Financial Data and Key Metrics Changes - Gross revenue for the first quarter decreased by approximately 1% year over year to $2.9 billion, while revenue excluding billable expenses grew by 2% year over year [26] - Adjusted EBITDA for the first quarter was $311 million, up 3% from the prior year, resulting in an adjusted EBITDA margin of 10.6%, an increase of 30 basis points year over year [30] - Net income for the first quarter was $271 million, a year-over-year increase of 64%, primarily due to a favorable agreement with the IRS [31] - Diluted earnings per share grew 70% year over year to $2.16, while adjusted diluted earnings per share increased 7% year over year to $1.48 [32] Business Line Data and Key Metrics Changes - Revenue in the Defense sector increased by 7% year over year, while revenue in the Intelligence sector rose by 6% compared to the prior year [26] - Civil business revenue decreased by 13% year over year, reflecting the challenges faced in that segment [26] Market Data and Key Metrics Changes - The total backlog reached an all-time Q1 record of $38 billion, up 11% year over year, with a book-to-bill ratio of 1.42 times for the quarter [28] - The proposal pipeline at the end of the first quarter was nearly $43 billion, which is 3% higher than the same point in fiscal year 2024 [28] Company Strategy and Development Direction - The company is focusing on a strategy termed "Vault," which emphasizes velocity, leadership, and technology, aiming to leverage technology investments to drive mission effectiveness [9] - The company is restructuring its civil business to align with current demand and is focusing on modernization opportunities, such as a $51 million task order with Customs and Border Protection [12] - The company is also advancing partnerships across the technology ecosystem to maintain global technological supremacy [18] Management's Comments on Operating Environment and Future Outlook - Management noted that while the procurement environment is improving, it is still operating below historical speeds, and they expect to see a return to growth in the second half of the fiscal year [8][21] - The management expressed optimism about the medium to long-term outlook, particularly in technology investments related to AI, cyber, and quantum [9][21] Other Important Information - The company repurchased just over 1% of its outstanding shares during the quarter and increased its commitment to Booz Allen Ventures by $200 million [24][34] - The company expects free cash flow for the fiscal year to be between $900 million and $1 billion, reflecting anticipated federal tax impacts [35] Q&A Session Summary Question: Is there a greater appreciation for Booz Allen's technology in the current procurement environment? - Management acknowledged that the business has stabilized and that their technology is recognized for its effectiveness in mission-critical conditions, leading to optimism about future opportunities [44][45] Question: What is the interest from Silicon Valley tech providers to partner with Booz Allen? - Management confirmed that partnerships with commercial tech companies are a significant part of their strategy, and they are seen as a valuable partner by these companies [48] Question: Can you comment on funded backlog trends? - Management indicated that while they are winning work, the funding environment is slow, leading to a relative decline in funded backlog [56] Question: What are the challenges in hiring talent? - Management stated that they are comfortable with their hiring pace and are effectively matching supply and demand, with no significant challenges in attracting talent [63][64] Question: How does the current administration's focus on transformational contracts affect Booz Allen? - Management believes that the current administration's focus on new priorities presents both challenges and opportunities, and they are well-positioned to adapt [101][102]

Financial Data and Key Metrics Changes - Gross revenue decreased by approximately 1% year over year to $2.9 billion, while revenue excluding billable expenses grew by 2% year over year [27] - Adjusted EBITDA for the first quarter was $311 million, up 3% from the prior year, resulting in an adjusted EBITDA margin of 10.6%, an increase of 30 basis points year over year [31] - Net income for the first quarter was $271 million, a year-over-year increase of 64%, primarily due to a favorable IRS agreement [31] - Diluted earnings per share increased by 70% year over year to $2.16, while adjusted diluted earnings per share rose by 7% year over year to $1.48 [32] Business Line Data and Key Metrics Changes - Revenue in the Defense sector increased by 7% year over year, while Intel revenue rose by 6% compared to the prior year [27] - Civil business revenue decreased by 13% year over year, reflecting ongoing challenges in that segment [27] - The company achieved a book-to-bill ratio of 1.42 times for the quarter, with total backlog reaching an all-time Q1 record of $38 billion, an 11% increase year over year [28] Market Data and Key Metrics Changes - The proposal pipeline at the end of the first quarter was nearly $43 billion, which is 3% higher than the same point in fiscal year 2024 [28] - The company noted variability in converting bookings to revenue compared to previous years, indicating a dynamic procurement environment [29] Company Strategy and Development Direction - The company is focusing on five strategic priorities to drive transformation, including restructuring the civil business, reimagining service delivery, directing resources to growth areas, advancing partnerships in the tech ecosystem, and creating efficiencies within the business [10][18] - The company is leveraging its technology-based approach to align with government priorities, particularly in areas like AI, cyber, and quantum technology [9] - Booz Allen Ventures received an additional $200 million commitment to invest in startups, emphasizing the company's focus on maintaining technological superiority [35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about medium to long-term opportunities despite short-term disruptions and slow funding in the procurement environment [22][26] - The company anticipates a return to growth in the civil sector in the latter half of the fiscal year as funding solidifies [7][26] - Management highlighted the importance of adapting to the changing landscape and the potential for increased funding from the "One Big Beautiful Bill" [59] Other Important Information - The company repurchased just over 1% of its outstanding shares during the quarter [24] - Free cash flow for the quarter was $96 million, resulting from $119 million in cash from operations [34] - The company plans to pay a quarterly dividend of $0.55 per share on August 29 [34] Q&A Session Summary Question: Is there a greater appreciation for Booz Allen's technology in the current procurement environment? - Management confirmed that the business has stabilized and that the technology is performing well, with strong mission impact recognized by customers [42][44] Question: What is the interest from Silicon Valley tech providers to partner with Booz Allen? - Management stated that partnerships with commercial tech companies are a key strategy, and Booz Allen is seen as a valuable partner in making technology work in mission-critical environments [46][47] Question: How does the funded backlog trend relate to the overall book-to-bill ratio? - Management explained that while they are winning work, the slow funding environment has led to a relative decline in funded backlog [55] Question: What are the challenges in hiring and matching talent to demand? - Management indicated that they are comfortable with hiring and are focused on matching talent to demand, particularly in technical roles requiring security clearances [62][80] Question: How disruptive are the changes in software acquisition and contracting? - Management expressed that changes in the FAR and a shift towards outcome-based contracting are positive for the company and the government, allowing for more efficient operations [115][118]

Group 1: Earnings Performance - Booz Allen Hamilton reported quarterly earnings of $1.48 per share, exceeding the Zacks Consensus Estimate of $1.46 per share, and up from $1.38 per share a year ago, representing an earnings surprise of +1.37% [1] - The company posted revenues of $2.92 billion for the quarter ended June 2025, which was below the Zacks Consensus Estimate by 0.54%, and a decrease from year-ago revenues of $2.94 billion [2] - Over the last four quarters, Booz Allen has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - Booz Allen shares have declined approximately 10.6% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $1.60 on revenues of $3.06 billion, and for the current fiscal year, it is $6.39 on revenues of $12.24 billion [7] Group 3: Industry Context - The Consulting Services industry, to which Booz Allen belongs, is currently ranked in the top 41% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Booz Allen was unfavorable ahead of the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6]

Q1 FY26 EARNINGS CALL PRESENTATION JULY 25, 2025 Copyright © Booz Allen Hamilton Inc. 2025 Copyright © Booz Allen Hamilton Inc. 2025 www.boozallen.com OK TO WORK DESIGN Booz Allen Hamilton Internal PARTICIPANTS KRISTINE MARTIN ANDERSON Executive Vice President, Chief Operating Officer EARNINGS CALL PARTICIPANTS HORACIO ROZANSKI Chairman, Chief Executive Officer & President MATT CALDERONE Executive Vice President, Chief Financial Officer DUSTIN DARENSBOURG Head of Investor Relations Copyright © Booz Allen Ha ...

