Ladies and gentlemen, thank you for standing by. Welcome to the CACI International third quarter fiscal year 2023 conference call. Today's call is being recorded. At this time, all lines are in a listen-only mode. Later, we will announce the opportunity for questions and instructions will be given at that time. If you should need any assistance during the call, please press star and then zero, and someone will help you. At this time, I would like to turn the conference call over to Dan Leckburg, Senior Vice President of Investor Relations for CACI International. Please go ahead, sir. Well, thank you, and good morning, everyone. I'm Dan Leckburg, Senior Vice President of Investor Relations for CACI International. Thank you for joining us this morning. We are providing presentation slides. Let's move to slide number two. There will be statements in this call that do not address historical facts, and as such, constitute forward-looking statements under current law. These statements reflect our views as of today and are subject to important factors that could cause our actual results to differ materially from anticipated. Those factors are listed at the bottom of last night's press release and are described in the company's SEC filings. Our safe harbor statement is included on this exhibit and should be incorporated as part of any transcript of this call. I would also like to point out that our presentation will include discussion of non-GAAP financial measures. These should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. Let's turn to slide three, please. To open our discussion this morning, here's John Mengucci, President and Chief Executive Officer of CACI International. John. Thanks, Dan. Good morning, everyone. Thank you for joining us to discuss our third quarter fiscal year 2023 results. With me this morning is Jeff MacLauchlan, our Chief Financial Officer. Slide four, please. Last night, we released our third quarter results. I'm very pleased with our performance. We grew revenue by 10%, all of which is organic, with growth in both expertise and technology. Profitability was strong, with an adjusted EBITDA margin 11%. Cash flow was solid. Our trailing 12 months book-to-bill of 1.4 x remains very healthy. As a result of our strong year-to-date performance, we are raising our fiscal 2023 revenue and earnings guidance. Jeff will provide additional financial details shortly. Let's go to slide five, please. Turning to the external environment, market and demand trends remain very favorable to CACI. Government fiscal year 2023 budgets showed healthy growth, and we continue to see positive funding trends. In addition, the President's GFY 2024 budget request calls for further growth in defense, which is just a starting point as Congress begins the budget process. While budget indications are positive, we will continue to monitor the process and debt ceiling negotiations. We see continued growth in key areas of focus for CACI, driven by the heightened global threat environment, bipartisan support for national security, and the need for modernization. From a capability perspective, we see continued government demand in several important areas for CACI, including broad modernization of both applications and networks and accelerating demand for cloud migration. The space domain with photonics and situational awareness and the electromagnetic spectrum, including software-defined signals intelligence and electronic warfare and their convergence with cyber. CACI's industry leadership and commitment to invest ahead of need position us extremely well to deliver innovation to our customers and value to our shareholders. Slide six, please. We continue to successfully execute our strategy of building differentiated capabilities rooted in software and deep domain expertise. Just as important, we remain focused on exceptional execution. The combination of these two factors enables CACI to not only win new work in the marketplace, but also retain, expand, and extend that work over time. Let me give you some examples. First, our Enterprise Information Technology as a Service or EITaaS award with the United States Air Force is the largest contract award in our company's history. This award demonstrates CACI's leading position in broad IT modernization. While the award has been under protest, I am happy to say that our win was recently upheld by the GAO. We are ready to get to work and look forward to beginning this important program for the Air Force in the near future. Second, I want to highlight the Army's Integrated Personnel and Pay System, or IPPS-A. IPPS-A is the largest PeopleSoft implementation in the federal government and arguably the most complex PeopleSoft implementation at scale in the world, serving more than 1 million soldiers. We are excited to have rolled out the latest version of the system earlier this year. For the first time, the Army has a single system for managing more than 1 million soldiers across the Army Reserve, and Army National Guard. That is software development at scale, and we look forward to working with our customer to provide additional functionality and enhancements to further support our soldiers. This performance is yet another example of CACI's industry leadership in software development for both enterprise and mission customers. In the space domain, we continue to see strong demand for our photonics technology from both government and prime customers. We also continue to invest in and advance this critical technology, and as a result, continue to achieve important performance and interoperability milestones. CACI's photonics technology enables secure space-based communications networks using more powerful, efficient technology that transmits more data faster. We are currently under contract to deliver optical communications terminals for the SDA under Tranche 0 and Tranche 1 for both the Transport and Tracking Layers. We continue to provide our photonics technology to a wide range of additional classified programs at multiple orbital altitudes. We continue to demonstrate leadership in the electromagnetic spectrum, an increasingly important area of focus for national security, particularly in the Pacific and European theaters. CACI is one of the largest providers of sensing systems across all domains: land, air, sea, space, and cyber. As we've discussed before, one of our key differentiators is a strategy focused on software-defined technology. This allows us to update capabilities in a faster, more agile manner, enabling our national security