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

Good afternoon, everyone. Thanks for joining us on our virtual conference here. We're very fortunate to have with us representatives from Jacobs, who many of you know. My name is Gautam Khanna, I'm the analyst at Cowen who covers Jacobs. With us from Jacobs today, we have Caesar Nieves, who is the Senior Vice President and General Manager of the Cyber & Intel portion of the CMS business; and as many of you know, Jon Doros, who's SVP and Head of Investor Relations. Caesar, I'm going to turn it to you. And after your opening remarks, we'll move to Q&A. But welcome.

Thank you. No, and I really appreciate the time. I think we've prepared a couple of slides just kind of want to run through our journey and kind of tell you where we're at and then look forward to some lively Q&A at the end there. So Slide 2, as you guys can see, Jacobs all the way back to 2014 has been on a very, very, what I would say, deliberate journey. And starting really to accelerate that journey in 2019 with acquisitions of KeyW really to advance our areas within some intelligence areas as well as space and I would say, law enforcement and counterterrorism. So that was a significant, what I would say, acquisition that bolstered some of our organic business that we have today. And then we moved into 2020 with the Buffalo Group, and we said, we want to keep the momentum going, and we want to really expand into some other areas within the intelligence arena as well as pulling some, what I would say, DevSecOps capabilities within that community to really modernize a number of applications and systems that are pretty, what I would say, mission- and national security-centric. And also with the Buffalo Group, gave us a big footprint in the COCOMs and the COCOMs really being in the J2, the intelligence arena. And then as we were looking beyond 2020, we said we've got a sound and heavy footprint in just true professional services. How do we pivot and look at technology, software, platforms and different, what I would say, solutions that enable us in these, what I would say, high barrier of entry markets? And so our recent one of BlackLynx acquisition back in November of last year really created, what I would say, a technology and solutions platform for us that's in the IC community. And so if you think about the IC community, these are products that I'll go into more detail in the next slide, but products that have been accredited and that are being used today. And then finally, when you look at '22, where we're at today, you guys may have heard the last 48 hours, we did make an acquisition, StreetLight Data, not primarily in this unit today. But if you think about that acquisition, it's really tied to kind of our theme of getting into data security solutions. And that acquisition is really tied to more of the transportation market and sector but a really fascinating acquisition for us. And I think as we go forward, that is part of our strategy of growing. Next slide. So just who we are today? I think when you look at Cyber & Intelligence, our business, as you can see, a lot of organic as well as inorganic components here, really tied to, what I would say, delivering and operationalizing a number of organizations that we support today and bringing those software-enabled services. We're about a little less than 4,000 employees today. You see the mix here of about 2,100 and 1,600 from cyber to intelligence. From a revenue perspective, a little less than $1 billion. And you guys know dealing with the government market, right, the margin profile, specifically for us, are in that 10% to 12%, right, kind of capped at that area just because of the government work that we primarily do. But when you look at how we deliver today, we really go to market and deliver services, and you can see these 4 pillars, if you will. And I'll just highlight a couple of things. Readiness, we really look at that as more of our -- preparing the people and processes and technologies. One of the big things we do is cyber training. And so we do this cyber training using our Ginkgo+ platform that was part of our KeyW acquisition. And when we think about the cyber training, think about it in 2 components. We have a training, what I would say, of course, that we put about 200 government folks through to 55-week course, right? And I would say half of the folks fail halfway through the cycle. And that's actually a good thing considering the training that we do from a classified offensive standpoint. The other training we do, and we push probably about 2,000 people through this, is a Cyber Training Academy where we do a lot of cybercrime training. We've got about 10 courses there from forensic analysis to log reviews. If you think about any incident in law enforcement or on the federal side that happens, we deploy these teams to really do the analytics and the forensic analysis of those situations. And so all in total, we feel that we've got a best-in-class training and learning management environment and then cyber training courses that we do for the government. On the operations side, a lot of things we do are really tied to operation centers. And so when I mentioned the Combatant Commands, the information and intelligence operation centers, that's the heart of where we're at today. And then from some of our classified customers, we do run a number of the offensive and defensive operation centers as well. And so again, our focus has really been to really pivot into those high-commodity, national security, high-end areas and really kind of expand as we go forward there. Insights. I think a lot of companies have big data or analytics components. Our insights and analytics is really tied to, what I would say, the threat intelligence and all source intelligence. And so what we do is we really kind of align with the integrated intelligence centers across the federal market. And so when you think about things as Dissemination-as-a-Service, collection automation, that's what our analysts do. There's about 1,000 of those folks. And it's really tied now to multisource, multi-intelligence, all the way down to economics, looking at the financial components and the counter drug and crime cartel components now with a lot of things going on. So pretty fascinating things that we're doing from an insights perspective. And again, a number of tools that we use as well to support that, what I would say, speed and agility as we're kind of looking at that actionable intelligence. And then finally, probably one of the things that I'm the most excited about is our digital enablement center. And this is really where we take our technologies, our products, our software platforms, our vendor-strategic alliances, and we really build, what I would say, that digital ecosystem that we deploy to our clients today. And so think about -- you see some of the logos that we highlighted we're -- who we're working with. And I'll just kind of talk about a few of