Booz Allen (BAH) Q3 2022 earnings summary

Executive summary

• Q3 FY22 revenue rose 6.6% YoY to $2.0B; growth was primarily acquisition-driven, partly offset by slower work ramp-ups, lower utilization and billable-expense pressure.

• Backlog reached $27.8B as of Dec. 31, 2021, up 19.2% YoY; funded backlog was $4.0B, up 11.7%.

Financial highlights

• Q3 operating income fell 3.8% to $177.2M, while Adjusted Operating Income rose 5.5% to $194.4M; Adjusted EBITDA increased 8.1% to $222.1M.

• Q3 net income declined 10.8% to $128.8M; Adjusted Net Income fell 5.5% to $137.0M. Diluted EPS was $0.95 vs. $1.03; Adjusted Diluted EPS was $1.02 vs. $1.04.

• 9M revenue was $6.1B, up 4.2%; Adjusted EBITDA was $729.9M, up 12.9%; Adjusted Net Income was $453.0M, up 8.3%; Adjusted Diluted EPS was $3.35, up 11.3%.

Outlook and guidance

• FY22 revenue growth guidance was reduced to 5.7–7.2% from 7.0–10.0%; Adjusted EBITDA margin guidance moved to approximately 11% from mid-10%.

• FY22 Adjusted Diluted EPS guidance was reaffirmed at $4.10–$4.30; net cash from operating activities guidance fell to $700–$750M from $800–$850M.

• FY23–FY25 goals include 5–8% organic revenue growth, strong mid-10% Adjusted EBITDA margin, Adjusted EBITDA of $1.2–$1.3B and $3.5–$4.5B of capital deployment.