Thank you very much, guys. We are gonna day with SAIC. You may have seen the release earlier today that SAIC put out, so we will talk a little bit about that. We have with us the CFO of SAIC, Prabu Natarajan. And thank you very much for coming. I know-
Thank you, Garth.
busy day, lots going on, and
Yeah.
So I wanna just leave it open-
Yeah
at the outset to just say, like, okay, there was an 8-K file today-
Yeah, yeah
and just kind of the genesis behind that-
Sure
... the reduction in guidance and the like.
Sure, absolutely. First of all, you know, thanks for the interest and the opportunity to be able to have this conversation. I think, you know, big picture with the 8-K, we started out at the end of last year in December, we said, you know, we expect growth to be flat to +3%. And then we said, we're likely to be at the lower end of that range if we lost an Army Corps of Engineers recompete, which is about 3% of the top line, and of course, we lost that about a few weeks ago. And then we lost Cloud One, which is another recompete, roughly 1% revenue. So nominally, we were sitting at about -1% growth for FY 2027, calendar 2026.
Mm-hmm.
I think as we looked at the Q4 revenue environment, I think we began, you know, Q4 at a reasonable pace. Q4 being kind of the, you know, November, December, January months for us, were, you know, normal company plus one month.
Yeah.
Growth rates were fine in November, and they were fine in December, but they were certainly compressed in January, which is the twelfth month of the fiscal year.
Sure.
I think it was important for us to recognize that, you know, there is some unevenness in the funding environment, and even if you have contracts that have adequate ceiling, that the money isn't moving through the system as efficiently as it used to. So I think recognizing that, we said, you know, let's take the assumptions around on-contract growth we had baked into the flat to 3% previously, and now we're assuming more nominal amounts of on-contract growth, as well as ramp on the new programs, and we won a ton of new work last year.
Right.
But the ramp on those programs have been incredibly slow. And so in order to just think about this risk, this year as a, you know, a year where we can set up for the FY 2028 discussion, we said, "Let's de-risk the year as much as we can, focus on the things that we control inside the company." The macro environment is confusing, but what we can do-
Right
is to remain really focused and make sure that we can communicate this story crisply to our shareholders and hope them, hopefully, they'll bring them along for the conversation here.
Actually, to that point, the Q4 revenue was... It appeared light by about 2%. Is that right? So that was a function of-
Yeah
the month of January
January
in your view? It was not a function of shutdown-related noise from early November.
There was a little bit in the way of shutdown noise, remnants of it, about $5-$10 million from shutdown, that sort of stretched into January.
Okay.
Because recovery didn't fully occur.
Yeah.
There was a little bit of disruption from Hurricane Fern and winter weather we had in the D.C. area-
Right
... where D.C. governments were shut down for, you know, close to a week here at certain customers.
Yeah.
So a combination of that, and I think the 1\3, perhaps more important factor, is that we had some materials which have been really hard to predict this year on timing, materials that we were expecting to see in Q4 of this year that has slipped out of Q4 into Q1 of this current FY 2027. So those three things added up to the miss of that 2%, relative to what we previously signaled.
Okay. And just to be, again, strictly speaking on the guidance revision for fiscal 27, so January of 2027 for everyone, it was about a 5% reduction-
Yeah
... if I read on sales-
Correct
... approximately?
Yeah.
What you described earlier, the Cloud One RITS, Cloud One, and then the RITS, which is, what's it called now?
Castle.
Castle-Net, sorry. Those two aggregate to about 4% of sales-
Correct
... correct?
Yeah.
So the guidance reduction was slightly in excess of the two recompete losses.
That's right.
The Castle-Net-
Yeah
... presumably, there's some transition period as well, so you will carry some of that revenue. It's not a full 3% loss, right, in fiscal 2027? So maybe if you could walk around the mechanics of that.
Yeah, I will do that.
Okay.
So I think, you know, what we've assumed right now in the revised guidance is that there will be about a $200 million impact from CastleNet on a year-over-year basis, recognizing that we probably do have some transition period built in that'll probably take us through at least the first half of Q1.
