Science Applications International Corporation (NYSE:SAIC) Q4 2023 Earnings Call Transcript

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So I would say there is many aspects that are going into that. It’s certainly not a one and done. We intend to strengthen our abilities in this area to continue to drive great success in our recompete win rates as well as our new business, recognizing that we’re not going to win everything. We’re not going to win every recompete. But to those that are must wins for us, we aspire and we put our money where our mouth is and our talent where our mouth is to ensure that we have the best solution for the customer. Prabu, anything you want to add to that?

Prabu Natarajan: That was fantastic, Nazzic. Nothing to add.

Unidentified Analyst: Right. Then touching on the talent portion, how is the hiring environment changed over the last few months?

Nazzic Keene: A couple of comments there. So I would say on the turnover is obviously a part of that dynamic. We are seeing turnover return to much more closely aligned to the pre-pandemic levels. And so very, very pleased to see what was probably heightened issue for us as well as other companies over the course of the last couple of years get back to a more normalized environment. It is an area we can continue to focus on. We want to be best-in-class when it comes to turnover as well as hiring. On the hiring side, certainly, we €“ there is some headwinds in some areas. But I would say, over the last few months, it has gotten, again, what I would consider more normalized. And so there is pockets of the business. If you think about looking for special security clearances that tend to take us a little bit longer, as it does everybody in the industry.

But in general, the hiring teams are hiring what we need to, especially as we’re looking to start up some of these new programs that’s top of mind for us. And we put, again, tremendous focus on that as well as trying to mitigate the turnover risk where it makes sense. There is pockets of the business that are more critical than others. So I appreciate the question. It is a dynamic we’re all watching, especially the services business, but very pleased with how we sit today.

Unidentified Analyst: Great. Thank you.

Nazzic Keene: Thank you.

Operator: Your next question comes from the line of Cai von Rumohr from Cowen. Your line is open.

Cai von Rumohr: Thank you very much.

Prabu Natarajan: Hi.

Cai von Rumohr: Hello, Prabu. Hello, Nazzic.

Nazzic Keene: Good morning.

Cai von Rumohr: Vanguard, you’ve gotten the extension. But where are we in the recompete? My understanding was that it was going to be split into five different sections, and you could only bid on two. And then secondly, my understanding is this has been an above-average margin program, should the profitability should generally be sustained if you win it and kind of when did those decisions come up that we should be looking for?

Nazzic Keene: Cai, Nazzic here. A couple of comments. Obviously, this is a very active procurement and it’s going through its cycle. As far as timing, I don’t know that I can predict when it’s all going to happen. There is €“ with such a big program going through a very different procurement cycle than obviously they had many years ago, I think there is a lot of moving pieces. It is true, we broke it up into multiple pieces. Obviously, SAIC will look to play a critical and important role in those aspects to procurement where we believe we can bring differentiated solutions. And €“ but probably not going to comment on exactly which ones that we are going to pursue or not pursue as well the reasons that I know you will appreciate.

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