Matt Calderone: Yeah. Thanks, Bert. First, our strategy isn’t changing from a capital deployment and M&A perspective. I think we’ve always been biased to M&A over share repo, but the right M&A, right, that’s strategic and that really helps us fill a gap in a capability or a business model. We don’t need to buy for scale. As Horacio mentioned, as the numbers indicate, we’re growing 13% to 14% organically this year. We don’t need scale. What we’re looking for are unique and oftentimes niche capabilities or business models that’ll help us accelerate into some of these waves of technology or into areas where we think, for example, outcome based contracting may emerge. So, I’ve heard the same commentary, Bert. I think we are seeing indications that more assets and potentially assets of scale will come to market.
My leading indicator is always how many bankers are asking me to lunch. And my dance card is full, particularly from the New York bankers, which typically indicate that more assets of scale are coming to market. I’m not sure that we’re seeing yet enough data points to call it that prices have come down, but I certainly hope they will. Thank you, Bert. Appreciate it.
Operator: Thank you. One moment for our next question, please. And it comes from the line of Mariana Perez Mora with Bank of America. Please proceed.
Mariana Perez Mora: Good morning, everyone.
Horacio Rozanski: Hola, Maria. Good morning.
Mariana Perez Mora: So, my first question — hola. My first question is about China. So, you mentioned in your prepared remarks, all these like defense focus on China and the mission and the role that Booz Allen could play there. What are the opportunities around JADC2? Because you recently announced this collaboration with LHX, like how you can play with the primes, how you can play directly with the government and how large that opportunity could be.
Horacio Rozanski: It’s a great question. JADC2 is a key strategic initiative to bring together all the information that a co-com commander would need to operationalize. And it’s therefore an important deterrent to aggression. So, we’re very committed to it. We’re a significant part of it. We work closely with the CDAO on a number of initiatives that feed into JADC2 and into other efforts that ultimately may or may not integrate together into it, but are all part and parcel of the same thing, which is how do you create full domain awareness? How do you create a decision cycle that takes advantage of all of the data available and that accelerates inside of a potential adversary’s decision cycle? That is something that Booz Allen is very good at.
Our understanding of the mission, our ecosystem of partners that bring technology at scale, and the at-scale part is the crucial part here. And frankly, our ability to co-create with them and to build pipelines of solutions are a big part of it. And this is really what VoLT has been all about, doing that fast, doing that at-scale and bringing the right technology. And that’s what we’re focused on.
Mariana Perez Mora: Great. Thanks so much for the color. And my follow-up question is about headcount. So, we see all these great increases in headcount and the client staffing, but I’m curious if you could discuss a little bit about the clearances, how they are performing. And also, post-pandemic, you were able to be really flexible and really agile to adapt to these remote working. How are the customer’s appetite to these remote working solutions as we go back to business as normal in the post-pandemic world?
Matt Calderone: Yeah. Mariana, it’s Matt. I’ll take it. I don’t think we’re seeing any material improvements in the processing of clearances. It may be on the margins in certain areas, but nothing that is material from a firm-wide perspective. To your second question, we have tried to, and our clients, take advantage of a lot of the lessons learned through COVID about remote work, about flexibility, about the opportunities to combine and recombine how people interact and engage in different ways. We learned a lot, for example, about remote hiring and how to make our hiring process more efficiently through COVID. That has absolutely carried forward through to today. So, we are seeing that our clients are more receptive to alternate work arrangements.
We really pride ourselves on our flexibility. And as Horacio said, undoubtedly, the labor market has gotten a little looser in the last 12 to 18 months, and that’s been helpful. But our performance really is intentional. And we talk a lot about remarkable consistency in the business. It has been particularly true on the labor side or on the supply side. Our attrition is down meaningfully. Employee satisfaction is up, which we care a lot about. Our average monthly applications are on pace to double year-over-year, and a lot of that is technology-enabled. And we’ve seen an almost 60% increase in referrals, employer referrals, over the last three years. And I think that’s, in many ways, the best indication of our employee value proposition and the fact that our employees are willing and eager to recommend us as a place to work and employer of choice to their network.
So, the short answer to your question is yes. The longer answer is it requires a lot of work, and it’s been very intentional.
Mariana Perez Mora: Perfect. Thanks so much.
Operator: Thank you. One moment for our next question. And it comes from the line of Cai von Rumohr with Cowen. Please proceed.
