowed us to do three things simultaneously: increase investment in the talent, technologies, and partnerships needed to solve emerging mission challenges, transform key corporate functions, and continue to get scale in our operations. Working down the P&L, our net income was $606 million, 123% higher year-over-year. Adjusted net income increased 19% year-over-year to $719 million. Diluted earnings per share grew to $4.59 per share, up 126% year-over-year. Adjusted diluted earnings per share grew 21% year-over-year to $5.50. These results include significantly higher interest expense for the fiscal year, offset in part by a lower than anticipated adjusted tax rate in the fourth quarter. Moving now to the balance sheet. We ended the fiscal year with $554 million of cash on hand, net debt of $2.86 billion, and a net leverage ratio of 2.4 x adjusted EBITDA for the trailing twelve months. We have ample capacity to continue executing our disciplined capital deployment strategy. Free cash flow for the fiscal year was $192 million, the result of $259 million of cash from operating activities, less $67 million of CapEx. Note that this CapEx excludes $16 million of accrued expenditures that were paid in early fiscal year 2025. From a free cash flow perspective, this was offset by an unanticipated $13 million dollar cash tax outlay related to contested D.C. tax assessments, which is further described in our Form 10-K. Collections were strong for the fiscal year, and cash outflows remained consistent with our outsized growth and ongoing investments in our business. Excluding one-time events, cash performance improved in fiscal year 2024, and this will remain an area of focus going forward. Turning to capital deployment on slide eight. In fiscal year 2024, we returned $668 million of capital to shareholders. This included $415 million in share repurchases at an average price of $116.81 per share, as well as $253 million in quarterly cash dividends. Additionally, we made $23 million of strategic investments through our corporate venture capital program. While we completed no acquisitions last fiscal year, strategic acquisitions are still an important part of our capital deployment strategy as we focus on bringing technology to mission at speed and scale. We are pursuing a healthy pipeline of small- to mid-size tuck-ins. As a firm, we remain committed to maximizing long-term shareholder value through efficient capital allocation. Finally, I'll note that our board has approved a quarterly dividend of $0.51 per share, which will be payable on June 28th to stockholders of record as of June 13th. The board also approved an increase of $525 million to our share purchase authorization, bringing our available capacity to $1 billion as of March 31st. I will now take you through our fiscal year 2025 guidance. Please turn to slide nine. Given how our fiscal year aligns with government funding cycles, we typically plan for a strong first half and a more uncertain second half. We are doing the same this fiscal year. We enter this fiscal year with significant momentum, but anticipate continued uncertainty from societal and geopolitical conflicts, the upcoming election, and possible disagreements about the next budget cycle. In this environment, we are focused on controlling what we can control. We are positioning our business for continued growth, to keep driving forward, to keep compounding. Let's now walk through our fiscal year 2025 guidance. At the top line, we expect organic revenue growth of 8%-11%. This range takes into account several variables, including the extent to which we win and start work, the potential for drawn-out federal budget negotiations, and the timing and pace of headcount gains. We are again targeting mid-single-digit headcount growth for the fiscal year. We expect to deliver adjusted EBITDA dollars in the range of $1.26 billion-$1.3 billion. As Horacio noted, this is the high end of our investment thesis range. We expect to achieve this almost entirely through organic performance, creating significant balance sheet capacity for the future. The implied full fiscal year adjusted EBITDA margin is about 11%, on par with fiscal year 2024. We expect ADEPS of between $5.80 and $6.05 per share. This assumes an adjusted effective tax rate of between 23% and 25%, an increase from the prior fiscal year, as well as a marginally higher interest expense in the range of $180 million-$190 million. Lastly, we expect operating cash flow of between $825 million and $925 million, and free cash flow of between $725 million and $825 million. This assumes CapEx spend of around $100 million, including the previously mentioned accrued expenditure that shifted from the fiscal fourth quarter and was paid in early fiscal year 2025. In closing, I want to reiterate how proud I am of the outstanding year we just delivered. The momentum we built translates into a strong guide for fiscal year 2025 and a great finish to our three-year investment thesis. Our VoLT strategy is working, and we continue to deliver value to all of our stakeholders. This is a real testament to our people and the enduring power of Booz Allen. With that, operator, let's open the line for questions. Thank you. If you'd like to ask a question, please press star one one. If your question has been answered and you'd like to