ManTech International Corporation

Revenue was $676 million, up 7% year over year. EBITDA was $66 million, up 7% year over year, with a 9.7% EBITDA margin, flat versus Q1 2021. Net income was $31 million and diluted EPS was $0.76, both down year over year due to higher intangible amortization from acquisitions; adjusted net income was $37 million and adjusted diluted EPS was $0.89, both up 1% year over year. Cash flow from operations was $34 million, leverage remained within comfort level with $60 million in cash and $300 million of debt, and Q1 bookings were $464 million with a roughly 0.7x book-to-bill. Full-year 2022 guidance was reiterated: revenue of $2.6 billion to $2.7 billion, EBITDA margin of 9.6%, adjusted net income of $141.3 million to $148.5 million, adjusted EPS of $3.42 to $3.60, operating cash flow of at least $215 million, and capex at 1.5% of revenue.

Kevin Phillips said ManTech had a “healthy start” to the year and that the quarter was above expectations, especially in revenue, EBITDA, cash flow and bookings. He pointed to enacted FY22 appropriations, the FY23 budget request, and rising demand for cyber, digital modernization, data at the edge and automation as supportive backdrops. His tone was cautiously optimistic: he said the environment is “getting better, not worse,” but emphasized that procurement timing remains uncertain and execution will still be choppy.

Judith Bjornaas highlighted that Q1 revenue of $676 million and EBITDA of $66 million both exceeded expectations, with revenue helped by better direct labor, an uptick in ODCs and acquisitions. She said operating cash flow was $34 million, supported by a 63-day DSO, and noted end-of-quarter cash of $60 million and debt of $300 million; the company also paid $17 million in dividends and the board authorized the $0.41 per share dividend to be paid in June. On capital allocation, she said M&A remains the preferred priority and potential targets could be actionable over the next few quarters. She reiterated full-year guidance, including a 9.6% EBITDA margin, at least $215 million of operating cash flow, and capex at 1.5% of revenue.

Analysts focused on what drove the quarter’s revenue beat, the cadence implied by unchanged guidance, M&A conditions, the impact of higher defense spending, recompete exposure, and labor-market conditions. Management said about 60% of the revenue beat came from ODCs, roughly $20 million of pull-forward, while direct labor also ran higher on utilization; they expect a slight dip in Q2 and a step-up in the second half as new awards ramp. On backlog and risk, they said about 90% of revenue is visible from backlog, total recompete exposure across this year into next is about 20% to 25%, and no contract is greater than 5% of sales. On labor, they said hiring remains competitive but feels more like pre-pandemic norms, and on FY23 budgets they said the environment is improving but timing of spending and procurements remains uncertain.