PART I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Booz Allen Hamilton Holding Corporation, including balance sheets, statements of operations, comprehensive income, cash flows, and stockholders' equity, along with detailed notes explaining the company's business, accounting policies, revenue recognition, earnings per share, intangible assets, liabilities, debt, income taxes, comprehensive income, fair value measurements, commitments, and supplemental financial information for the quarter ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, detailing changes in total assets, liabilities, and stockholders' equity over the quarter | Metric | June 30, 2025 (Millions) | March 31, 2025 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :----------------------- | :------------------------ | :---------------- | :------- | | Total Assets | $7,170 | $7,312 | $(142) | -1.94% | | Total Liabilities | $6,105 | $6,309 | $(204) | -3.23% | | Total Stockholders' Equity | $1,065 | $1,003 | $62 | 6.18% | | Cash and cash equivalents | $711 | $885 | $(174) | -19.66% | | Accounts receivable, net | $2,286 | $2,271 | $15 | 0.66% | | Total current assets | $3,135 | $3,313 | $(178) | -5.37% | | Total current liabilities | $1,760 | $1,846 | $(86) | -4.66% | - Total assets decreased by **$142 million**, primarily driven by a **$174 million** decrease in cash and cash equivalents[12](index=12&type=chunk) - Total liabilities decreased by **$204 million**, mainly due to reductions in accounts payable and other accrued expenses, and accrued compensation and benefits[12](index=12&type=chunk) - Stockholders' equity increased by **$62 million**, primarily due to net income and additional paid-in capital, partially offset by treasury stock repurchases[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's financial performance, highlighting changes in revenue, operating income, net income, and earnings per share | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | :------- | | Revenue | $2,924 | $2,942 | $(18) | -0.61% | | Operating income | $257 | $255 | $2 | 0.78% | | Net income | $271 | $165 | $106 | 64.24% | | Basic EPS | $2.17 | $1.27 | $0.90 | 70.87% | | Diluted EPS | $2.16 | $1.27 | $0.89 | 70.08% | - Net income significantly increased by **64%** to **$271 million**, primarily driven by a substantial income tax benefit in the current quarter compared to an expense in the prior year[14](index=14&type=chunk) - Revenue saw a slight decrease of **1%** to **$2,924 million**[14](index=14&type=chunk) - Operating income remained relatively stable, increasing by **1%** to **$257 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Reports the company's comprehensive income, including net income and other comprehensive income/loss components | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | :------- | | Net income | $271 | $165 | $106 | 64.24% | | Total other comprehensive loss, net of tax | $(1) | $(2) | $1 | -50.00% | | Comprehensive income | $270 | $163 | $107 | 65.64% | - Comprehensive income increased by **65.6%** to **$270 million**, primarily reflecting the higher net income[16](index=16&type=chunk) - Other comprehensive loss, net of tax, decreased from **$(2) million** in 2024 to **$(1) million** in 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Outlines the company's cash generation and usage from operating, investing, and financing activities | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | :------- | | Net cash provided by operating activities | $119 | $52 | $67 | 128.85% | | Net cash used in investing activities | $(32) | $(127) | $95 | -74.80% | | Net cash used in financing activities | $(261) | $(181) | $(80) | 44.20% | | Net decrease in cash and cash equivalents | $(174) | $(256) | $82 | -32.03% | | Cash and cash equivalents––end of period | $711 | $298 | $413 | 138.59% | - Net cash provided by operating activities more than doubled, increasing by **$67 million** to **$119 million**, driven by strong collection performance and lower compensation disbursements[19](index=19&type=chunk)[95](index=95&type=chunk) - Net cash used in investing activities decreased significantly by **$95 million** to **$32 million**, primarily due to the absence of a large business acquisition present in the prior year[19](index=19&type=chunk)[96](index=96&type=chunk) - Net cash used in financing activities increased by **$80 million** to **$261 million**, mainly due to increased share repurchases and term loan payments[19](index=19&type=chunk)[97](index=97&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Details the changes in the company's stockholders' equity, including net income, share repurchases, and dividends | Metric | June 30, 2025 (Millions) | March 31, 2025 (Millions) | Change (Millions) | | :-------------------------------- | :----------------------- | :------------------------ | :---------------- | | Class A Common Stock (Amount) | $2 | $2 | $0 | | Treasury Stock (Amount) | $(3,249) | $(3,082) | $(167) | | Additional Paid-In Capital | $1,071 | $1,042 | $29 | | Retained Earnings | $3,271 | $3,070 | $201 | | Accumulated Other Comprehensive Income (Loss) | $(30) | $(29) | $(1) | | Total Stockholders' Equity | $1,065 | $1,003 | $62 | - Total stockholders' equity increased by **$62 million**, driven by net income of **$271 million** and additional paid-in capital of **$29 million**, partially offset by **$167 million** in treasury stock repurchases and **$70 million** in dividends paid[21](index=21&type=chunk) - The company repurchased **1.4 million shares** of Class A Common Stock for **$167 million** during the three months ended June 30, 2025[21](index=21&type=chunk) [1. Business Overview](index=9&type=section&id=1.%20Business%20Overview) Describes Booz Allen Hamilton as an advanced technology company supporting federal and commercial clients with 33,400 employees - Booz Allen Hamilton Holding Corporation is an advanced technology company incorporated in Delaware in May 2008[22](index=22&type=chunk) - The company builds technology solutions using AI, cyber, and other cutting-edge technologies to support critical missions for federal government customers and commercial clients[22](index=22&type=chunk) - As of June 30, 2025, the company had approximately **33,400 employees** and operates as one reportable segment[22](index=22&type=chunk) [2. Basis of Presentation](index=9&type=section&id=2.%20Basis%20of%20Presentation) Explains the financial statements' preparation under U.S. GAAP and SEC rules, noting reclassifications and new accounting standards - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, condensing or omitting certain annual disclosures[23](index=23&type=chunk) - Management has reclassified interest income for fiscal 2025 from 'Other income (loss), net' to 'Interest expense, net' with no impact on financial position or results of operations[24](index=24&type=chunk) - The company holds equity and other investments in unconsolidated entities totaling **$105 million** as of June 30, 2025, up from **$90 million** at March 31, 2025[25](index=25&type=chunk) - The company is assessing the impact of ASU 2024-03 (Disaggregation of Income Statement Expenses), effective for annual periods beginning after December 15, 2026, which will affect disclosures but not financial condition or results of operations[28](index=28&type=chunk) [3. Revenue](index=10&type=section&id=3.