Booz Allen Hamilton (US:BAH)2024-10-25 15:24Financial Data and Key Metrics Changes - Total revenue for Q2 2025 grew 18% year-over-year to $3.1 billion, with organic revenue increasing 17% year-over-year [24] - Adjusted EBITDA for the quarter was $364 million, approximately 25% higher than the prior year period, with an adjusted EBITDA margin of 11.6%, up 70 basis points compared to the prior year quarter [24] - Net income for the quarter was $390 million, 129% higher year-over-year, while adjusted net income increased 38% year-over-year to $233 million [24] Business Line Data and Key Metrics Changes - Civil revenues rose approximately 12% from the prior year quarter, continuing double-digit growth for the past 13 quarters [8] - Intelligence market revenue increased 8% year-over-year, marking a return to growth [10] - Defense business revenue increased 17% year-over-year, driven by strategic support in geopolitical conflicts and modernization efforts [12] Market Data and Key Metrics Changes - Total backlog as of September 30 was a record $41 billion, up about 18% from a year ago, with net bookings for the quarter at $8.2 billion [23] - The trailing 12-month book-to-bill ratio was 1.5 times, the highest in six years [23] - Client staff increased by 4.3% in the first half of the fiscal year, totaling nearly 33,000 employees, an 8.1% increase year-over-year [23] Company Strategy and Development Direction - The company's growth strategy, VOLT (velocity, leadership, and technology), continues to drive performance and positions the company for future growth [6] - The focus is on supporting national missions with leading-edge technology, adapting to complex environments, and leveraging innovation to navigate challenges [7] - The company aims to exceed the top end of its multi-year investment thesis through organic performance [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the turbulent environment due to geopolitical instability and upcoming elections, which may affect visibility and priorities [29] - Despite uncertainties, management expressed confidence in the company's operational momentum and ability to adapt to changing demands [30] - The company remains optimistic about growth in both the near and medium term, driven by strong demand across various sectors [31] Other Important Information - The company repurchased about 1.2% of its shares, totaling $232 million, and declared a quarterly dividend of $0.51 per share [25] - The company expects total cyber revenue to reach between $2.5 billion and $2.8 billion by the end of the fiscal year, with plans to double that revenue in the next five years [11] Q&A Session Summary Question: Guidance implies a deceleration; what are the drivers of growth in the back half? - Management acknowledged the turbulent environment and potential changes in priorities due to the upcoming election but highlighted strong performance indicators such as hiring and backlog [29] Question: What is the range of outcomes regarding cash impact from audit adjustments? - Management indicated that there has not been a cash impact yet and advised against building expectations of cash into models at this time [32] Question: How strong is the demand environment relative to potential headwinds from specific contracts? - Management emphasized that the company is not defined by a single contract and has the ability to adapt talent to new opportunities, maintaining overall growth momentum [41] Question: What is the outlook for recruiting and retention trends? - Management expressed confidence in continued strong recruiting and retention, noting that Booz Allen is increasingly seen as a destination for top talent [50]