Good morning, and welcome to the Parsons Corporation First Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then One on your touchtone phone. To withdraw your question, please press Star then Two. Please note this event is being recorded. I would now like to turn the conference over to Dave Spille, Senior Vice President of Investor Relations. Please go ahead. Thank you. Good morning. Thank you for joining us today to discuss our first quarter 2023 financial results. Please note that we provide a presentation slides on the investor relations section of our website. On the call with me today are Carey Smith, Chair, President, and CEO, and Matt Ofilos, CFO. Today, Carey will discuss our corporate strategy and operational highlights. Matt will provide an overview of our first quarter financial results in a review of our 2023 guidance. We will close with a question-and-answer session. Management may also make forward-looking statements during the call regarding future events, anticipated future trends, and the anticipated future performance of the company. We caution you that such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ materially from those projected in the forward-looking statements due to a variety of factors. These risk factors are described in our Form 10-K for fiscal year ended December 31, 2022, and other SEC filings. Please refer to our earnings press release for Parsons' complete forward-looking statement disclosure. We do not undertake any obligation to update forward-looking statements. Management will also make reference to non-GAAP financial measures during this call. We remind you that these non-GAAP financial measures are not a substitute for the comparable GAAP measures. Now we'll turn the call over to Carey. Thank you, Dave. Good morning, and welcome to Parsons' first quarter 2023 earnings call. We had an excellent start to the year. We delivered all-time records for revenue of $1.2 billion and year-over-year organic revenue growth of 12%. We also delivered first quarter records for adjusted EBITDA and cash flow. In addition, our year-over-year contract awards increased by approximately 50% in both our Federal Solutions and Critical Infrastructure segments. We continued our hiring and retention momentum, and we acquired a strategic company that enhances Parsons' Critical Infrastructure Protection capabilities in both of our business segments. I am very pleased with our results this quarter as we've strengthened our federal national security portfolio and our global critical infrastructure posture across all six of our end markets: cyber and intelligence, space and missile defense, Critical Infrastructure Protection, transportation, environmental remediation, and urban development. As a result of our strong first quarter performance, we are increasing our 2023 guidance ranges for all financial metrics, which Matt will discuss in a few minutes. During the first quarter, we achieved a book-to-bill ratio of 1.2 times on an enterprise basis, including 1.3 times in Critical Infrastructure and 1.1 times in Federal Solutions. These results were driven by a 52% year-over-year increase in Federal Solutions contract award activity and a 49% increase in Critical Infrastructure award activity. This is now the 10th consecutive quarter in which Critical Infrastructure's book-to-bill ratio has exceeded 1.0 times. Our ability to successfully deliver our customers' missions has enabled us to continue to win large, new, and recompete contracts in areas aligned with national security and global infrastructure priorities. During the quarter, we were awarded 3 contracts that exceeded $100 million, and after the first quarter ended, we won 3 additional contracts that were worth more than $100 million each. These meaningful and long-duration contract wins span our 4 business units and our 6 end markets, which has solidified our financial outlook and positioned us well for the future. Significant first quarter and early second quarter contract wins included a new 3-year, $750 million State Department humanitarian support contract. Led by Xator, this delivery order contract includes a 1-year base period of $250 million and 2 1-year option periods valued at $250 million each. For this significant contract win, we booked $250 million in the first quarter. Xator has won a substantial amount of new business and has performed exceptionally well in its first year with Parsons. This recent win follows the $119 million Department of State award we announced last quarter to provide electronic security systems, operation centers, and counter unmanned aerial systems worldwide. We were awarded an additional $214 million to continue overseeing the Giant Mine remediation program in Canada, which is one of the largest mine reclamation projects in the world. We won a new $164 million four-year contract by the Army Corps of Engineers to deliver a new explosive decomposition chamber facility at Holston Army Ammunition Plant. This follows Parsons' award of the Radford Army Ammunition Plant for a new energetic waste incinerator and contaminated waste processor. These strategic wins are part of the Army's larger and broader 15-year and more than $16 billion ammunition plant modernization plan to modernize the U.S. depots, arsenals, and ammunition plants. In addition to the three wins greater than $100 million each, we