%20Revenue) Analyzes revenue by contract and customer type, along with remaining performance obligations and contract balances Revenue by Contract Type (Three Months Ended June 30) | Contract Type | 2025 (Millions) | 2025 (%) | 2024 (Millions) | 2024 (%) | | :---------------- | :-------------- | :------- | :-------------- | :------- | | Cost-reimbursable | $1,758 | 60% | $1,660 | 56% | | Time-and-materials | $638 | 22% | $671 | 23% | | Fixed-price | $528 | 18% | $611 | 21% | | **Total Revenue** | **$2,924** | **100%** | **$2,942** | **100%** | Revenue by Customer Type (Three Months Ended June 30) | Customer Type | 2025 (Millions) | 2025 (%) | 2024 (Millions) | 2024 (%) | | :---------------- | :-------------- | :------- | :-------------- | :------- | | Defense Customers | $1,517 | 51% | $1,421 | 48% | | Intelligence Customers | $484 | 17% | $457 | 16% | | Civil Customers | $923 | 32% | $1,064 | 36% | | **Total Revenue** | **$2,924** | **100%** | **$2,942** | **100%** | - Remaining performance obligations increased to **$10.6 billion** as of June 30, 2025, from **$9.5 billion** as of March 31, 2025. Approximately **65%** is expected to be recognized as revenue over the next 12 months[33](index=33&type=chunk) Contract Balances (Millions) | Metric | June 30, 2025 | March 31, 2025 | | :---------------------------------------- | :-------------- | :------------- | | Accounts receivable–billed | $725 | $781 | | Accounts receivable–unbilled (contract assets) | $1,562 | $1,491 | | Total accounts receivable, net | $2,345 | $2,329 | | Advance payments, billings in excess of costs incurred and deferred revenue (contract liabilities) | $14 | $18 | [4. Earnings Per Share](index=11&type=section&id=4.%20Earnings%20Per%20Share) Provides basic and diluted earnings per share, detailing the impact of net income and share count Earnings Per Share (Three Months Ended June 30) | Metric | 2025 | 2024 | | :---------------------------------------- | :----- | :----- | | Earnings for basic computations (Millions) | $269 | $164 | | Earnings for diluted computations (Millions) | $269 | $164 | | Weighted-average common stock shares outstanding, basic | 124,114,149 | 129,387,052 | | Dilutive stock options and restricted stock | 361,521 | 530,211 | | Weighted-average common stock shares outstanding, diluted | 124,475,670 | 129,917,263 | | Basic EPS | $2.17 | $1.27 | | Diluted EPS | $2.16 | $1.27 | - Basic EPS increased by **70.87%** to **$2.17**, and Diluted EPS increased by **70.08%** to **$2.16**, primarily due to higher net income and a lower weighted-average share count[35](index=35&type=chunk) [5. Intangible Assets](index=12&type=section&id=5.%20Intangible%20Assets) Details the net carrying value of intangible assets, including customer contracts, software, and trade name Intangible Assets (Millions) | Asset Type | June 30, 2025 Net Carrying Value | March 31, 2025 Net Carrying Value | Change | | :---------------------------------------- | :--------------------------------- | :---------------------------------- | :----- | | Customer contracts and related customer relationships | $299 | $314 | $(15) | | Software | $60 | $59 | $1 | | Total amortizable intangible assets | $359 | $373 | $(14) | | Trade name (unamortizable) | $190 | $190 | $0 | | **Total Intangible Assets** | **$549** | **$563** | **$(14)** | - Total intangible assets, net, decreased by **$14 million** to **$549 million**, primarily due to amortization of customer contracts and related customer relationships[36](index=36&type=chunk) [6. Accounts Payable and Other Accrued Expenses](index=12&type=section&id=6.%20Accounts%20Payable%20and%20Other%20Accrued%20Expenses) Presents the breakdown and changes in accounts payable and other accrued expenses, including vendor payables Accounts Payable and Other Accrued Expenses (Millions) | Category | June 30, 2025 | March 31, 2025 | Change | | :---------------------------------------- | :-------------- | :------------- | :----- | | Vendor payables | $635 | $693 | $(58) | | Provision for claimed costs | $246 | $245 | $1 | | Accrued interest | $47 | $16 | $31 | | Accrued expenses | $21 | $33 | $(12) | | **Total** | **$949** | **$987** | **$(38)** | - Total accounts payable and other accrued expenses decreased by **$38 million** to **$949 million**, mainly due to a reduction in vendor payables[37](index=37&type=chunk) [7. Accrued Compensation and Benefits](index=12&type=section&id=7.%20Accrued%20Compensation%20and%20Benefits) Details the components and changes in accrued compensation and benefits, primarily accrued payroll Accrued Compensation and Benefits (Millions) | Category | June 30, 2025 | March 31, 2025 | Change | | :---------------------------------------- | :-------------- | :------------- | :----- | | Accrued payroll | $232 | $328 | $(96) | | Accrued retirement | $105 | $85 | $20 | | Accrued paid time off | $247 | $242 | $5 | | Other | $72 | $47 | $25 | | **Total** | **$656** | **$702** | **$(46)** | - Total accrued compensation and benefits decreased by **$46 million** to **$656 million**, primarily due to a **$96 million** decrease in accrued payroll[38](index=38&type=chunk) [8. Debt](index=13&type=section&id=8.%20Debt) Provides an overview of the company's debt structure, including term loans and senior notes, and credit facility status Debt (Millions) | Debt Type | June 30, 2025 Outstanding Balance | March 31, 2025 Outstanding Balance | Change | | :---------------------------------------- | :-------------------------------- | :--------------------------------- | :----- | | Term Loan | $1,506 | $1,526 | $(20) | | Senior Notes due 2028 | $700 | $700 | $0 | | Senior Notes due 2029 | $500 | $500 | $0 | | Senior Notes due 2033 | $650 | $650 | $0 | | Senior Notes due 2035 | $650 | $650 | $0 | | Less: Unamortized debt issuance costs and discount on debt | $(27) | $(28) | $1 | | **Total Debt** | **$3,979** | **$3,998** | **$(19)** | | Long-term debt, net of current portion | $3,896 | $3,915 | $(19) | - Total debt decreased by **$19 million** to **$3,979 million**, primarily due to a reduction in the Term Loan balance[39](index=39&type=chunk) - The company had a **$1.0 billion** revolving credit facility with no outstanding balance as of June 30, 2025, and was in compliance with all financial covenants[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [9. Income Taxes](index=13&type=section&id=9.%20Income%20Taxes) Explains the effective income tax rates and the significant impact of uncertain tax position reserve adjustments Effective Income Tax Rates (Three Months Ended June 30) | Period | Effective Tax Rate | | :---------------------------------------- | :----------------- | | June 30, 2025 | (25.5)% | | June 30, 2024 | 22.9% | - The effective income tax rate for the three months ended June 30, 2025, was **(25.5)%**, a significant decrease from **22.9%** in the prior year, primarily due to an **$89 million** reduction in uncertain tax position (UTP) reserves[43](index=43&type=chunk)[44](index=44&type=chunk) - The UTP reduction of **$89 million** resulted from the completion of an IRS examination through fiscal year 2021, leading to an **$86 million** adjustment and **$20 million** in accrued interest (net of tax effect) on a related long-term receivable[44](index=44&type=chunk) - The company recorded long-term income tax receivables of **$172 million** as of June 30, 2025, related to federal return refund claims, which are subject to Joint Committee on Taxation (JCT) review[45](index=45&type=chunk) [10. Accumulated Other Comprehensive Income / (Loss)](index=14&type=section&id=10.%20Accumulated%20Other%20Comprehensive%20Income%20%2F%20(Loss)) Details the components of accumulated other comprehensive income/loss, including post-retirement plans and derivatives Accumulated Other Comprehensive Income (Loss) (Millions) | Category | June 30, 2025 | March 31, 2025 | | :---------------------------------------- | :-------------- | :------------- | | Post-retirement plans | $(28) | $(28) | | Derivatives designated as cash flow hedges | $(2) | $(1) | | **Total** | **$(30)** | **$(29)** | - Accumulated Other Comprehensive Income (Loss) decreased slightly to **$(30) million** as of June 30, 2025, from **$(29) million** at March 31, 2025, primarily due to a change in unrealized loss on derivatives[47](index=47&type=chunk) [11. Fair Value Measurements](index=14&type=section&id=11.