Good morning, and thank you for standing by. Welcome to Booz Allen Hamilton's earnings call covering first quarter fiscal year 2025 results. At this time, all participants are in a listen-only mode. Later, there will be an opportunity for questions. I would now like to turn the call over to Mr. Matt Calderone. Thank you. Good morning, everyone, and thanks for joining the call. I would like to begin by introducing Lindsey Joyce. Lindsey has been a trusted advisor and core member of the Booz Allen finance team for nearly a decade. She joined the firm to help me establish our corporate development function and has since had a variety of roles in corporate and business finance. Lindsey is now a vice president at Booz Allen, leading both investor relations and financial planning and analysis. Lindsey, welcome, and over to you. Thank you. Good morning, and thank you for joining us for Booz Allen's first quarter fiscal year 2025 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 to talk about our business and financial results are Horacio Rozanski, our Chairman, Chief Executive Officer, and President, 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 discussed 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 first quarter fiscal year 2025 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 chairman, CEO, and president, Horacio Rozanski. We are now on slide 4. Thanks, Lindsey. It's great to have you on this call. Good morning, everyone. Matt and I are proud to share with you another quarter of strong momentum and double-digit top-line growth. Today, I'll begin with an overview of the first quarter in the context of our fiscal year and investment thesis. Then I'll describe how VoLT strategically positions us for continued growth and helps us attract exceptional talent. Finally, I'll share our priorities for the remainder of the fiscal year before turning it over to Matt for an in-depth look at our first quarter fiscal 2025 results. Beginning with performance, we built significant momentum in the quarter, delivering double-digit organic revenue growth. Our bottom-line performance was comparatively softer due to a combination of operational and non-operational factors, which Matt will describe momentarily. Leading indicators for the business remained strong. Headcount for the quarter was robust. Cash flow was ahead of our own internal expectations, and our 1.72 book-to-bill was excellent. So when looking at the full picture, we believe we are on track to meet our fiscal year 2025 guidance and achieve the high end of our investment thesis goals. Booz Allen's momentum shows beyond our financials. It is evident in the quality of the work we win, the innovative capabilities we deliver, and the exceptional talent we attract. This is because VoLT is working. VoLT, which stands for Velocity, Leadership, and Technology, has put us at the center of the tech transformation taking place across national priority missions. Our ability to help clients utilize dual-use and leading-edge technologies faster and at scale is a powerful differentiator. At this time of historic challenge and change for our nation, Booz Allen is an innovation accelerator. This morning, let me share three examples that demonstrate this. The first is actually from one of the missions we have supported the longest: space. Space encompasses civilian, intelligence, and defense missions. Today, Booz Allen's space business is more than $500 million and growing. We have been a trusted U.S. space partner since the beginning, more than 60 years, from our nation's response to Sputnik, to Apollo, to the Hubble Space Telescope. And we continue to help NASA launch the future and inspire the world, working on trajectories as we did 55 years ago using leading-edge analytics. We are the overarching system of systems integrator for Artemis, the mission to go back to the Moon and create a lunar outpost for a flight to Mars. Importantly, and over the past year, Booz Allen has won several strategic contracts that position us to support and protect vital national security interests in space. Two weeks ago, I had the opportunity to spend time with our Colorado Springs teams and visit the United States Space Operations Command to discuss opportunities to modernize our nation's space capabilities. Coincidentally, while I was there, our team successfully uploaded and made operational what we believe is the first large language model in space onboard the International Space Station's National Lab. This intersection of AI and space is one of the next frontiers. Just as Booz Allen is a leading provider of AI to the federal government, we are on the cutting edge of this effort too. The second example of VoLT in action is our long-standing work in Europe and our growing footprint supporting one of the most dynamic combatant commands, United States European Command, or EUCOM. Booz Allen has been a trusted partner supporting efforts in Europe for more than 30 years. Over the past 10 years, our work has grown nearly sixfold, from about 150 to more than 800 professionals. This growth accelerated to support our country's efforts during Russia's invasion of Ukraine. Through VoLT, we had the right people and solutions at the right time to help EUCOM leverage cutting-edge data science to speed decision-making at the highest levels. That is why we are particularly proud to have won a critical recompete to continue our work supporting U.S. missions across the continent. My third and final example for how VoLT is driving our momentum is our recent acquisition of PAR Government Systems Corporation. PAR is an original creator and leading engineering partner for preeminent software products and solutions, enabling tactical support that spans ground, air, and space missions. This acquisition strategically augments Booz Allen's capabilities in situational awareness, mission readiness, and detecting and defeating drone threats. It will help accelerate our ability to deliver mission-critical solutions to our nation's warfighters on the tactical