customers to stay ahead of rapidly advancing adversaries and threats. In the latest example of this capability, we recently executed the first over-the-air software upgrade of an operational system on a Navy ship at sea. Rather than waiting for the ship to return to port, we deployed an over-the-horizon update to enhance capabilities while keeping the asset on mission. This software-enabled speed and agility is critical to the context of near-peer competition. In summary, we delivered strong results, and I remain confident in our long-term prospects. We are successfully executing our strategy. We're making the right investments, hiring and retaining top talent, winning new work, delivering with excellence, and leveraging our financial strength to drive free cash flow per share and additional shareholder value. On top of all that, while we are effectively managing our capital structure to allow for flexible and opportunistic capital deployment and taking advantage of all available value-creating initiatives like the tax method change we recently effected. As a result of our performance to date and our strong position, we are raising our fiscal year 2023 revenue and earnings guidance. With that, I'll turn the call over to Jeff. Thank you, John. Good morning, everyone. Please turn to slide seven. To echo John's sentiment, I'm very pleased with our third quarter results. We generated revenue of $1.7 billion in the quarter, representing year-over-year growth of 10%, all of which is organic. Expertise revenue grew 13%, and technology revenue grew 7%, both reflecting the ramp-up of new awards as well as the expansion of existing work. Adjusted EBITDA margin was 11% in the quarter and is 10.6% on a year-to-date basis, which is consistent with our full year guidance. As we previously discussed, we expected margin in the H2 of the year to be stronger than the H1, and our third quarter results are very much in line with that expectation. Third quarter adjusted diluted earnings per share were $4.92, up 6% from a year ago, with strong operating performance more than offsetting higher interest expense and a higher tax rate. Slide 8, please. Third quarter operating cash flow, excluding our accounts receivable purchase facility, was $56 million. This primarily reflects higher working capital as a result of our strong revenue growth in the quarter. Free cash flow was $41 million. As it relates to cash flow, we've had several extraordinary tax items that have influenced cash flow in fiscal years 2020 through 2023. We thought it might be helpful to lay them all out in one place to make it easier for you to normalize our reported free cash flow, as some years have enjoyed a tailwind while others experienced a headwind. Each of these items has been previously disclosed. We have them here only to aid your analysis. For example, as we have previously discussed in fiscal 2023, between the CARES Act, the tax method change, and Section 174, we expect to have a $222 million cash headwind. This year will be the largest cumulative headwind experienced for these three items. Slide nine, please. You will recall last quarter, we announced our board had authorized a $750 million share repurchase program. We deployed an initial $250 million of that authorization as an accelerated share repurchase on January 30th. We expect that ASR to be complete by August. As part of that authorization, we also initiated an open market repurchase program. As of the end of the third quarter, we have repurchased an additional 45,000 shares in the open market at an average price of about $283. When we discussed the ASR, we noted that this remaining $500 million authorization provided us with the ability to be even more flexible and opportunistic, our stated strategy for some time. This additional flexibility is key to our commitment to drive shareholder value by deploying capital based on business and market dynamics over time, that is exactly what we are doing. We ended the quarter with net debt to trailing 12 months adjusted EBITDA at 2.5 x. This leverage reflects the impact of the $250 million ASR, as well as the open market share repurchases. The healthy long-term cash flow characteristics of our business, our modest leverage, and our access to capital continue to provide significant optionality to deploy capital and support a future share growth and shareholder value. Slide 10, please. As a result of this strong execution, we are raising our fiscal year 2023 revenue, adjusted net income, and adjusted EPS guidance. We now expect fiscal 2023 revenue growth to be in the range of approximately 7.5%-9%. I'll remind you that two points of our expected growth in fiscal 2023 is from acquired revenue, with the balance being organic growth. We continue to expect our full year adjusted EBITDA margin to be in the mid to high 10% range. We are raising our adjusted net income and adjusted EPS guidance to reflect our higher revenue outlook, as well as our diluted share count guidance of 23.5 million shares. We continue to expect our interest expense to be in the range of $80 million-$85 million. Let me remind you, interest expense this year is up about $20 million compared to our initial expectations, primarily due to the rate increases we've seen over the last few quarters. I'm very pleased that the underlying strength of our business puts us in a position to offset that additional interest expense and raise the low end of our adjusted net income guidance. I'll also mention that during the third quarter, we entered into $500 million of additional floating-to-fixed interest rate swap agreements to hedge an additional portion of our floating rate debt. With these interest rate swaps in place, interest rates on approximately 2/3 of our debt are effectively fixed, helping to further insulate us from rate volatility. We are updating our fiscal year 2023 free cash flow guidance to reflect the delay of a $40 million refund related to the tax method change we previously discussed. The refund was expected to be received this fiscal year, but has been delayed due to IRS timing. We now expect to receive the refund in fiscal 2024. Slide 11, please. Turning to our forward indicators, CACI's prospects continue to be strong. Our trailing 12 months book-to-bill of 1.4x reflects strong performance in the marketplace. third quarter backlog of $25.3 billion grew 8% from a year ago. For fiscal 2023, we now expect virtually all of our revenue to come from existing programs, with minimal recompete and new business remaining. Our pipeline metrics are also very healthy. We have $7.2 billion of submitted bids under evaluation, approximately 65% of which are for new business to CACI. We expect to submit another $18.7 billion over the next two quarters, with over 80% of that for new business. In summary, we're seeing the successful ex-execution of our strategy manifest in our strong results. Our performance enables us to raise fiscal 2023 revenue, adjusted net income, and adjusted EPS guidance. We remain confident in our ability to continue to drive long-term growth, increase free cash flow per share, and generate shareholder value. With that, I'll turn the call back over to John. Thank you, Jeff. Let's go to slide 12, please. In closing, CACI delivered another quarter of strong financial results. 