Jacobs Solutions Inc. (J) Earnings Call Transcript & Summary

Good morning, everyone. This is Sheila Kahyaoglu with the Jefferies aerospace and defense equity research team. Thank you for joining us for our management call with Jacobs today. We're going to focus on cyber and intelligence. We have Caesar Nieves here with us, who's Senior Vice President and General Manager of Cyber and Intelligence; and Jonathan Doros, who's Senior Vice President of Investor Relations, FP&A and Treasury. He's a man who does it all. So this specific call is going to focus on cyber intelligence. Given the acquisition that Jacobs announced this morning, BlackLynx, Caesar is going to talk a little bit about that, their intel offering, how it differentiates versus peers. We'll walk through a few presentation slides to start and then head into Q&A. Caesar, with that, I'm going to hand it off to you.

Great. Thank you, Sheila, and really appreciate the opportunity. I think December will be my 2 years here at Jacobs. And really, we've gone through a truly transformational explosion, I'll say. A lot of great things over the last 2 years. I wanted to just spend some time and walk you through kind of our journey, where we've been, talk about a couple of wins that we had, where we're going, and then a little bit about BlackLynx. And so you can see today, it's a bit of a deliberate and focused journey for us at Jacobs. Even before my time, all the way back to 2014, to really get into the intelligence and cyber business as well as getting some new capabilities within the DevSecOps standpoint. And so what you see on this chart here is some of the acquisitions we've made over the last 5 to 6 years. We really honed in on 2019. The KeyW acquisition, which was really what I would say a truly transformational one for us where it brought a lot of deeper capabilities within the ISR market, intelligence, cyber, counterterrorism and space. Space has been a big focus for us as well. And then since I've been here, integrating KeyW as well as the acquisition of The Buffalo Group, right, which really gave us additional capabilities, but really focused on specific customer sets, specifically the DIA, the intelligence community on the Army side and a number of analytics and digital services. They also have brought a number of space components for us, specifically with the intelligence community, and then the combatant commands, specifically CENTCOM and some of the other COCOMs that we deal with. And then naturally, as we're looking at '21, our focus was not purely bringing in professional services, but looking at products or what I would call enhanced capabilities. And the reason why we really want to look at that is we really wanted to differentiate ourselves within the market, really bring in disruptive technologies and solutions and then get into the software side of the house. And so as you see to the right in the announcement we made this morning about the signing of BlackLynx, we're really excited about this. BlackLynx is really a technology company and what we call software-enabled services and products that really tie into edge computing, hybrid cloud infrastructure and collection automation. And you see some of their unique, what I would say, software products below here, an ISR sensor, which is really, truly a deployed sensor that you could put on any device, whether that's land, air or sea. And then they have a number of capabilities tied to collection automation, which is really ingesting a number of different data technologies or sources to really spit out or push out situational awareness dashboards. You see KnackStack on here, right? KnackStack is really the hybrid cloud infrastructure that they bring on to the set, and it's really deployed in the intelligence community. Everything is all about analytics and data. So there's a set of analytics tools that come with the potential acquisition as we look to close at the end of this Q1 of FY '22. But not only that, but there was a number of customers that they brought to the table, too. When I say customers, really prime customers where they have significant contracts in, specifically, obviously, you see the classified customer there with the NRO and then the Air Force side of the house within the intelligence arena. So again, a truly transformational last 2 years. But beyond that, it's always been part of the strategy to really grow and really push into the cyber and intelligence business. Long term, you look at our business today within that -- those 2 areas, we're pushing at about $1 billion as far as revenue. And our operating margin profiles, right, were in the 10% to 12%. I think if you look at the split, about 60% of that is cyber and about 40% is in the intelligence arena. So it's a nice healthy split, and it's really what I would say focused on a number of areas that -- budgets continue to increase. It's not commoditized. And we have, what I would say, differentiated and disruptive capabilities and technologies in those areas. Next slide. So I had mentioned being about 2 years in, this last year, closing out the year, we had some significant wins. And I think when you put them all together, these are all prime contracts. I'd like to say it's about $1 billion of new wins, but it's really, if you put all the numbers together, $888 million, right? And specific in agencies, right? So within the NGA, a big win for us within NGA, really doing cyber, digital services and what I'd say modern software engineering where we're taking store -- software data stores and modernizing them into cloud infrastructure, really tied to the geospatial side of the house. So again, when we say space, Space Command is a big customer of ours within the intelligence arena as well as NGA. If you pivot over here to the right-hand side, you see the DIA there. This is really the terrorism, the defense counterterrorism center. A big deal for us, too, if you look at all the vulnerabilities, the intelligence, the outsourcing components in there, a big takedown for us as well. And then when you pivot down to the INSCOM, they were a $234 million one. Another one, right? But this is really tied to what I would call intrusion and damage assessment, digital forensics and the human side of the business. So bringing cyber and intelligence together makes it a little stronger. And our customers really, really like the fact that it's not just cyber and it's not just intelligence. It's cyber and intelligence. And the last piece here is one of our classified customers that was very significant for Q4 of this past year. But think about this opportunity that we won as really modernizing a number of existing cyber and technologies within this customer set and then really being part of the new development of software and technologies. And so when we look at '22, not to go through all the market drivers and growth accelerators, I'll just say that space and cyber convergence is a big deal, just like cyber and intelligence conversions was a big deal about 3 or 4 years ago. And then I would say the technologies and the demand are always