them. When we talk about remote sensing, that's a partnership that we're with HawkEye 360. So again, very deliberate, very focused on specific things like that. Advanced analytics, that's the Splunk, the Palantirs, the IBMs, very niche-focused on what we're doing from their platforms tied to the environments that we're in. And then when you talk about software-defined networks, right, think about NetAbstraction, again, another start-up that we're involved in and really just, what I would say, is allows us to push the technology out faster and then expand in the areas that we're in today. Finally, supply chain. I think everybody is talking about that. Interos is one of the companies that we're working with as well. And so you look at that mix of companies that we're dealing with. We've got those legacy ones that are out there. We've got those near-term start-up ones, and then you've got Jacobs really kind of being that company to help kind of deploy them into specific markets that we're in. Next slide. So I spoke a lot about that digital enablement center. This is just a highlight of a number of our products that we have. And I think we talked about Ginkgo+. KeyProtect is really a dual data encryption module that we have that we really are deploying on our mobile Samsung devices. That's really being used in our COCOM environment, specifically CENTCOM and SOCOM. And think about these devices as your forward deployed, your data is encrypted and safe and protected. Our Insights Stack, again, another series of tools just like what you see all the way to the right, our mission analytics tools. Just a series of tools that we have that we support for our clients. Some of these are pushed out directly for those customers, but our baseline of what we have is developed within Jacobs. And then the 2 middle here, you see Blackstack and Knackstack, right? Those are really 2 products that are part of the BlackLynx acquisition that we recently did. So Blackstack really becomes more of that data-processing engine, right, all the way at the edge, collecting that data from multiple sensors we have out there. And the Knackstack, look at that as more of your hybrid cloud platform. Both of these are deployed already in multiple areas within the IC community. And so we're excited that they're -- they've been deployed in there and that we're able to take those now to other markets as we look to drive the strategy for Jacobs going forward. The next 2 slides, and I won't spend too much time because I know these slides are available, and we might want to get to some questions soon, but just give you some details on Blackstack. The next slide is Knackstack. And again, right, when we acquired BlackLynx, one of our goals was to ensure that the products that they said they had were fully deployed and accredited and that we'd be able to take those across our commercial and critical infrastructure markets, meaning our other line of business within Jacobs. And so those are very deliberate, and we're moving forward in less than 60 days of that acquisition and integration going on today. Next slide. Here are some highlights. We really closed out 2021 on a strong note. However, with everybody else knows this, right, the CR is definitely impacting our ramp-up for these, but these are just some highlights of the last 4 large wins that we had closing out 2021. Starting from the left, this is with NGA, right? And this is a big contract for us where we do a lot of data store transformation, software migrations and really, what I would say, modernizing a number of the software applications that are within the NGA environment. So pretty exciting for us. There's a lot of partnerships that we deal with, too, if you think about companies like a Maxstar, even in AWS and things like that just because of where the data stores are served. But we're the ones leading this for NGA and very, very excited about that. If you look on the right-hand side here, the $184 million with the DIA, I can't specifically tell you that specific customer, but this is really where we have a lot of targeting and watch listing with a number of our analysts looking at those integrated intelligence centers and components within the field. So this is where a bulk of our analysts sit, and then we use a lot of collection automation and some of the automation tools to spit out that data and push it out. If you drop to the bottom, a pretty exciting one here is really on the Army side, but this component is more Army-driven but DoD-focused as well. These is where we do some damage assessments. We look at a lot of forensics, and some of the human intelligence targeting happens within this. A lot of open source components that we look at as well, as well as kind of the social cultural analysis that we do, too. So think about our adversaries, the China, Russia, Korea and things like that, a lot of this stuff is looked at within this arena as well. And then the final one was this classified customer. This is a very exciting one for us because this is a contract that we're actually able to really work with this classified customer and look at these emerging tools, kind of do some analysis of those tools and actually help kind of develop additional modules for tools that are existing to forward hunt in areas to really kind of look at where the challenges are from a national security perspective. And I think the next slide here, how we're split today. I've mentioned we do have a nice hybrid mix. Probably a little bit about half of our work is in the intelligence community. About 30% you see here is in the DoD, really tied to the COCOM specifically. And then when you look at our fed civ, we are making some adjustments. You see a lot of logos on there. I would say, going forward, our primary focus is going to continue to be the Department of Homeland Security and Department of Justice. And within Justice, really, the FBI, right? So the FBI becomes that core piece for us. And that will be our focus from just a federal civilian perspective as we kind of go forward. And then our last slide, I think it is, Jon. So just to wrap it up, right, before we get to Q&A, we've been definitely on a deliberate journey really to deliver and operationalize a number of areas that we're in. We are morphing into more of that software-enabled services area, as you can see with the BlackLynx acquisition, StreetLight Data, although not directly applicable to the cyber intelligence community, but more software-focused. That's where Jacobs is really pushing and going. And then when you look at just cyber and intelligence, again, right, the core pieces that I had mentioned, really looking at products and technologies to help accelerate some of the things that we're doing in that market. We'll continue to look at M&As. That's part of our growth strategy, but our organic growth of the foundation that we've built today is, what I would say, if we didn't have the CR, I think we would be growing pretty significantly as well.