10% revenue growth, 11% adjusted EBITDA margin, and solid cash flow. We're well-positioned for continued performance with a strong track record of awards and a healthy pipeline of additional opportunities. Our performance is not by accident. We have a strategy focused on differentiation, innovation, operational excellence, and flexible capital deployment. Our objectives in executing that strategy are to drive long-term growth, margin expansion, strong cash flow, and free cash flow per share, and ultimately, customer and shareholder value. Jeff said it very well. We're pleased to see the successful execution of our strategy manifest in our results. It's also important to remember that CACI's success is driven by our employees' talent, innovation, and commitment to our customers' missions and to each other. I'm immensely proud to lead such a capable and diverse group of people. It's your dedication, your good character, and your innovative spirit that's truly foundational to our success. Thank you all. To our customers and our shareholders, thank you for your continued support and confidence in us. With that, Emily, let's open the call for questions. Thank you. If you would like to ask a question today, please do so now by pressing star followed by one on your telephone keypad. If you change your mind and would like to be removed from the queue, please press star followed by two. We ask that you allow yourself one question and one follow-up to allow everyone the opportunity to ask a question today. Our first question comes from the line of Bert Subin with Stifel. Please go ahead, Bert. Hey, Bert. Sorry, am I connected? Yeah. There you are. Hey, hey. Hey, hey, good morning. Morning, Bert. Just my first question, you know. Hey, good morning. Organic growth inflected to 10% in fiscal 3Q and looks to be on track to grow around 6% in the fourth quarter. I guess depending on where you fall within that range you gave, can you just highlight what's driven that inflection? Has it primarily been on contract growth, just as outlays have rebounded and hiring has eased? Or has it been more a function of the new contracts you highlighted when you guys were going through your prepared remarks? Yeah, Bert, thanks. It's, you know, it's a little of both. You know, we put our FY 2023 plan together last August. It is playing out as we expected. You know, during our second quarter call, Jeff mentioned that I think on the margin side at 10.2% and 10.4% the first couple of quarters, you know, he, you know, begged everybody. Nobody panicked, you know, because this is the way the year is gonna play out. That's what drove our confidence in ensuring we would finish the year at the mid to high end of the 10s on our margin numbers. As for the revenue mix, you know, it's really a combination of both. Over the last few years, we've really been focused on on-contract growth. You know, when you win some of these large programs, pretty much the first year of revenue is 100% in sight. You really have to go grow capabilities across the company and sort of take current capabilities to more and more customers out there. Our line leaders have done just a fantastic job there. You know, as for some of the new programs, it's really spread across both expertise and across tech. You know, one of the big things about good news for us is both are growing. You know, I often get asked, you know, technology is growing at 10 and expertise is growing at seven. You must be happy with the tech. I often answer, "I'm actually glad when they're both growing." The fact that enterprise may have grown, you know, larger than our technology business, you know, is actually positive news for us. I've always said, as we look at growth, you know, just don't fixate on one quarter. You know, things are going to move around quarter-to-quarter. That's why we focus on the outlook for the year. In the longer term, we're really glad that we've gotten to this point to close our third quarter and are very, very happy that we're able to raise both top and bottom line guidance. Yeah. Thanks for that, John. Maybe to follow up to that point, you guys have had some notable wins recently, you know, across expertise in the enterprise tech side, you know, with a few multi-billion-dollar wins. It seems like that part of the business is sort of evolving at least as good or better than you expected. Can you walk us through how to think about the mission tech sales side of the business? Because I feel like that's the part that ebbs and flows more quarter-to-quarter. You noted in your prepared remarks that the optics part of the business is seeing some success with both primes and government customers. Can you just walk us through sort of how we should think about the next few quarters as it pertains to some of your businesses across EW, SIGINT, optics, you know, variety of the mission tech and hardware business? Thank you. Yeah. Bert, thanks. Terrific question. On our mission tech side, you know, I'll actually relate it back to the third quarter that we just finished, right? Expertise outpaced technology on the revenue side, but still at the, you know, margins that we expected. You know, it doesn't take a lot of mission tech. Although you won't see that in the revenue side, it really has a pronounced effect on our margins, and we continue to make progress. You know, what's very different in a historical government services business is not just selling the expertise piece. The technology rate of orders is very different. It rarely hits backlog. you know, we'll get a, we'll get an award for X number of units, and then before that quarter is done, we have usually shipped. Which we're also seeing on the product side is, you know, eventually everything does come back. We talked about some funding issues with our investors during