changing. You see here critical infrastructures on our other line of business, P&PS. People & Places Solutions is a key within advanced facilities, transportation, built environments and other, what I would say, critical infrastructure sectors. We believe that deploying our cyber capabilities in those areas help us provide that and be that end-to-end player. So that's what we're looking at in '22. And then when you look at the growth accelerators, you see these here, nothing foreign or unknown to many in the industry. But the advanced cyber training has been very significant for us. And we'll go into some details. But as the threat continues and the misinformation and bad actors start to continue to evolve, the training becomes the #1 priority for the readiness of the forces as well as our federal civilian side of the house. Next slide. So this is kind of bringing it all together. Who we are, right? We've got basically 4 capability areas: readiness, operations, insights and digital enablement center. And then if you look at readiness, we really kind of coined that with our advanced training, cyber resilience. And when I say cyber resilience, that's really the end-to-end cyber capabilities that we provide for customers. And then you see Ginkgo+, one of our IP, intellectual property, or offerings that we have that we have deployed in several environments. And that's really our cyber learning management environment. From an operations perspective, again, pretty much anywhere when you talk about operations, if it's information or mission ops, defensive or offensive and even space and counterspace operations, we're in those critical areas today. And we provide that end-to-end operational support in those areas. Another product we have, and we have a slide on this too, this KeyProtect, which is really a NIAP-certified dual data-at-rest encryption module that we've deployed on an Android device, being used in COCOMs, but very critical, again, when you look at data being a disruptor in that strategic asset to ensure that data is protected. Insights. I think everybody talks about analytics or AI and ML. Insights is our analytics hub, if you will. And it's really tied to the digital intelligence, threat intelligence, how we do collection, automation and then where our all-source analysts sit. We have a stack in Insights Stack that probably many have, but I would say our -- the difference with ours is a lot of ours will be deployed in accredited environment today and are being used effectively as well. And then finally, our Digital Enablement Center. Think about this as your hub or your marketplace to really look at new technologies, new solutions, work with vendors to develop distributed -- disruptive capabilities as we go into the market. Our numbers are on to the right. We're growing, as you can see, but we're not growing to the extent that we'll commoditize ourselves. We've been very focused and true to a deliberate strategy to really kind of stay in tune where the margins are, where the emerging trends are, and obviously, where the dollars are going. Next slide. So here are some -- just a sampling that we wanted to share, just we would say our differentiators within the market today. And you see some of the logos below where they're deployed. When you think about Ginkgo+, we provide one of the most advanced cyber training support to a number of customers, and this is classified and unclassified training that we do. And think about how unique this training is. It's 50 weeks of training. So almost a year -- a little over a year of training that we put these government officials through, and we're the ones -- Jacobs is the one who's leading the way there. We also have another component called the Cyber Training Academy. That's where we do our forensics analysis training, our incident response, SOC awareness, a number of other unique training courses that we develop. We teach, and then we obviously have a system that it relies on. And again, a number -- another contract that we do that on is called the Defensive Cyber Training Academy for the Air Force, but it supports all of DoD. KeyProtect. I mentioned it's a great NIAP-certified device, right? So again, as we talk about these solutions and products, right, we're not just developing them, but we're making sure that they're usable and deployable in these high barrier of entries. Cyber Insights, the stack that we talked about. I would say one of the takeaways here is we do a lot of threat detection and IoT exploitation, right? So you think about the missing information that's going on there, this is what the stack is able to do. And then to the right-hand side, you see the -- what I would say the subdued gray area. These are the BlackLynx capabilities that bring to bear. They've been deployed. They've been accredited. And the great thing we like is they're easily integrated into other environments. So I don't want to say it's out of the box in the scenario, but we can easily deploy these technologies and software services in other devices and locations. The last piece here, if you look at the mission analytics, you see the analytic tools there, right? A number of them, CyberLynx, SearchLynx, VisionLynx and SignalLynx, right? It really hits all of those core domains that really are the threats today. And so that was one of the other areas that we looked at is by the time we have to develop something like this, the R&D components and the technology, getting a company like BlackLynx that has these enabled services, allow us to deploy and accelerate faster. Next slide. So just to highlight, right, how we're split, 25% in the civilian agencies, 30% in the defense and 45% in our intel. I think for our civilian agencies, our real focus is going to continue to be Homeland Security and Department of Justice as well as Department of State. And then obviously, DoD and intel will be the primary focuses for us to deploy in the future. But as we evolve, I would say that the Department of State, Department of Justice and DHS become a big focus for us given the budgets and where they're going and plus our existing footprint through some previous acquisitions that allow us to penetrate that a lot faster. Next slide. And so just to close out before we get to Q&A, Sheila, because I know you're kind of burning to ask some questions here, we've been on a deliberate focus. Our strategy since I came on board is really to be market-focused, to bring in the right functional capabilities, to grow into areas that are higher barriers of entry as well as bringing in disruptive technologies and software and solutions. Cyber and intelligence, right, continue to be our focus. And then as we continue to grow and look to expand in an accelerated fashion, it's not just M&A, but I would say it's other areas of investments that we'll do such as venture portfolios where we're looking at other companies that have, what I would say, startup-type scenarios that allows us to get the differentiated thinking and newer technologies at a faster pace. All right. So I'll throw it over to you for any Q&A.