remove yourself from the queue, please press star one one again. Our first question comes from Mariana Perez Mora with Bank of America. Your line is open. Good morning, everyone. Thank you. My first question is about this recent memo on AI that the Biden administration put forward, and the memo mandates that each agency will have to appoint a chief AI officer. Have you seen any of those, like, that increased demand come through? Or how are you thinking about opportunities as these new officers actually think about their AI strategy, use cases, and all those things? Hola, Mariana. Thank you for the question. Here's how I think about it. AI is becoming an integral part of how the federal government operates. We are seeing it more and more over the last couple of years. You've heard me talk about things moving from demonstration projects to prototypes. We're now entering the scale phase, and so it makes sense that governing AI correctly in these agencies, managing the resources and the investments against it be done. And it makes sense that in some of these agencies, there's already chief data and AI officers, and they're making a difference. And Booz Allen's been poised to take advantage of this growth in AI now for several years. I think, you know, we've been talking about this from before it became popular. And our business is growing. As I mentioned, in the prepared remarks, we are looking at a roughly $600 million business now. We are thinking that business alone will reach a $1 billion in a couple of years. But more importantly, we are seeing AI become a differentiator across a lot of our procurements. And the fact that we have a leading position that is recognized externally, that we're doing work that our clients see as nobody else being able to do, I think opens doors and opportunities for Booz Allen that we're very excited about. And as we look forward, we really think that AI is really AI and. It's AI and cyber, where we also have a leading position. It's AI and space, where we're making significant inroads. It's AI and zero trust, AI and communications. And so I think Booz Allen's ability to continue to expand and grow as a result of that and to be differentiated is only going to increase in the years to come. Thank you. So you mentioned AI as a differentiator. Could you please also give us some details or color around these, like, contracts that you have for recompete? What is the recompete risk and how you think these skills position you towards, like, having a stronger P win? Sure. Let me frame this conversation in a couple of ways. The first one is, you know, we're coming off our best year ever, right? And we're entering our FY 2025 year with a lot of momentum. Both our strategy is working and, you know, the V in VoLT is for velocity, and we are faster than ever before. We're strategically really well positioned. And, you know, as we said earlier, while we recognize the uncertainties that an election year can bring, we are guiding to the top end of our investment thesis, and we're entering this year with momentum and with resiliency, both in our balance sheet, in our portfolio, and everything else. Recompetes are a part of our business. The reality of the business is, if you look at it over the last five or 10 years, we've gone from almost no billion-dollar contracts to now a significant portfolio of billion-dollar-plus contracts. And if these are 5-year contracts, 20% of those, on average, will get recompeted every year. This year, you know, there's a little concentration of that in our health business, and a little bit in our defense business. As I look at those, we are really well-positioned by the quality of our delivery, by the uniqueness of our offerings, and by the work that we do. And this is all wrapped inside of a pipeline that is a record pipeline, close to $64 billion of opportunity. So we're looking at the year with optimism. We're very focused, laser focused on winning our recompetes, but also capturing new work and taking advantage of the fact that a number of these recompetes come with increased scope and increased ceiling, which also presents new opportunity. Thank you so much, and congratulations on the appointment, and congratulations to Ralph in retirement. Thank you so much. Thank you. Our next question comes from Robert Spingarn with Melius Research. Your line is open. Well, good morning. Good morning. Had a couple of questions for you, but wanted to start, Matt, with you on the growth. You know, you've talked about, and you know, hitting high single-digit organic growth and about 3%-5% headcount growth for the full year, and a book-to-bill around 1.2-1.3 in order to hit that high single-digit organic growth. Now, you're guiding perhaps a little bit above that. You've already said that you anticipate mid-single-digit headcount growth this year. So what should we anticipate for book-to-bill? And then as a follow-up to that, are there any significant recompetes that you have coming up this year that we should be thinking about? Yeah, thanks, Rob. I'll take them in turn. Look, as Raso said, we're entering the year with a lot of momentum, both on the supply side and the demand side. Starting the year on the supply side, with headcount growth of about 7.4%, so above the mid-single digit headcount target that we've talked about