Okay.
Possibly into the H2 of Q1, but hard to tell where we're sitting right now.
Mm-hmm.
That's $200 million.
Got it.
And then on top of that, we had Cloud One, which is about $75 million, give or take. That's $275 million.
Right.
And then we simply took down our assumptions around the robustness of on-contract growth and the ramp on new work that we've already won.
Okay.
That adds another 1% to the total mix. Between 2%-3%, roughly-
Mm-hmm
... 1% Cloud One, and then 1% between on-contract growth and ramp on new, that's your 5% effectively.
Okay. So big picture-
Yeah
... what is sort of the visibility to returning to growth? Obviously, some of these headwinds have to roll through. That is, nothing you can do. But the inflection beyond that,
Yeah, it's a good question. We talk about it a fair bit inside the company. I think, you know, as we navigate the rest of this year, I think we're looking for maybe a couple of signposts.
Mm-hm
One, are we seeing on-contract growth recover in the H2 of the year?
I think right now we are assuming that we're gonna be pretty level loaded on-contract growth between 1% and 3% throughout the year.
Okay.
... that is going to be about as low as it has been in the five years that I've been with SAIC.
Okay.
From a high of maybe 7% or 8% on contract growth. To the extent we see on contract growth trends stabilize and actually start to improve in the second half of this year, you should start to see some tailwinds.
Okay.
I think factor number two, we are assuming that the new business we've won, whether that's Air Force TENCAP. It was a billion-dollar program we won last year.
Yeah.
Navy ATSO, $350 million over 5 years, $75 million a year, roughly. As well as Army OSINT, open intelligence work that we do for the Army, new work takeaway from BAE Systems-
Right
... about $75 million a year. None of those programs have come anywhere close to where we expect them to be six months into the program-
Okay
In terms of just the slowness of the ramp. I think when we start to get the right signals that those programs are starting to ramp, I think those become, frankly, tailwinds to growth. Right now, in the revised guidance, we've assumed nominal amount of contribution from those three programs. To the extent that we get better than nominal growth from them, via on-contract growth or just the ramp on the new, then we'll start to see better revenue trends, I think, from the second half of the year. And the most important factor is we will eventually lap out both Cloud One as well as RITS.
RITS.
At that point, the absence of a headwind effectively becomes a tailwind in the next year. So that's how we're thinking about it.
Okay.
I think the signposts are within on-contract growth and the ramp on the new stuff.
Yep, and just to, for the audience, the three big contracts that you've mentioned, the takeaway win from BAE, et cetera, were they all takeaways, or what was there anything that was new work to the industry?
Yeah. So two of the three that I mentioned, both TENCAP HOPE-
... as well as Army OSINT, were new takeaways.
Yep.
Navy ATSO was new, new work that was shaped into a Navy vehicle-
Okay
... that we effectively went on contract for towards the end of last fiscal year.
Mm-hmm.
None of those programs are anywhere near the ramp we expect them to be at, but the funding is there.
Right.
The programs are appropriately factored and sitting in backlog, which, by the way, was incredibly healthy through the first three quarters of the year. We were trailing twelve-month at 1.2.
Yeah.
We expect to finish this fiscal year, FY 2027, FY 2026 rather, at a book-to-bill trailing twelve-month north of 1.0.
Mm-hmm.
We're still obviously, you know, scrubbing our numbers for year-end here, and so we haven't actually put a number out, but we expect to be north of 1.0.
Okay.
So we will have the backlog to be able to convert backlog into revenue. In this environment, it's just taking a little bit longer.
Gotcha. And on the transition of that BAE contract, is it just because they haven't transitioned it from the incumbent contractor over to SAIC, or is it a function of something else?
It's a function of something else. Here's how I would say it. I mean, the contract has transitioned.
Okay.
The individual contract then requires technical directive letters to be issued, where we're not negotiating fee, but we're negotiating the scope of the work that needs to be done for a point in time inside of the contract.
Okay.