second and third quarter last year. That funding is all picked up. It has allowed us to make more product deliveries, thus support our margin. you asked about SA Photonics and where we're going in the optics world. I have to tell you, I could not be more pleased with their performance overall. you know, we're very confident. I continue to gain confidence every quarter that we're gonna realize the strategic value that we expected. Just remember, the way to look at this is we're in the very early innings of optical comms. We are seeing strong demand. We've got great relationships and contracts with our government and our industry satellite primes. We are doing a great job of the transition and the connection to remember to our heritage LGS Innovations business. That's going well. We're expanding our production facilities down in Orlando, and we're still in the investment phase. I would tell you should look for growth at the end of 2024 and into 2025 based on the current schedules and on funding. From a technology side, we've done an outstanding job. We're looking at bandwidth from 1 to 100 Gb. We've got decades of development experience. We're continually get pulled into many CRAD efforts where we can expand what we're doing there. During the quarter, we've also secured contracts for both LiDAR and comms applications in the air domain. You know, we're sort of already looking at capability that the airborne layer is going to require as it comes to optical comms. You know, you should continue to look for revenue and margin growth in this space, as well as what we do in our ID Tech, Archon acquisition as we get, you know, more towards the end of 2024 and as we continue on throughout 2025. Thanks for that question, Bert. Very helpful. Thank you, John. Our next question comes from Robert Spingarn with Melius Research. Please go ahead, Robert. Good morning, everybody. Morning, Robert. John, I want to follow up on that, on that growth question, the revenue growth question. You talked about that's both, I guess, a function of demand and supply. Supply being outlays moving faster and so on. How do you see that trending from here? As, you know, separately, you know, you mentioned the debt ceiling fight. Has customer behavior adjusted for that? It's a tough question to ask in a quarter where you had such good revenue growth, wanting to see if you could talk about that a little bit. Yeah, sure. It's always gonna be a function of, you know, budget outlays and, you know, what the defense committee budget looks like. You know, we're sort of, I hate to use this term again, but we're in the early commit meetings, putting together our FY 2024 plan. You know, we've got, I think the government has a lot of work to do to get us to a clear 2024 budget. There's a lot of talk of is that gonna be a full year CR? What is the debt ceiling impact? You know, I don't have the best crystal ball, but I would tell you is I like the hand we play. I like the capabilities that we have created ahead of customer need. Yes, there are times where funding doesn't you know, totally line up with that, all is not lost because we're in the right areas of very healthy spending trends. You know, let's talk about the budget. On one side, you know, there's legitimate concerns about the government's deficit and our debt situation. On the other side, I mean, there remains significant bipartisan support for national security. We've got a war going on in Europe. We got near-peer threats like China, who in some ways has surpassed us. You know, cyber is that great equalizer. A decade ago, we were at war in Afghanistan, where we sort of own the skies, and we own the electromagnetic spectrum. That's not gonna be the case in the next fight. We're gonna have to rely heavily on space, and that domain is now contested. At a macro level, I like the capabilities we have. We've been working at this for a number of years. When we break that down into the mission tech side, you know, from the Mastodon LGS acquisitions and what we had internal to CACI, we're seeing demand, so those products pick up. Some of our counter-UAS systems, we've got some testing going on in Europe looking at enhancing what we do in the counter-UAS domain and really work through our federal government, Bill LaPlante and his team, as to how we may be able to help in the Ukraine fight. That's, that's a, you know, positive trend here. Again, you know, we're the long-term company. You know, we're not gonna look quarter-to-quarter. Long term, over a number of quarters, a number of years, I like where the funding's showing up. We've really expanded our relevance to those areas. We've got terrific relationships working with, you know, large OEM primes, who are, you know, building those exquisite platforms, be it space or be it airborne or be it land, that we find our products on. You know, if I look at the long-term growth plan, I really like how we're positioned. When we get to the August time frame, we'll be talking about 2024. You know, we've also got some really nice large programs that we've won as well. Okay. Then just on the, on the supply side, on your ability to staff up. You know, these recent intelligence leaks, the documents that were leaked, is that going to slow down the approval process for security clearances? Can that, you know, and if so, you know, how significant could this be? Yeah, I mean, look, we've talked for as long as I've been in this market, which is a long time, around the ability to get not only our folks cleared, but our government folks cleared. You know, I think that's gonna continue to be an issue. There is no perfect answer there. You know, at the end of the day, we're all assessing whether somebody has the right aptitude and the right, you know, what the rights, the good stuff that helps people make the right decisions there. You know, more to come on that. I know that folks in the House and in the Senate have been talking about how do, you know, how do we all better plan for that. You know, under the categories of things that we can, you know, control, I like what we're doing on hiring and retaining our talent. Look, the demand remains high. To your point, Rob, we've got to get through that clearance wicket as well. You know, we've got our attrition that's the lowest of, you know, in a number of recent years. Definitely lower than what it was as we entered COVID. We are still filling a lot of our open reqs through our referral program. About 40% of our hires come to us through referrals. 