Core Insights - Booz Allen Hamilton has revised its annual outlook downward following a decline in profit and revenue during its fiscal second quarter, primarily due to a persistent slowdown in funding [1] Financial Performance - The company reported lower profit and revenue in its fiscal second quarter, indicating financial challenges [1] Market Conditions - The decline in financial performance is attributed to a continued slowdown in funding, which is impacting the company's overall outlook for the year [1]

Financial Performance - Revenue for the three months ended September 30, 2025, was $2,890 million, a decrease of 8.1% compared to $3,146 million for the same period in 2024[14] - Operating income for the six months ended September 30, 2025, was $540 million, down 32.8% from $804 million in the prior year[14] - Net income for the three months ended September 30, 2025, was $175 million, a decline of 55.1% from $390 million in the same quarter of 2024[14] - Earnings per share (EPS) for the three months ended September 30, 2025, was $1.42, compared to $3.02 for the same period in 2024, reflecting a decrease of 52.9%[14] - Total revenue for the six months ended September 30, 2025, was $5,762 million, with a net income of $453 million[119] - Operating income decreased by 48% to $283 million for the three months ended September 30, 2025, and by 33% to $540 million for the six months ended September 30, 2025[85] - Revenue decreased by 8% to $2,890 million for the three months ended September 30, 2025, and by 5% to $5,814 million for the six months ended September 30, 2025, compared to the prior year period[86] Assets and Liabilities - Total assets as of September 30, 2025, were $7,153 million, down from $7,312 million as of March 31, 2025[11] - Total liabilities decreased to $6,157 million as of September 30, 2025, from $6,309 million as of March 31, 2025[11] - Total debt as of September 30, 2025, was $3.96 billion, with a long-term debt net of current portion of $3.88 billion[45] - Long-term debt as of September 30, 2025, was $3,876 million, a slight decrease from $3,915 million as of March 31, 2025[118] - The company had total accounts receivable, net, of $2.28 billion as of September 30, 2025, compared to $2.33 billion as of March 31, 2025[40] Cash Flow and Investments - Cash and cash equivalents at the end of the period were $816 million, a decrease from $885 million at the beginning of the period[19] - Net cash provided by operating activities for the six months ended September 30, 2025, was $540 million, compared to $639 million for the same period in 2024[19] - Net cash used in investing activities was $61 million for the six months ended September 30, 2025, a decrease from $153 million in the prior year period[110] - Net cash used in financing activities was $548 million for the six months ended September 30, 2025, compared to $481 million in the prior year period, primarily due to increased share repurchases[111] Stockholder Equity and Dividends - The total stockholders' equity increased to $3,378 million as of September 30, 2025, from $3,271 million at June 30, 2025[25] - The company paid dividends of $0.55 per share of common stock during the three months ended September 30, 2025, totaling $68 million[25] - The company repurchased common stock worth $395 million during the six months ended September 30, 2025[19] - The company repurchased a total of 1,944,702 shares during the quarter ended September 30, 2025, with an approximate dollar value of shares that may yet be purchased under the plans totaling $384 million[131] Performance Obligations and Revenue Sources - Revenue from cost-reimbursable contracts was $1.71 billion, accounting for 59% of total revenue for the three months ended September 30, 2025[37] - The company’s revenue from defense customers was $1.58 billion, representing 54% of total revenue for the three months ended September 30, 2025[37] - Remaining performance obligations as of September 30, 2025, were $12.1 billion, with an expectation to recognize approximately 65% as revenue over the next 12 months[39] - The company expects to recognize approximately 65% of remaining performance obligations as revenue over the next 12 months as of September 30, 2025[80] Expenses and Cost Management - General and administrative expenses increased by 37% and 14% for the three and six months ended September 30, 2025, compared to the same periods in 2024, with expenses as a percentage of revenue at 11% and 9% respectively[91] - Cost of revenue as a percentage of revenue was 46% for the three months ended September 30, 2025, compared to 43% for the same period in 2024[88] - Billable expenses as a percentage of revenue were 32% for the three months ended September 30, 2025, compared to 31% for the same period in 2024[90] - The Company incurred $36 million in severance and related expenses in the first quarter of fiscal 2026 due to a cost management initiative and restructuring of the Civil business[65] - The Company plans to reduce costs by approximately $150 million annually starting in the third quarter of fiscal 2026[66] Tax and Regulatory Environment - The effective income tax rates for the three months ended September 30, 2025, and 2024, were 24.9% and 24.0%, respectively, while for the six months ended September 30, 2025, and 2024, they were 0.7% and 23.7%[9] - As of September 30, 2025, the Company recorded $56 million in reserves for uncertain tax positions (UTPs), down from $142 million as of March 31, 2025, primarily due to an $86 million adjustment from IRS examination procedures[50] - The One Big Beautiful Bill Act ("OBBB") was enacted on July 4, 2025, which includes provisions for the permanent extension of certain tax benefits, impacting the Company's effective tax rate[52] - The company is subject to various risks including changes in U.S. government spending and potential impacts from government shutdowns[121] - A prolonged government shutdown is expected to negatively impact the company's business and financial condition[76] Employee and Operational Metrics - As of September 30, 2025, Booz Allen Hamilton had approximately 32,500 employees[28] - The company’s total accrued compensation and benefits as of September 30, 2025, were $675 million, a decrease from $702 million as of March 31, 2025[44] - The company’s disclosure controls and procedures were evaluated as effective as of the end of the reporting period[124]