When we have fewer contracting officers and customers able to sit down and negotiate the technical packages, it tends to take longer to put that work on contract.
Gotcha.
And so even though the ceiling is there, the funding is there, the work just has not taken off at the pace that we would want it to take off.
Okay.
That's inherently, you know, I'd say, perturbation on the customer side, and we are assuming that it'll get figured out at some point this year, but it hasn't happened yet.
Okay, the defense budget was actually passed into law earlier this month.
Yeah.
Have you seen any change in behavior since that, or has that not been a meaningful catalyst one way or the other?
Not a meaningful catalyst yet.
Okay.
I do think that at some point, I think we'll start to see money put, being put to work.
Mm-hmm.
We haven't seen that yet, and our going-in assumption right now is we should not assume any of that to be a tailwind yet in our guidance.
Okay.
And again, I think last year was, I'm gonna say, sufficiently unpredictable, that I think we're just taking this a quarter at a time-
Yeah
bringing investors along with us to say: How do we calibrate investor expectations so that we are telling you as much as we know about what's going on inside the business in a way that is transparent? And yes, we took some medicine today.
Yeah.
The reality is, I think, there was a lot happening in the market.
Yeah.
I think I feel good about being able to communicate this narrative and say we do expect to return to growth-
Mm-hmm
... once we get through this year.
Just to be clear on other kind of risk items out there, are there any other... What, what percentage of the business is up for recompete?
Yeah
... from here over the next 12 months? Are there any concentrated recompete contracts?
I would say the big-picture answer is there's nothing anywhere near the size of a RITS-
Yeah
That is going through recompete right now. I think we typically tend to have programs in that 1% range of revenue.
Mm.
But candidly, we also have a very healthy pipeline, and we're bidding work actively, so.
Yeah
... I'd say nothing that stands out in the way RITS did coming into this fiscal year. So I'd say that's the big picture.
Mm-hmm.
You know, I think our submit volume is another one we're watching, just to see how effective the procurement environment is gonna be for this year. There was a time in the first couple of quarters of last year where things were really active, and things seemed to be getting on track.
Right.
And then we began to see some of the effects from the shutdown, and our submit volume really went down over the course of the H2 of last year.
Yeah.
We are expecting it fully to bounce back early this year.
Okay. The company has gone through quite a bit over the last five years.
Mm-hmm.
There's been a CEO change to an interim CEO. What are sort of the lessons learned on some—I mean, I'm sure every contract loss has-
Yeah
... a different explanation.
Yeah.
But is there any broad takeaways that you, lessons learned-
Yeah.
-that you guys have kind of put back to your BD folks to make sure that you address them?
I think there may be a couple of things that, you know, one of the threads we're pulling on today through the filings we've had in the 8-K-
Yeah
... is that, you know, we're seeing maybe more commoditization, if you will, of some parts of the enterprise IT market.
Mm-hmm.
I think it tends to be more prevalent within the DOD, where customers are, I'd say, more comfortable buying enterprise IT on a cost-plus basis.
Gotcha.
The FEDCIP customers, I think, are more comfortable, if I can generalize, buying enterprise IT on T&M or firm fixed-price basis.
Okay.
We make very good margins. It's, it's a win-win, I think, for us and our customers. Where we're seeing larger commoditized enterprise IT contracts within DOD, customers are reluctant to go to fixed price-
Mm.
which makes it harder for us to differentiate our offering from somebody else's offering.
Okay.
And if I look back, if I zoom out just a little bit and look at the history of our recompete losses over the years-
Yeah
... the one common thread across most of them has been large EIT, cost-plus DoD. And so to me, I think part of the message today is that, you know, we are focused on being more selective. We're not going to walk away from enterprise IT. That is not the message. But to say, "Let's focus on vitamins, not calories," is a healthy message inside the company. It is a healthy message that we can communicate to customers-
Mm-hmm
... to say, "Look, we want you to transform. We're not here just to run the network.
Right.
We need their help to be able to set up contract terms that allow us to bring real automation, real AI, which we're able to do on the FEDCIP side.
