Booz Allen Hamilton (US:BAH)2025-10-24 10:47Financial 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]