Financial Performance - Q2 revenue declined 8.1% year-over-year to $2.9 billion, with a 4.7% decline when excluding prior year changes to the provision for claimed costs[5] - Net income for Q2 was $175 million, representing a 55.1% decrease compared to the previous year[5] - Adjusted EBITDA for Q2 was $324 million, an 11.0% decrease, with an adjusted EBITDA margin of 11.2%, down 40 basis points[5] - Adjusted net income for Q2 was $183 million, a 21.5% decrease compared to the same period last year[5] - Revenue for the three months ended September 30, 2025, was $2,890 million, a decrease of 8.1% compared to $3,146 million for the same period in 2024[27] - Operating income for the six months ended September 30, 2025, was $540 million, down 32.8% from $804 million in the same period of 2024[27] - Net income for the six months ended September 30, 2025, was $446 million, a decrease of 38.5% compared to $727 million for the same period in 2024[27] - Diluted earnings per share for the three months ended September 30, 2025, was $1.42, down from $3.01 in the same period of 2024[27] - Adjusted diluted EPS guidance for fiscal 2026 is now projected at $5.45 - $5.65, reduced from $6.20 - $6.55[7] - Adjusted EBITDA for the six months ended September 30, 2025, was $635 million, down from $666 million in 2024, reflecting a margin of 10.9%[30] - Adjusted diluted earnings per share for the three months ended September 30, 2025, was $1.49, down from $1.81 in 2024[30] Cash Flow and Assets - Free cash flow for Q2 was $395 million, down from $563 million in the prior year, reflecting a 29.8% decrease[6] - Net cash provided by operating activities for the six months ended September 30, 2025, was $540 million, compared to $669 million for the same period in 2024[29] - Free cash flow for the six months ended September 30, 2025, was $491 million, compared to $283 million in 2024, reflecting a significant increase[30] - Cash and cash equivalents at the end of the period were $816 million, compared to $885 million at the beginning of the period[29] - Total current assets as of September 30, 2025, were $3,221 million, a decrease from $3,313 million as of March 31, 2025[28] - Total liabilities as of September 30, 2025, were $6,157 million, down from $6,309 million as of March 31, 2025[28] Backlog and Demand - The company reported a record Q2 backlog of $40 billion and a quarterly book-to-bill ratio of 1.7x[5] - The total backlog increased by 2.9% year-over-year, indicating ongoing demand despite current funding slowdowns[5] - Total backlog as of September 30, 2025, was $40,188 million, an increase from $39,066 million in 2024, with funded backlog at $5,440 million and unfunded backlog at $10,668 million[40] - Book-to-bill ratio for the three months ended September 30, 2025, was 1.7x, compared to 2.4x in the same period of 2024[41] Shareholder Actions - The company repurchased 2.7% of outstanding shares in the first half of the fiscal year[5] - The company repurchased common stock worth $395 million during the six months ended September 30, 2025[29] Future Outlook - Full year revenue guidance has been adjusted to $11.3 - $11.5 billion, down from the previous range of $12.0 - $12.5 billion[7] - The company anticipates future improvements in operating margins and revenue growth, although specific guidance was not provided[26] Workforce and Sector Performance - Total headcount decreased to 32,500 as of September 30, 2025, down from 35,800 in 2024[42] - Revenue from the Defense sector for the three months ended September 30, 2025, was $1,580 million, compared to $1,547 million in 2024, indicating a growth of 2.1%[42] - Cost-reimbursable contracts accounted for 59% of total revenue for the three months ended September 30, 2025, up from 57% in 2024[43] Financial Ratios - Net leverage ratio as of September 30, 2025, was 2.5, indicating a stable financial position compared to previous periods[35]