edge. These examples from across the globe and beyond show how VoLT moves us forward and helps ensure we remain a vital partner in missions of national importance in the face of ongoing change. So if VoLT is the engine powering our momentum, our people are the fuel that makes us go. Our people bring unmatched mission expertise and technological innovation to every project. And this is why I always speak about our people and not our contracts as the real key to our success. Booz Allen stays vibrant by attracting the best talent, like Bill Vass, whom we welcomed last month as our new Chief Technology Officer. Bill brings more than 40 years of technology leadership and experience spanning industry and government. He will help Booz Allen accelerate our leadership in injecting dual-use tech into our clients' missions faster and at scale. Bill, welcome. On the other end of the spectrum, we are building our pipeline of future stars through our summer internship program, which we call Summer Games. This year, we have 128 exceptional students participating in the program. Our interns collaborate on challenge projects in the areas of capability development, process improvement, and social good. We believe good ideas come from every level in this firm, from our newest colleagues to our longest-serving. This fits with Booz Allen's purpose to empower people to change the world. That starts with empowering our own people, whether consultants, engineers, scientists, analysts, cyber professionals, and of course, summer interns. I am so, so proud of this team and want to thank again all of my Booz Allen colleagues, past, present, and future. Returning to the here and now, today our collective focus is on the operational priorities we laid out in May. First, we will take full advantage of our record proposal pipeline. This includes continuing to win new work and recompetes, launching programs quickly, and hiring excellent people to build the depth of our expertise. Second, we will continue to manage the business tightly to drive efficiency and effectiveness across all our functions. We have opportunities to improve margin while we continue to mitigate growing budgetary uncertainty in an election year. Third, we will continue to implement VoLT at full speed by building the next-generation technology solutions and market positions, securing breakthrough technology partnerships, and maturing our internal capabilities. In summary, we remain optimistic about our growth prospects even in an uncertain budgetary scenario and a contentious election environment. We believe in the fundamental strength of the business we have built and feel confident about the future. At 110 years young, Booz Allen is as vibrant and exciting as ever. And with that, Matt, over to you for a deep dive into our financial performance. Thank you, Horacio. As you noted, Booz Allen continued to build momentum in the first quarter. Our VoLT strategy is working, and our work is increasingly at the center of the government's technology transformation. We are poised to keep growing and to deliver another strong fiscal year. For the quarter, on the positive side, our team once again delivered double-digit organic revenue growth. Cash performance was solid. Most important, our leading indicators were strong. On the demand side, we had key wins that yielded an excellent book-to-bill and record backlog. On the supply side, we continued to add the talent needed to support our growth objectives. Our bottom-line performance, however, was a bit softer than we anticipated. This was due to a number of individually small operational and non-operational factors that added up over the quarter. As we said previously, we managed the business for the full fiscal year. We have both the demand side and supply side momentum, as well as the operating levers available to us to meet our fiscal year 2025 objectives and achieve the top end of our investment thesis. I'll now cover our first quarter results in more detail. Please turn to slide six. Total revenue for the quarter grew about 11% year-over-year to $2.9 billion. Organic revenue was up 10.6% year-over-year, and revenue excluding billable expenses increased 8.4%. Taking a look at the market breakdown, our defense business continues to thrive, up 16% from the prior-year quarter. Our defense leaders won both recompetes and takeaway opportunities in missions of true national importance. Our civil business continues to perform well. Total revenue grew 12% year-over-year, and this performance was broad-based. As expected, revenue in our intelligence business declined about 3% year-over-year. We continue to expect this business to demonstrate solid growth for the full fiscal year. Turning to slide seven, we are pleased with both the scale and the quality of the work that our teams are capturing. We came out of the gates strong in the quarter, taking full advantage of our robust proposal pipeline. Net bookings for the first quarter were $5 billion, and our quarterly book-to-bill was 1.72 times. This yielded a trailing 12-month book-to-bill of 1.43 times, our highest in five years. Total backlog as of June 30th hit an all-time record of $36 billion, up 16% year-over-year. At the end of the first quarter, our qualified pipeline for the remainder of fiscal year 2025 stood at $55 billion. This is up 32% from a year ago. In short, we have the backlog and the pipeline necessary to fuel future growth. Moving now to headcount, Booz Allen closed the quarter with more than 35,000 people. We increased client staff headcount by more than 700 in the quarter, including 200 skilled professionals who joined Booz Allen through the PAR acquisition. This translated to 7.7% client staff growth year-over-year, ahead of our full-year goal of 3%-5%. We continue to recruit and hire aggressively to match our demand-side momentum. Turning now to the bottom line, we generated $302 million in Adjusted EBITDA in the first quarter, down 1.6% from the prior year period. Our Adjusted EBITDA margin was 10.3%, down 130 basis points