historically, which, you know, is part of the reason we're guiding to robust 8%-11% organic growth. And then, on the demand side, 1.25x, which is sort of right in line with where we wanna be. To give you a feel for how we anticipate the year is gonna play out, we do expect a quarterly growth profile on a year-over-year basis to be strong, but maybe even a little more even than last year, primarily driven by some, you know, quarterly comps. You recall last year, we grew 16% in the first half. And I think we'll see a similar pattern for margins, where they're more stable than our historical patterns, similar to what we saw last year. It had a solid start to the year. I'm not gonna call where we're gonna end up on book to bill. But we've had a really good start, particularly on the demand side. It's, you know, recompetes are part of that, but as Horacio said, we've got a really robust pipeline. It's up 38% from where we were at this point last year. So, the fact that we're targeting mid-single digit head count growth for this year, which typically sets us up for next year, and we've talked about, you know, the robustness of our backlog, our book to bill, and obviously, our pipeline, I think gives you a feel for how we're thinking about growth over the medium term. Okay, and then Horacio, just for you, high level, and, and you did address—you talked a bit about AI in the prior question and throughout the call, but you've been at the forefront of things like AI, 5G, cyber, all along. And when we think forward, next five to 10 years, curious, in terms of the major growth trends where you want to be a leader, how should we think about things like quantum computing and post-quantum encryption? I really so appreciate that question, Rob. I mean, I think part of the reason we are sitting here feeling so good about the business is because over the last decade, we've invested on a number of things, and, you know, we missed a couple, hit a few singles, but also hit a few home runs. And that's our continued approach, is we're trying to be in front of the market. Things that we think a lot about now is the intersection of AI and cyber, and AI and zero trust. We think a lot about Edge, both Edge cloud, Edge computing, and how you bring together AI at the Edge, which is actually a very significant technical challenge. And that's why we have made investments through our venture fund, that position us really well on that. That's why we're building unique technology stacks with some of our technology partners that position us really well on that. And then, as you said, I mean, I think we already have a budding leadership position in quantum and PQE. I think those are all going to be fields that are going to continue to grow, and I believe Booz Allen is continuing to build because I think our mantra is, let's focus on these missions of national importance. Let's make sure we can bring our technology to these missions, and let's make sure we can help our clients create solutions that scale beyond the prototype. I think the sort of focus on the prototype as the end-all-be-all sure changes what our clients ultimately need, and that's why we're so focused on scaling. Thank you. Sure. Thank you. Our next question comes from Bert Subin with Stifel. Your line is open. Yeah, thank you, and good morning. Morning. Horacio, I just wanted to follow up to some of your AI comments to Mariana's question and just in your prepared remarks. So when you hosted your AI and event, I guess around AUSA last year, you were looking for FY 2024 sales in the range of, I think, $500 million-$700 million. Sounds like you came in around the midpoint of that, based on what you noted. You also, however, said in your prepared remarks, you looking to get to $1 billion in the next couple of years, so that would imply pretty significant growth. So I guess my question is: What's changing in AI in FY 2025 and 2026 for you to see that acceleration in growth? Is that a function of awards taking time, or is the function of shifting internal investment to the contract side? And is that growth more skewed to the DoD Intel opportunity, or has it been more civil driven? You know, it's a really good question. I think this is where AI is in the cycle in the federal government. I think, you know, there's a cycle of experimentation, there's a cycle of trying things out, then you start to get early successes, and then, you know, you go vertical on scaling. And I think we're just at the very beginning of the vertical scaling phase. The rationale there is, you know, these missions are becoming increasingly complex. We talk a lot about the Pacific and the pacing threat. That set of missions poses a whole new set of challenges to our nation, just out of sheer scope. If you think about it, sort of, half of the world's surface or something like that is the INDOPACOM region. And so when you start to look at that, you understand how important it is to actually augment humans through artificial intelligence. Our clients understand that, and they're coming to us for work, for help, for support as they scale these capabilities. But it is really broad-based. You know, if you'd asked me this question 18 months ago, I would have said it was most prominent in Intel. DoD was starting to go down that path, and the civil agencies were really more