Right.
But we need to be able to do that, because part of what is going on is incumbency risk on enterprise IT contracts.
Right.
If I can earn 12%-14% margins, I'm okay taking a little bit of incumbency risk.
Yeah.
What you cannot do is make 6% or 7% margins and get thrown out five years later.
Right.
So I think, given that lack of differentiation within parts of that enterprise IT segment-
Yeah
... I think we're just gonna be really crisp about which ones we want to bid-
Mm-hmm
... and hold the teams accountable to it. If I look at the non-EIT part of the business, just over the same time frame, over the last five years, our win rates on recompetes have been compellingly high.
Yeah
... you know, close to the industry benchmark of 90%. They're between 85% and 90% on non-EIT work.
Okay.
On my new work that I'm chasing in that market, my win rates are close to 50% or above 50%.
Okay.
Which means I know that this company can be really successful working on the mission side of it.
Mm-hmm.
That's the legacy of SAIC.
Right.
We're a very proud, mission-oriented engineering company, and our win rates suggest that we should be reallocating capital from larger cost-plus enterprise IT programs, which are getting more commoditized-
Right
... towards things that are either fixed price or towards mission and engineering.
Yeah.
That's where, frankly, the budget dollars are gonna be over the next few years.
Right.
We think we're actually positioned well to be able to capitalize on it.
Do you have a sense for what percentage of the company today revenues are-
Yeah
... still kind of enterprise IT, as you would kind of subject to commoditization over time?
Yeah, I think we, in the filing today, we referred to large enterprise IT as, you know, roughly 10% of the company.
Okay.
About $700 million out of a base-
Yeah
... of $7 billion. Easy math.
Mm-hmm.
Of that $700 million, which includes both cost-plus and fixed price and T&M-
Mm-hmm
... about $200 million is Department of State Vanguard program-
All right
... which we all know is going through a recompete process.
Yes.
It's getting broken out into five components. You can bid the first work stream, which is, you know, if you do that, then you're prevented from, by organization conflict of interest rules, from bidding the other four work streams. So we're bidding the other four work streams. We've been qualified in all four. We're gonna keep our share of Vanguard. We're performing really well, bringing real automation into the networks here.
Mm-hmm.
The second-largest program is Department of the Treasury T-Cloud, which was a takeaway from one of our competitors, and we have four years left on that program.
Okay.
As I look at the tail of what's left in Enterprise IT, large EIT, we only have two contracts left in the company.
Okay.
We have our share of smaller EIT programs, but I think we're performing really well. Our track record is we can hold our own on these more small, more differentiated, more fixed-price-oriented enterprise IT programs.
Okay. But on the DOT, the Treasury-
Yeah
... and the State, how do you play defense to make sure that that work doesn't move away from... So that you prevail-
Yeah
... on whatever terms-
Yeah
... you know?
They're slightly different. So on-
Yeah
... Department of Treasury T-Cloud-
Yeah
... you know, we are on year three of that program, and that program continues to ramp really nicely for us.
Okay.
It was a $1.3 billion dollar program, and we are not at full run rate yet. We are expecting that program to grow FY 2026 into FY 2027.
Got it.
So that program, I think we feel really good about how much that team has done inside of that program.
Mm-hmm.
Vanguard, Department of State, look, our performance scores are stellar inside that environment.
Mm-hmm.
I think we know we are going to be difficult to dislodge in the Vanguard environment.
Yep.
Having said that, we also know that it's going to be heavily competed, and we're gonna win our share of work, but likely, maybe not 100% of the work we have today.
Right.
I think the one saving grace is the Vanguard program is going to actually become a larger program, because other incumbent work is also coming into the program.
Okay.
So even if our percentage of the new Vanguard evolve is smaller ... the denominator is actually bigger, so we should be able to hold our own on Vanguard. So, I take comfort in the fact that we're actually doing really good work on T&M or fixed price.
Mm-hmm.
The customer is consistently recognizing the quality of the work we're doing there, so I feel good about it.