year-over-year. Our profitability came in lower than expected due to a combination of factors. On the operational side, slightly softer contract-level profitability, lower utilization, and back-weighted client staff hiring during the quarter. On the non-operational side, slightly higher expenses on a year-over-year basis. Some of these items are non-recurring, and others are timing-related and are expected to normalize over the course of the fiscal year. Working down the P&L, our net income was $165 million, up 2.4% higher year-over-year. Adjusted net income declined 7% year-over-year to $180 million. Diluted earnings per share increased 4% year-over-year to $1.27 per share. Adjusted diluted earnings per share decreased 6% year-over-year to $1.38. These results include both a higher interest expense from our inaugural investment-grade bond offering and a higher tax rate than last fiscal year, moderately offset by a lower diluted share count. Moving now to the balance sheet, we ended the first quarter with $298 million of cash on hand, net debt of $3 billion, and a net leverage ratio of 2.7x Adjusted EBITDA for the trailing 12 months. cash flow for the quarter was $20 million. Cash from operating activities improved to $52 million due to strong collections. CapEx in the quarter was $32 million and includes $16 million of previously accrued expenditures that were paid in the first quarter. Our balance sheet is strong. This gives us flexibility in how we operate the business and deploy capital to generate value. Turning now to capital deployment on slide eight, we are committed to using our cash generation and balance sheet strength to drive superior value for our shareholders. In the first quarter, we deployed a total of $251 million. This includes roughly $156 million of capital return to shareholders through almost $90 million in share purchases at an average price of $149.74 per share and $66 million in quarterly cash dividends. It also includes approximately $93 million for the acquisition of PAR in June. We believe this acquisition will increase the value we deliver to clients and accelerate our financial performance. We anticipate that PAR will add $80-$90 million in revenue for the balance of this fiscal year and will be mildly accretive to earnings. We also made $2 million of strategic investments through our corporate venture capital program, including our recently announced investment in Quindar, an early-stage commercial space technology company. Finally, I'll note that our board has approved a quarterly dividend of $0.51 per share, which will be payable on August 30th to stockholders of record as of August 14th. Now for a look ahead. We believe we have the momentum and operating flexibility to deliver strong top and bottom-line performance for the full fiscal year. Please turn to slide nine as I run through our fiscal year 2025 guidance. At the top line, we expect revenue growth of 8%-11%. We expect to deliver Adjusted EBITDA dollars in the range of $1.26-$1.3 billion. This implies an Adjusted EBITDA margin of about 11% for the full year. While we previously indicated a flatter quarterly margin profile for fiscal year 2025, we now expect a moderately ascending profile over the remaining three quarters. Our ADEPS guidance range is between $5.80 and $6.05 per share. Lastly, we expect operating cash flow between $825 and $925 million and free cash flow between $725 and $825 million. In closing, I am extremely proud that in the final year of our three-year investment thesis, we are positioned to deliver at the top end of our target range for Adjusted EBITDA almost entirely through organic performance. We continue to build our business for the future and are forging ahead with confidence. With that, operator, let's open the line for questions. Thank you so much. And as a reminder to our tele audience, if you do have a question, simply press star 11 on your telephone to get in the queue and wait for your name to be announced. One moment for our first question, and it comes from Mariana Perez Mora with Bank of America. Please proceed. Good morning, everyone, and a special welcome to Lindsey. Thanks, Mariana. Good morning. So my first question, I have two, one business-related and the other one more like technical. The first question is about the PAR acquisition. Could you please describe a little bit about all the potential that you can unlock from these companies, special leading position with WinTAK and TAK, and this talent base they have, leveraging that with Booz Allen Talent, customer intimacy, and reputation? What is the combination of this acquisition, and when and what type of synergies we could expect from this? Thanks for that question, Mariana. We're very happy with the PAR acquisition. Sometimes big innovators come in small packages, and this is one of those cases where we were able to find a company and close a transaction with really a carve-out that really focuses on doing some really innovative edge-type work for the warfighter. That fits so well into our entire Digital Battlespace platform and what we're trying to do about integrating information and bringing it together from multiple sources using ultimately artificial intelligence to filter it and giving the warfighter the information he or she needs at the time that they need it in the place that they need it. This really will help augment and knit together a number of things that we are doing. It's very exciting. The basis for this acquisition is not cost reduction, as you said. It's really revenue synergies. Like we've always been saying, this acquisition fits the perspective of strategic acceleration. We're looking for companies that will take what we're doing and allow us to leapfrog both our competitors and our own efforts to be able to move faster and implement VoLT faster. Thank you. The second one to Matt. What makes you confident that you can achieve the EBITDA margin for the year in this trend? What are the key milestones that you'll be looking throughout the year to make sure