Right. Are we ready for Q&A, Caesar and Jon?

Sure. I think we are.

Right. Cool. So first question, I did want to just follow up on your last point on the CR. And how has that actually slowed the ramp of some work, if at all? What about contract award pace? Has it slowed the adjudication phase on some of the bids outstanding?

Yes. I mean unfortunately, it has slowed the pace of our speed of growth, right? So I showed you the last 4 large wins that we had. And we expect it to be fully ramped up in Q1. And with the incremental funding that's going on, all those dollars aren't being obligated. So I would say the great thing is we've won the contracts. Now it's a waiting phase for us to get the full funding. I think we anticipate probably Q3 to have that full funding if everything goes well, right? I think they extended it again or hold down the bus. But as that moves well, then we'll go there. The other piece, Gautam, is that we've probably got about $2 billion in source selection today. And naturally, we're not winning all $2 billion, but we do expect to win a high percentage of that. And then as we kind of go forward in our rebids for fiscal year '22, I anticipate our submits, meaning opportunities we're going to bid, at about probably $3 billion. And of that $3 billion, about 10% of that is part of our rebids or our recompetes.

So as a recompete year then, this is actually -- is it -- it's about 30% of the business base that would be up for rebid this year. I mean...

Yes. I would say if you -- collectively, total contract value, if you put the -- I think there's probably about 3 or 4 of -- probably 3 significant ones. It's probably ranging probably about $600 million in total.

And in terms of the $2 billion of source selection, have you seen -- like what do you expect to happen? Let's say we have a CR that's in place until the end of March, call it, and then we have our national budget passed, is there like a backlog of stuff that you think will like finally get awarded all at once and we'll see a fairly quick ramp? Or is it going to be -- yes, how does this logjam break? And what do you think happens right after?

There definitely is, I would say, a bottleneck, and we do expect to see an explosion of funding. But as you know, right, I mean, as things get awarded, you've got that automatic protest cycle that goes in there, right? And that just seems to be -- with an industry, it's just normal, right? Just expect that 90 days to happen. For us, of that $2 billion, there's probably -- I think the total number of bids are close to a dozen. There's 3 or 4 core ones that we do expect to win. And that ramp will be similar to what we're doing today, right? We don't expect that ramp to happen fully in this fiscal year, but we do expect to end the year in a positive trajectory from that standpoint.

And how are you managing ahead for that growth? Are you -- do you guys have contingent hires already signed up? Or is it once you win it, then you'll figure out how to staff it and then hire?

Well, it's a talent war, right? And I would say we've got -- our attrition rate within just this business is probably similar to our industry competitors, right, in the teens. And so when we look at these bids, our anticipation is that the incumbent capture is at least 95% of those incumbents. And the only difference there is that traditionally, where we've had a PM that we're looking at, right, those PMs we bring on ahead of time, where those leaders would be going to have it ahead of time to help kind of war game and work the initial transition pieces. Now we're in this wait mode because you bring folks on 6 months early, and now you're waiting for them. But the great thing is, I mentioned that $3 billion of what we expect to submit, now they're deployed on those opportunities as well. So definitely, it's positive for us.