Okay. No, that's good to hear. And, you know, we obviously, there's all this, like, you know, malaise in the sector, but yet the Department of War is asking for as much as $1.5 trillion in the 2027 budget.
Yeah.
Do you have any view on what the pockets of opportunity incrementally would be for SAIC?
Yeah. So I think, you know, big picture, you know, we're gonna let Congress sort of navigate the budget side of the challenges.
Sure.
But, you know, between base and reconciliation, we think the number's likely to be north of $1 trillion.
Mm-hmm.
We, uh...
Right
I don't know if we get to $1.5 trillion, but I think as some combination of that, we're probably gonna get north of $1 trillion comfortably.
Yeah.
I think in terms of the priorities, I think there are probably a few different areas that we would really be focused on. One, I would say all things mission data.
Mm-hmm.
I think we have some very specialized offerings that allow us to be very differentiated in the mission data area.
Okay.
Two, we have a program called Cloud-Based Command and Control.
Mm.
where we do that for the Air Force, and we, on a single pane of glass, effectively reflect the entire NORAD airspace in a single pane of glass. That program went from ideation to full execution in 13 months. It is very unusual to see programs like that in the DoD.
Mm-hmm.
And so we are well-positioned on all things Cloud-Based Command and Control. So if I think about Enterprise IT-
Mm-hmm
... the higher end of the stack is cloud-based command and control. So we, we tend to think of that as sort of the right place in that market. We're well-positioned. We have a program called GMAS-
Right
... which was a takeaway from one of the primes a couple of years ago.
Yeah.
That program is on its way, modernizing legacy radar systems built by the primes. We are getting more performance out of those legacy radars, which we think is going to be really critical for Golden Dome
Yeah
... relative to the performance that the customer was getting without the updates through this program.
Okay.
So we think we're well-positioned in parts of that market, and we have a really good CEDA business.
Right.
To the extent that the customer is on buying new space systems, the CEDA work that we do for some of the three-letter agencies really help us advise the customer-
Mm-hmm
... on what procurements make sense, what requirements we need to look like.
Mm-hmm.
To me, that part of the market is, you know, doing pretty well as well. We've got multiple areas of exposure.
Right.
I think it's for us. It's now that we've figured out where we want to spend our attention, because the hardest thing sometimes is deciding what not to do-
Right
... more than figuring out where you wanna be. For us, I think the team is fully aligned with Jim in ensuring that we are crisp about where the attention needs to be, and then we're putting additional resources into areas where we do see budget dollars grow-
Yeah
... and we are bringing some inherently superior technical skills to those areas. I think our win rates over the last five years demonstrate that we can hold our own there.
Right. No, that makes sense. Looking at the portfolio, like you said, areas you don't want to be, areas you want to lean into, are there any obvious capability gaps to really get into those growth vectors that you want to lean into, that you'd fill either via M&A or organic, what have you? What is missing, if anything?
Yeah. I mean, look, I think any management team worth its salt would say the portfolio is never where it needs to be. So I think we go through this process over and over again, and I would say-
Mm-hmm
... you know, as we move upmarket, if you will-
Yeah
... I think consistently improving on the capabilities we bring is gonna be important. So I would say, we're deadly focused on, you know, bringing AI, I'm gonna say little AI, to real automation inside the company and inside customer environments, where we can execute missions with AI.
Okay.
It is nowhere at the scale that it needs to be at, and AI just isn't there yet.
Mm-hmm.
Notwithstanding the market's concern about it, AI just isn't there. So taking our inherent mission knowledge and being able to build small AI to execute missions is, I think, part of where the focus is gonna be. Two, things that are data-related.
Right.
I think there is an inherent need to separate platforms from data, so that we can actually have other companies that are more agile, that focus on the data level, so we can create these decision panes for commanders.
Sure.
I think, so to me, I think it really is very much a data-intensive exercise.
Mm-hmm.
And I would say, look, I think we would love to add some intel capabilities to the portfolio.
Mm.
We are predominantly CEDA right now.
Right.
