Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| I think on the international side one of the most exciting things we have going for us is the strong footprint we have organically and already, obviously in the United States, but also in the UK and Australia |
| We are so proud of Liz and the Health team for their performance, their sustained performance that you call out over time |
| It's good to be with you today to report another strong quarter for Leidos and to put a bow on a very successful 2023 |
| But the most exciting thing about our whole HR system in 2023 was attrition at very good levels for our industry, low levels for our industry |
| Obviously CHS-6, a major franchise win for Leidos in the fourth quarter of last year, one we're very proud of the team for |
| The team has been working hard on the IFPC Enduring program and we're excited about the fact that we delivered some of the first fieldable prototype launchers in December |
| Operating cash was also well ahead of plan |
| 2023 cash performance was exceptional, and we expect conversion to return to normative levels near 100% in ‘24 |
| So as it relates to protecting the margin, the downside on inflation, I feel good about where we're positioned there |
| That contributed some uplift in profitability and Q4 we benefited from nice incentive performance |
| So they and we remain bullish on the long term outlook for this business and we're excited to be in this aspect of the market |
| I continue to be very impressed by the people and sound business engine we have here at Leidos and I believe our top and bottom line financial performance over the last three quarters of 2023 just begins to hint at our full potential |
| Even while affecting our recent organizational realignment, the team ran through the tape to deliver an impressive 2023 |
| And they are taking this reset business and really they are excited about the opportunities that the market is presenting to us to grow, both in the traditional places and non-traditional places |
| So the SES business itself is improving |
| Customer demand remains strong for our products and solutions, and our programs are well insulated from significant budgetary risk |
| For example we're sharing best practices much better across digital modernization programs for greater efficiency and efficacy |
| And we're aggregating and better leveraging our robust engineering talent across our platform businesses within Defense Systems |
| And we're very excited about bringing forward those ideas and deploying cash responsibly, organically in great capabilities and great technologies that will enable us to have differentiated solutions going forward |
| ‘24 will be stronger than ‘23 on both the top and bottom line and we've seen good migration on the planning efforts, working closely with the customer, and the DAFA’s to get them ready for more migrations as we progress through 2024 |
| Our strong balance sheet gives us flexibility to return capital to shareholders, and we have 13 million shares remaining under our repurchase authorization |
| The team is performing exceptionally well |
| Excellent results |
| He shares my passion for winning, and we are committed to delivering industry-leading win rates and above market organic growth |
| We are very excited about the opportunities that gives us to lower the thresholds of sharing data |
| Day sales outstanding for the quarter was 56, a one-day improvement from the third quarter of 2023, and a two-day improvement from the fourth quarter of fiscal year 2022 |
| The 470 basis point increase in quarterly margin was primarily driven by increased volumes, greater efficiency, and better program execution in the medical examination business, all of which led to higher incentive awards |
| What's especially rewarding to see is sequential improvement in Civil margins for three straight quarters |
| So a fantastic capability |
| We've already exceeded the margin target that we set in 2021, and this level serves as a great foundation from which to grow in the future |
| Statement |
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| But we are erring on the side of caution given the realities of the current funding environment |
| We are also provisioning for a slight temporary revenue headwind as our business leaders shift their team's focus to higher reward opportunities for Leidos |
| One was the over performance in 2023 that makes year-on-year comparators difficult, and in this case challenging |
| There was a National Security Intel program that transitioned away from us earlier last year, so that's a little bit of a headwind |
| So that's not a – hasn't been a driver for us and therefore it's not a risk as that particular funding stream potentially, comes under some pressure going forward |
| With a leverage ratio of 2.8x gross debt to adjusted EBITDA, we are comfortably below our three-times target |
| So rolling up to the enterprise level, we expect both revenues and margin to step down from Q4 levels in Q1 and then grow throughout the year |
| So you can be sure we won't be satisfied if we just hit the bottom end of that range |
| But longer term, sadly, the world is not becoming a safer place, and we don't see that customers are going to be spending less on National Security and Defense |
| For the year, operating cash flow was just shy of $1.2 billion and free cash flow was $958 million for a 95% conversion rate |
| Taken together, tax rate and interest lowered non-GAAP diluted EPS by $0.13 for the quarter and $0.14 for the year |
| Tom, anything you'd add to that? Tom Bell Well, I would just add Josh, there's two macro headwinds that informed the conservative end of our range |
| We are very proud of our performance in ‘23, but that creates a headwind for ‘24 year-on-year revenue growth, against also the backdrop of the budget situation that is not yet crystal clear here in Washington, DC |
| I mean we've talked in the past about Health has been great, but the DHMSM program as an example, we're through the deployment phase essentially and so even though we've won some additional work there with Digital First, there is a step down in volumes on that particular program |
| And so as we progress into ’24, our outlook in that regard is it's moderated down relative to where we were a year ago |
| Macro picture, as Chris articulated, our ‘24 guidance is somewhat conservative given the funding uncertainties on Capitol Hill |
| Please refer to our press release for more information on the specific risk factors that could cause actual results to differ materially |
| Obviously, on the outlay side, there's always this lag, right, between the budget and the outlay and the timing that it's difficult to project |
| This is down an average of 4 million shares from fourth quarter levels, based on Q4 repurchases accomplished, and another 500 million of repurchases anticipated in ‘24 |
| I think I know why you did that |
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