focused on cloud migration than on AI. I think that has really changed. I think right now, everybody's taking advantage of the data on the cloud, in particular, to drive AI into their missions. and we're well positioned to help across the board, as I said, and to integrate it into other technologies that are key to that. And I think part of, for us, part of what's really powerful is while we're highlighting AI a little bit of its own because there's so much interest on it. Everything we do is integrated, so it's always AI and cloud, AI and cyber, AI and space, AI and C2. And that's, I think, where the power is going to come on, is AI is not a standalone thing that you buy by itself. AI is an ingredient in accelerating a mission need. Got it. That makes a lot of sense. Matt, I have a follow-up for you. You're assuming flattish margins in FY 2025. I guess, as you think longer term, you know, putting everything into this from your AI growth, cyber growth, you know, potentially faster growth in the civil sector, what would it take for Booz to go from an 11% margin to a 12% margin? Yeah, thanks. That's a broad hypothetical question. First, let me start by saying, I'm really pleased with our margin profile over the past couple of years and where we're guiding. I mean, we've talked about how dynamic the market is. Horacio was, you know, talking about how, you know, much the market has changed with AI and other infusions of technology in the market. And to be a compounder, right, to generate the kind of consistent organic growth we've generated, you've got to invest ahead of demand. So, you know, remember, in our original investment thesis, we were guiding to mid-tens margins, so that we've been able to invest at record levels and really transform our business and deliver 11% margins over the past couple of years. It really speaks volumes about the strength of our business. You know, I think to answer your question, it's really threefold. You know, can we continue to get scale out of our business? How much do we need to invest, or do we wanna invest in order to continue to compound? But the inflection point, you know, probably will be around selling differently and our clients buying differently. Talked a lot about outcome-based contracting. It's, you know, still in its early stages. We're seeing some experimentation in different parts of our market. We're experimenting ourselves, but we're nowhere near being able to call that as having a material impact on our margins going forward. But I'm sure this will be, you know, quite the topic for our next investment thesis. Thanks very much, Matt. Thank you. Our next question comes from Seth Seifman with JP Morgan. Your line is open. Thanks very much, and good morning. Good morning. Morning. I wanted to ask, maybe if you could talk a little bit more about capital deployment in the coming years. There's probably, you know, maybe a little bit of excess cash on the balance sheet, $750 million-$800 million of cash after CapEx coming this year. I guess, how do you see the M&A environment right now? Are there deal evaluations that make sense? And if not, should we expect a pickup in share repurchases this year from the 400-ish last year? Yeah, thanks. You're right. We're in a good spot that we've been able to hit the top end of our investment thesis almost entirely through organic performance, leaves us a lot of room on the balance sheet to deploy. I'll start by saying our capital deployment priorities haven't changed. Strategic M&A is our preference, but our approach hasn't either, right? We're gonna remain patient and disciplined. So, we didn't make any acquisitions last year. We were closing a few transactions and feel really, really good about our pipeline. There are more assets out in the market, including some high quality ones. Interestingly, we're seeing, I think, a disproportionate number of carve-outs this year, which it provides some opportunity, but some challenges as well. I'm actually, I'm really encouraged by what I see, but we're gonna stay flexible. I also appreciate that the board has increased our share purchase authorization, which gives us the flexibility to return value in lots of different ways. Yeah. Okay. Okay, excellent. And maybe as a follow-up, just, you know, more of a clarification about the outlook for the year. You talked about planning for the strong start and then, you know, maybe a little bit more uncertainty in the back half around the budget. But there's also. So that would lead you to think, okay, maybe growth is gonna be faster in the first half, but then you talk about the way that the comps align. So we should be expecting this kind of, you know, 9%, 10-ish% growth, you know, through the year, and you see that happening in the back half as well, even with some of the, uncertainty that you're thinking about, with regard to the budget and the election? Yeah, I think that's roughly in line with what we anticipate. Yeah, a flatter profile, both in terms of year-over-year growth, percentage and margins over the course of the year. Great. Great. Okay, well, thanks very much. Thank you. Our next question comes from Toby Sommer with Truist Securities. Your line is open. Yeah, good morning. This is Jack Wilson on for Toby Sommer. I know you've recently spoken about sort of how the workforce has evolved