Booz Allen Hamilton (US:BAH)2025-10-24 10:49Financial 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]