Booz Allen (BAH) investor relations material

Executive summary

• First quarter results aligned with expectations, showing resilience in a dynamic funding environment and positioning for growth through technology, strategic transformation, and engagement with administration leadership.

• Record Q1 backlog of $38B and a 1.42x book-to-bill ratio reflect robust demand for advanced technology solutions, especially in defense and intelligence.

• Civil business restructuring and reset actions largely completed, with defense and intelligence segments driving growth and optimism for medium- and long-term opportunities.

• Strategic transformation accelerated through restructuring, technology investments, and outcome-based contracts, positioning for growth as funding normalizes.

• Workforce at approximately 33,400 employees, with headcount managed to match demand.

Financial highlights

• Revenue for the quarter was $2.924B, down 1% year-over-year, with revenue excluding billable expenses up 2.3%.

• Adjusted EBITDA rose 3% to $311M, margin up 30 bps to 10.6%; Adjusted Net Income up 2.2% to $184M.

• Net income increased 64% to $271M, driven by a one-time $106M tax benefit; diluted EPS grew 70% to $2.16, adjusted diluted EPS up 7.2% to $1.48.

• Free cash flow surged to $96M, supported by strong collections and lower compensation disbursements.

• Cash flow from operations was $119M, up from $52M in the prior year.

Outlook and guidance

• Fiscal 2026 revenue guidance is $12.0–$12.5B (0–4% growth), with adjusted diluted EPS of $6.20–$6.55 and adjusted EBITDA of $1,315–$1,370M (~11% margin).

• Free cash flow guidance raised to $900M–$1B, reflecting a $200M federal cash tax benefit from new S174 rules.

• Revenue and profit growth expected to be lower in the first half, with a return to growth anticipated in the back half as funding normalizes.

• 65% of remaining performance obligations expected to be recognized as revenue over the next 12 months.

• Assumptions include a 23–25% adjusted effective tax rate, 123–125M average diluted shares, and $110M in capital expenditures.