to be sort of far more technical than, than historically. Can you speak to sort of how the hiring trends are in terms of sort of what percentage of new hires come in with technical skills, and what percent are upskilled once hired? Why don't I start on this? I think in general, you know, because we have become so much more of a firm that injects technology into missions of national importance, our hiring has shifted to both the mission expertise around those specific missions, like we do in the Pacific, but also a broad-based technical workforce that we both upskill internally and we hire externally. I don't know that we have. You know, every year, we increase the percentage of our technical workforce a little bit. I think that the good important trend is our attrition is down significantly year-over-year. We attribute that to, I think, the market is a little less frothy than it was a couple of years ago. But frankly, more importantly, we have done a lot of investing and a lot of work internally on binding people to our culture, on giving them internal opportunities, on training our workforce. We built an AI aware force. We thought it would take us a couple of years to train 10,000 people. It took us, whatever, a couple of quarters to do it, order of magnitude. So, so we're feeling very, very good about our ability to retain, to train, and to upskill our workforce. And I think what's also underneath that is this focus on missions of national importance are really allowing us to bring in absolute top talent from across the country, from across all industries that want to work on these key national requirements. Thank you for that color there. And then maybe as a follow-up, are there any other regions outside of the INDOPACOM region that you're seeing sort of especially high levels of activity? Well, you know, the world is right now active just about everywhere. As I've spoken to before, we have significant presence in Europe and in support of our nations working there around EUCOM and Ukraine. We have a presence in CENTCOM. We have a very significant and growing presence in INDOPACOM. But also even outside of DoD, if you look at the nation is making significant investments in public health, and Booz Allen is right in the middle of that. There's a lot of modernization of technical infrastructure, really across the entirety of the federal government, and we are extremely active on that and differentiated, as I said before. Thank you very much. Thank you. Our next question comes from Cai von Rumohr with TD Cowen. Your line is open. Yes, thanks so much. So, Horacio, one for you. If I think about your industry 10-15 years ago, it was kind of focused on GWOT you know, a threat that really was not as significant as what we're seeing today with China, with digital transformation, with AI. And we're thinking about the folks from, from Booz basically were experts, but basically they were more supplementing what, the customer did, as opposed to today, where it seems like the technology level of expertise that you're bringing and others is, is higher. And, and if I look around, your numbers have been great, but your peers are also putting up some pretty good numbers. Part of that, obviously, is the strong flow-through of the, hefty FY 2023 budgets. But aren't we moving to a period where you think your industry and Booz in specific, can kind of delink from, you know, kind of looking at what's the O&M budget, what's the R&D budget, what's the intel budget? 'Cause you're taking a bigger chunk of that budget, and we're looking at maybe some secular upward shift in your total sector's growth. You know, let me speak about us a little bit. I think, you know, if you look at it broadly, and I think you were making this point really well, Cai. If you go back, you know, when I started in this business, the vast majority of innovation was funded really in the government. You go back 50 years, right? I mean, the space program was inventing things that the public, the private sector would then adopt. If you go back to the birth of the internet, right? I mean, that was a DARPA program that this private sector adopted. If you look at the way things work now, the flow of innovation is really in the other direction. The funding for innovation that the private sector can provide now, you know, they outspend the government every year. And, you know, I think that's an American strength. I think that is actually fundamentally a good thing. And so in that context, you know, I think your question makes a lot of logical sense. You know, as the dual use technologies continue to grow, I think Booz Allen is particularly well positioned because we started early, because we have the right partnerships, because of the talent base that you described, to take advantage of these secular trends over years. I think overall, the market has to be linked to the budget by definition. But as you well know, not every part of the budget grows at the same speed, not every part of the market grows at the same speed. And I think key to our success is not just being to take share in the places where we are, but also to be positioned against the fastest areas of growth in the market. And to the extent that we can continue to do that, you know, we obviously, on any given year, this is an election year, we need to be