that you can, or what efforts are you making sure you put in place to achieve the 11% versus the low 10s that you print in the quarter? Hey, Mariana, since I'm on a roll, let me give some context, and then I'll turn it over to Matt if that's okay. The primary view that we have is, of course, we're very happy with the top-line growth in the quarter. We're not as happy with the bottom-line results in this quarter, although, as Matt pointed out, and he'll take you through, this is largely driven by timing and one-offs. So the underlying profitability of the business remains very strong. What gives us the most confidence is the strong momentum that we see in the business. You see it in our book-to-bill, which is exceptional. You see it in our hiring, which is exceptional. You see it in PAR, which is a great small acquisition for us. And when we put all of that together, we are confident that we can achieve the objectives for FY25 and then deliver at the top end of our investment thesis. And I think what's really important is, inside all of these numbers, we continue to invest in the things that are making VoLT accelerate us because VoLT is working. We're winning not just a lot of work, but the type of work we want, and I'm sure we'll talk more about that. We're attracting exceptional technical talent that probably wouldn't have come to Booz Allen five years ago. And we are positioning strategically to keep bringing leading-edge technology to missions of national importance, which is both an accelerator in the near term, but also gives us resiliency at a time of political uncertainty, of budgetary uncertainty, and the like. So again, in that frame, I'll turn it over to Matt. Yeah, thanks, Horacio. Just to add to that, Mariana, we've talked about this in the past. We manage the business for EBITDA dollars, not margin. So our focus is on how do we drive profit dollars up, and then margin will increase as a result. But to take you through first, sort of what drove the miss in Q1, profit was impacted by a number of factors, both operational and non-operational, that were individually small, but they added up over the quarter. And as Horacio mentioned and I said in the prepared remarks, a significant portion of these were timing-related or non-recurring. Just to go deeper on the operational side, contract-level profitability was a touch soft, but the primary driver was a combination of lower client staff utilization and, quite frankly, the pattern of when and how we added client staff over the quarter when they started billing. That cost us about 1.5% in revenue ex billable growth for the quarter on a year-over-year basis and obviously an equivalent amount of profit dollars. And then on the non-operating side, compared to Q1 last year, we saw higher expenses in a couple of areas, including M&A, busy quarter, legal and regulatory expenses. But that said, our utilization metrics improved over the quarter and continued to trend up. And most important, we have the headcount we need to meet our fiscal year growth aspirations and really set us up well for the years as well. So we're confident we have both the momentum and the operating levers, if needed, to deliver another really strong year on the bottom line. Thank you very much. Thank you. One moment for our next question, please. It comes from the line of Sheila Kahyaoglu with Jefferies. Please proceed. Good morning, Horacio, Matt, and Lindsey. Thank you so much. So maybe just to continue on that topic, Matt and Horacio, I know you're going to get a lot of questions on this margin. Matt, I don't know if you're willing to quantify that 130 basis point contraction year-over-year. How much of that was just timing of the hiring and client utilization versus contract structure and M&A fees, etc.? Yeah, Sheila, sorry. As I just said, the timing of when we added staff and they became billable as well as utilization cost us about 1.5 points on Rev ex-billable. So you can do the math in terms of what that meant from a profit side. I would say second, contract-level profitability was a little bit soft. And then we probably had an equivalent amount on the non-operating side in terms of these one-time and timing-related activities. Okay. Sorry if I missed that point and a half. And then, Horacio, maybe a bigger picture question for you. I think the defense business and civil have been home runs, double-digit growth, lapping difficult comps. So how are you thinking about the runway of each of those customer segments for the remainder of the year? Sure. I think the good news about the momentum is that it is really broad-based across the portfolio. Our defense business, as I mentioned, won a couple of critical recompetes and really won some exceptionally important new work in the Pacific that we are very excited about, allowing us to bring technology to a set of missions that we care very much about that the country cares deeply about. So we see strong momentum, strong performance in our defense business really throughout the year, absent some major disruption, which will be industry-wide, nationwide as a result of budgetary pressures in the fall or whatnot. When you go to our civil business, civil, as you said, has had tremendous growth for a long time. I think this is the 10th consecutive quarter of double-digit growth in our civil business. They won one key recompete. We had the extension of our CDM program, which is great news. They have some critical recompetes in front of them that they're preparing for. We're well-positioned by, and they're all centered around bringing technology to key missions. These are places where we can't predict the future, but Booz Allen is very well-positioned. Then our intelligence business, even though in the quarter it showed a decline, actually the underlying momentum in that business is really strong. They won some really important work. This is the last quarter of the sort of the tough comp from last year because of the Focus Fox issue that we've talked about extensively. We see this business growing