were awarded a $94 million recompete contract to provide command, control, communications, computers, and capabilities development services to the United States Cyber Command. This important contract provides support to expand full-spectrum military cyberspace operations. The period of performance is one 12-month base period with four 12-month options. We won prime positions on several multiple award IDIQ vehicles, including a $75 billion ceiling contract with the Department of Health and Human Services Administration for the provision and operation of influx care facilities. After the first quarter ended, we were awarded three contracts greater than $100 million each. The first is a new five-year single award contract in our Federal Solutions segment from the General Services Administration with a potential value of $1.2 billion. This contract supports the Department of Defense and its strategic partners in delivering global quick reaction capabilities, leveraging advanced technology solutions across the all-domain battle space. The second new contract is a four-year single award contract for a roads and highways transportation project valued at more than $100 million. After the first quarter ended, we successfully won our major Federal Aviation Administration Technical Support Services contract re-compete. This $1.8 billion ceiling value contract will support the FAA's Aviation System Capital Investment Plan and includes a base period of four years and two three-year option periods. Parsons has been the prime contractor for this work for more than 2 decades and supported this critical customer for more than 4 decades. With the Infrastructure Investment and Jobs Act, the FAA has $5 billion of additional funding for facilities-related work. With the FAA win, we have now won all 4 of our key re-compete contracts over the last 2 years, including the TEAMS, FAA, Faro, and Giant Mine contracts. These long-duration contracts span from 7-20 years and are worth approximately $2 billion each, which solidifies our financial outlook. These wins are a testament to our strong program execution, customer relationships, and re-compete win rates. During the 1st quarter, we also announced the acquisition of IPKeys Power Partners. This strategic acquisition, which closed in April, expands Parsons' presence in 2 rapidly growing end markets, grid modernization and cyber resiliency for Critical Infrastructure. IPKeys enables Parsons to bring cybersecurity tools, technology, and market experience to utility operators to secure operations, optimize efficiency, and achieve grid resiliency. This acquisition is consistent with our strategy of completing accretive acquisitions of companies with revenue growth and adjusted EBITDA margins of 10% or more while adding intellectual property that strengthens the company's existing portfolio in both business segments. With the macro environment focused on utility and water, critical infrastructure protection and modernization, we look forward to the contributions that IPKeys will bring to Parsons. We maintained our robust balance sheet and ended the first quarter with a 1.4x net leverage ratio. We continue to have an active M&A pipeline in both segments and will use our strong balance sheet to complete additional accretive acquisitions that drive growth and margin expansion into our business. We continue to build on our long-standing commitment to ESG. During the first quarter, we were recognized for our initiatives that attract, hire, and promote women, racial diversity, LGBTQ+, and other underrepresented people into the engineering industry. We are proud that we were named one of the world's most ethical companies by Ethisphere for the 14th consecutive year. In April, we released our 2023 ESG report highlighting key milestones and initiatives we achieved last year. These include year-over-year decreases in Scope 1, 2, and 3 emissions to reduce our carbon footprint. ESG is fundamental to our core values and how we operate as a company. In summary, we delivered record first quarter total revenue, organic revenue growth, adjusted EBITDA, and cash flow results. We also achieved a healthy book-to-bill ratio by increasing contract awards by approximately 50% in both segments. We continued to execute on our strategic M&A program by acquiring IPKeys. These results illustrate our continued momentum, and I am proud of the work our talented employees deliver every day on our customers' most critical missions. Looking forward, I am very excited about our business. We have the right portfolio, the right team at the right time to capitalize on unprecedented global infrastructure spending and growing demand for national security solutions. We've solidified our financial outlook by winning a significant amount of new and repeat business, and we have a strong balance sheet that will enable us to continue to make accretive acquisitions to drive revenue growth and margin expansion. With that, I'll turn the call over to Matt to discuss our first quarter financial highlights. Matt? Thank you, Carey. As Carey indicated, our 1st quarter was highlighted by record results in a number of areas, including total revenue, organic revenue growth, adjusted EBITDA, and cash flow from operations. Total revenue of $1.2 billion for the 1st quarter of 2023 increased 24% from the prior year period and was up 