Do you have a sense for -- of the $2 billion of outstanding bids, how much -- is it all kind of takeaways from others that currently are doing this work, either the customers doing it in-house or if there's another contract? Or are these entirely greenfield opportunities? Like what percentage would you say...

It's a mix. And let me just take it this way, is that what we've seen is that now contracts are being consolidated into one contract as they were split up. So it's that full cycle, right? So at one point, it was everything is broken up. Now there's $1 billion bid is now broken up to 4 bids, and now we're seeing that come back together in some instances. And so -- and there are some new pieces to it. And the new pieces are really tied to, what I would say, more on the space side that we're doing, more of the space intelligence that we're looking at. And then, as I had mentioned, a lot of the sensor-type stuff or the technology stuff, those are adders that we're looking at now, too, that are part of that submits that we're waiting for award.

That makes sense. I was also curious on the recompetes that you're facing. Are any of these small business -- you've done a lot of acquisitions in recent years. And I wonder if there's still a tail of contracts that were won under small business set aside or some sort of preferential treatment that are now being completed full and open. Do you have any exposure there?

Well, that's -- I've been on Board since 2019. And that -- that has been one of the main focuses. As we look at acquisitions, if they're smaller acquisitions, looking at that small business mix. And the last 3, meaning KeyW, the Buffalo Group and BlackLynx, there are no small business contracts under that, that we are a prime. We are subs with some small just like others on those, but that are in our areas where we're a prime. And that was a deliberate thing, too, right? Because just as you know, it looks good in the beginning, but 3 years later, right, normally, those small business contracts -- and we ran into that with a Blue Canopy contract we had on the civilian side, where we acquired Blue Canopy, and that small business contract was supposed to go large business full and open potentially. And just with the small business requirements and the size of that and those small businesses, it just didn't make sense for the government, even though we were pushing, for them to do that. So as we go forward, our forward-looking focus is really looking at those niche companies and making sure that there's no small business exposure that directly would impact us as we do that.

And can you talk about how demand has changed since the U.S. withdrew from Afghanistan in late August for your business?

Yes. Well, for us, it's actually -- I talked about the integrated intelligence centers, some of the watch list and things that we're doing on -- with some of our customers. We've actually increased in volume. Just because if you think about how we exited out of Afghanistan and the number of folks came, if you think -- I think at one point, there was close to 21,000 folks that left the country. And so a lot of our teams are not just betting these folks but were actually part of a technology that's being used to bet those as well. So you've got your analysts, and then you've got your technologists. And so the great things with what we're doing is we're doing both.

That's actually interesting. So on a net basis, it's actually expanded because...

Well, for us it has because our folks have always been on the analysts side, right, in the betting process, and then our technologists are deployed to really help with that betting and accelerate that. So...

Interesting. Okay. I didn't realize that. I was going to also ask, on the outset of -- in your opening remarks, you mentioned the size of the business, just under $1 billion at 10% to 12% margins, which are sort of capped. I am curious, those are actually fairly high margins even for an intelligence-oriented business. I think about ManTech, for example, they're doing 6.5% EBIT margins, and they have 45% of their sales to intelligence agencies. What is sort of the mix of revenue, cost-plus, fixed-price, T&M? And how has that evolved with all the acquisitions? And how do you expect that to evolve over the next couple of years as you layer in more products and the like?

Look, we'd love to have more fixed-price contracts. I mean -- but I would say, in the current book of business we have, our fixed-price contracts, really, I think it's less than 5%, and that's really tied to a recent acquisition that we had that came with those fixed-price contracts. The business today is all tied to T&M and cost-plus, majority on the cost-plus side where you have those fees that are capped. We -- and we've been deliberate, and then I use that word again to focus on, what I would say, those high margin, high barrier of entry pieces. So in other words, Jacobs is not doing the day-to-day operations and management of systems in an intelligence center, right, the O&M or the system administration of that. We're doing more of the analytics, the tool development, the DevSecOps stuff within those centers. And so those draw a different margin profile than, I would say, when you look at our industry competitors, some of them might be managing the IT for these operation centers. And those margins are -- helped us Tier 1, Tier 2, a lot lower than what we're doing.

On the M&A front, you guys have been fairly active in your division, especially. Are you seeing any attractive, larger properties kind of like the KeyWs of the world pop up? Or is the pipeline full of mostly of the recent kind of BlackLynx, Buffalo Group, that size or less?

