Financial Data and Key Metrics Changes - The company reported total revenue of $1.6 billion, a decrease of 5% from the prior year period and down 9% on an organic basis. Excluding the confidential contract, total revenue grew 138% on an organic basis, driven by growth in transportation and cyber markets [27][28] - Adjusted EBITDA was $149 million, with a margin expansion of 40 basis points to 9.4%, marking a second quarter record [28][29] - The company achieved a free cash flow conversion rate of 151% for the quarter and 125% on a trailing twelve-month basis [6][33] Business Line Data and Key Metrics Changes - Federal Solutions segment saw a total revenue decrease of 19% from the prior year, but excluding the confidential contract, revenue increased 88% on an organic basis [29] - Critical Infrastructure segment revenue increased by $97 million or 14% from the previous year, driven by organic growth of 8% and contributions from recent acquisitions [30][31] Market Data and Key Metrics Changes - In North America, total revenue grew 177% on an organic basis, reflecting strong demand and successful contract execution [9][10] - The Middle East infrastructure business is expected to grow over 10% in 2025, marking the fourth consecutive year of double-digit organic revenue growth in the region [11][12] Company Strategy and Development Direction - The company is focused on hard infrastructure projects, aligning with bipartisan support and government priorities, particularly in areas like roads, bridges, and airports [10][55] - The acquisition of Chesapeake Technology International is expected to enhance capabilities in electronic warfare, cyber, and autonomous systems, strengthening relationships with key customers [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing a robust backlog of nearly $9 billion, with 70% funded, and a pipeline of $55 billion including 114 opportunities worth $100 million or more [25][26] - The company anticipates a stronger Q3, traditionally the strongest quarter for federal business, and expects to maintain a book-to-bill ratio of 1.0 or greater [50][51] Other Important Information - The company was recognized as the top program manager firm globally by Engineering News Record, reflecting its reputation for complex program delivery [7] - Significant contract wins in Q2 included a $176 million contract with the U.S. Army Corps of Engineers and a $138 million contract for cyber work with the Defense Threat Reduction Agency [8][9] Q&A Session Summary Question: Opportunities related to Golden Dome and FAA procurement - Management highlighted strong past performance with the FAA and readiness to pursue the integration contract, emphasizing a partnership with IBM [41][44] Question: Expectations for Q3 and industry trends - Management expects a robust Q3, with a strong pipeline and historical performance indicating a continuation of growth [49][50] Question: Impact of the One Big Beautiful Bill on infrastructure - Management noted a shift in funding priorities towards hard infrastructure, which aligns well with the company's portfolio [55] Question: Guidance increase and contributions from acquisitions - The guidance increase is primarily attributed to the acquisition of CTI, which is expected to contribute significantly to revenue and earnings [57][58] Question: Organic growth outlook and performance in Critical Infrastructure - Management anticipates 18% organic growth in the second half, driven by existing contracts and strong hiring [66][71] Question: Unbooked backlog and funding environment - The unbooked backlog is over $11 billion, with strong funding and cash flow expected to support growth [101][105]

Financial Data and Key Metrics Changes - The company reported revenues of $3,400,000,000, reflecting a 2% year-over-year growth [7] - Adjusted EBITDA was $262,000,000, up 3% from the prior year quarter, with a 10 basis point increase in adjusted EBITDA margins [21] - Free cash flow for the first quarter was $102,000,000, indicating a positive start to the fiscal year [25] Business Line Data and Key Metrics Changes - Digital Solutions generated revenues of $1,300,000,000, representing 1% growth, with adjusted EBITDA increasing to $100,000,000 [22][23] - Global Engineering Solutions reported revenues of $2,100,000,000, reflecting a 3% growth, with adjusted EBITDA increasing by 4% [24] Market Data and Key Metrics Changes - The company achieved $3,600,000,000 in net bookings, resulting in a 1.1 times quarterly book-to-bill ratio and a total backlog of $45,000,000,000 [8] - The company has $30,000,000,000 in pending awards, driven by $12,000,000,000 of submitted bids in Q1 [11] Company Strategy and Development Direction - The company is focused on executing well-funded enduring programs of national significance, with a stable environment across long contracts [30] - The integration and value capture activities are on track, with expectations of achieving $30,000,000 in run rate synergies by the end of fiscal year 2025 [15] - The company is leveraging advanced technology solutions to drive efficiency and effectiveness for customers, particularly in defense and national security sectors [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive sustained shareholder value through long-term growth and strong free cash flow generation [19] - The company acknowledges potential impacts from the new administration's priorities but remains optimistic about its core business and demand in areas like cyber and space [34][36] Other Important Information - The company has a strong liquidity position with $522,000,000 in cash and no outstanding balances on its revolving credit facility [26] - The fiscal year 2025 guidance includes revenues in the range of $13,800,000,000 to $14,200,000, with adjusted EBITDA between $1,060,000,000 and $1,100,000,000 [27] Q&A Session Summary Question: Can you talk about areas where you're seeing an acceleration with the administration priorities? - Management noted a stable environment across long contracts, with some delays in awards due to government guidance [30][31] Question: Can you provide context on the pending awards and how they fit between digital solutions and global engineering? - Management indicated that roughly two-thirds of the pending awards are new business, well split between both segments [37] Question: Is there any seasonality we should think about in free cash flow between Q1 and Q4? - Management confirmed that Q4 is expected to be the strongest quarter for cash flow due to the alignment with the government fiscal year end [39] Question: What are you seeing in terms of demand in the commercial business? - Management expressed excitement about growth in the commercial sector, particularly in AI and advanced infrastructure [45] Question: How do you think personnel changes in the government could impact the business? - Management believes that the need for government services remains unchanged, and there are opportunities for companies that can deliver more efficient methods [74][76] Question: Can you elaborate on the 1% revenue impact from the new administration? - Management acknowledged the fluid situation but reaffirmed guidance, indicating minimal impacts primarily related to foreign aid contracts [78]