%20Fair%20Value%20Measurements) Presents fair value measurements for financial instruments, including derivatives and long-term debt, using valuation inputs Recurring Fair Value Measurements (Millions) as of June 30, 2025 | Category | Level 1 | Level 2 | Total | | :---------------------------------------- | :------ | :------ | :---- | | Long-term deferred compensation plan asset | $43 | $— | $43 | | Current derivative instruments | $— | $1 | $1 | | Long-term derivative instruments | $— | $2 | $2 | | Long-term deferred compensation plan liability | $43 | $— | $43 | - The company uses interest rate derivative financial instruments (cash flow hedges) with a total notional amount of **$350 million** to manage interest rate risk on variable rate debt, maturing from June 2026 to June 2027[50](index=50&type=chunk) - The fair value of long-term debt as of June 30, 2025, was estimated at **$3,957 million**, using Level 2 inputs[54](index=54&type=chunk) - Investments accounted for at fair value on a non-recurring basis totaled **$99 million** as of June 30, 2025[55](index=55&type=chunk) [12. Commitments and Contingencies](index=16&type=section&id=12.%20Commitments%20and%20Contingencies) Addresses liabilities for claimed costs and potential impacts from ongoing government audits, reviews, and litigation - The company recorded liabilities of **$246 million** as of June 30, 2025, for estimated adjustments to claimed costs based on historical DCAA audit results[57](index=57&type=chunk) - The company is subject to ongoing U.S. government audits, reviews, and investigations related to contract compliance, labor time reporting, and classified information access[58](index=58&type=chunk) - Management does not expect any currently ongoing audits, reviews, investigations, or litigation to have a material adverse effect on the company's financial condition or results of operations[58](index=58&type=chunk) [13. Supplemental Condensed Consolidated Financial Information](index=16&type=section&id=13.%20Supplemental%20Condensed%20Consolidated%20Financial%20Information) Provides supplemental financial details, specifically severance and related charges from cost management initiatives Severance and Related Charges (Three Months Ended June 30, 2025) (Millions) | Category | Amount | | :---------------------------------------- | :----- | | Cost of revenue | $30 | | General and administrative expenses | $6 | | **Total severance charges** | **$36** | - The company incurred **$36 million** in severance and related charges during the three months ended June 30, 2025, due to a cost management initiative and restructure of the Civil business[60](index=60&type=chunk) - The unpaid portion of these charges, **$22 million**, is included in accrued compensation and benefits on the balance sheet as of June 30, 2025[61](index=61&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's business, factors affecting its operations, detailed analysis of financial results, contract backlog, non-GAAP measures, liquidity, and capital resources. It highlights the company's focus on advanced technology solutions for government and commercial customers, the impact of the U.S. political and budget environment, and the drivers behind changes in revenue, expenses, and cash flows [Overview](index=18&type=section&id=Overview) Introduces Booz Allen Hamilton as an advanced technology company serving federal and commercial clients with cutting-edge solutions - Booz Allen Hamilton is an advanced technology company that builds AI, cyber, and other cutting-edge solutions for critical civil, defense, and national security priorities[65](index=65&type=chunk) - The company has approximately **33,400 employees** supporting federal government customers, including nearly all U.S. cabinet-level departments, and commercial clients domestically and internationally[66](index=66&type=chunk) [Factors and Trends Affecting Our Results of Operations](index=18&type=section&id=Factors%20and%20Trends%20Affecting%20Our%20Results%20of%20Operations) Discusses the impact of the U.S. political, budget, and regulatory environment on the company's operational results - The company's performance is significantly influenced by the uncertain U.S. political, budget, and regulatory environment, including government spending levels and priorities[67](index=67&type=chunk) - Changes in government administration priorities, reviews of spending, and mandates for efficiency can lead to contract impacts, price adjustments, and renegotiations[68](index=68&type=chunk) - Reductions in government agency personnel and a changing regulatory environment have led to a slower procurement environment, causing delays in contract awards, payments, and security clearances[69](index=69&type=chunk) - The 2025 Appropriations Act funds the U.S. government through September 30, 2025, with increased Department of Defense base budget and reduced nondefense spending, providing conditional authority for new program starts[71](index=71&type=chunk) [Contract Backlog](index=19&type=section&id=Contract%20Backlog) Details the company's contract backlog, including funded, unfunded, and priced options, and remaining performance obligations Contract Backlog (Millions) | Backlog Type | June 30, 2025 | June 30, 2024 | Change (Millions) | % Change | | :---------------- | :-------------- | :-------------- | :---------------- | :------- | | Funded | $4,047 | $4,464 | $(417) | -9.34% | | Unfunded | $10,441 | $9,185 | $1,256 | 13.67% | | Priced options | $23,777 | $20,923 | $2,854 | 13.64% | | **Total backlog** | **$38,265** | **$34,572** | **$3,693** | **10.68%** | - Total backlog increased by **10.7%** to **$38.265 billion** from June 30, 2024, to June 30, 2025, driven by increases in unfunded backlog and priced options[73](index=73&type=chunk)[75](index=75&type=chunk) - Remaining performance obligations were **$10.6 billion** as of June 30, 2025, with approximately **65%** expected to be recognized as revenue over the next 12 months[73](index=73&type=chunk) - Additions to funded backlog totaled **$11.5 billion** for the twelve months ended June 30, 2025[75](index=75&type=chunk) [Critical Accounting Estimates and Policies](index=20&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) States that critical accounting estimates and policies remain consistent with the prior annual report - The company's critical accounting estimates and policies are consistent with those disclosed in its Annual Report on Form 10-K for the year ended March 31, 2025[77](index=77&type=chunk) [Results of Operations](index=20&type=section&id=Results%20of%20Operations) Analyzes the drivers behind changes in revenue, operating costs, and net income for the reporting period Consolidated Statements of Operations (Three Months Ended June 30) (Millions) | Metric | 2025 | 2024 | % Change | | :-------------------------------- | :----- | :----- | :------- | | Revenue | $2,924 | $2,942 | (1)% | | Cost of revenue | $1,423 | $1,372 | 4% | | Billable expenses | $881 | $945 | (7)% | | General and administrative expenses | $323 | $329 | (2)% | | Depreciation and amortization | $40 | $41 | (2)% | | Total operating costs and expenses | $2,667 | $2,687 | (1)% | | Operating income | $257 | $255 | 1% | | Interest expense, net | $(44) | $(38) | 16% | | Other income (expense), net | $3 | $(3) | (200)% | | Income before income taxes | $216 | $214 | 1% | | Income tax (benefit) expense | $(55) | $49 | (212)% | | Net income | $271 | $165 | 64% | - Revenue decreased by **1%** to **$2,924 million**, primarily due to lower billable expenses[79](index=79&type=chunk) - Cost of revenue increased by **4%** to **$1,423 million**, mainly due to a **$99 million** increase in salaries and related benefits, partially offset by other business expense decreases[80](index=80&type=chunk) - Billable expenses decreased by **7%** to **$881 million**, driven by reduced use of subcontractors[81](index=81&type=chunk) - Operating income increased by **1%** to **$257 million**, maintaining a stable operating margin of **9%** due to cost management efforts[84](index=84&type=chunk) - Net income increased by **64%** to **$271 million**, significantly impacted by an income tax benefit of **$55 million** compared to an expense of **$49 million** in the prior year[87](index=87&type=chunk) [Non-GAAP Measures](index=22&type=section&id=Non-GAAP%20Measures) Presents non-GAAP financial measures like revenue excluding billable expenses and Adjusted EBITDA for core