over the course of the year. But again, importantly, we have transitioned a lot of this business in the last couple of years, first under Judi Dotson and then under Tom Pfeifer from delivering excellent intelligence analysis to delivering extraordinary technology that undergirds, the accelerated intelligence analysis for the nation. So again, this is a business that is sourcing critical talent and doing good things. And so we expect momentum and growth across the entirety of our markets for the year. Thank you. Thank you. One moment for our next question. It comes from the line of Bert Subin with Stifel. Please proceed. Hey, good morning. Good morning, Bert. Good morning. Hey, Horacio, Matt. So the bookings of the quarter were, I would say, unusually strong. If you look at the last few years, sort of in the 1.0, maybe sort of that range in the first quarter, and you were closer to 2.0 in this quarter. Obviously, some good momentum. And I imagine, Matt, some of the comments you made around utilization was just sort of, I guess, now you're going to be getting ready to pursue some of that work. As we think about the second quarter, that's typically your strongest booking quarter over 2.0 on quarterly book-to-bill. Was there some pull forward there, or do you think that momentum just keeps building on the award side? Thanks for that question, Bert. The way to think about it is there's really strong underlying demand, strong momentum, and a good budget right now. And so based on those fundamentals, you would expect to see a good demand quarter this quarter. Our tactical sales engine is second to none, as you know, and our ability to take advantage when clients have money in their budgets and missions that matter to them, to take advantage of that opportunity to help them do it and to sell hard against it is something we've done for years. I wouldn't say there was any pull forward. I would say, if anything, there was some stuff left over from the prior year that took longer to realize. I think what the exact number is going to be this year is driven by a number of factors. Even if we win a lot of work, the large contracts tend to get protested, and your guess is as good as ours as to when something comes off protest. But the reality is we have ample demand, we have ample ceiling, and we have the headcount to deliver against our commitments for the year. Got it. Maybe just to follow up on that point, you mentioned recompetes earlier, Horacio, and you said you've seen some pretty good momentum there in terms of winning your recompetes. You highlighted last quarter that this was a higher-than-average recompete year. Can you just give us a sense for where we stand? Are you through some of the larger ones you've been watching, or are those still out in front of you? Yes and yes, I suppose. As you know, we've built a portfolio that is really enviable in terms of the work that's there, the quality of the work that's there, and how the underlying contracts grow. And when a recompete comes, it's really a recompete plus because it generally comes with additional scope and significant increase in ceilings. As you said, we've been through some of those very successfully. There's a few of those left on the year that we obviously want to deliver against, and we want to win. But importantly, the overall pipeline is really, really healthy. Matt pointed out, we have a $55 billion pipeline that we're prosecuting actively, and that's up 32% year-over-year. So the demand condition is really good, is really strong, and we intend to continue to win as much as we can. Thanks, Horacio, and welcome, Lindsey. Thank you. Thank you. One moment for our next question that comes from the line of Cai von Rumohr with TD Cowen. Please proceed. Yes, thank you so much. So Matt, you kind of explained what the factors were. I guess I'm kind of interested to know why the factors were. Why did you lose the 1.5? Because the timing and utilization, because basically you've been talking about using AI so that you've basically been doing better there until this quarter. And then secondly, you mentioned the regulatory, legal, M&A expenses. Those are presumably timing. And how should we think as we look at the next quarter? I mean, are we going to see more of this sort of delay? So the second quarter is sort of still a little disappointing, or does it get a big snap back? And thirdly, I apologize for all these questions. PAR, you said, is accretive, but if you look at their 10-K, it looks like that this business has a gross margin of about 6%. So how does it become accretive on your numbers? Thanks. Yeah, thanks, Cai. I'll try to take them in turn, but if I miss one, please bring me back. First, just to dig a little deeper into utilization, and Bert mentioned this, it really was a combination of factors, right? Both prosecuting and ramping up for a significant proposal pipeline, including some meaningful new wins. We had some one-off contract-related issues, for example, the delay in funding for Ukraine, more people go out on military leave. And honestly, we can run the business a little tighter. We've been in a pretty heavy investment mode. We remain in investment mode, but our market leaders know what they need to do there. And from a perspective of just when we added staff over the course of the quarter, typically interquarter numbers don't matter, but it happens. Q1 last year, we added a lot of staff early in the quarter and Q1 this year, not just through the PAR acquisition, but even organically when staff started, it was towards the back end. So that adds up to the one and a half. But as I mentioned, in response to an earlier question, utilization has been ticking up. We feel good about where that's headed. On the non-operational side, you're right, a lot of it's one-off or timing-related. I don't want to get into Q2, but obviously we feel very comfortable about our ability to deliver the full fiscal year. And then on PAR, we've gotten this question quite a bit. Obviously, PAR itself, being a public company, they