Perspecta Inc. (NYSE:PRSP) Q2 2020 Earnings Conference Call - Final Transcript

Nov 13, 2019 • 05:00 pm ET


Perspecta Inc. (NYSE:PRSP) Q2 2020 Earnings Conference Call - Final Transcript


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Good day and welcome to the Perspecta Incorporated Second Quarter Fiscal Year 2020 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Stuart Davis, Vice President of Investor Relations and Strategy. Please go ahead.

Stuart Davis

Thank you. Welcome everyone to today's quarterly earnings conference call. Presenting today are Mac Curtis, our CEO; and John Kavanaugh, our CFO. This call is being webcast on the Investor Relations portion of our website where you'll also find the earnings release and financial presentation slides that we will use for today's call. Turning to slide two of the presentation, please note that, during this call, we'll make forward-looking statements that are subject to known and unknown risks and uncertainties that can cause actual results to differ materially from anticipated results.

For a full discussion of these risks and uncertainties, please refer to our SEC filings including our latest Form 10-K. In addition, the statements represent our views as of today and subsequent events may cause our views to change. Though we may elect to update the forward-looking statements, we specifically disclaim any obligation to do so. Finally, as shown on slide three, we'll discuss some non-GAAP financial measures that we believe provide useful information for investors. The slide deck for today's call includes reconciliations to the most closely comparable GAAP measures.

At this time, it's my pleasure to turn the call over to Mac, who will begin on slide four.

Mac Curtis

Thank you, Stuart, and thank you all for joining us this afternoon. I'm very pleased with Perspecta's performance in the second quarter and I'm proud of the progress we're making as a company. Now I'll communicate that through five key messages: First, we've had another outstanding quarter of operations with robust organic growth, strong earnings growth and excellent free cash flow. Second, we've had another strong business development quarter. Third, the integration of Knight Point Systems is proceeding well. Fourth, our business portfolio is quite healthy and extend well beyond NGEN. And fifth, our first year focus on getting the big things right has put us in a position to focus on the details to keep building a company that we can all be proud of.

First, we again exceeded consensus estimates on all of our key financial metrics. Quarter-after-quarter, we're delivering on our growth, margin, earnings and cash commitments. Revenue was up 6% sequentially and up 10% year-over-year, our fastest growth core yet. Adjusted EBITDA was up 11% and adjusted diluted EPS was up 20%. Free cash generation was again above our target at 118% adjusted net income. With this strong execution by the entire team, we're raising our revenue, EPS, and free cash flow conversion guidance. Second, bookings were seasonally strong with $2.3 billion, representing a book-to-bill ratio in the second quarter of two times. This continues a positive strength for us. Our book-to-bill ratio for the trailing 12 months is 1.4 times.

Now a clear area of booking strength in the quarter was our intelligence community business.