cognizant of potential turbulence. But in the medium and long term, we're very optimistic. Terrific. Thanks a lot. Thank you. Thank you. Our next question comes from Sheila Kahyaoglu with Jefferies. Your line is open. Good morning, Horacio and Matt, and congratulations to Ralph, a really great succession story. In terms of- I wanted to first ask about your health business. You said it doubled up to $2 billion and some work with the VA. What type of runway do you see in health going forward, given the technology implementation you have? And are there recompete opportunities from other competitors with VA and PACT Act? So, you know, our health business is an extraordinary business that has... It's a true success story. If you go back 10 years, 15 years, 20 years, it really was not a significant contributor to the portfolio. And now, it's a real source of pride, you know, reaching $2 billion, doubling in 5 years, and really demonstrating the Booz Allen proposition of bringing technology to these national priority missions. I think as we look forward into the coming years, the acceleration of the digital transformation of our entire public health infrastructure, from the support of veterans in the VA, to really the transmission of information across this very complex health system in our country, to the preparation and to be better prepared for, you know, the next health emergency, if it arises, when it arises, those are the missions that we are centered around. That is the work that we're doing, and we expect that work overall to continue to grow. It's competitively intense because it is very important work, it is really good work, and it's work we excel at. As I said earlier with Mariana's questions, there's a concentration of recompetes in that business this year. It's in part the calendar, it's in part the fact that actually some of these long programs, we are doing so much work, and it's so good work that we're actually going through the ceiling before the end of the period of performance, and so they're getting recompeted a little early. You know, I think the quality of our work, the new insights and the new technology we're bringing to it, position us well for all of these recompetes. And here's yet another place where, you know, it's almost like we all divide the work between new work and recompetes, and that makes sense, sort of as a characterization. But so much because the government is bundling procurements, these recompetes are both recompetes and new work all at the same time. There's increase in scope, there's increase in ceiling, there's new opportunity, and you've followed us for a long time. I think you know, one of the things that we're really good at is when we win work, whether it's a recompete with expanded scope, whether it's a new program, we are uniquely good at tactically sell into that, so that a billion dollar of ceiling actually becomes a $1 billion of work over the life of the contract, because we know how to find the opportunities and make sure that our clients get full access. Okay, thank you for that, Horacio. And then maybe just in terms of the other half of the portfolio in civil, can you talk about some of the drivers of growth there? And do you expect to see double digits in fiscal 2025? You know, we're actually excited about the entire portfolio. In civil, I'm glad you asked that question because we talk so much about our health business because it's such a success story. But the rest of the portfolio and our work in Treasury continues to grow. We're doing, again, exciting work, whether it's fraud detection, whether it's bringing AI to some of these missions for efficiency and effectiveness, whether it is the underlying digital transformation of some of these agencies, and certainly the cyber protection of this entire.gov domain. These are areas where Booz Allen has leading positions and excels. The other part of our portfolio that is also exciting and growing is our law enforcement portfolio with the federal agencies. We are seeing opportunity there. We've been investing in some of those clients for a while, and these investments are now taking hold, and we expect to see good growth there too. And Sheila, just to go outside health, I mean, if you look at the entirety of the portfolio, you know, I would say, and Horacio, I think you agree with this, our growth is probably as broad-based as it ever has been. I mean, even in our intel business, and the fact that they were able to grow 5% this year with the loss of F2, this speaks to the underlying strength in the business. So we're in an interesting spot, having just gone through with Kristine, you know, the review of all of our sectors and the accounts that underlie them. There's just a lot of optimism, and it's very broad-based. That's a really good point. I mean, our defense business grew 20% this year. I think the last time that our defense business grew 20%, it was maybe a fifth of its size. So it grew this year, the entire size that it was that year. So, you know, we're for good reason, feeling very good. And, you know, as I continue to say, we're cognizant of the fact that this is an election year, that the budget situation going into the next government fiscal year is something we all need to keep a close eye on, and we are. And that's why, you know, we're taking advantage