If we can, you know, figure out a way to get a little more development exposure, and we bought this company called SilverEdge, you know, a few months ago.
Right.
Predominantly at ODNI, about half their business is there.
Mm.
But they also have a really interesting commercial, I'm gonna say, software development as a service model. So they don't actually do software, they do software development as a service within mission environments.
Oh, okay.
It's a really interesting business model. So I think you'll continue to see us experiment with some business models. And at the very end, I would say, you know, for about five years now, we've had a venture program.
Okay.
We invest in venture companies, and they're small companies. We typically like to be effective in the capital structure.
Mm-hmm.
So we tend to pick a top five position in the capital structure because you can actually influence the tech roadmap for these companies-
Mm-hmm
... relative to our space.
Sure.
And so we made two or three investments just last year. One of the investments we made just went public through a SPAC and-
Right.
So that's a market where I think we don't suffer from the hubris believing we have to invent it all.
Right.
I think bringing the ecosystem together so we can get capability on an accelerated fashion over to the customer is where the priority is, and any acquisition that allows us to do that-
Yeah
... I would say bring it on. But we're clear-eyed that we are heavily discounted as a stock-
Right
... and therefore, the threshold for acquiring somebody has to be really high-
Yeah
... to justify allocating capital there versus buying your own stock. And so to me, I think it's just a process of navigating it, and, you know, we're excited about what the next 12 months can bring, because I think there's some real potential here.
Well, it's interesting, just on M&A versus buybacks, and we've asked this of many-
Yeah
... hardware companies in the defense space, because there's an EO-
Yeah
... that's talking about restricting-
Yeah
... buybacks and dividends. Does that influence your thinking calculus at all on capital allocation, the EO?
Yeah. I mean, look, we, we've read it. We think that the underlying spirit of the EO is-
Yeah
... if you are underperforming on your contract and you're under-investing in your production line, then you perhaps ought to, this is the DoD's message-
Right
... perhaps ought to prioritize investment in the war fighter needs more than share buybacks.
Right.
I think thankfully, so far, we are not on the naughty list-
Right
... and therefore, we don't have any real communications from the government. But look, it is going to be a factor-
Yeah
... in the way we allocate capital. But again, I, I think we're performing well on our program, so I'm hopeful that we're not on any list like that, but it's one we have to navigate, and we'll wait to see what comes out of it.
With respect to M&A pipeline, now, you mentioned the-
Yeah
... data-focused AI opportunities-
Yeah
... and intelligence.
Mm-hmm.
Are there such opportunities that you're coming across, or is this still very much an emerging kind of?
So we are seeing... I think, you know, the hardest thing in M&A is scarcity value, and I think we just see too many assets that just look like too much we've seen already.
Yeah.
I think it's really hard to find that rare one thing that can really make a difference in the portfolio.
Right.
So I think we're gonna be very selective. I think the second thing that we will wanna see inside the company is ensuring that whatever it is we buy, what is the alignment between that company and the pipeline we've got inside the company?
Mm-hmm.
If a target creates a strategy, that's probably not a good fit.
Right.
You need to have a strategy that is then informed by a target list.
Right.
And so we're doing the Venn diagram to say, "How much of the pipeline overlaps with my M&A target list?
Gotcha.
Where is the budget money going?
Yeah.
And I think when we start to do that, you end up with volumes that are much lower than your initial screen of companies.
Mm-hmm.
I think if we do one or two tuck-ins a year, which we have capital to allocate, inside of the free cash flow we generate every year, that's okay.
Yeah.
That's okay.
Right.
We have done large M&A. I think it's hard to do large M&A in our space.
Yes.
I think you can be much more effective doing small M&A because you're bringing real capability into the company, and, you know, that's where the priority is right now.
Fair enough. I have to ask about the CEO search-
Yeah
... and where you guys stand at that. Where are we with respect to the,
Yeah
... permanent CEO search? When would you anticipate having an announcement, and what attributes are you searching for?
Yeah, I mean, look, big picture, the board is in the middle of that process.