Yes. I think yes, yes to all. But our focus has really been in that $200 million to $500 million range just because of as we integrate these, we certainly can go after the bigger ones, but then I -- our focus is we don't want to be commoditized. And so we're going to acquire to bolster us in certain areas, whether that's a technology or software or give us a larger footprint in a number of market areas. And then I'll say, Gautam, the other piece is, we've actually really spent a lot of focus time to really look at venture capital, right, start-ups and putting a number of dollars aside to really work with start-ups that have, what I would say, emerging technologies that our customers are looking for, we're looking for, and it's just speed and agility that they come to bear. So Hawkeye 360 is one; NetAbstraction, I have mentioned; and then Interos, right? Those would be kind of an example of some initial ones. And those are new for Jacobs, right? New for Jacobs is looking at things like that, but it ties to our strategy as really kind of morphing from that pure-play engineering to that solutions and software company.

That makes sense. One other question I was just thinking about because we've talked to a number of other government services companies over the last week. They've mentioned -- a common theme is limited skip access, limited access to customer sites where normally the work is performed. And I guess, one of the things we've heard is the DoD one and the COVID mandate was sort of priced -- the vaccine mandate, I should say, the density within DoD customer sites was limited. You couldn't have 40% occupancy. You had to have 25%. And that actually impacted billability among a number of contractors. I'm wondering. Are you seeing that? Did you see that? Is there any residual kind of COVID impact that you can talk to that's kind of impairing billability right now?

Well, the great thing is a lot of -- majority of our work, if not all of it, has been really mission-focused and -centric. And so the only challenge we had was that we went to shift work, right? And so because of the social distancing and limited number of folks you could have in there, we ended up going from an A to B. I think we call -- some of these depending on the customers, we call them different color schemes, but it was about 3 shifts. And so it was a culture adjustment for our folks. But if you think about the work that we're doing, all those folks supporting these customers, are all mission-focused, and that's what they live and feel. And so we adjusted there. Now we've adjusted back to kind of the normal routine of having the folks in the building. But what we did find is if we had more skips, we'd be able to fill them easily. And so that is now -- if you see in our offices, 19 offices, about 23 scales. And so we're looking to -- because of the time it takes to get a skip accredited to really focus and put some capital to place some bets on what's to come because the skips will continue to be really, really a focus for us. And we've also looked at locations where we're getting ready to open up an office in Augusta, Georgia, where you have the cyber center for the Army, really on DoD, a lot of the intelligence pieces out there as well as in San Antonio and Austin, Texas, where we have another piece of our intelligence and business moving. And so we're thinking ahead, and we're looking to -- those offices will be open probably in the next 6 months, and they'll have skip components. The other thing I'll throw out there and my last piece I'll say is now that we can have these skips located in different locations, our customers have co-use, it's easier for us to attract talent, too, now. So now we're attracting talent in Augusta, Georgia; San Antonio; Colorado Springs as opposed to just here in the National Capital Region. So I don't want to release too much of the secret sauce, but that's really a key area for us with regards to talent.

And presumably, it allows you to bid at a lower price point.

Absolutely.

Because the wages are lower. I was going to ask on inflation broadly. We have -- every company we've covered has talked about labor inflation as an issue. And I'm curious how you're guarding against that. I know you have a big cost-plus mix. But how, if at all, has this impacted you and have guarded against it?

I haven't seen any effects really on the labor inflation from our standpoint. I am not something that has really kind of risen up as an issue for us. So not much for say on that from our -- from the business that we're running, that standpoint.

What about voluntary turnover, which is sort of related? Has that picked up at all in recent months?

Well, I think that once the pandemic ended, right, or -- we're still in the pandemic, I'm not sure, right, pre-pandemic, in the pandemic, post-pandemic, just with our business, attrition is always going to stay in the teams. I think we've got average to best-in-class benefits in some areas that we have just within the markets. And then I think when you look at Jacobs, one thing that's happened during the pandemic is a lot of our folks in the intelligence arena and cyber arena that's traditionally federal and DoD, taking those skill sets into the commercial and critical infrastructure markets and be able to do analytics for a water treatment facility or transportation organization and do it anywhere, not in a skiff, is very, very exciting that they know those opportunities are there. So that's part of what we're calling upskilling and reskilling some of our talent within this organization as being able to give them opportunities to take the skill sets they're doing today for a classified customer and doing it in the health environment or the finance district and things like that.