of the momentum that we have. Yeah. Congratulations. Thank you. Thank you. Thank you. Our last question comes from Louie DiPalma with William Blair. Your line is open. Horacio, Matt, and Nathan, good morning. Hey, good morning. Hi, Louie. Horacio, in your prepared remarks, when you discussed your outsized role in INDOPACOM, and then on LinkedIn, last month, you highlighted your recent trip to Okinawa, were you alluding to your role with the JADC2 development and your Connected Battlefield platform, and in February, the Deputy Secretary of Defense, Kathleen Hicks, she was at an AI symposium, and she indicated that for the first time, the DoD has attained a minimum viable level for JADC2 to counter China in the INDOPACOM. I am under the impression that you're playing a major role there. So, is that true, and are you deeply involved there? Louis, what I can say is that our growth in INDOPACOM is broad-based. As I've said in these calls, I spend time in Taiwan, I spend time in Japan, I spend time, a fair amount of time in Hawaii. The conversations with senior clients, from my perspective, are all about speed. How can we accelerate bringing technology to the theater in support of the mission? The C2 portfolio is obviously an important area of focus, a particular area of focus. The fact that you have to communicate across all these platforms, across all of these distances in what could be sort of challenged electromagnetic spectrum, those are areas that we're thinking very deeply about and we're very involved in making investments in. So, those are the kinds of things that we think about, and more to come. Great. And for Matt, what would you attribute your hiring strength to? Have you been making tech investments to improve your recruiting and onboarding? And has anything structurally changed that's allowing you to grow and improve employee utilization above your historical pace? And has the generational, like AI excitement, been positive from a recruiting standpoint? The answer to your question broadly is yes, Louis. We've made a number of improvements, including using technology to really enhance and expedite the entire portion of the recruiting cycle. But remember, about a third of our employees come from referrals, which just gives you a sense of the power of the employee value proposition, right? I think people are joining Booz Allen, not just because we're, you know, better able to find them and process them. They're joining Booz Allen because they wanna be here. We're doing exciting work, and we're offering them, you know, careers and pathways, particularly for our technical talent, as well as our mission-focused talent, that really wanna have an impact that they find meaningful. The only thing I challenge you on a bit is we're not seeing utilization above historic levels. I think our utilization is fine, but it, it's where it should be. So t hat hasn't been a driver of growth. It really has been, you know, obviously, we've got to work to put people on, and we're doing a better job of attracting and retaining the kind of talent that we want. Yeah, I mean, I'll add to that simply by saying, you know, we're saying internally, we're 110 years young, and we use that language specifically because it's a really vibrant environment inside Booz Allen right now. Our people feel it. People that are looking for a job are attracted to it. And the work that we're doing, the clients we're doing it for, and the way in which we work with one another, I think, are all talent magnets. And that's what gives us, you know, optimism for the future in an uncertain environment. Great. Thanks, everyone, and happy Memorial Day weekend. Hey, you as well. You as well. Thank you. At this time, I'd like to turn the call back over to Horacio for any closing remarks. Thank you. Thank you all for your questions and for joining us this morning. As I was just saying, at Booz Allen, we are so proud of our history and equally excited about the future. We are working in our virtuous circle, where our strategy drives our performance, performance drives investment, which creates opportunity, and opportunities simply attract great talent that begin the cycle all over again. Just this week, we held our Booz Allen Excellence Awards, which is our internal effort to both highlight and celebrate the talent that we have and the incredible work that they do. And this was an opportunity to hear some amazing stories of how we're supporting our veterans, how we're helping our local communities, how we're closing major national security vulnerabilities, our efforts to protect American troops, and to stop cyberattacks. We had a chance to reflect on how we helped the country get through a global pandemic and how we're helping the country prepare for any future health emergency. For 110 years, 110 years, Booz Allen has always supported our clients and our nations, and, and we highlight the fact that we do it with excellence. It's, it's not just what we do, it's who we are. Every day, the people of this company continue to deliver excellence. We really do have the most amazing team, and I am just so proud to work with them. Thank you, Booz Allen, if you're listening, for all you do, and, and thank you all again for joining us this morning. Have a great day. Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.