Perfect. Thank you so much, Caesar, for that overview. So the slides that I did not get to see until this presentation gave me a few questions. So I'm throwing a few additional ones in there for you. But I guess to start, you've talked about the cyber business, Cyber and intel being about $1 billion of revenues, 60% cyber, 40% intel. What really differentiates the 2 because we kind of think of them as the same?

Yes. No. So I think in our cyber area, really, it's tied to what I would say a number of capabilities such as training, right, the advanced training components in there. We do a lot of threat hunting as well. And then there's a number of security operation centers that we manage as well, right? So obviously, in the intelligence community, but very key to what we're doing. The deployment to what I would say our mission operations is really tied to our security and cyber areas, so standing up a number of sites globally around the world. It's really our cyber professionals that are warriors that actually go out there to make sure they're [ set up ] correctly. The intelligence side, Sheila, this is really tied to the IC agencies out there. I think as you look at this, we say that out of the 18 agencies, we're in 14 of the 18. And those 14 are prime contracts that we have today. And the work that we're doing is really unique, right? So I kind of look at it as within the COCOMs, all the J2 stuff, right, all the intelligence and analytics pieces that go on there. And then within some of the other areas within the intelligence arena, it's really a lot of the software development of tools and techniques and technologies as well as managing a number of systems and environments in those areas.

Okay. No, that's helpful, Caesar. And then maybe if you could just talk about some of the growth rates you've had in the intel business. You started 2 years ago. So give yourself some kudos for that growth. And how you think about the growth over the next 3 years? One of your peers that you formerly worked at do not give an intel guideline of the growth, but it's the customer base that's set to expand while Leidos kind of called out 3% long-term growth for that. So how do you guys envision intel and cyber growing?

