Booz Allen (BAH) investor relations material

Executive summary

• Revenue and net income declined sharply due to persistent procurement headwinds, especially in the civil segment, while the national security portfolio showed solid growth and major contract wins in cyber, AI, and warfighting technology.

• The company operates in a bifurcated market, with civil business facing the most challenging environment in a generation and delayed recovery, while national security remains robust.

• Immediate cost reduction and restructuring actions, including $150 million in annualized savings and civil business restructuring, are underway to support future growth and margin recovery.

• Strong balance sheet and record backlog provide strategic and financial flexibility.

Financial highlights

• Q2 revenue was $2.89 billion, down 8.1% year-over-year; first half revenue was $5.81 billion, down 4.5%.

• Adjusted EBITDA for Q2 was $324 million, down 11% year-over-year, with a margin of 11.2%.

• Net income for Q2 was $175 million, down 55% year-over-year; adjusted net income was $183 million, down 21%.

• Diluted EPS for Q2 was $1.42, down 53% year-over-year; adjusted diluted EPS was $1.49, down 18%.

• Free cash flow for Q2 was $395 million; cash on hand at quarter end was $816 million.

Outlook and guidance

• FY26 revenue guidance lowered to $11.3–$11.5 billion, a 4.0–6.0% decline.

• Adjusted EBITDA expected at $1,190–$1,220 million; adjusted diluted EPS at $5.45–$5.65.

• Free cash flow guidance set at $850–$950 million.

• Guidance incorporates $30 million revenue and $15 million profit loss from the government shutdown and assumes persistent funding/procurement trends.

• Approximately 65% of $12.1 billion in remaining performance obligations expected to be recognized as revenue over the next 12 months.