Financial Data and Key Metrics Changes - The company reported a top-line growth of 7% for the quarter, with revenue reaching $4.47 billion, and a year-to-date revenue growth of 5% [3][18] - Adjusted EBITDA margin was reported at 13.8%, with adjusted EBITDA of $616 million, reflecting a 3% year-over-year increase [19] - Non-GAAP diluted EPS grew by 4% to $3.05, supported by a lower share count [19] Business Line Data and Key Metrics Changes - National security and digital revenues increased by 8% year-over-year, driven by recent contract awards and increased volumes for defense IT and mission support [20] - Health and civil revenues grew by 6% year-over-year, with a record non-GAAP operating income margin of 25.7% [21] - Defense systems segment grew by 11% year-over-year, marking its seventh consecutive period of high single to low double-digit growth [22] Market Data and Key Metrics Changes - The company experienced a 27% sequential increase in funded backlog, indicating strong customer demand [15] - The energy infrastructure business has grown significantly, now representing over $600 million in annual revenues, driven by robust investments in U.S. energy infrastructure [9] Company Strategy and Development Direction - The North Star 2030 strategy is guiding the company's actions, focusing on five growth pillars: space and maritime, energy infrastructure, digital modernization and cyber, mission software, and managed health services [7][6] - The company is committed to investing in innovation and technology to meet customer needs, particularly in defense tech and energy infrastructure [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current government shutdown, noting that most programs have not been impacted [3][18] - The company raised its guidance for 2025, reaffirming revenue guidance of $17 billion to $17.25 billion and increasing adjusted EBITDA margin guidance [24][17] Other Important Information - The company repurchased $100 million worth of shares and accelerated the payoff of $450 million on its term loan [16] - A dividend increase of 7.5% was announced, reflecting confidence in the company's earnings and cash generation potential [16] Q&A Session Summary Question: How does the company view M&A in the current environment? - The company is focused on shareholder-friendly capital deployment and will consider inorganic growth as part of its strategy, particularly in defined growth areas [27] Question: What are the growth prospects for the defense systems segment? - The defense systems business is expected to deliver significant value through various franchise programs, with a focus on air and base defense systems and hypersonic missiles [28] Question: How is the company managing the impact of the government shutdown? - The company has shown resilience, with the FedSiv portfolio performing well despite the shutdown, and expects to continue executing effectively [30] Question: What is the outlook for the health and civil segment? - The health and civil segment is expected to sustain strong performance, driven by ongoing investments in technology and innovation [31] Question: What are the expectations for bid submissions next year? - The company anticipates a significant increase in bid submissions next year, with a robust pipeline of $69 billion in near-term opportunities [35] Question: How is the international business performing? - The international business, particularly in Australia and the U.K., is seen as a growth area, with a focus on aligning with the North Star 2030 strategy [54][55]

Financial Data and Key Metrics Changes - In Q1 2025, organic revenue increased by 7% year over year, reaching $4.25 billion [24] - Adjusted EBITDA was $601 million, up 23% year over year, with adjusted EBITDA margin increasing by 190 basis points to 14.2% [24] - Non-GAAP diluted earnings per share rose by 30% to $2.97, reflecting a significant increase in profitability [5][24] Business Line Data and Key Metrics Changes - National Security and Digital revenues increased by 5% year over year, with a non-GAAP operating income margin of 10.1% [25] - Health and Civil revenues grew by 8% year over year, with a non-GAAP operating income margin of 23.6% [25] - Commercial International revenues saw a 12% increase year over year, driven by strong performance in commercial energy and UK operations [26] - Defense Systems revenues increased by 7%, supported by activity in space sensing and hypersonic programs, with non-GAAP operating margins expanding by 110 basis points to 9.1% [27] Market Data and Key Metrics Changes - The company reported a total backlog of $46.3 billion, up approximately $3 billion from the previous quarter [34] - The first quarter generated $2.1 billion in net bookings, maintaining a solid 1.3 book-to-bill ratio on a trailing twelve-month basis [34] Company Strategy and Development Direction - The company is focused on its North Star 02/1930 strategy, which includes five growth pillars: space and maritime, energy infrastructure, digital modernization and cyber, customized critical mission software, and managed health services [7][10] - The strategy aligns with the new administration's priorities, emphasizing smarter and more efficient government outcomes [11][12] - The company has accelerated its share buyback program, executing a $500 million accelerated share repurchase agreement [12][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning to address customer challenges and capitalize on new opportunities presented by the administration [6][21] - The company reaffirmed its full-year 2025 guidance, expecting revenue between $16.9 billion and $17.3 billion, with adjusted EBITDA in the mid to high 12% range [32] - Management noted that the current macro environment has had a negligible impact on revenue, estimating less than a 1% effect [40] Other Important Information - The company has made significant investments in R&D, particularly in cybersecurity, with over $75 million spent in the last five years [15] - The company is actively pursuing an acquisition to enhance its cyber capabilities, which is a key component of its growth strategy [14][16] Q&A Session Summary Question: How are larger contracts like NGEN performing under the current contracting environment? - Management indicated that while there has been some impact from macro actions, it is negligible, and they are seeing traction in the DoD for additional acquisitions and modernizations [40][41] Question: Can you provide insights on the Health and Civil segment's decline? - Management explained that the segment did not benefit from large single award IDIQs and highlighted upcoming opportunities, including the follow-on to MHS Genesis [42][43] Question: What is the company's outlook on the GSA request for proposals? - Management expressed excitement about engaging with the GSA and emphasized their focus on mission-critical work rather than consulting [48][50] Question: How does the company view the VA's EHR modernization work? - Management is optimistic about growth in the health business, anticipating increased volumes and opportunities to expand services for veterans [55][56] Question: What are the implications of the supplemental defense bill? - Management sees significant upside from the bill, particularly in FAA modernization and border security, aligning with their growth pillars [62][64] Question: How does the company plan to navigate potential funding limitations? - Management believes they are well-positioned with existing programs and franchises that can continue to generate revenue without needing new starts [69][70] Question: What is the company's stance on the FAA air traffic control modernization? - Management highlighted their active engagement with the FAA and the administration, positioning themselves as key technology providers for air traffic control solutions [75][76] Question: What are the drivers behind the commercial and international segment's growth? - Management attributed the growth to recovery in the UK operations, strong performance in security solutions, and opportunities in ports and border security [82][86]