1 in 4 of our openings is filled internally. You know, for those folks who are looking to come to a company not for a job, but to build a career, there's a lot of places that they can move around. You know, from a funding, from a budget, from the, you know, clearance process, CRs, we're a 61-year-old company now. We've been operating in that environment for a while. I really am excited by both the expertise and the technology hand that we have, as well as some of these large recent awards, and really looking for a continued long-term growth and add even more shareholder value. Thanks, Rob. Thanks for all the color, John. Appreciate it. Our next question comes from Matt Akers with Wells Fargo. Please go ahead, your line is open. Hey, thanks. Good morning, everybody. Good morning. I was wondering if you could talk about kind of the longer term. Good morning. I wonder if you could talk about kind of the longer term view of margins. I mean, like, if you go back a few years ago, when you guys started first talking about kind of the technology versus expertise, you were kind of a high, high 9s or 10% business, and you know, now you're kind of high 10s. Is there a lot more room to go? Could you get to kind of like 11%, 12% margin or, you know, does it sort of get harder to improve from here? Yeah, Matt, thanks. You know, it really comes down to mix, frankly. You know, I love the fact that we're talking with analysts and our shareholders about what else can we do to continue to grow margins. You know, you're absolutely right. About six years back, to where we are today, we're up about a little north of 200 bps. While at the same time, we restructure how we go after the market. We've added an entire part to our business in the mission tech area. It's really the mix of business we have, and it's the volumes that we can achieve in our mission tech business. You know, frankly, you know, change is hard. Change is hard for our customers. You know, we're that option that, you know, is very much focused on. You gotta remember, six, seven years back, we had pretty bright budgets, and we were a nation at war. You know, we were looking for that day when budgets would be tighter, frankly. With tightness and with spending constraints comes what are new ways we can look at the technology that we need out there. How do we do software-defined devices? How do we collapse, you know, five devices into one? You know, how do we do over-the-air upgrades, which I talked about during my prepared remarks. You know, if we end up in a conflict, in the INDOPACOM region, it's a long haul to a shore to do a hardware card up, right, to change the capabilities on ships. The fact that we can do that via software, and software is this company's superpower, you know, that will drive margins. Some of the work we've done with our ID Tech acquisition, and our Archon product line, that we expect, you know, relatively strong growth. Again, that's an area where a customer has to change how they buy, you know, end item devices. Long term, we're very well-positioned. Along the way, our mix of programs continues to, you know, drive margins. It won't be every quarter. You know, it may or may not be every year. If I look at the trend line from six years back to where we sit, in FY 2023, you know, north of a 200 bp s [audio distortion] while we've been building new parts and new capabilities, I think there is continued shots. You know, as for our number, Matt, you know, I really shy away of, you know, can it be 12, can it be 15, because it really is that mix. We're doing everything that we should be doing as a responsible public company management team to make sure we make the right investments at the right time to, you know, make that probability of success even higher. We see that getting better each quarter. Great. Thanks. That's helpful. Then I guess maybe one for Jeff. Can you talk about, you know, thanks for laying out on slide eight the cash flow impact. Can you talk about kind of those moving pieces as they go into 2024, what that looks like? You know, what does that 222 number look like next year? Sure. for 2024, obviously, we'll have the $40 million, related to the CARES Act refund that we expected this year and moved out. The CARES Act activities at this point are finished. The R&D tax credit starts getting, much smaller. Steps way down. you know, I think we're in probably low double digits or so next year. It starts getting quite small. The big impact was this year. Great. All right. Thanks. Yep. Thank you. Our next question comes from Tobey Sommer with Truist Securities. Please go ahead. I gotta talk. Thank you. I was wondering if you could tell us what the hiring and retention looks like as sort of a different angle on the revenue growth that you're able to achieve in terms of filling open positions, not just in the cleared categories. Yeah, Toby, thanks. Look, hiring and retaining talent, we're doing a terrific job. You all have heard me say in the past, it doesn't do any good to win large programs in expertise side if we're either bidding them at a rate where I can't find the people or if I'm having trouble finding them. You know, no investor loves sharing a great awards number and then not being able to convert that. You know, very proud and happy to say we're not that type of company. We actually spend an awful lot of time making certain that we are still staying true to that, you know, theory of, you know, bid less and win more, and less, win larger items. You know, a perfect example of that hiring connected to winning large programs is our EITaaS award. You know, extremely pleased that award was recently reaffirmed by GAO for the second time. All the stop works have been lifted. Government has been very, very clear that there's nothing that's going to stop progress on this job. That job is just about fully staffed, and we just had our kickoff meetings earlier this week with DeEtte Gray and her outstanding leadership team. We're moving forward. We're looking at how we start the program up. We're working OpsCon. You know, clearly areas where we could quicken the pace of, you know, rearchitect, rearchitecting where the Air Force is gonna go, and all their, all their base wide networks. There is a great connection between the jobs that we have won, these larger jobs, and making sure that we can staff them. You know, from a cost of labor, you know, you don't have to look too deep to look at some of the, some of the quote-unquote, "high-tech companies," those in the, in the technology sector with a large number of layoffs. You know, it's been years since we've