performance insights Non-GAAP Measures (Three Months Ended June 30) (Millions) | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Revenue, Excluding Billable Expenses | $2,043 | $1,997 | | EBITDA | $297 | $296 | | Adjusted EBITDA | $311 | $302 | - Revenue, Excluding Billable Expenses, increased to **$2,043 million** from **$1,997 million**, providing insight into core operating performance by excluding lower-margin billable expenses[88](index=88&type=chunk)[89](index=89&type=chunk) - Adjusted EBITDA increased to **$311 million** from **$302 million**, reflecting core operating business performance after excluding non-operational and unusual items like severance costs[88](index=88&type=chunk)[89](index=89&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the company's liquidity position, expected cash needs, and strategies for capital allocation - As of June 30, 2025, total liquidity was **$1.7 billion**, comprising **$711 million** in cash and cash equivalents and **$999 million** available under the Revolving Credit Facility[90](index=90&type=chunk) - The company expects to meet its liquidity and cash needs for the next twelve months through operating cash flows, existing cash, and available borrowing capacity[92](index=92&type=chunk) - Potential uses of excess cash include strategic acquisitions, business investments, and returning value to shareholders via share repurchases and dividends[91](index=91&type=chunk) [Cash Flows](index=24&type=section&id=Cash%20Flows) Provides a detailed analysis of cash flows from operating, investing, and financing activities and their drivers - Net cash provided by operating activities increased significantly to **$119 million** for the three months ended June 30, 2025, up from **$52 million** in the prior year, driven by strong collection performance and lower compensation disbursements[95](index=95&type=chunk) - Net cash used in investing activities decreased to **$32 million** from **$127 million** in the prior year, primarily due to the absence of a business acquisition in the current period[96](index=96&type=chunk) - Net cash used in financing activities increased to **$261 million** from **$181 million**, mainly due to higher share repurchases and term loan payments[97](index=97&type=chunk) [Dividends and Share Repurchases](index=24&type=section&id=Dividends%20and%20Share%20Repurchases) Reports on quarterly cash dividends paid and ongoing share repurchase program activities - The company announced a regular quarterly cash dividend of **$0.55 per share**, payable on August 29, 2025[98](index=98&type=chunk) - During the three months ended June 30, 2025, the company paid **$70 million** in quarterly cash dividends[98](index=98&type=chunk) - The company repurchased **1.4 million shares** of Class A Common Stock for **$154 million** during the first three months of fiscal 2026, with approximately **$591 million** remaining under the repurchase program as of June 30, 2025[99](index=99&type=chunk) [Summarized Financial Information](index=24&type=section&id=Summarized%20Financial%20Information) Presents summarized financial information for the obligor group, including intercompany balances and debt guarantees - The Senior Notes due 2033 and 2035 are fully and unconditionally guaranteed by the Company[101](index=101&type=chunk) Summarized Statements of Financial Condition (Millions) | Metric | June 30, 2025 | March 31, 2025 | | :---------------------------------------- | :-------------- | :------------- | | Intercompany receivables from non-guarantor subsidiaries | $12 | $13 | | Total other current assets | $3,101 | $3,272 | | Goodwill and intangible assets, net of accumulated amortization | $1,502 | $1,501 | | Total other non-current assets | $1,017 | $978 | | Intercompany payables to non-guarantor subsidiaries | $6 | $91 | | Total other current liabilities | $1,743 | $1,819 | | Long-term debt, net of current portion | $3,896 | $3,915 | | Total other non-current liabilities | $430 | $535 | Summarized Statement of Operations (Three Months Ended June 30, 2025) (Millions) | Metric | Amount | | :---------------------------------------- | :----- | | Revenue | $2,898 | | Revenue from non-guarantor subsidiaries | $5 | | Operating income | $271 | | Operating loss from non-guarantor subsidiaries | $(6) | | Net income | $274 | | Net income attributable to the Obligor Group | $274 | [Commitments and Contingencies](index=25&type=section&id=Commitments%20and%20Contingencies) Refers to Note 12 of the financial statements for detailed information on commitments and contingencies - The company is subject to various reviews, investigations, claims, lawsuits, and other uncertainties, as detailed in Note 12 to the condensed consolidated financial statements[106](index=106&type=chunk) [Special Note Regarding Forward Looking Statements](index=25&type=section&id=Special%20Note%20Regarding%20Forward%20Looking%20Statements) Highlights that the report contains forward-looking statements subject to risks and uncertainties, with no obligation to update - The report contains forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially[107](index=107&type=chunk) - Key risks include issues with U.S. government relationships, changes in government spending, compliance failures, competitive bidding, loss of contracts, internal system failures, employee misconduct, and legal proceedings[107](index=107&type=chunk)[112](index=112&type=chunk) - All forward-looking statements are made as of the report date, and the company undertakes no obligation to update or revise them[108](index=108&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's quantitative and qualitative disclosures about market risk during the period covered by this Quarterly Report on Form 10-Q compared to the information provided in its Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - No material changes occurred in market risk disclosures during the quarter[109](index=109&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, with the participation of the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures, concluding they were effective as of the end of the reporting period. There have been no material changes in internal control over financial reporting during the last fiscal quarter [Disclosure Controls and Procedures](index=26&type=section&id=Disclosure%20Controls%20and%20Procedures) Confirms the effectiveness of the company's disclosure controls and procedures as evaluated by management - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[110](index=110&type=chunk) [Changes in Internal Control Over Financial Reporting](index=26&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) States that no material changes in internal control over financial reporting occurred during the last fiscal quarter - There have been no material changes in internal control over financial reporting during the last fiscal quarter[111](index=111&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 12, 'Commitments and Contingencies,' in the Notes to Unaudited Condensed Consolidated Financial Statements - Legal proceedings information is detailed in Note 12 of the financial statements[114](index=114&type=chunk) [Item 1A. Risk Factors](index=27&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 - No material changes to risk factors were reported during the period[115](index=115&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the company's equity security transactions, specifically detailing share repurchase activities during the quarter ended June 30, 2025, and confirming no unregistered sales of equity securities [Recent Sales of Unregistered Securities](index=27&type=section&id=Recent%20Sales%20of%20Unregistered%20Securities) Confirms that there were no unregistered sales of equity securities during the reporting period - There were no unregistered sales of equity securities during the period[116](index=116&type=chunk) [Issuer Purchases of Equity Securities](index=27&type=section&id=Issuer%20Purchases%20of%20Equity%20Securities) Details the company's share repurchase