Financial Data and Key Metrics Changes - The company reported revenue of $3.5 billion for the second quarter, reflecting a 1% year-over-year growth, with adjusted EBITDA of $268 million, representing a 3% increase [7][24] - Free cash flow for the quarter was $53 million, slightly higher than expected due to solid operating performance and disciplined working capital management [27] - Adjusted diluted earnings per share were $0.53, up 4% from a year ago, driven by revenue growth and strong operating performance [25] Business Line Data and Key Metrics Changes - Digital Solutions generated revenues of $1.3 billion, representing a 3% growth year-over-year, with adjusted EBITDA increasing to $107 million and margins rising to 8% [25][26] - Global Engineering Solutions reported revenues of $2.2 billion, a year-over-year decrease of 1%, but adjusted EBITDA increased to $161 million due to strong operating performance [26] Market Data and Key Metrics Changes - The company reported $2.8 billion in net bookings for the quarter, resulting in a book-to-bill ratio of 0.9 times, with a year-to-date book-to-bill ratio of 1.0 times [8][9] - The total backlog at the end of the quarter was $45 billion, representing 3.2 times the annual revenue [9] Company Strategy and Development Direction - The company announced the divestiture of its Rapid Solutions product business, aligning with its core strategy and strengthening its balance sheet [7][20] - The focus remains on mission-critical solutions, with strong demand across diversified end markets, particularly in intelligence and cybersecurity [10][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the evolving geopolitical dynamics and the new administration's priorities, which reinforce the need for mission-focused solutions [15][16] - The company anticipates continued strong demand for its services, particularly in defense and energy sectors, and expects to achieve its financial objectives for the fiscal year [30][31] Other Important Information - The company has $29 billion in pending awards and plans to submit over $35 billion for the full fiscal year [15] - The divestiture of the Rapid Solutions business is expected to close in the second half of 2025 and generate approximately $325 million in after-tax proceeds [28] Q&A Session Summary Question: Insights on nuclear opportunities across geographies - Management highlighted strong demand for nuclear capabilities in the US and UK, with ongoing projects and partnerships in various countries [34][36][38] Question: Impact of divestiture on guidance - The guidance does not include significant impacts from the divestiture, as the business represents only about 1% of revenues and adjusted EBITDA [45][46] Question: Current award environment - Management acknowledged some delays in awards but emphasized strong year-to-date business development performance and a robust pipeline [49][50][51] Question: Future debt pay down and proceeds from divestiture - The sale price for Rapid Solutions is expected to be $360 million, with net proceeds around $325 million, which will strengthen the balance sheet [60][61] Question: Revenue guidance and headwinds - The company expects a 3% sequential revenue increase in the second half, with organic growth offset by joint venture transitions [68][70] Question: Impact of NASA budget cuts - Management does not expect material impact from NASA's proposed budget cuts for FY 2025, as they are well-positioned for ongoing projects [101][102]

Financial Data and Key Metrics Changes - The company reported revenue of $3.5 billion for the second quarter, reflecting a 1% year-over-year growth [6][24] - Adjusted EBITDA was $268 million, showing a 3% year-over-year increase, with adjusted EBITDA margins rising by 20 basis points to 7.7% [6][24] - Free cash flow for the quarter was $53 million, slightly higher than expected due to solid operating performance [27] Business Line Data and Key Metrics Changes - Digital Solutions generated revenues of $1.3 billion, representing a 3% growth year-over-year, driven by new contract awards [25] - Global Engineering Solutions reported revenues of $2.2 billion, a year-over-year decrease of 1%, impacted by the ramp down of certain historical programs [26] - Adjusted EBITDA for Digital Solutions increased to $107 million, while Global Engineering Solutions saw an increase to $161 million despite revenue volume impacts [25][26] Market Data and Key Metrics Changes - The company reported net bookings of $2.8 billion for the quarter, resulting in a book-to-bill ratio of 0.9 times, with a year-to-date book-to-bill ratio of 1.0 times [8] - The total backlog at the end of the quarter was $45 billion, representing 3.2 times the annual revenue [9] Company Strategy and Development Direction - The company announced the divestiture of its Rapid Solutions product business, aligning with its core strategy and strengthening its balance sheet [6][20] - The focus remains on mission-critical solutions, with strong demand across diversified end markets, particularly in intelligence and cybersecurity [10][21] - The company is strategically expanding into commercial and international markets, which represent 20% of revenue, targeting high-potential sectors like nuclear engineering and commercial 5G [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the evolving geopolitical dynamics and the new administration's priorities, which reinforce the need for mission-focused solutions [14][15] - The company anticipates strong demand for its services, particularly in national security areas, and expects to meet its financial objectives for the fiscal year [15][29] - Management highlighted the importance of disciplined execution and managing controllable variables to drive long-term growth [6][21] Other Important Information - The company has $29 billion in pending awards and expects to submit over $35 billion for the full fiscal year [14] - The divestiture of the Rapid Solutions business is expected to close in the second half of 2025, generating approximately $325 million in after-tax proceeds [28] Q&A Session Summary Question: Insights on nuclear opportunities across geographies - Management expressed excitement about nuclear opportunities, highlighting strong capabilities in the US and partnerships in Europe, particularly in the UK [34][36] Question: Impact of the divestiture on guidance - The guidance does not include significant impacts from the divestiture, as the business represents around 1% of revenues and adjusted EBITDA [44][45] Question: Current pace of awards in the market - Management acknowledged some impacts on timing due to federal workforce disruptions but noted strong year-to-date business development performance [50][52] Question: Future portfolio assessments for potential divestitures - The company will continue to assess its portfolio annually to ensure alignment with strategic priorities, similar to the decision made regarding Rapid Solutions [55][56] Question: Revenue guidance and potential headwinds - Management expects a 3% sequential revenue increase in the second half, driven by organic growth, despite some headwinds from joint venture transitions [68][71] Question: Impact of NASA budget cuts on guidance - Management does not expect any material impact from NASA's proposed budget cuts for FY 2025, emphasizing ongoing strong support for NASA missions [100][104]