Booz Allen (BAH) Q4 2026 earnings summary

Executive summary

• Fiscal year 2026 was highly challenging, with revenue declining 6.4% to $11.2 billion, but profitability exceeded revised expectations due to strong execution, disciplined cost management, and continued investment in advanced technologies.

• Leadership changes included the appointment of a new CFO and the promotion of the COO to President, reflecting a focus on strategic transformation.

• Strategic focus areas include accelerating growth in cyber and defense tech, monetizing intellectual property, and leveraging partnerships with tech leaders.

• National Security and cyber segments are driving growth, while the Civil segment remains pressured by market changes.

• The company ended the year with a record $38.2 billion backlog and a trailing twelve-month book-to-bill ratio of 1.1x.

Financial highlights

• Fiscal year 2026 gross revenue was $11.2 billion, down 6.4% year-over-year due to Civil business declines; Q4 revenue was $2.8 billion, also down 6.4%.

• Adjusted EBITDA for FY26 was $1.23 billion (11.0% margin); adjusted diluted EPS was $6.51, up 2.5% year-over-year.

• Free cash flow for the year was $951 million; $1.1 billion was deployed in investments, dividends, and share repurchases.

• Q4 adjusted EBITDA was $309 million (11.1% margin); adjusted EPS for Q4 was $1.78, up 10.6%.

• Net income for FY26 was $851 million, down 9% year-over-year.

Outlook and guidance

• Fiscal year 2027 revenue expected between $11.2–$11.7 billion, representing 0–4% growth, with National Security growing mid-single-digits and Civil declining high single-digits.

• Adjusted EBITDA guidance is $1.24–$1.29 billion (approx. 11% margin); adjusted EPS $6.00–$6.35.

• Free cash flow projected at $825–$925 million, excluding a $170 million IRS refund expected in FY 2028.

• Capital expenditures for FY27 expected to be ~$220 million, including $105 million for new headquarters.

• First half of FY 2027 expected to be the low point for growth, with sequential improvement through the year.