Yes. No, I mean, it's a great question. I think what we do know is that the budgets continue to be sustained or increased, right, whether they're the publicly known budgets or the intelligence side of those budgets that aren't widely known. I think in our areas, we're focused on those mission-critical areas. So there's near-peer threats that tie to Russia, China, Korea, Iran, in those areas. And so we view the work that we're doing, whether it's our all-source analytics or it's our mission operations components, tied to those higher focused areas of where those adversaries are there and the near-peer threats are there. The dollars, right, they continue to flow, but we've been very, very deliberate to focus on those areas that, one, where we've made these acquisitions and they come with the relevancy and relationships and focus on those areas; but two, where we can bring in other capabilities to allow us to grow faster. I would say space is a big one, right, for us. When you look at one of our other business units that has a foundational space business and then you look at what we do, it's just a complementary capability that we have that really tie to the intelligence side of convergence within space.

And maybe a little bit to expand about that. You talked about your key customers with 25%, civilian agencies; 45%, intel; and defense, 30%. So maybe is it possible for you to give us some growth guidelines without talking about Q4 long-term growth for each of these customer bases?

Yes. I would say if you just look at the federal civilian side of the house, we know that with all the modernization efforts that are going on and all the ransomware and attacks that have been going on, that a number of dollars are going to be deployed obviously from DHS, the cybercrime components, obviously, to DOJ. And then we look at Department of State as a critical area for us, too, given the intelligence side of the house that we have. So that's why I mentioned those are the key 3 agencies that we'll focus on. That's where we see the budgets increasing tied to the work that we're doing. And so it's a big focus for us. When you look at DoD, it's really the Army specifically, the Air Force, really the 16th Air Force and the cyber and ISR community in there, and then the combatant commands, right, specifically CENTCOM. We've got some SOCOM components. And then when you look at SPACECOM, a lot of funding is going there, obviously, with the near-peer threats there. The intelligence community, those budgets continue to increase, right, whether they're publicly known or not. I would say the logos that you see on here that may not have the official logo in there, probably at their higher budget's standpoints from what we recognize and what we're seeing. And then NRO, from a satellite perspective, is becoming very, very attractive as long -- along with NGA given the geospatial components.

Can you rank order the growth for me since you're not quantifying it? I got to plug this into my [ model ] so...

Yes. I would say, DoD is going to continue to have their standard budgets, right? But we do see the intelligence arena, specifically NGA, NRO and some of the blacklisted clients that we have in there, is those budgets increasing. DHS is getting an uptick, but I think that's from a long time ago. They've needed additional funds to take on a bigger role within the community. And then justice with the cybercrime stuff going on would probably be another area that we're going to look at. So we're focused on the intelligence area. Defense is probably the second piece. Those budgets are standard, with little increase over year-over-year growth there. And then the Fed SIV is those 3 logos that I mentioned.

Sure. That helps. And then maybe can you talk a little bit about how you guys think you differentiate from peers? What are the areas you guys are focused on where peers might not be as big in terms of scale or they might be too broad or diluted? Can you give us some ideas there?

Sure. Look, you see our numbers here, right? When we look at the cyber and intelligence arena, right, revenue-wise, it is like a 60-40 split. But really, our capabilities, we don't have massive capabilities, right? So we're not commoditizing ourselves and doing 20 things or saying we can do 20 things. We certainly can, but we're really focused on these areas that you see here. And training is going to be one of our continued focus across the intelligence and the cyber arena. And then I would say the consulting and advisory becomes pretty significant for us, too. And that is really where we have our subject matter experts if there's a cyber event that's able to deploy and be able to provide that domain expertise, depending on where they're focused and what they're doing. The other pieces in here, from an operations perspective, we view ourselves as focusing on the operation centers, not doing business operations, if you will, just to manage the network. We want to be at the heart of the -- of these organizations. And whether that's an intelligence operations center, a security operations center or a space operations center, those are the core areas that we're focused on, those operations centers. From an analytics perspective, we really look at it from a threat intelligence perspective, right? So we can ingest anything just like everybody else, but it's really tied to collecting information from the different multi-intelligent sources and being able to differentiate ourselves faster with the data we have to provide that threat intelligence ahead of time versus being in a reactive mode. That's why we have threat intelligence there, and then we have digital intelligence. And digital intelligence has really taken human intelligence, signal intelligence, [ massive ] intelligence, right, and putting it together, right, into a digital arena that really kind of collects all that information and pushes it out in multiple dashboards. And then this -- you see the Digital Enablement Center. We really like that. And the hub here is in Reston, but we actually have spokes is what I'll say in locations like Augusta, Georgia where the cyber hub is; Austin, Texas, where you guys know Army Futures Command is; and then Huntsville, where we have a big footprint in there, too. And one of the primary reasons for doing that is to really look and attract what I would say junior talent, right, rather than locations here in the D.C. national capital arena. So we've really looked at a number of areas to connect with academia and bring in that junior talent to help us kind of look at things a little differently.