had layoffs here. That provides yet another source of ready-to-go labor. You know, we are tracking the market. We're looking at some of those recent commercial layoffs, and maybe move a little froth of what we've seen recently with people with certain kind of key technology skills. You know, folks love doing the mission that we do, and they love how we go about doing it. We're gonna bid responsibly. We're gonna win large programs, especially in the expertise area, that we can fully staff. The alternative to that is our customer loses. You know, you don't, you don't get the ability to be a 61-year-old company if you consistently let customers down. We're that company that's gonna win these large jobs, make certain that us and our partners can come out of the gate, you know, fully staffed. again, back to some of the other questions, I love what that does to our long-term growth prospects. Thank you very much. If I, in terms of the Photonics business, if you got a, you know, a bunch of massive orders, in an hour and were ramping up to production, are there any short-term negative financial implications that we should be aware of so we can understand what the arc of this may be over the next few years? I mean, you know, when we executed that acquisition, we were very transparent to talk about we're buying that business very early on in their cycle, right. The thesis to that acquisition was, let's take what we purchased with LGS on the large, extremely reliable bespoke kind of solutions market. Then here's SA Photonics who could use some assistance on the algorithm piece. Also, they had phenomenal, early stage successes at building satellite-based optics at scale. You know, I'll reiterate, we are in the investment phase still. You know, when we look at our capital deployment strategy and how we fill gaps, you talk about investment, acquisitions, partnerships, then share buybacks. You know, this is one that's gonna continue to take, you know, a larger share of our CapEx spend to make certain that we've got our algorithms right, that we've gone through the producibility model, correctly. You know, I mentioned we're looking to move a lot of that production to Orlando, which is not only a cost move, but it's a consolidation move to make sure that we're building all of our optics in the same place. Yes, there is a curve still through FY 2024, although I'm not trying to guide you all here yet. There will be more on the investment case than there will be on the, on the profitability case, throughout 2024. As we get into 2025, we'll see revenue meet up with, you know, profitability, sort of that chocolate and peanut butter game, that, you know, really gives us a, you know, 5- 10 year, strength in what we're gonna do in the, satellite-based optical comms. Hopefully that gives you some additional color. Thank you. Thanks, Tobey. Our next question comes from the line of Mariana Pérez Mora with Bank of America. Please go ahead. Good morning, everyone. Morning. First I'm gonna ask a follow-up question to Rob, a question about the debt ceiling. It's probably, it's far from too early, as you think about the risk of, let's say, a year-long consumer solution, on the other side, you have all these multi-billion dollar wins. How are you thinking about slower growth for the next month? Yeah, there's a lot of budget parts moving around. You know, we've got one large new win here and, you know, we're looking at finally securing the second large win. You know, as for specific guidance, you know, we're gonna provide that when we get more towards August. To your point, Mariana, obviously we have some nice awards. We had EITaaS reaffirmed. We're waiting on a large intel award. It's still under protest. Look into that for that to clear, hopefully by the middle of this quarter. If we got trailing 12 months book-to-bill of 1.4, some of that's going to take some time to ramp. We've got some nice budget growth. You know, what we have to go by now is the FY 2024 President's budget. I look at the budgets for SBA, for other satellite-based work, for IT modernization, for cloud, for a lot of the great things that the intelligence community does, you know, making certain we have the right analysis of some of the intel. You know, I like our opportunities to continue driving growth into 2024, and then when SA Photonics and our Archon solutions pick up, you know, more into 2025 and beyond. You know, we're gonna continue to monitor the budget process. We're going to continue to monitor the debt ceiling negotiations. At the end of the day, based on the size company we are and where we play, we've got a great portfolio of expertise in technology, where expertise informs technology, and technology makes expertise more effective and more outcomes based. At the end of the day, we're looking at how well are the things that CACI has world-class capabilities in, and how well are those funded. It immediately becomes less of what the overall defense budget is. In these four or five or six specific areas, how well are those being funded? I can tell you know, with an exclamation point, everything that we're doing today and those things that we're gonna drive growth in the future year to year, are very well funded as we look at some early, FY 2024 budget numbers. Thank you. My follow-up is, could you please provide some color on the pipeline of submitted bids? You mentioned how much of those are new businesses for CACI, could you please describe if you have, like, any multimillion-dollar opportunities there, or how much of those new businesses are take-away opportunities versus new opportunities? Yeah, sure. You know, Jeff shared some of our pipeline specific earlier. You know, we've got a great set of proposals that are being generated now. You know, there was some talk. You know, we had a 0.6 book-to-bill in the third quarter. You know, I'll remind you all again, awards are lumpy. We've always said that. We never took pride in a, you know, 2x book-to-bill each in the first and second quarter. You know, the number I'm watching is 1.4x. Historically, maybe the last 7-10 years, always above 1.3, which is clearly enough to be driving growth. We're looking to have some really nice bids be sub-submitted. What's really important is that long-term strategy of bid less and win more, drive the duration of contracts in backlog greater and greater each and every year gives our investors a really much more clear and transparent picture of what you can look for growth as we go forward. Yeah. Mariana, I would go back to my prepared remarks, too, and