Booz Allen Hamilton (BAH) - 2025 Q2 - Quarterly Results

Fiscal 2025 Second Quarter Performance Overview Booz Allen Hamilton achieved strong double-digit revenue and profit growth in Q2 and H1 FY25, driven by robust operational momentum Key Financial and Operational Highlights Booz Allen Hamilton reported strong Q2 FY25 performance with 18.0% revenue growth to $3.15 billion, a 128.5% net income increase, and robust operational momentum Q2 FY2025 Financial Highlights (vs. Q2 FY2024) | Metric | Q2 FY2025 | Change vs. Q2 FY2024 | | :--- | :--- | :--- | | Revenue | $3.15B | +18.0% | | Organic Revenue Growth | - | +17.1% | | Operating Income | $548.6M | +105.5% | | Adjusted Operating Income | $335.2M | +27.3% | | Net Income | $390.1M | +128.5% | | Adjusted Net Income | $233.0M | +37.8% | | Diluted EPS | $3.01 | +133.3% | | Adjusted Diluted EPS | $1.81 | +40.3% | - Total backlog increased by 17.7% year-over-year to $41.3 billion, with a strong quarterly book-to-bill ratio of 2.61x, indicating robust demand and future revenue visibility[1] - Client staff headcount grew by 8.1% year-over-year, an increase of approximately 2,500 employees, reflecting the company's ability to attract and retain talent to support growth[1] First Half Fiscal 2025 Performance The company demonstrated consistent H1 FY25 growth, with revenue up 14.4% to $6.09 billion, net income growing 67.2%, and Adjusted Diluted EPS reaching $3.19 H1 FY2025 Financial Highlights (vs. H1 FY2024) | Metric | H1 FY2025 | Change vs. H1 FY2024 | | :--- | :--- | :--- | | Revenue | $6.09B | +14.4% | | Operating Income | $803.8M | +60.3% | | Net Income | $555.3M | +67.2% | | Adjusted Net Income | $412.6M | +13.9% | | Diluted EPS | $4.27 | up from $2.51 | | Adjusted Diluted EPS | $3.19 | up from $2.76 | Cash Flow and Shareholder Returns H1 FY25 cash generation dramatically improved to $639.2 million from operating activities, and the company declared a $0.51 per share quarterly dividend H1 FY2025 Cash Flow (in millions) | Metric | H1 FY2025 | H1 FY2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $639.2 | $(118.9) | | Free Cash Flow | $583.0 | $(146.4) | - A regular quarterly dividend of $0.51 per share was declared, payable on December 4, 2024, to stockholders of record on November 15, 2024[2] Fiscal 2025 Financial Outlook Booz Allen Hamilton raised and narrowed its full-year FY25 guidance, projecting higher revenue growth, Adjusted EBITDA, Adjusted Diluted EPS, and cash flow based on strong H1 performance Updated Fiscal 2025 Guidance Updated FY25 guidance projects revenue growth of 11.0% - 13.0%, Adjusted Diluted EPS of $6.10 - $6.30, and higher Adjusted EBITDA and cash flow Fiscal Year 2025 Guidance Update | Metric | Updated FY2025 Guidance | Original FY2025 Guidance | | :--- | :--- | :--- | | Revenue Growth | 11.0% - 13.0% | 8.0% - 11.0% | | Adjusted EBITDA | $1,300 - $1,330 million | $1,260 - $1,300 million | | Adjusted Diluted EPS | $6.10 - $6.30 | $5.80 - $6.05 | | Net Cash Provided by Operating Activities | $925 - $1,025 million | $825 - $925 million | Consolidated Financial Statements (GAAP) This section presents the company's GAAP financial statements, including detailed statements of operations, balance sheets, and cash flows Condensed Consolidated Statements of Operations Q2 FY25 income statement shows revenue of $3.15 billion, operating income more than doubled to $548.6 million, and net income rose to $390.1 million Q2 FY2025 Statement of Operations (in thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Revenue | $3,146,386 | $2,666,282 | | Operating Income | $548,609 | $266,989 | | Net Income | $390,112 | $170,718 | | Diluted EPS | $3.01 | $1.29 | Condensed Consolidated Balance Sheets As of Sep 30, 2024, total assets were $6.88 billion, total liabilities $5.68 billion, with stockholders' equity growing to $1.20 billion Balance Sheet Highlights (in thousands) | Metric | September 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $2,917,023 | $2,738,909 | | Total Assets | $6,878,374 | $6,563,688 | | Total