Okay. No, that's super helpful. I was just thinking about a question that I'm going to throw in randomly, but where is your geographic? You said 19 locations. Like how big is Huntsville for you guys? Are there any key locations you want to get bigger? Or is that not a focus at all?

Yes. No. So right now, our core locations are here, right, in the national capital region. I would say that's where probably 70% of our work is and our people are. We do have -- Huntsville is really where what I would say our NASA team is, right? So they have a footprint there. Obviously, our work with the FBI is relocating there. And so that's where -- it's great we're not new to the environment. That's where we're going to grow. But the 2 locations I would say that we're really looking to expand into is Augusta, Georgia, right? If you think about Fort Gordon and the cyber hub for DoD. So that's -- you'll see soon. We have a footprint there today, but we're really looking to expand and open up our office probably, I think, it's end of this calendar year. And then San Antonio, right? Even though we do have a location in an office in Austin, San Antonio being the 16th Air Force ISR and cyber hub, we felt that, that was a big area, too. Our customers see that, too, right? They are redeploying some of their assets to those locations, right? So it's not one of those where we're just picking. We're working with our customers to make sure that we grow with them as we grow ourselves.

Sure. Thanks for that color. We're just thinking of field trips ideas up here. So -- and then getting more serious, you had a few recent wins. What drove you guys to -- I think one of your big wins was against ManTech, and you unseated them. Who do you view as your key competitors? What gave you the edge in your view?

Yes. No. I would like to say the Washington top 10 are our competitors, right? And I think we naturally have to really -- we can't leave any stone unturned, right? But the areas that we're focused on, and you're referring to the ManTech one, which is the INSCOM one, the $234 million one, right? ManTech has been one of those that has always has a great capability, a great set of focus areas as well. And so as we look at our pipeline and how we're going to market and competing, it's really been the ManTechs, the CACIs, the Booz Allens, the BAEs. We don't see Leidos in our area that we're doing today, specifically focused in the areas that we are in. But naturally, they are a competitor given kind of what they've done over the last 2, 3 years. But this goes back to a number of acquisitions that we made and really bringing all these capabilities together, right? What we had was we made some acquisitions, but we didn't really recognize, in my opinion, the fruits of the -- of what we actually acquired. And when we brought them all together into this business unit, it made it stronger and powerful. And the relationships that we didn't know we had, we just started looking at, wow, we've got a great footprint here. We've got people with relevancy in these areas. And when you combine this together, it just makes us 3 or 4 times stronger than before. So going from an individualized focus to a stronger together focus really allowed us to attack and win these 4 opportunities over the last year that were significant to us.

That's helpful. And then maybe if you could talk about -- CACI has talked about software being a competitive edge. How do you envision owning IP being a differentiator for Jacobs? And do products create any edge? And on BlackLynx, I don't know if you mentioned their product split, but it seems like they do have some product offerings. So if you could talk about that a little bit.

Yes. So we certainly aren't going to be a software factory that creates and done a number of software services and products and things like that. We really looked at '21 -- FY '21 as an area to look at, broadening our focus on products, but making sure as we look at products and software that as we build them and/or acquire them that they're easily deployed into these high barrier of entry environments and as we look to acquire, that they are proven, meaning that they're accredited. As we know, accreditation takes forever, right, and that we're able to make sure that other agencies or organizations are allowed to use that, right, not just built for one organization. And so the BlackLynx acquisition really brings additional products and software to the table. The previous acquisitions that we had really gave us a foundation on our training, making us an advanced training environment. And then there was a number of other products that we had that we hadn't really taken advantage of that we are now through the Digital Enablement Center, but it is a differentiator. If you look at opportunities we're going after or just the pipeline of opportunities there, if you're able to bring a software or a product into a opportunity like something within DIA or INSCOM or NGA, that allows them to use something without having to build it and spend time on it. The margin profile is attractive, but the mission focus is attractive as well. And the customers really like that, especially when they find out that others are using it, and it's been accredited and employed already. So it is...