activities, including shares purchased and remaining authorization Share Repurchase Activity (Quarter Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | | :---------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------- | :---------------------------------------------------------------------------------------------------- | | April 2025 | 365,952 | $109.45 | 365,440 | $705 | | May 2025 | 640,674 | $116.50 | 556,225 | $641 | | June 2025 | 490,946 | $103.54 | 483,019 | $591 | | **Total** | **1,497,572** | | **1,404,684** | | - The company repurchased **1.4 million shares** of Class A Common Stock for an aggregate of **$154 million** during the first three months of fiscal 2026[99](index=99&type=chunk) - As of June 30, 2025, approximately **$591 million** remained under the share repurchase program, which was most recently increased by **$500 million** to **$3,585 million** on January 28, 2025[99](index=99&type=chunk)[117](index=117&type=chunk) [Item 3. Defaults Upon Senior Securities](index=27&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities were reported[118](index=118&type=chunk) [Item 4. Mine Safety Disclosures](index=27&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[119](index=119&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information was reported[120](index=120&type=chunk) [Item 6. Exhibits](index=28&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications, financial statements in Inline XBRL format, and other relevant documents - Exhibits include certifications (31.1, 31.2, 32.1, 32.2), financial statements in Inline XBRL (101), and the Cover Page Interactive Data File (104)[121](index=121&type=chunk)

[First Quarter Fiscal 2026 Results Overview](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Results%20Overview) [First Quarter Fiscal 2026 Highlights](index=1&type=section&id=Q1%20Highlights) The company reported strong Q1 FY26 results in line with expectations, driven by growth in key defense and intel markets [Financial Performance Summary](index=1&type=section&id=FINANCIAL%20SUMMARY) | FINANCIAL SUMMARY | | Three Months Ended | | | --- | --- | --- | --- | | | | March 31, | | | | 2025 | 2024 | % Change | | | | (unaudited) | | | Revenue | $2,924 | $2,942 | (0.6)% | | Revenue Ex. Billable Expenses | $2,043 | $1,997 | 2.3% | | Net Income | $271 | $165 | 64.2% | | Diluted EPS | $2.16 | $1.27 | 70.1% | | EBITDA | $297 | $296 | 0.3% | | Adjusted EBITDA | $311 | $302 | 3.0% | | Adjusted EBITDA Margin on Revenue | 10.6% | 10.3% | +30 bps | | Net Cash Provided by Operating Activities | $119 | $52 | 128.8% | | Free Cash Flow | $96 | $20 | 380.0% | | Adjusted Net Income | $184 | $180 | 2.2% | | Adjusted Diluted EPS | $1.48 | $1.38 | 7.2% | - Revenue declined **0.6 percent** year-over-year to **$2.9 billion**[5](index=5&type=chunk) - Adjusted Net Income of **$184 million**, a **2.2 percent** increase[5](index=5&type=chunk) - Adjusted EBITDA of **$311 million**, a **3.0 percent** increase, with Adjusted EBITDA Margin on Revenue increasing by **30 basis points** to **10.6 percent**[5](index=5&type=chunk) - Adjusted Diluted EPS of **$1.48**, a **7.2 percent** increase[5](index=5&type=chunk) - Free cash flow of **$96 million**, compared to $20 million in the prior year, representing a **380.0% increase**[5](index=5&type=chunk) [Operational Achievements](index=1&type=section&id=Operational%20Achievements) - Record Q1 backlog of **$38 billion**, a **10.7 percent** increase[5](index=5&type=chunk) - Quarterly book-to-bill ratio of **1.42x**[5](index=5&type=chunk) - Repurchase of **1.1 percent** of outstanding shares[5](index=5&type=chunk) - **$200 million** anticipated FY26 federal cash tax benefit from new S174 rules[5](index=5&type=chunk) - Continued strategic investments to accelerate technology transformation[5](index=5&type=chunk) [Dividend Declaration](index=1&type=section&id=Dividend%20Declaration) - A regular quarterly dividend of **$0.55 per share** will be payable on August 29, 2025, to stockholders of record on August 14, 2025[3](index=3&type=chunk) [Fiscal Year 2026 Outlook](index=2&type=section&id=OUTLOOK2) The company anticipates fiscal year 2026 revenue between $12.0 and $12.5 billion and Adjusted Diluted EPS of $6.20 to $6.55 | OPERATING PERFORMANCE | FISCAL YEAR 2026 GUIDANCE | | --- | --- | | Revenue | $12.0 - $12.5 billion | | Revenue Growth | 0 - 4.0% | | Adjusted EBITDA | $1,315 - $1,370 million | | Adjusted EBITDA Margin on Revenue | ~11% | | Adjusted Diluted EPS3 | $6.20 - $6.55 | | Free Cash Flow4 | $900 - $1,000 million | [Company Overview](index=2&type=section&id=ABOUT%20BOOZ%20ALLEN%20HAMILTON) Booz Allen Hamilton is an advanced technology firm serving U.S. defense, civil, and national security priorities with global operations - Booz Allen is an advanced technology company delivering outcomes with speed for America's most critical defense, civil, and national security priorities, building technology solutions using AI, cyber, and other cutting-edge technologies[9](index=9&type=chunk) - The firm employs approximately **33,400 people** globally as of June 30, 2025[10](index=10&type=chunk) - Had revenue of **$12.0 billion** for the 12 months ended March 31, 2025[10](index=10&type=chunk) [Earnings Webcast Information](index=2&type=section&id=EARNINGS%20WEBCAST) The company hosted a conference call on July 25, 2025, to discuss Q1 FY26 results, with a replay available online - A live conference call was hosted at 8 a.m. EDT on Friday, July 25, 2025, to discuss the financial results for the first quarter of fiscal year 2026[7](index=7&type=chunk) - The conference call was webcast simultaneously and a replay will be available on investors.boozallen.com[8](index=8&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=NON-GAAP%20FINANCIAL%20INFORMATION) [Definitions of Non-GAAP Measures](index=3&type=section&id=Definitions%20of%20Non-GAAP%20Measures) The company utilizes various non-GAAP measures to provide supplemental information for evaluating financial performance and liquidity - **Revenue, Excluding Billable Expenses** represents revenue less billable expenses, providing useful information about operating performance by excluding the impact of costs like subcontractor and travel expenses[12](index=12&type=chunk) - **EBITDA** represents net income before income taxes, interest expense, net and other income (expense), net, and depreciation and amortization[13](index=13&type=chunk) - **Adjusted EBITDA** represents net income before income tax expense, interest expense, net and other income (expense), net, depreciation and amortization, and certain other items to eliminate the impact of unusual, extraordinary, or non-recurring items[14](index=14&type=chunk) - **Adjusted Net Income** represents net income before other corporate expenses, acquisition amortization, and amortization or write-off of debt issuance costs and debt discount, net of tax effect, to eliminate items not considered indicative of ongoing operating performance[15](index=15&type=chunk) - **Adjusted Diluted EPS** represents diluted EPS calculated using Adjusted Net Income[16](index=16&type=chunk) - **Free Cash Flow** represents the net cash generated from operating activities less the impact of purchases of property, equipment and software[16](index=16&type=chunk) - **Adjusted Effective Tax Rate** represents income tax expense (benefit) excluding the income tax effects of adjustments to net income, divided by adjusted earnings before income tax expense[17](index=17&type=chunk) - **Net Leverage Ratio** is calculated as net debt (total debt less cash) divided by Adjusted EBITDA over the prior twelve months[17](index=17&type=chunk) - These non-GAAP financial measures are considered supplemental and not a substitute for financial information prepared in accordance with GAAP[11](index=11&type=chunk)[18](index=18&type=chunk) [Reconciliation Exceptions](index=3&type=section&id=Reconciliation%20Exceptions) Forward-looking reconciliations for certain non-GAAP measures are excluded due to the inability to predict certain variables without unreasonable effort - A reconciliation of Adjusted Diluted EPS guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to the inability to predict stock price, equity grants, and dividend declarations[20](index=20&type=chunk) - A reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin on Revenue guidance to the closest corresponding GAAP measure is not available without unreasonable efforts due to the inability to predict specific quantification of the amounts required for reconciliation[21](index=21&type=chunk) - Any attempt to disclose such reconciliations would imply a degree of precision that could be confusing or misleading to investors, and the variability of these charges is expected to have an unpredictable and potentially significant impact on future GAAP financial results[20](index=20&type=chunk)[21](index=21&type=chunk) [Forward-Looking Statements & Risk Factors](index=4&type=section&id=FORWARD%20LOOKING%20STATEMENTS) [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This release contains forward-looking statements about future performance, which are subject to risks and uncertainties - Statements concerning preliminary financial results, financial outlook and guidance, future quarterly dividends, and future improvements in operating margins are considered "forward-looking statements"[22](index=22&type=chunk) - Forward-looking statements can be identified by terminology such as "may," "will," "could," "should," "forecasts," "expects," "plans," "anticipates," "projects," "outlook," "believes," "estimates," "predicts," "potential," and "contemplates"[22](index=22&type=chunk) - While expectations are believed to be reasonable, there is no assurance they will prove correct, as actual results may differ materially due to known and unknown risks, uncertainties, and other factors[22](index=22&type=chunk) - The company undertakes no obligation to update or revise publicly any forward-looking statements, except as required by law[23](index=23&type=chunk) [Key Risk Factors](index=4&type=section&id=Key%20Risk%20Factors) The company faces risks related to government relationships, spending changes, competition, and internal and economic factors - Risks include any issue compromising relationships with the U.S. government or damaging professional reputation[24](index=24&type=chunk) - Changes in U.S. government spending, including reduction efforts, increased insourcing, and shifts in expenditures, as well as government shutdowns and delayed funding[24](index=24&type=chunk) - Failure to comply with new and existing U.S. and international laws and regulations[24](index=24&type=chunk) - Ability to compete effectively in the competitive bidding process and delays or losses of contract awards[24](index=24&type=chunk) - Internal system or service failures and security breaches, including cyber attacks, and misconduct or improper activities from employees, subcontractors, or suppliers[24](index=24&type=chunk) - Inherent uncertainties and potential adverse developments in legal or regulatory proceedings, including litigation, audits, reviews, and investigations[24](index=24&type=chunk) - Risks related to a possible recession, volatility or instability of the global financial system, deterioration of economic conditions, or weakening in credit or capital markets[24](index=24&type=chunk) - Risks related to pending, completed, and future acquisitions and dispositions, and risks related to indebtedness and credit facilities[25](index=25&type=chunk) [Financial Exhibits](index=5&type=section&id=Financial%20Exhibits) [Condensed Consolidated Statements of Operations](index=5&type=section&id=EXHIBIT%201) The company reported revenue of $2,924 million and a significant increase in net income to $271 million for the quarter | (Amounts in millions, except per share data) | | Three Months Ended June 30, (unaudited) | | | --- | --- | --- | --- | | | | 2025 | 2024 | | Revenue | | $2,924 | $2,942 | | **Operating costs and expenses:** | | | | | Cost of revenue | | 1,423 | 1,372 | | Billable expenses | | 881 | 945 | | General and administrative expenses | | 323 | 329 | | Depreciation and amortization | | 40 | 41 | | Total operating costs and expenses | | 2,667 | 2,687 | | **Operating income** | | **257** | **255** | | Interest expense, net | | (44) | (38) | | Other income (expense), net | | 3 | (3) | | **Income before income taxes** | | **216** | **214** | | Income tax (benefit) expense | | (25) | 49 | | **Net income** | | **$271** | **$165** | | **Earnings per common share:** | | | | | Basic | | $2.17 | $1.27 | | Diluted | | $2.16 | $1.27 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=EXHIBIT%202) Total assets were $7,170 million and total stockholders' equity was $1,065 million as of June 30, 2025 | (Amounts in millions, except share and per share data) | June 30, 2025 (unaudited) | March 31, 2025 | | --- | --- | --- | | **Assets** | | | | **Current assets:** | | | | Cash and cash equivalents | $711 | $885 | | Accounts receivable, net | 2,286 | 2,271 | | Prepaid expenses and other current assets | 138 | 157 | | **Total current assets** | **3,135** | **3,313** | | Property and equipment, net of accumulated depreciation | 171 | 177 | | Operating lease right-of-use assets | 165 | 178 | | Intangible assets, net of accumulated amortization | 549 | 563 | | Goodwill | 2,405 | 2,405 | | Deferred tax assets | 334 | 332 | | Other long-term assets | 411 | 344 | | **Total assets** | **$7,170** | **$7,312** | | **Liabilities and stockholders' equity** | | | | **Current liabilities:** | | | | Current portion of long-term debt | $83 | $83 | | Accounts payable and other accrued expenses | 949 | 987 | | Accrued compensation and benefits | 656 | 702 | | Operating lease liabilities | 42 | 41 | | Other current liabilities | 30 | 33 | | **Total current liabilities** | **1,760** | **1,846** | | Long-term debt, net of current portion | 3,896 | 3,915 | | Operating lease liabilities, net of current portion | 164 | 180 | | Other long-term liabilities | 285 | 368 | | **Total liabilities** | **6,105** | **6,309** | | **Stockholders' equity:** | | | | Common stock | 2 | 2 | | Treasury stock, at cost | (3,249) | (3,082) | | Additional paid-in capital | 1,071 | 1,042 | | Retained earnings | 3,271 | 3,070 | | Accumulated other comprehensive (loss) income | (30) | (29) | | **Total stockholders' equity** | **1,065** | **1,003** | | **Total liabilities and stockholders' equity** | **$7,170** | **$7,312** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=EXHIBIT%203) Net cash from operating activities increased to $119 million, while financing activities used $261 million in cash | (Amounts in millions) | Three Months Ended June 30, | | | --- | --- | --- | | | 2025 | 2024 | | **Cash flows from operating activities** | | | | Net income | $271 | $165 | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | Depreciation and amortization | 40 | 41 | | Noncash lease expense | 12 | 12 | | Stock-based compensation expense | 19 | 20 | | Net (gains) losses on investments, dispositions, and other | (4) | 3 | | Changes in operating assets and liabilities: | | | | Accounts receivable, net | (15) | (217) | | Deferred income taxes and income taxes receivable / payable | 34 | 44 | | Prepaid expenses and other current and long-term assets | (69) | (27) | | Accrued compensation and benefits | (32) | (76) | | Accounts payable and other accrued expenses | (35) | 90 | | Other current and long-term liabilities | (102) | (3) | | **Net cash provided by operating activities** | **119** | **52** | | **Cash flows from investing activities** | | | | Purchases of property, equipment, and software | (23) | (32) | | Payments for business acquisitions and dispositions, net of cash acquired | - | (93) | | Payments for cost method investments | (9) | (2) | | **Net cash used in investing activities** | **(32)** | **(127)** | | **Cash flows from financing activities** | | | | Proceeds from issuance of common stock | 11 | 11 | | Repurchases of common stock | (181) | (116) | | Cash dividends paid | (70) | (66) | | Repayments on revolving credit facility, term