had to disclose how they did, how they broke out their accounting. I think it'll look somewhat different under our model. We're comfortable that it'll be very mildly accretive this year, which is not bad in year one of an acquisition. And as Horacio said, over time, we think we have the ability to not just generate incremental revenue, but margin by adding a lot of the AI and digital services we have on top of some of the great stuff they have, like the TAK unit that provides information to warfighters at the edge. So hopefully, did I catch all three? I think I did. Yes, you did. Thanks so much, Matt. All right. Thanks, Cai. Thank you. One moment for our next question that comes from the line of Matt Akers with Wells Fargo. Please proceed. Yeah. Hey, good morning, guys. Thank you for the question. Hey, Matt. Matt, I wonder if you could comment any more just on how we should think about modeling the quarters for the rest of the year because we've got some of these costs going away after Q1. I know you get an easier compare in the intel business. So I think you commented on the revenue ramp, but just any further color you could provide there. No, I think we provided the right amount of color. You're thinking about it the right way, Matt. Obviously, we anticipate profit and margins to be moderately ascending over the back of the remaining three quarters now. As you mentioned, our comps will change. Yeah. Got it. Okay. I guess any thoughts on free cash flow, decent start to the year? Last couple of years, you haven't been positive in Q1. Just any thoughts on working capital, where that goes from here, or just how you're doing there? Yeah, we had a good start. I think collections were particularly strong. As we talked about this for the past couple of calls, we aspire to return to a free cash flow conversion rate of 100% or greater and run a good vector to get there. Okay. Thank you. Thank you. One moment for our next question. It's from the line of Robert Spingarn with Melius Research. Please proceed. Hi, this is Scott Mikus for Rob Spingarn. Matt, you mentioned lower contract profitability in the quarter. I was just wondering if you could provide color on that. Was it more concentrated in defense, civil, or intel contracts? No, it was just slightly lower than we anticipated. It was spread across the business. No one factor that we're particularly worried about. Okay. And then, Horacio, for you, one of the lessons learned from the war in Ukraine is how large quantities of inexpensive drones can have a significant impact on the battlefield. So when we think about programs like the Air Force's CCA program or the DoD's JADC2 initiative, what do you want Booz's role to be in the digital and connected battle space? And how do you take advantage of the trend where hardware becomes increasingly more commoditized and the value is in the software that drives the hardware? You know, Scott, we've been on this trend for years, and we've been anticipating it. We view ourselves as a primary digital player that can bring information together at speed, at scale, to the warfighter from headquarters to the edge. And that is an important role that I believe Booz Allen is uniquely positioned to play because of our relationship with tech companies, because of our track record doing it, because of our own leadership in some leading-edge technologies like AI, like cyber. And because we're making investments, this quarter we talk about PAR, but we've been talking about investments that we've been making across the board to make all of this work. And even the work that we're doing in space that I described in the prepared remarks fits into this as well. We need to have the ability to persistently look at an environment that's in conflict to understand and anticipate threats and to take them on in ways that are effective to the type of threat. As you know, we're doing a lot of work in the Ukraine that informs and teaches us how to do this better, how to help our clients do this better. That work translates then into the work we're doing in the Indo-Pacific, the work we're doing in CENTCOM, and the work that we're doing across the board in contracts that have to do with readiness and helping our warfighters accelerate their ability to be ready and respond to these kinds of threats. Thanks for taking the question. Sure, of course. Thank you. One moment for our next question that comes from Noah Poponak with Goldman Sachs. Please proceed. Hi, good morning. Hi, Noah. Good morning. I was wondering if you might spend a minute on medium to long-term margins, where you think profitability can go beyond this year. I know you've talked about scale and driving revenue growth above the headcount growth, and I think also you've talked about favorable mix with faster growth in some of the more favorably contracted and higher margin parts of the business. Is that right, or are there offsets to that? And should we be thinking about higher margins over time or stable margins over time? Why don't I start, and then I'm sure Matt will want to add to this. Let me start by saying I'll take us back to the investment thesis. About three years ago, when we gave you our outlook, we said we thought margins were going to be in the mid-tens to be able to invest in the business and invest in all of these new technologies that were going to drive the next wave of growth. In fact, the underlying strength of the business, the underlying profitability of the business has allowed us to both invest at an even higher level organically than we thought we would while preserving our balance sheet capacity and, at the same time, deliver margins in the 11% range, which is a full half point higher than we anticipated. I think over time, the question, as Matt pointed out, is how quickly can we have EBITDA growth? And that's what we're going to be focused on. There's opportunities in the near term to accelerate that, that we're talking about for this year. But there's opportunities in the long term, especially as outcome-based contracting