One of the things -- you've talked about the CR and it's been a little bit extended. Maybe this is a question also for Jon. But just generally, when we think about the ability to hit numbers this year, I mean, it feels like a lot of things are sort of out of, every one of the companies that we cover in the space, their control because you don't control the timing of when the budget funds flow, when contract awards get made, when GAO protests are resolved, et cetera, et cetera. Do you feel like at the -- given where we are in the year, that there's clear line of sight for the CMS segment broadly and the C&I division within it to achieve those numbers? Is there a lot of cushion? Or are we kind of -- a lot of things have to kind of come in at the right time for us to get there?

A minute to jump on in that one real quick, Caesar. So...

Yes. I'll let...

I mean we definitely highlighted the Cyber & Intel business today because it's probably one of the faster-growing businesses we have inside of CMS. Remember, CMS is $5 billion of run rate revenue. And really, this is the one business that probably has the most shorter cycle type of contracts. The rest of the portfolio is all kind of, let's say, funded multiyear recurring contracts either at NASA, some missile defense agency or at DOE. So I'd say we feel pretty good about hitting the forecast, and really, Caesar's business unit provides a lot of the upside relative to the expectations. But I think we derisked the forecast pretty good. So now Caesar has his number.

That's the last statement. Yes. I mean, look, we -- our business is transactional, right, 3 to 5 years and the other pieces of CMS is more of 8 to 10 years and beyond. And so we're doing a lot of things different as far as speed and agility, but yes, we do have that pressure on our end to move faster. So...

One of the things I was also thinking about -- so you may have heard ManTech. ManTech is a public company, but they were talking about the Chairman and co-founder of the company, potentially putting it up for sale or doing something. You guys did a huge deal with KeyW years ago. Is there -- you mentioned $200 million to $500 million sort of a sweet spot of M&A for you guys? But is there any logic to -- industrial logic from where you set of getting really big quickly? Like I'm not saying ManTech specifically, but a company of that size, a KeyW-type acquisition. Is there any white space that, that would fill? Is it any -- would it give you some capability that would allow you to really accelerate organic growth based on the quality it would bring as a combined organization with someone big out there?

Yes, Gautam, I thought we were big. No, I'm joking. I'm joking. No, look, hey, we're closing in on $1 billion, right, in size. And I think within this market, not commoditizing yourself, that $1 billion to $2.5 billion range is probably where we want to be. But we also don't want to -- we want to make sure when we're looking at acquisitions that they're not complementary because we do feel we have some best-in-class, in some places, world-class capabilities and contracts. And so if it's able -- if they're able to add scale in certain areas, then we definitely will look at that. I was referring to that $200 million, $300 million, maybe $500 million just within this organization. But I think Doros knows this, right? As we look at opportunities, right, that's going to help the bigger pieces of Jacobs. We'll leave no stone unturned on that. But I'll to it over to Jon to add anything on to that.

And I think we don't like commenting specifically on deals just because we don't want to bid up the targets. But we -- the plan is to look at acquisitions but then also to evaluate buying back our own stock. But in Caesar's cases, a lot of attractive bolt-on acquisitions in different parts of the business, that's also true. So I think bolt-ons are probably more where we're going. And the scale would have to be something that's just very unique like we did with CH2M or like we did with KeyW, but you're probably more leaning towards bolt-ons even beyond Caesar's business as well.

And Caesar, maybe -- I know you talked a little bit about the to-be-submitted, the $3 billion-ish over the fiscal year. When you look out longer term, what are sort of -- what does that funnel look like? Do you think the following year is $5 billion? And how big are the opportunities? How fast is the opportunity pipeline growing?

I'll tell you, when we acquired BlackLynx, and we'd put BlackLynx with a rapid solutions as part of KeyW, right, acquisition, it opened up a whole new arena of opportunities for us that tied to satellite sensors, full motion video, types of things like that, that we haven't traditionally looked at to prime, certainly subbing to a lot of the bigger companies out there. So now those are areas that's going to help bolster our pipeline beyond '23. But I would say that would be an example of some of the growth trajectory that we're looking at.

So you would expect that number to grow, I presume, fairly sensibly?

Absolutely.

Well, thank you very much, guys. We're up on time. I really appreciate you participating in the conference and sharing your insights with us.

Thank you.

Thanks for the time.

Thank you.

All right, guys. We'll catch up later. Jon, I'd love to catch up with you afterwards at some point just to -- maybe tomorrow, I would...

All right. [ Talk to you ] tomorrow.

Thanks, Gautam. I appreciate it.

Thanks, Caesar. Best of luck. Thank you.

All right. Thank you. Jon, I'll give you a ring well quick.

Sure.