point out that we have over $7 billion of bids under submittal or under review right now, about two-thirds of which are new, and we have nearly $19 billion that we will submit in the next two quarters. And to John's comments about bidding less and winning more, bidding fewer and winning more, I would add that one of the things that we do keep track of much closely is the length of the awards that we're winning, which over the last couple of years has increased from about four and a half years on average to six and a half. We're bidding fewer things, we're winning bigger things, and we're winning longer things. Awesome. Thank you very much. Thanks, Mariana. Thank you. The next question comes from S cott Forbes with Jefferies. Please go ahead, Scott. Hey, good morning. Just to follow up on Matt's question, and appreciate the mix is the real driver of kind of margin improvement. We talk a lot about the differential between technology and expertise margins, but can you provide some color into how you've seen margins trend within just the expertise portfolio and how much room there is to drive it in there, excluding the kind of mix shift towards technology? Yeah. Sure. Thanks. You know, we've historically said that on average, and I'm gonna stress the word average, right? On average, technology margins are about 300 bps greater than expertise, you know. The tough thing when we're looking at a long-term growth is, hey, in any one quarter, a lot of things happen. You know, cost-plus revenue that, you know, people sometimes associate to lower margin versus firm-fixed-price. We've got some fantastic expertise work that are cost-plus, that are more at a firm-fixed-price margins because of the extreme expertise somebody needs in that mission expertise quadrant of our business that you're not gonna, you know, find those people just anywhere. It really gets back to Rob's earlier comment around talent. We try to give you a few different looks at this. One is what's the mix of our revenue? That's step one, right? If my margins in technology are 300 bps higher, over time, revenue numbers from technology aren't gonna be as high to drive a much higher margin. On the expertise side, you know, we're not bidding jobs at a loss. We're not bidding expertise jobs that we can't, you know, in relatively quick time generate revenue from. You know, if we look at jobs like EITaaS, that's enterprise technology job. That is really making sure we're re-architecting networks. It's not a, you know, the old style services bachelor kind of job. You know, this is one where we're, you know, drawing on from across the company software skill talent that is only working on the EITaaS job. You know, it's so long and the short of it, Scott, is this quadrant and this expertise versus tech is there to sort of guide. In any one quarter, we could do $40 million more of expertise work that had a higher margin to it and also bring some of our technology deliveries up. You're gonna see revenue growth as you saw in the third quarter, but you're also gonna see us holding margin. You know, I wish I had the, you know, perfect modeling formula for you, but just remember that on the expertise side, you know, margins can go from something like 4% to something like 15%. Just, you know, when those things cash in. That's helpful. Thank you. Thanks, Scott. Our next question comes from Seth Seifman with JP Morgan. Please go ahead, Seth. Hi. Good morning. This is Rocco on for Seth. Hey, Rocco. Good morning. Morning. What drove the approximately $135 million increase in accounts receivables this quarter, and when are you expecting to see that unwind? It's driven largely singly by the volume increase. There is some amount of variability I know you know in general around accounts receivable, but largely it's driven by the accelerating volume that we're seeing in the business. It ought to stabilize to a more normal level over the next quarter or two, even though it will continue to grow from its historical levels. Great. Thank you. On capital deployment, how does the M&A pipeline look, and how are you thinking about M&A versus returning capital to shareholders via buybacks? Yeah, when we were talking about the flexible and opportunistic, this is really at the core of that. Being able to rapidly shift as we see things that are interesting to us, to acquisition, or other investments from share repurchases, is really that. We see, the market has been, you will know a little, has been a little bit, has not afforded us a great number of things of that were of interest over the last year or so. We see that starting to change a little bit. We're seeing some things on the horizon that may be, may be of more interest. I think over the next quarter or two, we may find some targets that we, that we find of interest. We'll continue to be ready to toggle back and forth, relative to capital deployment. Toggle back and forth as some of those are more interesting. Yeah. Rocco, I'd also add, you know, flexible and opportunistic, truly is flexible and opportunistic. You know, whether we're doing M&A or, you know, direct share repurchases, shareholder value, the only delta there is timing, right? You know, time wise is we're doing M&As to find capability, customer relationships to provide longer term growth and that or long term provide shareholder value. As Jeff mentioned, you know, as we find times in the in our M&A cycle that, one, there aren't properties or else, two, we've got the capabilities we believe we need, and that will, you know, potentially cause, you know, an even harder shift more towards different capital deployment options. We're gonna be focused on some internal investment. Frankly, as we go into 2024 is some of the questions and some of my answers alluded to earlier around Archon and around SA Photonics to make sure we've got the right build outs there. you know, at the end of the day, we evaluate all options based on the current dynamics. All options are always on the table. You know, we pay down debt. We've gotten leverage down to a relatively low level. I really like the way we've managed cash inside the business, managed our balance sheet because things always turn around. if the M&A market changes and we think we need more capabilities or customer relationships, then, you know, it is a core, you know, company. It's a core competency for us that we understand how to do M&A, how we exploit and extend value, and make sure that we're making the right investment choices. Thank you. Great. Thanks. Our next question comes from