Core Insights - Booz Allen Hamilton announced preliminary results for the second quarter of fiscal year 2026 [6][9] - The company will host a conference call on October 24, 2025, to discuss these financial results [2][7] - Booz Allen Hamilton employs approximately 32,500 people globally and reported revenue of $12.0 billion for the 12 months ending March 31, 2025 [5] Financial Results - Preliminary results for the second quarter fiscal year 2026 were announced, with further details to be discussed in the upcoming conference call [6][9] Company Overview - Booz Allen Hamilton is an advanced technology company focused on defense, civil, and national security priorities, utilizing AI and cyber technologies [4] - The company aims to empower people to change the world through its technology solutions [4] Recent Developments - Booz Allen Hamilton expanded its partnership with SEEQC to accelerate quantum engineering solutions, enhancing capabilities for government and commercial clients [6] - The company secured a $1.58 billion contract for intelligence analysis related to countering weapons of mass destruction [8]

Group 1 - U.S. stock futures are trading higher, indicating potential investor interest in various stocks [1] - Procter & Gamble Co. is expected to report quarterly earnings of $1.90 per share on revenue of $22.17 billion [2] - Intel Corp. reported third-quarter revenue of $13.65 billion, exceeding analyst estimates of $13.14 billion, with adjusted earnings of 23 cents per share [2] - General Dynamics Corp. is anticipated to post quarterly earnings of $3.70 per share on revenue of $12.57 billion [2] - Deckers Outdoor Corp. reported second-quarter earnings with fiscal GAAP EPS expected between $6.30 and $6.39, and revenue of $5.35 billion [2] - Booz Allen Hamilton Holding Corp. is expected to report quarterly earnings of $1.51 per share on revenue of $2.99 billion [2] Group 2 - Procter & Gamble shares rose 0.8% to $153.49 in after-hours trading [2] - Intel shares gained 7.7% to $41.10 in after-hours trading [2] - General Dynamics shares rose 1% to $345.00 in after-hours trading [2] - Deckers Outdoor shares fell 12.3% to $89.91 in after-hours trading [2] - Booz Allen Hamilton shares slipped 0.3% to $100.00 in after-hours trading [2]

Core Points - The White House has released a list of donors for the construction of a new banquet hall, which is planned to cover an area of 90,000 square feet (approximately 8,361 square meters) [1] - The total estimated cost of the project is approximately $300 million, which is an increase from the previous government estimate of $200 million [3] Donor Information - Notable donors include major companies such as Apple, Amazon, Lockheed Martin, Microsoft, Google, cryptocurrency exchange Coinbase, Comcast, and Meta [3] - Other significant contributors include the Winklevoss twins (co-founders of Gemini), U.S. Secretary of Commerce Howard Lutnick and his family, and the Adelson family from Las Vegas Sands [3] - The donor list also features over 30 other organizations and individuals, including Altria Group, Booz Allen Hamilton, Caterpillar, Hard Rock International, HP, and Micron Technology [3]

Group 1 - The White House announced a list of donors for the construction of a banquet hall being promoted by President Trump, with a planned area of 90,000 square feet (approximately 8,361 square meters) [1] - The total estimated cost of the project is approximately $300 million, which is an increase from the previous government estimate of $200 million [1] - Notable donors include major companies such as Apple, Amazon, Lockheed Martin, Microsoft, Google, and cryptocurrency platforms like Coinbase and Gemini [1][2] Group 2 - Additional donors listed include companies such as Altria Group, Booz Allen Hamilton, Caterpillar, Hard Rock International, HP, Micron Technology, NextEra Energy, Palantir Technologies, Ripple, Reynolds American, T-Mobile, and the cryptocurrency issuer Tether [2] - The list features over 30 institutions and individuals contributing to the project [2]

