BAH earnings analysis
What we found in BAH's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Booz Allen’s fiscal Q1 revenue declined 4% year over year to $2.800 billion amid slower federal procurement, though operating margin expanded by roughly 1 percentage point to 10% and GAAP EPS of $1.63 exceeded consensus. Backlog grew 3% to $39.483 billion and operating cash flow more than doubled to $281 million, providing offsets to the top-line pressure. The key near-term issues are procurement uncertainty, lower cash following investment activity, and execution and funding of the planned $720 million Ultra Mission Solutions acquisition.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Margins expanded despite revenue contraction
- Revenue was $2.800 billion, down 4% year over year from $2.924 billion as procurement slowed, but up 0.7% sequentially from $2.780 billion. Operating income increased 9% to $279 million and operating margin expanded to 10% from 9%.
- EPS beat consensus despite lower GAAP earnings
- GAAP diluted EPS was $1.63, down 3.0% sequentially from $1.68 and 24.5% from $2.16 a year earlier, but above the $1.49 consensus estimate by $0.14. Net income fell 27% to $198 million, principally reflecting a $53 million tax expense versus a $55 million tax benefit last year.
- Backlog and RPOs increased
- Total backlog rose 3% year over year to $39.483 billion, including funded backlog of $4.664 billion, up from $4.047 billion. Remaining performance obligations increased to $11.1 billion from $10.7 billion, with approximately 65% expected to convert to revenue within 12 months.
- Operating cash flow strengthened
- Operating cash flow improved to $281 million from $119 million, driven by working-capital management and lower tax payments. Cash declined $188 million in the quarter to $540 million, as investing outflows rose to $328 million from $32 million, largely for Defy Security and strategic investments.
- Cost actions supported profitability
- Cost of revenue declined 6% to $1.336 billion and fell to 48% of revenue from 49%, supported by lower headcount-related costs and the absence of $30 million of prior-year severance charges. Adjusted EBITDA increased to $334 million from $311 million.
- Liquidity supports planned defense-tech acquisition
- The company agreed to acquire Ultra Mission Solutions for $720 million, with closing expected in fiscal Q2 2027. Management says its $2.0 billion of liquidity, including $540 million cash and $1.5 billion revolver availability, provides sufficient funds for the transaction.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Slower procurement is pressuring growth
- Revenue declined 4% to $2.800 billion as slowed procurement reduced headcount and billable expenses; management says the slowed procurement environment and contract-value reductions have negatively affected backlog conversion. Revenue excluding billable expenses decreased to $1.965 billion from $2.043 billion.
- Cash declined ahead of acquisition funding
- Cash fell to $540 million from $728 million while total debt was essentially unchanged at $3.936 billion versus $3.940 billion. The company also has a $720 million acquisition pending, increasing reliance on liquidity and financing flexibility.
- No formal risk update; contract model is evolving
- No material risk-factor changes were reported versus the May 22, 2026 10-K. However, management highlights ongoing federal-contracting reforms, including an April 30, 2026 executive order directing agencies to maximize firm-fixed-price use and renegotiate certain high-value other-than-fixed-price contracts, which can increase cost-overrun exposure.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.63
- Gross margin
- 52.3%
- Operating margin
- 10%
What they said about what is next.
The 10-Q contains no quantitative company guidance. Management expects operating cash flow, existing cash and revolver capacity to cover anticipated requirements for the next 12 months; it also expects the $720 million Ultra Mission Solutions acquisition to close in fiscal Q2 2027, subject to conditions.
The filing reads about the same as the one before it.
What came before.
- 10-K · May 22, 2026
- Booz Allen Hamilton's FY26 report reveals a 6% decline in revenue to $11.2 billion, attributed to a sluggish procurement environment, while adjusted EPS decreased to $6.90. Despite a drop in revenues from key segments,…
- 10-Q · October 24, 2025
- Booz Allen reported revenue of $2,890 million for the quarter ended September 30, 2025, down 8% YoY, with operating income of $283 million (operating margin 10%, down from 17% a year ago). Net income fell to $175…
- 10-Q · July 25, 2025
- Booz Allen reported revenue of $2,924 million, down 1% vs. prior-year quarter, with operating income essentially flat at $257 million (9% operating margin). Net income rose to $271 million (up 64%) driven largely by a…
- 10-K · May 23, 2025
- Booz Allen presents a VoLT (Velocity, Leadership, Technology) strategy to scale AI, cyber, and other advanced technologies and aims to be the market-leading mission partner by 2030. Fiscal 2025 revenue mix shifted…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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