and some of the other trends that we are anticipating and preparing for take more hold for overall profitability to continue to accelerate. Now, exactly when that is going to happen, I'm describing some long-term trends to you. I would not want to ascribe that to any given immediate fiscal year. But over the long term, we're very optimistic about Booz Allen's ability to drive above-market profitability growth rates. Okay. Yeah, I agree. You have the basic factors outlined. It's a question of our current contract mix and how does that evolve. We're generating scale in the business. How do we use that scale? And then to what extent can we build more of an outcome-based contracting business? And we've said that's something we aspire to. A lot of folks in the industry aspire to, but that's going to take a while. Okay. With regard to the top line, I guess the total organic revenue growth rate in the quarter is kind of at the high end of the range for the year. The compares get a little easier through the rest of the year. I guess, what are the risk factors we should be contemplating for what would take you to the low end now with nine months left in the year? I can start. I think, obviously, environmentally, we all need to be very mindful of the fact we are very mindful of the fact that this is an election year. This is a particularly challenging election environment with just in the last two or three weeks, the picture has changed so many times. And I assume it will continue to change or it may not, but it is unpredictable, and that tends to have an impact on the way Congress behaves around passing appropriations bills and continuing resolutions and so forth. And so we're very mindful of that. We are continuing to monitor it closely and doing all the things we need to do internally to be successful, whether we have a stable budget environment, which would be ideal, or a more unstable one. Beyond that, we continue to work on a number of recompetes that obviously we want to win. We continue to prosecute a very healthy pipeline, which we hope we will have significant wins in there, which will continue to push and accelerate our business. If that decelerated, then you would see some impact on that. On the whole and on the main, while we're cognizant of the risks and not dismissing any of them at all, we're optimistic. We're optimistic about the year. We're optimistic about our momentum, and we're optimistic about what happens even beyond this year. Okay. Great. Thank you so much. Thank you. One moment for our next question that comes from the line of David Strauss with Barclays. Please proceed. Hi, good morning. Thanks for taking the question. This is actually Josh Korn on for David. So I just wanted to ask how you expect the cost base to break out as a% of sales this year as compared to last year. So in other words, COGS, billables, SG&A. Thanks. Yeah, David, I think, as I mentioned, we've been in a pretty heavy investment phase to support not just growth this year, but into the out years. Part of our commitment to being a compounder is we build this business for the long term. So we continue to invest in the business. As I mentioned, we have some operating levers available to us as needed to make sure we deliver the full fiscal year. But Q2 for us really is determinant to go back to the last question. In many years, we got a lot of momentum we built in Q1 on the leading indicator side. A little work to do in terms of dropping profit to the bottom line. But I think Q2 really will be important for us this year in terms of setting us up for next year. We'll sort of adjust our cost basis as appropriate based on what happens. Okay. Thank you. Just one for me. Thank you. One moment for our next question, please. And it's from the line of Tobey Sommer with Truist Securities. Please proceed. Thank you. I was hoping you could give us some color on the pace of your hiring, if there are any changes there, and any comparable changing trends in billable headcount retention. Maybe touch on AI skills specifically as part of your answer. Thanks. Hey, Tobey, I can start. Over the last couple of years, we did some really important work. Our COO, Kristine Martin Anderson, led some really important work that allowed us to shorten the cycle of both identifying candidates, hiring, and then making them billable. That's been an exciting development that has allowed us to lean into this market. This is a good labor market more strongly. Frankly, the work that we are doing attracts people because this is one of the few places, if not the only place, where you can do all of this work, integrate all of these capabilities, bring AI to the edge against missions of national importance. And that puts us in a great recruiting position. And our attrition is some of the lowest numbers we've seen in many, many years. So we feel good about where we are, as Matt pointed out. Last year, we had more hires in April, and fewer in June. This year, we had more hires in June and fewer in April. But we don't manage this business by the month. We manage the business for the year. And our overall headcount growth is on par with what we expected, maybe even a little bit ahead on the AI front. I think the same story is true. Booz is working. We are winning work that is exciting, and it's allowing us to attract talent that in itself creates its own differentiation. And when you put that together with intellectual capital that Booz Allen has with the track record that we have, it's really a differentiating position. Yeah, just to give you a couple of numbers to build on that, I was talking to Kristine last night about this. Applications to Booz Allen in Q1 were up 33% year- over- year. Attrition, as Horacio said, we keep calling it historically low, but it's now seven consecutive quarters of historically low attrition. I think we need to adjust our baseline. It just speaks to the quality of the work we're doing and the quality of our value proposition. I've said it before, but it bears repeating. Slightly over a