And then maybe -- you kind of talked about this a little bit, so I don't want to be redundant, but how much of the IP do you guys -- what IP does Jacobs own today? And where do you envision that going?

Right. So there's a slide on here I think that really kind of showcases what I would say the core IP that we have today. And so we have what I would say a core set of products here, software as well as technologies. And you guys know that the investments to keep these things running is not cheap, right? But we're invested into making sure that we provide the right, what I would say, support to keep these going and advancing them, right? And so when I say advancing them, I mean, bringing in junior talent to other people to look at these things to make sure that we're not behind in the market as we deploy these. Because sometimes, as you deploy these and you just focus on 1 or 2 customers, you're not refreshing that technology. So these are the core products that we have. I think on the right-hand side is the BlackLynx core set of products, and we envision those continue to move forward. I use the term productize. So a number of these are being productized, right, where you're able to redeploy licenses and subscription models. But again, it's not going to be a software house or a software factory. It's going to be unique to the mission that we're doing into a core set of customers and then being able to redeploy that across other clients and customers within Jacobs.

And then maybe if we could talk about -- you had a slide on this, the acquisition evolvement for Jacobs. You guys did FNS, Blue Canopy, KeyW, Buffalo Group. And each of them has added a capability. Can you maybe see -- like how does this -- how does your focus evolve from here? And when we think about cyber and intel and your customer base, like what are the capability gaps that you're really missing?

Yes. No. I mean, look, if you look at the -- from 2014 to where we're at today, it's tremendous, right? And I say it's an explosion in a sense because if you put all this together such as what we did, we're in a lot of the core markets that would take us 12 to 18 months or longer to get into if we decided to just build organically. So inorganically, being able to acquire some of these contracts and capabilities allowed us to get there a lot faster and smarter. And I think as we look at going forward, when you put all this together, right, I think we're going to continue to really look at additional products and capabilities. I think we've got a number of great leaders, a number of great people that are deployed in these environments with relevancy and reputations, which are key. And what we don't want to do is, Sheila, is continue to just grow for the sake of growing. We've always been mission-focused and very tied to our customer sets. And really, when you look at where we're at today, I mean, it's pretty significant from where it was 3 or 4 years ago in my opinion.

No, that makes a lot of sense. And then maybe if you could talk about what are the major -- we talked about this a little bit at the start, but what are the major cyber threats facing the U.S.? How does the budget evolve? I think you mentioned like Department of Homeland Security. DHS had some funding a while ago, and that's what it's going through right now. Where should we think about changes to dollar spend?

Yes. No. I mean when we look at just talking cyber specifically, there is obviously a significant increase into DHS. But I think they're probably around that $2 billion or $2.6 billion going into '22. And their role has evolved to with all these threats going on ransomware, bad actors, threats within different critical infrastructure components. And so we look at that as a significant area. We do have a presence on the intelligence side of the DHS arena. And so we're going to evolve obviously into that critical infrastructure cyber side of the house. I think from a DoD perspective, the cyber budget continues to increase. I think it's about $10.4 billion. And it's really focused on what I would say the operations component for the cyber operations. And then I threw in space operations because there's a lot of cyber interactions in there with space convergence. And so that's our focus on the operations center, that side of the house from a cyber standpoint. And then on the intelligence side, this is pretty significant now, right, with the intelligence arena. When you look at FY '22, if you're familiar with the Intelligence Authorization Act, right, the IAA, as that was passed and funding really got pushed out to -- it was really in core areas: commercial imagery, analytics services were really tied to GEOINTs, counterintelligence, detect and counter cyber threats and ransomware, and then what I would say emerging threats across the market. So if you think about the additional funding going into the intelligence arena, it's kind of tied to the cyber side of the house and the space side of the house as well, just from that standpoint. So we kind of feel that the budgets are in the right areas that we're focused in. If you see and you look at the wins that we had, it's tied to those budgets. And our strategy is holding from what we said we would do 12 months ago.

That's great. And then maybe if we could dig into the concept of cyber intel across multiple domains. To normal people, what does that really kind of mean?

