So in short, VoLT, which is our commitment to strategy, is working. And we are creating resilience and momentum in the business, even as we see the reality of an uncertain budget and funding and political season ahead of us. And so really, at the firm-wide — so let me talk about civil, and I’ll come back. Our civil business has been a star in our portfolio for, as you said, multiple years. In the early years of that amazing run, it really was driven around public health and some specific agencies in there. But really, as we look at the business now, we are a leader in digital transformation. We’re a leader in cyber and in AI, and that is broad-based across the entire portfolio. So while, as I said, our health business now has crossed the $2 billion mark, and is certainly the larger part of this business, all elements from citizen services to law enforcement, it’s all really working together or humming together to produce the results that you see.
And you didn’t ask, but the same is true in defense. And we really see real momentum and growth opportunity also building in our national security business. So, I guess maybe to close out a little bit and bring it all together, 110 years young is Booz Allen. This business is as vibrant today as it’s ever been.
Sheila Kahyaoglu: Thank you for that, and I knew you’d like the title. In terms of just another one for you, somewhat related to the top line, but where your margins are pushing ahead of your long-term targets, essentially, and there’s been a lot of discussions about the government contracting differently. So, do you think the government is paying a premium for Booz just given the service offering?
Horacio Rozanski: Yes and no. I mean, I do think that we — and we’ve done this for years, we operate at the top of the market in terms of the capabilities that are required, the talent we need to bring, the investment we need to make. And so that will, over time, create higher economics. That is not true on every procurement for sure, but on average, there is some truth to that statement. I do think that the reason on the margin front that we’re ahead of pace on our three-year investment thesis is that we knew this was going to be a heavy investment period. I don’t think we fully anticipated how much efficiency we could create in the business to be able to invest from inside that efficiency and reinvest in the business from there, which has allowed us to preserve margins, even as we invest in talent, in capabilities, and in positions that I think hopefully will fuel the next round of growth.
Sheila Kahyaoglu: Great. Thank you.
Operator: Thank you. One moment for our next question, please. The question comes from the line of Bert Subin with Stifel. Please proceed.
Bert Subin: Hey, good morning, and thank you for the question.
Horacio Rozanski: Good morning, Bert.
Bert Subin: Maybe just — good morning. Horacio, just to follow up to some of your comments there around the business positioning growth. You’ve seen your staff headcount rise about 10% year-over-year, and organic growth is now in the teens levels relative to that 5% to 8% longer term expectation. As you think about that expectation, does that continue to be your view toward how the business should grow over time, or is something in your mind, be it AI or the geopolitical risk backdrop, accelerated how you think Booz can grow over the medium and long-term?
Horacio Rozanski: I think what you’re seeing right now, as I said, is the strength of our talent acquisition process, the ability to make investments in people, and a culture that keeps people here, coupled with a good environment out there and this unique positioning that we have around bringing technology to mission. I don’t think that is a one-quarter or two-quarter or three-quarter deal. I think this is something that, if you extend it back, it goes back at least a decade or more, and if you extend it forward. I think this unique positioning is going to continue to allow us to outperform the market. That leads to the next question, which is, what is the market and how long will this type of market sustain? I think we are, honestly, very — we appreciate the uncertainty in the funding environment.
CRs running out in March, an election year, a political season that is going to add uncertainty to all of this, and we’re watching that closely. One thing that is different this time than we’ve seen in the last couple of years is, typically, when you have this level of uncertainty, clients begin to pull back early because they’re worried about the run rate, post-CR and into the future. We’re not seeing that. We’re actually seeing our clients be very focused on mission, very focused on investing in technology to bring to mission, and that is driving our growth today. Obviously, for the sake of Booz Allen, we want that to continue, but I think, for the sake of the country, this is a good thing.
Bert Subin: Got it. Okay. Thanks Horacio. And Matt, just a quick follow-up for you on the capital side of things. You mentioned your net leverage now 2.5 times, and that’s on a trailing basis. If we look at that chart that you highlighted in the earnings presentation, you’ve been pretty balanced in how you’ve been allocating capital over the last couple of years. We’ve been starting to hear indications the M&A market is maybe getting a little better in terms of where seller expectations are and clearly where interest rates are going. As you think about M&A perhaps becoming a larger share of that capital allocation strategy, can you just talk about what you would look for in M&A and what you’re not doing today that would be of interest to grow into inorganically?