Current Liabilities | $1,874,855 | $1,692,190 | | Total Liabilities | $5,677,605 | $5,517,126 | | Total Stockholders' Equity | $1,200,769 | $1,046,562 | Condensed Consolidated Statements of Cash Flows H1 FY25 net cash from operating activities was $639.2 million, a significant improvement, with $153.3 million used in investing and $481.5 million in financing H1 FY2025 Cash Flow Summary (in thousands) | Cash Flow From | Six Months Ended Sep 30, 2024 | Six Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | Operating Activities | $639,219 | $(118,917) | | Investing Activities | $(153,272) | $(37,002) | | Financing Activities | $(481,480) | $308,353 | | Net Increase in Cash | $4,467 | $152,434 | Non-GAAP Financial Measures and Reconciliations This section details the company's non-GAAP financial measures, providing definitions and reconciliations to GAAP figures for core operating performance Explanation of Non-GAAP Measures The company explains its rationale for using non-GAAP metrics like Adjusted EBITDA to evaluate core operating performance by excluding unusual or non-recurring items - Management uses non-GAAP measures like Adjusted EBITDA and Adjusted Net Income for business planning, managing against internal projections, and measuring core operating performance by excluding non-operational or unusual items[6] Reconciliation of GAAP to Non-GAAP Measures Reconciliations detail adjustments from GAAP to non-GAAP figures, with Q2 FY25 including a $115.3 million gain from insurance recoveries and a $113.1 million reduction in claimed costs Q2 FY2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | Net Income (GAAP) | $390,112 | | Add: Taxes, Interest, D&A | $200,553 | | EBITDA | $590,665 | | Adjustments: | | | Change in provision for claimed costs | $(113,112) | | Insurance recoveries | $(115,320) | | Other adjustments | $1,717 | | Adjusted EBITDA (Non-GAAP) | $363,950 | - Key adjustments in Q2 FY25 included a $115.3 million pre-tax gain from insurance recoveries related to a prior settlement and a $113.1 million pre-tax benefit from a reduction in the provision for claimed costs[12][13][15] Key Operating Data Key operating metrics highlight strong business momentum, with significant backlog growth, a robust book-to-bill ratio, and expanding headcount Backlog and Book-to-Bill Ratio Total backlog increased 17.7% year-over-year to $41.3 billion, with a strong quarterly book-to-bill ratio of 2.61x indicating robust new awards Backlog Composition (in millions) | Backlog Type | As of Sep 30, 2024 | As of Sep 30, 2023 | | :--- | :--- | :--- | | Funded | $6,612 | $6,282 | | Unfunded | $10,317 | $10,128 | | Priced options | $24,325 | $18,630 | | Total backlog | $41,254 | $35,040 | Book-to-Bill Ratio | Period | FY2025 | FY2024 | | :--- | :--- | :--- | | Three Months Ended Sep 30 | 2.61x | 2.41x | | Six Months Ended Sep 30 | 2.18x | 1.72x | Headcount and Revenue Mix The workforce grew to 35,800 employees, an increase of 2,700, with 57% of Q2 revenue from cost-reimbursable contracts, indicating a stable mix Headcount Growth | Headcount Type | As of Sep 30, 2024 | As of Sep 30, 2023 | | :--- | :--- | :--- | | Total Headcount | 35,800 | 33,100 | | Client Staff Headcount | 32,700 | 30,200 | Q2 Revenue by Contract Type | Contract Type | Q2 FY2025 | Q2 FY2024 | | :--- | :--- | :--- | | Cost-Reimbursable | 57% | 55% | | Time-and-Materials | 23% | 24% | | Fixed-Price | 20% | 21% | Forward-Looking Statements This section provides a legal disclaimer for forward-looking statements, cautioning that actual results may differ due to various risks and uncertainties Risk Factors Key risk factors include dependency on U.S. government spending, regulatory compliance, competition, and the ability to attract and retain skilled talent - The document contains forward-looking statements concerning financial guidance and future performance. These are subject to risks including, but not limited to, changes in U.S. government spending, budgetary constraints, contract award delays, and competition[7]