third of our hires come from employee referrals, and that speaks to the fact that people who are here not just want to stay here, but they want to refer their friends. Tobey? All right. I'm going to go to our next question on the queue. Comes from the line of Louie DiPalma with William Blair. Please proceed. Horacio, Matt, and Lindsey, good morning and congrats on your 110-year anniversary. Thanks, Louie. Thank you, Louie. Three years ago, you guys had a couple of percentage points of exposure to Afghanistan, which was a headwind during the wind down, if I recall correctly. Matt, you mentioned how you were recently impacted by a delay in funding to Ukraine. Along those lines, can you quantify Booz Allen's exposure to Ukraine if funding for that conflict were to dry up with a new administration? Let me start. I mean, as I mentioned in the prepared remarks, we have about 800 people working across European Command. That's not only Ukraine. That is a very broad-based level of support across the entire mission in the entire continent. As Matt mentioned, when there was the funding interruption, there may have been about 100-150 of our professionals who could not bill to the contract, and then we had to hold until things restarted. I hope that gives you a sense of the exposure against a 35,000-strong footprint. I would view this as almost in the day-to-day, not as an exceptional level of exposure. But then let me flip it on its head, which is to also say the work that we're doing in Ukraine for the United States in the Ukraine conflict is extraordinarily important to the nation in that conflict, but also extraordinarily important for what we're learning that we're exporting to our missions across the world, and in particular to INDOPACOM, where, as I've said before, our role, our goal is to be a leading provider of the fusion of information that is going to be required to be able to deter conflict in that theater. So this is really exciting work. We are very proud of the work. We're very proud of the people we have working there who've made a tremendous difference for the country and who have been working almost literally around the clock now for two years at this level of OPTEMPO. I think more broadly, Booz Allen's positioning against these missions of national importance makes us resilient. We believe we're working on things that matter to the country and that transcend administrations. And to sort of end where you started, this is, I think, why over 110 years we've successfully worked for so many administrations. We have made a difference to the nation, and we very much want to continue doing so while we grow and deliver exceptional resources to our shareholders. Thanks, Horacio. I get the sense you're saying that your European command and theater work is very durable. And on another note, you are obviously one of the largest cybersecurity service providers. And I think in September, you're holding a Cyber Industry Day. And I was wondering, has there been any increased demand for your services from the CrowdStrike issue as you deal with the intelligence community and the overall DoD and F ederal Civ? And also related to cyber, how are your zero trust implementations progressing? Thanks. Yeah, I'll take this. The specific answer to your question is no, not yet on CrowdStrike. But taking a step back, and you'll hear more about this in September, really, it's the convergence of the battlespace in cyber. We're calling it one battlespace, right, across.gov,.com,.mil. It's a lot of the same threat actors, a lot of the same threat vectors, a lot of the same dynamics, application of AI to cyber, both on offense and defense that span those three. That's really driving our current growth and where we think growth is headed in this market. So we believe we're well positioned for this. Certainly, work may come out of it. Nothing has happened to date. In terms of your specific question, your last question, we're really pleased with where we're headed on Thunderdome. We're seeing not just technically, but in terms of client adoption, a lot of positive momentum there. Yeah, Louie, I'll just round out Matt's answer by saying the power of VoLT is that we have invested across a broad range of technologies and have leading positions not just in cyber and in AI, but in even things like quantum, some aspects of space. And what we're seeing, and we began to talk about it last September, and without stealing our own thunder, we'll probably talk about it more as it relates to cyber next September, that these technologies are really all integrating and coming together. It's AI and cyber, AI and space, and increasingly AI and cyber in space. And Booz Allen's ability to span both these markets, but also these technology sets, puts us in a unique position and gives us optimism for the future. Great. Thanks, Horacio. You don't want to steal your own Thunderdome. Thank you for that. Thank you. That's all the time we have for Q&A today. Thank you all who participated. I will pass it back to Horacio Rozanski for his final comments. Thank you. Thank you all for your questions and for joining us this morning. I hope this discussion gave you a deeper understanding of our performance and of why we feel confident we will deliver on our near and long-term goals. Last month, a few of us had the great honor to ring the bell at the New York Stock Exchange. It was a great moment in our company's long history, and it really reflected our enduring presence and enduring impact. It talked about the future and how we're shaping our own future and the foresight and the agility that had kept us relevant and vibrant for 110 years and looking for 110 years more. Ultimately, this event was a testament to our incredible team and to the clients and to the shareholders who have put their trust in Booz Allen to continue to develop exceptional performance. For that, we are forever grateful. With that, have a great day and a great rest of the summer. Thank you all for participating in today's conference. You may now disconnect.