Booz Allen (BAH) Q4 2025 earnings summary

Executive summary

• Achieved strong top-line and bottom-line growth in FY 2025, with revenue up 12.4% to $12.0 billion and adjusted EBITDA of $1.315 billion, exceeding multi-year targets and investment thesis.

• Defense and intelligence segments drove growth, while the civil segment faced headwinds from government spending reviews and contract run rate reductions.

• Strategic focus on advanced technology, AI, and national security priorities, with robust pipeline and record backlog.

• Proactively restructuring the civil business with targeted cost and headcount reductions to align with anticipated demand.

• Delivered value for shareholders through capital deployment, business model adaptation, and strong alignment with government priorities.

Financial highlights

• FY 2025 revenue reached $12.0 billion, up 12.4% year-over-year, with nearly all growth organic.

• Adjusted EBITDA for FY 2025 was $1.315 billion (11% margin), up 11.9% year-over-year; Q4 adjusted EBITDA was $316 million, up 10.5%.

• Net income for FY 2025 was $935 million, up 54.3% year-over-year; adjusted diluted EPS was $6.35, up 15.5%.

• Free cash flow for FY 2025 totaled $911 million; Q4 free cash flow was $194 million, up 51.6%.

• Year-end backlog reached $37 billion, up 15% year-over-year; trailing 12-month book-to-bill was 1.39x.

Outlook and guidance

• FY 2026 revenue expected between $12.0–$12.5 billion (0–4% growth); adjusted EBITDA $1.315–$1.37 billion; adjusted diluted EPS $6.20–$6.55.

• Free cash flow guidance: $700–$800 million; capital expenditures of $110 million and cash taxes of $80 million.

• Anticipates lower growth in H1 FY 2026, with re-acceleration in H2 as hiring and new opportunities ramp up.

• Civil business expected to decline in low double digits in FY 2026, with recovery anticipated in the second half.

• Adjusted effective tax rate expected at 23–25%; average diluted share count 123M–125M.