Core Insights - Booz Allen Hamilton Holding Corp. (NYSE:BAH) is recognized as one of the top defense stocks in Goldman Sachs' portfolio, with approximately 50% of its revenue derived from defense customers, including various branches of the U.S. military and other government entities [1] Group 1: Analyst Ratings and Valuation - William Blair analyst Louie DiPalma reiterated a Buy rating on Booz Allen Hamilton, highlighting the company's growing influence in the defense technology sector, as evidenced by its participation in a recent high-profile White House dinner alongside leading technology firms [2] - The analyst also noted that Booz Allen's current valuation is at a five-year low, presenting a potential investment opportunity despite rising valuations among its defense peers [3] Group 2: Company Services and Market Position - Booz Allen Hamilton provides a range of solutions including cybersecurity, artificial intelligence, analytics, digital engineering, and mission-critical IT services, making it one of the largest contractors for the U.S. Department of Defense and other federal sectors [4]

Core Viewpoint - Booz Allen Hamilton is set to report earnings on October 24, 2025, with expectations of a decline in EPS and revenue compared to the previous year [2][3]. Group 1: Stock Performance - Booz Allen Hamilton closed at $100.95, reflecting a +2.97% increase from the previous day, outperforming the S&P 500's gain of 1.07% [1]. - Over the past month, shares have decreased by 4.01%, which is better than the Business Services sector's decline of 5.09% but worse than the S&P 500's increase of 1.08% [1]. Group 2: Earnings Estimates - The upcoming earnings report is expected to show an EPS of $1.51, indicating a 16.57% decline year-over-year, with revenue forecasted at $2.99 billion, a 5.09% decrease from the same quarter last year [2]. - For the entire fiscal year, earnings are projected at $6.38 per share and revenue at $12.22 billion, reflecting changes of +0.47% and +2.05% respectively from the previous year [3]. Group 3: Analyst Estimates and Rankings - Changes in analyst estimates are crucial as they reflect the evolving business trends, with positive revisions indicating confidence in performance and profit potential [4]. - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks Booz Allen Hamilton at 3 (Hold), with a consensus EPS projection that has increased by 0.35% in the last 30 days [5][6]. Group 4: Valuation Metrics - Booz Allen Hamilton has a Forward P/E ratio of 15.37, which is lower than the industry average of 19.68 [7]. - The company has a PEG ratio of 1.54, compared to the Consulting Services industry's average PEG ratio of 1.26 [7]. Group 5: Industry Context - The Consulting Services industry, part of the Business Services sector, holds a Zacks Industry Rank of 90, placing it in the top 37% of over 250 industries [8].

Core Insights - Goldman Sachs highlights the top 10 stocks to buy, focusing on defense companies due to increased global defense spending driven by geopolitical tensions [1][6]. Company Overview - Goldman Sachs Group is a leading investment bank with over $720 billion in Assets Under Supervision, emphasizing long-term investments in quality companies with attractive valuations [2]. - The firm has significant exposure to the aerospace and defense sector, which is experiencing growth due to rising defense budgets amid geopolitical conflicts [3]. Recent Developments - The Canadian Government announced the creation of the Defence Investment Agency (DIA) to enhance procurement and investment in advanced defense systems, aligning with NATO's commitment to allocate 5% of GDP for defense [4]. - The U.S. government shutdown has delayed key budget decisions, impacting defense funding, with the Senate failing to pass a defense funding bill [5]. - U.S. Treasury Secretary Scott Bessent expressed concerns about defense companies lagging on deliveries and suggested prioritizing research spending over buybacks [6]. Stock Analysis - **Northrop Grumman Corp. (NYSE:NOC)**: Valued at $384 million in Goldman Sachs' portfolio, it has a 20% share price return from July 1 to October 16. The company is well-positioned to benefit from rising defense budgets and has a strong portfolio in next-generation defense systems [11][12][15]. - **Booz Allen Hamilton Holding Corp. (NYSE:BAH)**: Valued at $154 million, it generates about 50% of its revenue from defense customers. Despite a -7% share price return, analysts see potential due to its attractive valuation and growing influence in advanced defense systems [16][18][19].