Booz Allen Hamilton — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance:

• Revenue for the three months ended September 30, 2026, was $2.778 billion, a 3.9% decrease year-over-year from $2.890 billion in the prior year period.
• Revenue excluding billable expenses was $1.957 billion, a 0.8% decrease year-over-year.
• Net income was $181 million, a 3.4% increase year-over-year from $175 million.
• Adjusted Net Income was $211 million, a 15.3% increase year-over-year from $183 million.
• Adjusted EBITDA was $313 million, a 3.4% decrease year-over-year from $324 million.
• Adjusted EBITDA Margin on Revenue increased 10 basis points to 11.3% from 11.2% in the prior year period.
• Adjusted Diluted EPS was $1.76, an 18.1% increase year-over-year from $1.49.
• Free cash flow was $263 million, a 33.4% decrease year-over-year from $395 million.
• Net cash provided by operating activities was $294 million, a 30.2% decrease year-over-year from $421 million.
• Total debt was $4.410 billion, with net debt of $4.076 billion.
• Net Leverage Ratio was 3.3x, compared to 2.5x in the prior year period.

Guidance and Future Outlook:

• Fiscal 2027 Revenue guidance was raised to $11.3–$11.6 billion from a prior range of $11.2–$11.7 billion.
• Fiscal 2027 Revenue Growth guidance was raised to 1.0–3.0% from 0–4.0%.
• Fiscal 2027 Adjusted EBITDA guidance was raised to $1,260–$1,290 million from $1,240–$1,290 million.
• Fiscal 2027 Adjusted Diluted EPS guidance was raised to $6.50–$6.70 from $6.00–$6.35.
• Fiscal 2027 Free Cash Flow guidance was raised to $850–$925 million from $825–$925 million.
• Guidance assumes an effective tax rate of 16–19% and average diluted shares outstanding of 118–120 million.
• Guidance assumes capital expenditures of approximately $200 million for fiscal 2027.

Business Segments and Product Lines:

• National Security portfolio revenue was $2.076 billion for the quarter, showing momentum.
• Civil and Commercial portfolio revenue was $702 million for the quarter, performing in line with expectations.
• Total backlog increased 1.9% year-over-year to $40.933 billion (rounded to $41 billion in summary).
• Funded backlog was $5.711 billion; unfunded backlog was $10.409 billion; priced options were $24.813 billion.
• Quarterly book-to-bill ratio was 1.5x, and the trailing twelve-month book-to-bill ratio was 1.1x.
• The company is accelerating investments in advanced cyber, agentic, and defense technologies.
• Revenue by contract type for the quarter: Cost-Reimbursable (59%), Time-and-Materials (21%), and Fixed-Price (20%).

Market and Competitive Landscape:

• The company describes itself as an advanced technology company building commercial-grade products for defense, civil, and national security priorities.
• National Security segment includes revenues from Defense and Intelligence customers, which were previously reported separately.
• Headcount decreased to 31,000 as of September 30, 2026, from 32,500 in the prior year period.
• Customer staff headcount was 28,200.

Risks and Challenges:

• Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations, including factors described in the Annual Report on Form 10-K filed May 22, 2026.
• Specific risks include the inability to predict stock price, equity grants, and dividend declarations, which impacts the reconciliation of Adjusted Diluted EPS to GAAP EPS.
• Non-GAAP measures exclude items such as acquisition-related costs, severance, and restructuring charges which may impact future GAAP results.

Management Commentary and Tone:

• Horacio Rozanski, Chairman and CEO, stated the company is "executing exceptionally well and investing in our next phase of growth."
• Management highlighted building and scaling cyber and defense tech products and bringing "super intelligence" into critical missions.
• Profitability was described as "above expectations driven by strong operational execution."
• The tone emphasized momentum in the National Security portfolio and the delivery of advanced technologies to drive speed and mission impact.

Analyst Questions and Answers:

• No specific analyst questions and answers are included in the provided press release text.

Other Key Points:

• A regular quarterly dividend of $0.59 per share will be payable on December 4, 2026, to stockholders of record on November 12, 2026.
• Total capital deployment for the quarter was $965 million.
• Significant investing activities included payments for business acquisitions and dispositions of $934 million and strategic investments of $155 million.
• The company repurchased $170 million of common stock during the six-month period.
• Other corporate expenses included acquisition-related costs for Defy Security (Q1 FY27) and Ultra I&C Mission Solutions (Q2 FY27).
• The press release includes a live conference call scheduled for October 23, 2026, at 8 a.m. EDT.