Multiple domains. So yes, yes. So many domains, right? So land, aerospace, sea, cyber is a domain as well, right? And so we look at it, at our areas, as that specifically when you think about data being that strategic asset, right? Data is everything, whether that's on the land, on sea, in space or just abroad within big cyber from that cyber domain perspective. So multidomain in our perspective means that cyber intelligence, our capabilities can play across all those domains I just mentioned, really tied to data, protecting and defending that. And I really look at data as a weapon now, right, just because of the information and the way you respond to the data you receive. And if we don't look at it that way, we just continue to just look at data as just information, then we'll be -- the threats will continue to increase, and we'll be not on par with our adversaries, if you will.

I have 2 audience questions, and then I'll hand it over to Jonathan too see -- Jon, if he has anything else. So I'm going to maybe just ask in terms of cyber and intel, we get a lot of focus on salaries. Maybe you could give us an idea of the background of some of the employees you employ. What kind of -- if you're willing to divulge that, which I don't think Jonathan will let me do this, but salaries look like versus other parts of the IT services market.

Look, I think you've heard this like it's a talent war out there. I mean it's a -- we've got a great group of professionals. And I think for us, whether you're a cyber engineer, you're a data scientist, chief data architect, you're a information security officer, you name it, right, these positions and the work that these folks are doing, one, they do it for the mission, right? So they're in it for the mission. But there are commercial companies like, and I'll use the word AWS, that's moving into the D.C. area that we are challenged with, right, competing with because their requirements may not be as stringent, meaning that maybe some of our folks are on SCIFs or classified spaces all day. So their mobile device, they don't have all day, right? And you can go work for another company like an AWS and be able to do that. I'd say our culture here at Jacobs is really the reason why our folks have really been the key or the backbone to the foundation of where we're going. Salaries continue to increase, right, but it has a limit, right? And the limit to me is -- from a Jacobs perspective is a lot of people -- the majority of the folks are here because of the mission and the culture. The salaries are the salaries, and you can go and get a bigger salary, a 10% increase. But at the end of the day, is that where you're going to be in the next 5 to 10 years is the pitch I always say. And a lot of the time -- for a majority of the times, the folks come and take a step back and say, hey, I didn't realize putting a value on culture and our people add a lot to the base there.

And maybe one more just kind of topical today. Obviously, you guys announced the acquisition of BlackLynx, and ManTech acquired Gryphon, which is a private company I don't know much about. First, in terms of Jacobs' strategy and given your acquisitive culture, how familiar are you with the assets before you acquire them? And second, how do you envision the like -- or how large is the opportunity set of potential assets out there for cyber and intel?

No, it's a great question. I think when you look at that journey chart, I mentioned that when we made all these acquisitions, a number of them before my time to post my time, when you put them all together, it's a very powerful, powerful group of capabilities, group of contracts, but most importantly, people, right, that really were the heart pulling up all these opportunities together as far as these companies that were acquired. For us, I think we'll continue to look at acquisitions, specifically niche-focused within the cyber intelligence arena. So if you could look at the trends, I think our range is probably between the [ 200 to 300 ], maybe a little higher depending on the asset that we're looking at. But that's the commitment that we've had with the company as part of our strategy going forward is that if we were to accelerate in areas in the market, right, without commoditizing ourselves, the commitment has been there to put dollars out there for us to make those types of acquisitions. The other thing, Sheila, is one of the new things that we're doing, too, is really getting involved in these venture capital funds where you're looking at these portfolio companies that have these startups. You'll see some headlines in the next couple of weeks. But these are companies that in that Series B and C standpoint that we're investing in today to be part of that change of technology and solutions.

Great. With that, I think I'm out of questions, and this was super informative on the cyber and intel business at Jacobs. Jon Doros, if you have any other questions or have anything, let me now.

Yes. And I'll just -- one thing and I'll just throw it. I want to quantify one of the things Caesar said is that some of our best retention rates are actually on some of the most mission-critical projects where you'd think that that's where you'd have the lowest retention. It's surprising. People really just want to work on the coolest stuff, and it's really some of the other areas that have the higher retention, which we can manage with remote workers.

That's great to hear. Thank you, guys, so much for involving us in this and educating us on your business. So we really appreciate the time, and thank you for everybody for dialing in.

Thank you. Appreciate it.

Thank you.

Thanks, everyone. That concludes our call.