Okay
... so I'm not gonna comment beyond saying-
Sure
... Jim is part of the search committee. The board's on their way-
Mm-hmm
... and I think, you know, we're gonna wait for them to go through that process.
Okay.
I think in terms of timeline, I, you know, I don't know for sure, but I would say within the next few quarters, you should expect to hear something from us.
Right.
And in terms of the, you know, qualities that they're looking for, I think probably a couple of things are really important. One, you know, a track record of creating real shareholder value.
Mm-hmm.
I think a track record of getting the most out of the portfolio we have today. I think just execution-oriented is gonna be really important.
Mm.
One of the things that Jim and I, frankly, have talked about for six months now-
Mm-hmm
... is just focus on what's in front of you, focus on what you control, because that is all you get to do in this environment. I think the board's very much of the view that we need an execution-focused CEO that can bring some real shareholder value, and I do think that there are some real opportunities in the way of portfolio transformation.
Mm-hmm.
But we need somebody permanent in place to be able to navigate the next few steps. But the board's at it, and
Right
... we'll get there.
It's interesting, though, SAIC, we remember the history of it-
Yeah
... you know-
Yeah
... very vaunted,
Yeah.
I don't wanna get into that.
Yeah.
But the point is, it would actually, I would think it would benefit from an insider-
Yeah
... as opposed to an outsider. That's my personal view, but I wonder, like, does that, does that make a difference?
I don't know that it's part of the calculus for the board. I think.
Okay
... you know, they, they will look inside, and they'll go external-
Okay
... and, I think at the end of the day, we have a business that is in the midst of a transformation.
Yes.
We have a sector that is also going to be transforming. Services changed from 2013 to now-
Yeah
... and it's likely gonna change again over the next 10 years.
Right.
I do think that what you're likely to see companies do is focus less on calories, winning large programs and juicing up revenue growth rates, and really focused on, "What is it that I want to be known for?
Mm-hmm.
I think the next CEO's job at SAIC is figuring out what is it that we want the next 10 years of SAIC to be like-
Yeah
... and what portfolio pivots do I have to make in order to get to the budget dollars that are out there? To me, that's the challenge.
Now, one other question. We always think about it as a people's bi-
Yeah, mm-hmm
... a people business, right? You wanna retain your best talent-
Yeah
... and the like, and the stock and the company have gone through a tougher time-
Sure
... of late, as have many of the peers.
Sure.
It's not unique to SAIC. How do you keep culture, if you will, or spirits high? I don't know.
Yeah.
-retention high.
Mm.
Is there anything the company's doing to kind of address that potential risk?
Yeah, I mean, it's a, it's a great question, and, you know, it's, it's one of the most important things we can do, especially over the next 12-24 months as we're in the middle of this transformation.
Yeah.
I think we have some top-notch folks in the company.
Okay.
I think we are much more crisp about the top talent in the enterprise and saying: What is it that we can do to ensure that they are here to see the success of this enterprise over the next few years?
Mm-hmm.
So we are paying a fair bit of attention. We're going through a fair bit of training for our program managers. We're investing in people-
Okay.
through technical training and the like, to ensure that, you know, when we make the investment in our people, our people see that as an investment that the company is making in them.
Right.
I think there's a fair bit of investment going into that. One of the things that we talked about in the 8-K filing is we have a set of charts informing that we're beginning this transformation process. You know, since the split in 2013, we really haven't seen an end-to-end reorientation of what SAIC could look like.
Mm-hmm.
We're just beginning that process, and, you know, we, we've got our best people, not the ones that are looking for coverage, our best people working on this project-
Right
... because we wanna make sure we can redo this enterprise top to bottom in a different way, so we set ourselves up for the next 10 years, but importantly, give ourselves the flexibility to invest a little more in the business.
Yeah.
And so I think we're dead focused on getting it right. I don't wanna sound Pollyannaish, we don't always get it right.
Right.
But it's really important to remember that is one of the most important things we can do.
I appreciate it. Thank you very much, Rahul.
Of course. Thanks for having me.
Thank you.
Thank you.
That was great.