Jan-Frans Engelbrecht with Baird. Please go ahead. Morning, Jan-Frans. Good morning, John, Jeff, and Dan. Sorry. I'm on for Peter this morning. Great. Thank you. Just you may have alluded to this a bit earlier, but, just wanted to sort of get a better feel how you guys are thinking about sort of fixed-price versus cost-plus, moving forward as you start your planning for 2024. Sort of with that, you know, sort of almost close to the 30% mix of your revenue, and just sort of how DCSA and the new Air Force contract might sort of change that as you, as you look towards 2024. Thank you. Yeah, I'll start. You know, if I look at, you know, our revenue mix trend, you know, towards more cost-plus over time, sometimes driven by firm-fixed-price and the like, you know, there's no particular trend. You know, the last couple of quarters, you might recall we saw stronger growth in fixed price. I hate to use the word lumpy again, but it is lumpy. In some ways, it's almost nondeterministic. You know, we're ramping new work, and, you know, that happens to be cost-plus. You know, we've got material purchases. We have to do under different types of contracts that actually comes in at, you know, slightly lower margin. When we look at the mix, you know, we are going to come out of the year with a, you know, greatly expanded revenue guide, holding margins between mid and high 10s. You know, it also matters what kind of work that we're doing. As I mentioned earlier, you know, margins on cost-plus can run the gambit. We've got a lot of Time-Materials contracts. We can get cost out of those. Whatever we're not spending on the cost side of that immediately falls to the bottom line. You know, programs like DCSA, what that really did was just, you know, we were looking in 2024 and 2025 to drive more volume. You know, we've gone from some three providers of that service to two. You know, that would be an indicator of potentially some additional revenue that we could generate from that program. We got a lot of programs that end. You know, it's just constantly moving mix, and our job is to give you a guide that really, you know, covers what those, you know, different cases can look like. Many programs are also a mix of contract types, and they can often change over time. As we're in different phases of a program where we're buying equipment, where we're ramping things up, where we're defining next phases, doing different things, different activities, different contract types will be appropriate. We obviously like to do fixed price whenever we're able to do it in a way that gives us an opportunity to financially capitalize on it and also give our customers some price certainty. In many ways, it's easier for them, if we take some of that risk, so that can be a mutually beneficial thing. Many programs have multiple dimensions, and they'll change around over time. It's a little nuanced. It's hard to draw a macro conclusion about it. That's perfect. Thanks for the detail there. Just a quick follow-up. You mentioned the Intel awards. Just going with your bid win, bid less, win more mantra, is there any areas that we should like look out for any sort of, maybe not the size of the Air Force Award, but sort of, large type awards in 2024 and maybe just the areas? Yeah. We really shy away from specifics, in there. Sure. Some additional color in the spirit of the way you asked it. You know, there is a sizable cyber related IC [audio distortion] award that we're still waiting for that to be decided upon. That is a, that's one of those jobs that, you know, we've worked on over a number of years to make certain that we believe we could bring better and, more long-standing extending capabilities to that extremely important customer. It was a competitive award. We were able to displace the incumbent, bringing in more capabilities versus, you know, the lowest rates and really make certain that we could supply the outcome that they're looking for. That's a pretty strong mission expertise job for us. You know, you should look for more of the same. you know, we've got some great capabilities, you know, customers who are wanting to take more things to the cloud. today in the intelligence community, we move more apps to the cloud than the next five companies combined. We have outstanding partnership relationships with AWS and with Microsoft Azure. I like the hand we have in the enterprise tech area. I like the hand in the mission expertise area. you know, we'll be looking for some resolve to some larger mission tech awards that we have put bids in on. Again, it's really to the extent possible using the full extent of those four quadrants and making certain that we've got that, you know, balance right. Winning, you know, winning low margin expertise jobs that we have trouble staffing, or we've got to use our balance sheet to help staff it, those aren't good long-term moves for us. Those solve a, you know, single quarter issue, we're not that single quarter company. We have shareholders looking for long-term, profitable, predictable growth. We're trying to do that by being as transparent as we can. You know, Jeff mentioned earlier, just the number of years that a program sits in our backlog is a positive indicator that we're, you know, we're able to better predict what the out years are, and you're able to predict along with us. We may not see that growth eye to eye, of course, you know, again, being transparent is the first step. As you see us build our book of business, as you see us continue to, you know, plow into margins, you know, I really like the opportunities we have in all four of those quadrants. Again, expertise informs tech, and tech informs or makes expertise more available for our customers. We like them both. They both play an important role as we continue to grow this company. Thanks for your questions. Thank you. Appreciate the detail. I'll jump back. Thank you everyone for your questions. Those are all the questions we have. I will now turn the call back to John Mengucci for closing remarks. Well, thanks, Emily, and thank you for your help on today's call. We'd like to thank everyone who dialed in or listened to the webcast for their participation. We know many of you will have follow-up questions, and Jeff MacLauchlan and Dan Leckburg and George Price are available after today's call. Please stay healthy, and all my best to you and your families. This does conclude our call. Thank you, and have a great day. Thank you everyone for joining us today. The call is now concluded, and you may now disconnect your lines.