loans, and Senior Notes | (21) | (10) | | **Net cash used in financing activities** | **(261)** | **(181)** | | **Net decrease in cash and cash equivalents** | **(174)** | **(256)** | | Cash and cash equivalents-beginning of period | 885 | 554 | | **Cash and cash equivalents-end of period** | **$711** | **$298** | [Non-GAAP Financial Reconciliations](index=8&type=section&id=EXHIBIT%204) This section provides detailed reconciliations of non-GAAP measures like Adjusted EBITDA and Free Cash Flow to their GAAP equivalents Revenue, Excluding Billable Expenses | (In millions) | Three Months Ended June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Revenue | $2,924 | $2,942 | | Less: Billable expenses | 881 | 945 | | **Revenue, Excluding Billable Expenses** | **$2,043** | **$1,997** | EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin on Revenue | (In millions) | Three Months Ended June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Net income | $271 | $165 | | Income tax (benefit) expense | (55) | 49 | | Interest expense, net and other income (expense), net | 41 | 41 | | Depreciation and amortization | 40 | 41 | | **EBITDA** | **$297** | **$296** | | Other corporate expenses (a) | 14 | 6 | | **Adjusted EBITDA** | **$311** | **$302** | | Net income margin | 9.3 % | 5.6 % | | Adjusted EBITDA Margin on Revenue | 10.6 % | 10.3 % | Adjusted Net Income | (In millions) | Three Months Ended June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Net income | $271 | $165 | | Other corporate expenses (a) | 14 | 6 | | Acquisition amortization (b) | 12 | 13 | | Amortization or write-off of debt issuance costs and debt discount | - | 1 | | Adjustments for tax effect (c) | (113) | (5) | | **Adjusted Net Income** | **$184** | **$180** | Adjusted Diluted Earnings Per Share | | Three Months Ended June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Weighted-average number of diluted shares outstanding | 124,475,670 | 129,917,263 | | Diluted earnings per share | $2.16 | $1.27 | | **Adjusted Net Income Per Diluted Share** | **$1.48** | **$1.38** | Free Cash Flow | (In millions) | Three Months Ended June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Net cash provided by operating activities | $119 | $52 | | Less: Purchases of property, equipment and software | (23) | (32) | | **Free Cash Flow** | **$96** | **$20** | Historical Adjusted EBITDA and Net Leverage Ratio | (In millions) | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | --- | --- | --- | --- | --- | | Net income | $271 | $193 | $187 | $390 | | Income tax (benefit) expense | (55) | 49 | 61 | 123 | | Interest expense, net and other income (expense), net | 41 | 32 | 43 | 36 | | Depreciation and amortization | 40 | 42 | 40 | 42 | | **EBITDA** | **$297** | **$316** | **$331** | **$591** | | Change in provision for claimed costs (a) | 1 | 1 | 1 | (113) | | Insurance recoveries (b) | - | - | - | (115) | | Other corporate expenses (c) | 14 | - | 1 | 1 | | **Adjusted EBITDA** | **$311** | **$316** | **$332** | **$364** | | Last 12 months Adjusted EBITDA | $1,323 | | | | | Total Debt | $3,979 | | | | | Less: Cash | 711 | | | | | Net Debt | $3,268 | | | | | **Net Leverage Ratio (f)** | **2.5** | | | | | (In millions) | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | | --- | --- | --- | --- | --- | | Net income | $165 | $128 | $146 | $171 | | Income tax expense | 49 | 91 | 62 | 55 | | Interest expense, net and other income (expense), net | 41 | 45 | 40 | 41 | | Depreciation and amortization | 41 | 40 | 41 | 41 | | **EBITDA** | **$296** | **$304** | **$289** | **$308** | | Change in provision for claimed costs (a) | - | - | - | (18) | | Other corporate expenses (c) | 6 | 2 | 2 | - | | DC tax assessment adjustment (d) | - | (20) | - | - | | Financing transaction costs (e) | - | - | - | 1 | | **Adjusted EBITDA** | **$302** | **$286** | **$291** | **$291** | | Last 12 months Adjusted EBITDA | $1,170 | | | | | Total Debt | $3,403 | | | | | Less: Cash | 298 | | | | | Net Debt | $3,105 | | | | | **Net Leverage Ratio (f)** | **2.7** | | | | [Operating Data](index=10&type=section&id=EXHIBIT%205) Total backlog grew to $38,265 million with a quarterly book-to-bill ratio of 1.42x and a total headcount of 33,400 Backlog | (Amounts in millions) | As of June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Funded | $4,047 | $4,464 | | Unfunded | 10,441 | 9,185 | | Priced options | 23,777 | 20,923 | | **Total backlog** | **$38,265** | **$34,572** | Book-to-Bill | | Three Months Ended June 30, | Trailing Twelve Months Ended June 30, | | --- | --- | --- | | | 2025 | 2024 | 2025 | 2024 | | | 1.42x | 1.76x | 1.31x | 1.41x | Headcount | (Amounts are rounded) | As of June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Total Headcount | 33,400 | 35,100 | | Customer Staff Headcount | 30,400 | 32,000 | Revenue by Customer Type | (Amounts in millions) | Three Months Ended June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Defense | $1,517 | $1,421 | | Intelligence | 484 | 457 | | Civil | 923 | 1,064 | | **Total Revenue** | **$2,924** | **$2,942** | Percentage of Total Revenue by Contract Type | | Three Months Ended June 30, | | | --- | --- | --- | | | 2025 | 2024 | | Cost-Reimbursable | 60% | 56% | | Time-and-Materials | 22% | 23% | | Fixed-Price | 18% | 21% |

Core Insights - Analysts project Booz Allen Hamilton (BAH) will report quarterly earnings of $1.45 per share, a 5.1% increase year over year, with revenues expected to reach $2.94 billion, reflecting a slight decline of 0.1% from the same quarter last year [1] - The consensus EPS estimate has been revised upward by 0.3% over the past 30 days, indicating a collective reassessment by analysts [2] - Revisions to earnings estimates are significant indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3] Revenue Estimates - Revenue from U.S. Government Defense Clients is forecasted to reach $1.53 billion, representing an increase of 8.1% from the prior-year quarter [5] - Revenue from U.S. Government Civil Clients is estimated at $973.22 million, indicating a decrease of 8.5% from the prior-year quarter [5] - Revenue from U.S. Government Intelligence Clients is expected to be $483.07 million, reflecting a growth of 4.8% from the prior-year quarter [6] Backlog and Market Performance - Total Backlog is projected to be $40.23 billion, up from $36.18 billion a year ago [6] - Booz Allen shares have increased by 8.6% in the past month, outperforming the Zacks S&P 500 composite, which rose by 5.9% [6] - Despite recent performance, Booz Allen holds a Zacks Rank 5 (Strong Sell), suggesting expected underperformance in the near future [6]

Booz Allen Hamilton (BAH) is expected to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 2 ...

Group 1: Company Overview - Assertio (ASRT) is a specialty pharmaceutical company focused on branded prescription medications for neurology, inflammation, and pain [1] - Bridgeline Digital (BLIN) operates as a digital engagement company, offering a platform that integrates Web Content Management, e-commerce, e-marketing, Social Media management, and Web Analytics [2] - Booz Allen Hamilton (BAH) provides management and technology consulting, analytics, engineering, digital solutions, mission operations, and cyber expertise to governments, corporations, and not-for-profit organizations [3] Group 2: Earnings Estimates - The Zacks Consensus Estimate for Assertio's current year earnings has been revised downward by 83.3% over the last 60 days [1] - Bridgeline Digital's current year earnings estimate has been revised downward by almost 47.1% over the last 60 days [2] - Booz Allen Hamilton's current year earnings estimate has been revised downward by 6.8% over the last 60 days [3]

Group 1 - The stock market is currently experiencing a strong upward trend, indicated by the CNN Business Fear & Greed index reaching "Greed" territory, one of the highest readings in the past 52 weeks [1] - This shift is notable as the index was previously at "Extreme Fear" just a few months ago, highlighting a significant change in market sentiment [1]