12% on an organic basis. Organic growth was driven by new and existing contracts. Our Xator acquisition contributed approximately $112 million of revenue in the 1st quarter. SG&A expenses for the 1st quarter were 17% of total revenue, compared to 19.5% in the 1st quarter of 2022 due to efficient growth across the portfolio. Adjusted EBITDA of $90 million increased to 22% from the 1st quarter of 2022. This increase was driven primarily by the ramp-up of new and existing contracts, as well as contributions from our Xator acquisition. The year-over-year margin decrease to 7.7% was driven by lower equity and earnings as a result of contract change orders, which are delaying the timing of profit recognition into future quarters, as well as legacy program impacts. I'll turn now to our operating segments, starting first with Federal Solutions, where first quarter revenue increased by $143 million, or 29% from the first quarter of 2022. This increase was driven by organic growth of 6% and $112 million from Xator. Organic growth was driven primarily by higher volume on existing contracts. Federal Solutions adjusted EBITDA increased by $13 million, or 32% from the first quarter of 2022. Adjusted EBITDA margin increased 20 basis points to 8.9%. These increases were driven by operating leverage and higher margin growth related to our Xator acquisitions. Moving now to our Critical Infrastructure segment. First quarter revenue increased by $81 million or 18% from the first quarter of 2022, all of which was organic. This strong growth was driven by higher volume in both our Middle East and North America operations. Critical Infrastructure adjusted EBITDA increased by $3 million or 8% from the first quarter of 2022. Adjusted EBITDA margin decreased 60 basis points to 6.3%. The adjusted EBITDA increase was driven by higher volume on new and existing contracts, offset by lower equity in earnings as a result of change orders and legacy program impacts. I'll discuss cash flow and balance sheet metrics. Our net DSO at the end of Q4 2022 was 69 days, down 7 days from the prior year period. During the first quarter of 2023, we consumed $9 million of operating cash, compared to the use of $26 million in the prior year period. This $17 million improvement was driven by higher net income and strong collections across the company to include the Middle East. Capital expenditures totaled $8 million in the first quarter of 2023. CapEx continues to be well controlled and remains in line with our planned spend of approximately 1% of annual revenue. Our balance sheet remains strong as we ended this quarter with a net debt leverage ratio of 1.4 times. Considering the impact of the $43 million all-cash IPKeys acquisition, which closed in April, our pro forma net debt leverage ratio would be approximately 1.5 times post-transaction. Our low leverage and undrawn borrowing capacity enables us to continue to make internal investments and accretive acquisitions to support long-term growth. As part of our $100 million share repurchase program, we repurchased approximately 140,000 shares for an aggregate purchase price of $6 million during the first quarter. On a run rate basis, this is slightly more than our annual repurchase target of $20 million. As of the end of Q1, $50 million remains available under the program. Turning to bookings for the first quarter. Year-over-year contract award activity increased 51% to $1.4 billion, driven by growth of 52% in Federal Solutions and 49% in our Critical Infrastructure segment. Our book-to-bill ratio for the first quarter was 1.2 times, with Critical Infrastructure at 1.3 and Federal Solutions at 1.1. Our backlog at the end of the first quarter totaled $8.4 billion, up $186 million from the fourth quarter of 2022. Let's turn to our guidance. We are increasing all of our 2023 guidance ranges provided on February 15th to reflect our record first quarter results, recent large contract wins, hiring and retention momentum, positive end market exposure, and our outlook for the remainder of the year. For 2023, we are increasing our revenue range by $125 million to $4.5 billion-$4.7 billion. This represents total revenue growth of 10% at the midpoint and 5% on an organic basis. Additionally, we are increasing our adjusted EBITDA range. We now expect adjusted EBITDA to be between $375 million and $415 million, which represents 12% growth at the midpoint of the range. Margin at the midpoint of our revenue and adjusted EBITDA remains at 8.6%. We are also increasing our cash flow guidance. We now expect operating cash flow to be between $275 million and $335 million, representing 28% growth at the midpoint. Free cash flow conversion is expected to remain above 100% of adjusted net income. Other key assumptions in connection with our 2023 guidance are outlined on slide 10 in today's PowerPoint presentation, located on our investor relations website. In summary, we had a very strong start to the year with great top and bottom-line results. We collected significant cash, raised guidance for all metrics, effectively leveraged our balance sheet with the IPKeys acquisition, and we're confident in our ability to achieve our updated 2023 guidance. With that, I'll turn the call back over to Carey. Thank you, Matt. In closing, I am pleased with our start to 2023. We delivered on our commitments, resulting in record first quarter revenue, organic revenue growth, adjusted EBITDA and cash flow. We also won strategic large contracts in both segments, driving a 51% increase in contract award activity. In addition, we maintained our hiring and retention momentum, acquired a strategic company that enhances our critical infrastructure protection capabilities, and we increased all three of our 2023 guidance metrics. Looking forward, I'm excited about our business given the significant amount of new and repeat business we've won, our strong backlog and robust balance sheet that will enable us to continue to make accretive acquisitions to drive future revenue growth and margin expansion. With that, we will now open the line for questions. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw from the question queue, please press star then two. The first question is from Greg Conrad of Jefferies. Please go ahead. Good morning and great quarter. Thank you, Greg. Maybe just to start, you kind of touched on it in the script, but I mean, looking at the improved outlook for the year, can you maybe talk about, you know, the weighting of the drivers? How much is tied to improved awards on contract growth? You had a smaller deal in the quarter and then, you know, how much maybe hiring above expectations has contributed to the improved outlook. Greg. I would say it's mostly tied to the awards, predominantly, but also some on contract growth. Hiring we are exceeding or meeting our expectations, but I would say, you know, we're doing as well as we did last year and maintaining our momentum. We were up on hiring 27% this quarter over a year ago. I would, again, predominantly the very large awards that we've won. Just on the margin, I mean, you typically have a back half ramp. I mean, it's a pretty steep ramp through the back half of the year. You mentioned, you know, some of the equity income in CI in the quarter. You know, when you think about that ramp, I mean, how much is tied to volume versus maybe mix or just anything else to call out that kind of drives that sequential margin improvement? Greg, the main point I would make is relative to equity and earnings. When we look at Q1, the biggest impact, we had a $7 million impact on equity and earnings related to the change orders we mentioned during the script. That's, you know, we expect, you know, a little bit of a recovery throughout the year. That's $7 million. You know, we talked about change orders a couple of quarters now and, you know, the positive story is that over the next four years, that'll contribute $20 million more in equity and earnings. We're positive around the equity and earnings recovery toward the back half of the year. We still expect equity and earnings to be about $22 million, you know, call it low $20 million range, before the end of the year. If you lay that out, it's $8+ million for the rest of the quarters. Maybe just sneaking in one last one. I mean, you had the acquisition close, the IPKeys. You know, historically, most of the deals have been in FS, and you've talked about kind of the targets for M&A. Are you seeing maybe increased opportunity to add to CI inorganically, just thinking about maybe the pipeline going forward? Yeah, great question, Greg. We certainly are. We have a robust M&A candidate list that spans both of the business segments. To touch upon IPKeys a little more, why we were particularly excited about that, it kind of plays well at the intersection between our balanced portfolio. When you look at a company that is servicing utility companies, water companies, and providing cyber monitoring capabilities, it really is at the right intersection for both Federal and Critical Infrastructure. I'd also point out IPKeys brought us hundreds of new customers. Now we can take the entire Parsons portfolio and sell it to that new slate. Yeah, more M&A, both segments, Federal and Critical Infrastructure. Thank you. Thank you, Greg. The next question is from Bert Subin with Stifel. Please go ahead. Hey, good morning. Morning, Bert. Morning, Bert. Hey, Carey, Matt. maybe just following up to the first question there. If I look at your revised guidance assumptions, they're now incrementally more weighted toward Federal Solutions. you were sort of targeting 53%-54%, and now you're looking at 54% of sales coming from that. That's despite, you know, a pretty strong start to the year for Critical Infrastructure and then the IPKeys acquisition. Can you just walk us through, you know, maybe some more granularity on what's driving the outperformance in Federal Solutions and how we should think about the ramp phase for the State Department contract? Sure, Greg. What's driving it is new business wins. When you look at the CARES contract, $750 million over 3 years. The large FedSIM contract will also come into play. Again, that got announced shortly at the end of first quarter. That's $1.2 billion over 5 years. You look at the Holston contract, $164 million over 4 years. The FAA contract re-compete win, which is gonna get some upside due to the infrastructure bill. Those are all key contributors. As far as the CARES ramp, it's early days yet on that contract. We did about $40 million in Q1, and we're just watching the ramp-up pace, and we will adjust guidance going forward as needed, upward if we need to based on the ramp. Yeah. Bert, Okay, thank you. Oh, sorry. I