Where Booz Allen says it fits into the military's JADC2 initiative

One program or initiative does not define a government agency, and yet it is difficult to not look at JADC2 and see all of what the U.S. military wants to become.

Simply put: the Defense Department sees the Joint All-Domain Command-and-Control construct as the means to connect every deployed soldier and system into a more common networking environment.

Booz Allen Hamilton's chief executive Horacio Rozanski also described JADC2 this way to investors on Friday during the company's fiscal third quarter earnings call:

"JADC2 is a key strategic initiative to bring together all the information that a (combatant command) commander would need to operationalize, and it's therefore an important deterrence and deterrent to aggression," he said.

Given JADC2's wide nature, DOD has structured the contract awards around it as essentially an open tent for the government contracting industry. The Air Force has awarded contracts to around 240 companies over the past three years, while Booz Allen was invited to the program in the summer of 2020.

Earlier this month, Booz Allen and L3Harris Technologies announced they are working together on the development and delivery of mission system integration offerings to support JADC2. L3Harris was one of the first companies to be awarded a contract as part of JADC2, also in the summer of 2020.

On the call with analysts, Rozanski said Booz Allen is working with the Pentagon's chief digital and artificial intelligence office on several initiatives that certainly will contribute to JADC2 and other efforts that may or may not be a part of it.

"But all are part and parcel of the same thing, which is how do you create full domain awareness? How do you create a decision cycle?," Rozanski said. "That takes advantage of all of the data available that accelerates inside of a potential adversary decision cycle."

Rozanski sees the work Booz Allen does in support of JADC2 and the collaboration with L3Harris as directly tied to the firm's longer-term VoLT strategy and vision for itself that stands for Velocity, Leadership and Technology.

JADC2 is an example of Booz Allen's "understanding of the mission, our ecosystem of partners that, that bring technology at scale," Rozanski said.

"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."

Fiscal third quarter revenue of $2.6 billion was 12.9% higher than the prior year period with the organic growth rate at 12.8%, while profit of $290.6 million represented a 19.1% year-over-year increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

Booz Allen nudged up its full-year sales growth outlook to a range of 14%-to-15% compared to the prior 11%-to-14%. Fiscal 2023 revenue was $9.26 billion.

The firm's expectations for adjusted EBITDA are now in the range of $1.155 billion-to-$1.175 billion versus the prior $1.115 billion-to-$1.145 billion outlook.

One other important change is worth noting when considering that revised outlook. In its second quarter financial statement, Booz Allen assumed a partial government shutdown of between two and four weeks when putting together financial guidance at that time.

During the Friday call, Chief Financial Officer Matt Calderone told investors they now believe a multi-week shutdown is "significantly less likely to occur in our current fiscal year" that ends on March 31. That means a shutdown contingency is not included in Booz Allen's fiscal 2024 guidance.

As things stand now, the current continuing resolution has one set of government funding slated to expire on March 1 and the rest on March 8.