was gonna add, Bert, the, you know, specifically for Xator, we had targeted $300 million when we put guidance out previously. We're now at $400 million, which is obviously, for the current calendar year, which is obviously weighted toward Federal. Just to clarify that, I mean, you're including within that $400 million the State Department, so that you're assuming more like $100 million instead of the... Or maybe $250 million once you lap a full year there? Correct. Yeah. We're adding $100 million for Xator, yeah. Okay ... and $25 million associated with the CARES contract. Got it. Okay, thanks. Just one follow-up. If I look at sales in the Middle East region, at least, you know, based on sort of preliminary numbers in the queue, it looks like that was up 38% year-over-year in the first quarter, which I believe is the highest growth rate for the region since you became a public company. Can you just help us think through sort of what that tailwind should look like going forward? Carey, I know at the Investor Day, you talked about how Middle East could remain a, you know, a pretty strong growth contributor for a couple of years. Is that still the view? Yeah, it's still the view. We were fortunate, and we've been awarded 5 of the 5 giga projects in the Middle East. We're seeing very strong demand there. The programs, particularly, I would say, Neom Oxagon and Neom The Line have been significant contributors, but also the largest entertainment city that's being built outside of Riyadh is important. Our hiring there has been very strong, and that's been driving our growth. Great. Thanks, Carey and Matt and Dave. Congrats on the quarter. Thank you. Thanks, Bert. Thanks very much. The next question is from Tobey Sommer of Truist Securities. Please go ahead. Thanks. I wanted to get your expectations for mix between the segments over time. Clearly, there are some strong drivers within Critical Infrastructure with the activity in the Middle East and in the infrastructure bill, but it was only a couple of years ago that we were expecting a mix shift towards the federal government space to occur over time. How do you think about that over a longer stretch of time than two or three years? And is there a preference for where to apply capital in terms of acquisitions? Yeah. Tobey, great question. We like our balanced portfolio. I think, you know, we're unique in the industry, and this diverse portfolio really helps us. Obviously very pleased with the strong organic growth that we had, 12%, 18% from Critical Infrastructure, 6% from Federal. Very pleased with the awards that we're seeing in both segments. When you look at our 6 end markets, 3 in each of the segments, they're all 6 growing. For us, it's just a really great place to be, and it's the right portfolio. From M&A, again, we have targets in both areas, so we'll continue to acquire the best companies that will deliver like Xator has. In terms of your reinvestment into the business, how are you choosing to do that as the top line growth has accelerated and you've, you know, had better than expected top line results, what sort of tactical choices are you making, and where are you placing those sort of additional dollars? Yes, we have a very focused research and development program, we refresh that as we go throughout the year. What we do is invest in areas where we have technology differentiation. I can't talk too much due to the classification level about the award that we just won, but I will say that was the $1.2 billion FEDSIM one. I will say that our investments have been targeted on winning awards such as that. We also invest in areas where we're technologically differentiated. Great example there would be PFOS, PFAS investment. Appreciate that. You mentioned hiring up 27% year-over-year. What's your expectation for headcount growth for the year? Have you noticed any changes in terms of the component pieces to achieve that growth year to date, either retention or sort of acceptance rates? We've heard from other companies in our coverage about some changes in those dimensions. Yeah. What we're planning on is hiring that's roughly the same as what we achieved last year. That was what we had booked into our plan, and obviously, we're very pleased with getting off to a strong start of 27% increase. We are seeing improvement on both the hiring and the retention. Our retention improved this quarter. We continue to be ahead of the PwC industry benchmarks, and that's across all of our businesses, which is good. I would say in the hiring, again, a lot was in the Middle East, but seeing strength as well in North America. It's the labor market, I think, has become better for us. Last one for me, if I could sneak one in. How would you describe the bids you have submitted or are working on for relatively large programs? How would you describe that piece of your pipeline? First, I would say we have awarded not booked value of $7 billion. We have an awaiting notice of award value of $14 billion. By the way, that's up from $9 billion in the last quarter. Within the $14 billion, there are 20 programs greater than $100 million. When you look at our qualified pipeline, it's $48 billion, and there are 90 awards greater than $100 million in that. Thank you. Thank you, Tobey. Thanks, Tobey. The next question is from Andrew Wittmann of Baird. Please go ahead. Oh, yeah. Excuse me. Great. Thanks for taking my question. I guess I just wanted to understand the margins a little bit better in the Critical Infrastructure segment. Matt, I guess you talked about the $7 million equity in earnings, which is really just an accounting result of the change order that you received a few quarters ago, and you've been talking about that. It sounded like there was also a charge on the legacy project in a joint venture. I mean, the quarter was good despite what looks like there was a charge, but, like, how much better could it have been? What was the size of the charge that you took on the legacy JV project? Yeah. We also had that we took a charge of about $4 million related to one of the legacy contracts that we've talked about in the past. That's the program that's scheduled to wrap up, we call Q3, late Q3 timeframe. We're kind of coming up on the back end of that program, which is positive. If you pro forma, you know, the change order plus the write-offs, it would be about 8.5% for CI. I think the key thing there, and we were asked earlier about the ramp-up in margins at the end of the year. The legacy program will be wrapped up again in the third quarter, but also the change orders, we anticipate positive change orders starting in the second quarter. Yeah. Got it. Okay, good. That's my only question. Thank you very much. Thank you, Andy. Thanks, Andy. If you have a question, please press Star then One. The next question is from Josh Sullivan of The Benchmark Company. Please go ahead. Hey, good morning. Good morning, Josh. Just the comment and prepared remarks looking at, you know, 10th quarter with the book-to-bill over one times. You know, just looking at the future spending coming forward, how long do you think that cycle can generally last? You know, clearly quarter-to-quarter there's gonna be variability, but, you know, where do you think we are in that cycle? I would look at three dynamics. First is Canada. Canada passed its infrastructure bill back in 2016, those programs are off and ramping. We're kind of in the sweet spot of that. When you look at the infrastructure bill, we haven't started to see the strong uptick yet. We're expecting that at the end of this year to early 2024. When you look at the Middle East, that's gonna continue for quite a while because the programs that we're on are part of Saudi Vision 2030. If you look at a program like NEOM Line, the goal is to have, like, 9 million people living in the city by 2030. These are really long duration programs and long spend. Our U.S. infrastructure bill again is $1.2 trillion, $550, of that is billion is new. If you look at the Middle East, it's $1.5 trillion with about 60%-70% of that new funding. Got it. Then, I mean, as far as, you know, just the headlines around debt ceiling negotiations, have you seen any change in customer behavior or scenario planning at this point? Well, first, we don't think that the debt ceiling will have a material impact of Parsons, and also we feel it's highly unlikely the country will default on its debt. The debt ceiling's been increased 20 times since 2001, so it's highly likely that that will happen again. I'd also say that we're fortunate compared to many of our peers because we have our diverse portfolio. 50% will not even be impacted by the debt ceiling, and that includes our international business, our state and local business, and our commercial business. When you look at the remainder, in Federal Solutions, a good portion of the Federal Solutions backlog is already funded. Great. Thank you for the time. Thanks very much, Josh. Thanks, Josh. The next question is from Cai von Rumohr of Cowen. Please go ahead. yes. Thank you. An excellent quarter. Thanks, Cai. Thanks, Cai. Your guide hike of $125 million. I mean, basically you pick up at least $100 million from Xator and the CARES Act. You pick up IPKeys, which suggests that you're really not adding anything else given what you have very good bookings. You know, you talk of good retention, but I mean, throughout your sector, everybody is talking about retention is a whole lot better than it was last year, which presumably should help you on your utilization. I mean, you know, normally people don't raise their guide this early in the year. I mean, it looks like just at the factors that this is a guide hike that has some opportunity. Is that a reasonable assumption? Yes. I would say again, we try and keep a very measured approach to guidance to make sure that we can achieve it. It is early in the year. We've won a lot of new work, and we wanna see how those programs ramp up. Got it. You're really off to sort of a very strong start here in terms of bookings in this quarter. Leidos reported yesterday, and they were talking about, you know, expecting to see, you know, the award flow, which kind of was, you know, very slow last year, that that's really starting to pick up very aggressively as folks try to get money put under contract before, you know, what could be a tough CR later this year. Are you seeing that too? I mean, beyond what you've already got, but if you look at the additional potentials for Q2 and early Q3, you know, the bookings potential looks pretty good. Yes. We're also seeing kind, similar trends. That's why I wanted to include a couple of the wins that we got just after the end of Q1. We have seen good progress. Again, we have quite a big awaiting notice of award that we're hoping starts to get awarded soon and a large pipeline. Yeah, Cai. Now you- From a statistics perspective, I'd tell you that, you know, I suspect in Q2 that'll be the first time in over a year, probably a year and a half, where a waiting notice of award will come down. Carey talked about FAA happening in Q2 and a couple other billion-plus jobs. you know, that number's kind of been stacking up over the last 18 months, it'll probably be the first quarter where that number starts to come down, which is evidence of what you asked. Got it. Thank you very much. Thank you, Cai. Thanks, Cai. The next question is from Louie DiPalma of William Blair. Please go ahead. Carey, Matt, and Dave, good morning. Good morning, Louie. Morning, Louie. Geopolitical tension has been increasing on multiple fronts. Do you expect increased demand for your missile defense and space services as it relates to the Indo-Pacific and Guam? Yes, I would say definitely, and again, I can't talk too much about that $1.2 billion contract, but just I will say it is in those areas. Overall, in INDOPACOM and Guam, we have a pretty good presence. We've been on Guam for a couple of decades providing infrastructure support. We're doing the Kwajalein Airfield program. We run a lot of our cyber work, particularly for the combatant commander program out of Hawaii. INDOPACOM and the Pacific Deterrence Initiative of $9.1 billion is very much in our line of sight for expansion and growth. Thanks, Carey. You discussed the Xator $250 million 1-year contract, and how a portion of that is expected to be recognized for this year. Do you have any visibility in terms of that contract renewing for the option years in year 2 and in year 3? Is it considered the type of service that would only be for 1 year, or do you think that is sustainable for the rest of the contract? We believe, yeah, we believe it's sustainable and could perhaps even continue beyond the 3-year period based on the demand and the requirement. Excellent. Thanks, Carey. That's it for me. Thanks, Louie. Thanks, Louie. Again, if you have a question, please press star then one. The next question is from Noah Poponak of Goldman Sachs. Please go ahead. Hey, good morning, everyone. Morning. Morning, Noah. Just back to the question on, sort of how the top-line outlook is revised today and the pacing of the year. I mean, was there anything, you know, kind of pulled into the end of the quarter, pulled forward into the quarter, just given where the growth rate was and then seems like the sort of sequential pacing is for the rest of the year is a little bit different than what you had previously indicated? Yeah, no. What I'd point to is we've talked a little bit about the headwinds around Kwajalein. The majority of that $70 million is weighted toward Q2, Q3, really Q3 as the peak. I'd say from a modeling perspective, Q3 was, you know, $40+ million of revenue. That's non-recurring given the program was completed. That's the biggest driver to the cyclicality or the updated quarterly outlook. Okay. You know, you just had an Investor Day where you gave a longer-term look at the top line. You know, given where this year is now tracking, given what you're seeing on the order activity, you know, that implies a deceleration in the growth rate. Obviously, the larger the revenue base gets, the harder to compare. You know, with the program you just mentioned, as a headwind this year, but then not beyond, and the bookings what they are, I guess, you know, why would the growth rate decelerate over the next two years? Yes, I would say at Investor Day, first, we didn't have, a couple of those very large awards that we've just won in hand. So that was kind of a point in time. Yep. Is obviously see how these programs ramp up, and then we'll take a look at our longer term targets. Yep. Okay. Yeah, okay. That's fair. Then last one, just Carey, you've given some good detail here on what happened to the CI margin and how the sort of terms of trade, I guess, in the contracts play out. I think you may, I forget the exact wording, but you made a comment about when you get into the middle of this year, being out of some legacy, being out of legacy contracts. Are you referring to a specific contract or I guess what's kind of the timing of where you're off of everything you consider to be legacy in terms of the contract terms in CI? Yeah. We had some contracts, and these were bid back in the 2015 timeframe that we've been trying to wind out of the portfolio. As we've mentioned, we've had two remaining as we entered this year. One of those is gonna wrap up. Our estimate right now is, third quarter, the second one will wrap up second quarter of 2024. Once those are behind us, it's really gonna help the CI margin 'cause those have been a drag on the margin. Okay, great. Thank you. Thanks, Noah. Thanks, Noah. That is all the time we have for questions today. This concludes our question and answer session. I would like to turn the conference back over to Dave Spille for closing remarks. Thank you. Thank you for joining us this morning. If you have any questions, please don't hesitate to give me a call. We look forward to speaking with many of you over the coming weeks. With that, we'll end today's call. Have a great- The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.