Booz Allen Hamilton Holding Corporation

What they do

Booz Allen provides AI, cyber, defense technology, and digital modernization services and products, primarily to federal government and national security customers, with a smaller commercial business. It operates as a prime contractor on government schedules and IDIQ contracts, generating revenue through labor, billable expenses, and increasingly through proprietary technology products like Vellox and Sit(x)R. The company traces its national security focus to post-9/11 work and spun off its global commercial business in 2008.

Revenue drivers

• AI and advanced technology services — Booz Allen is the federal government's largest AI provider with approximately 400 active AI projects, spanning agentic AI, physical AI, and AI-RAN for mission-critical environments.
• Cyber — The company protects U.S. federal, defense, and intelligence agencies as well as Fortune 500 and Global 1,000 commercial customers; its Vellox AI-native cyber product suite pairs automation with adversary tradecraft models.
• Defense Tech — Booz Allen builds AI-enabled defense products, including Sit(x)R, EdgeExtend, and the Modular Detachment Kit, supported by three flagship engineering facilities and more than 20 manufacturing centers.
• Digital modernization — Enterprise-scale cloud-enabled infrastructure, data platforms, and software applications support government missions and complement the higher-growth technology areas.

Recent performance

In Q1 fiscal 2027 ended June 30, 2026, revenue decreased 4.2% year over year to $2.8 billion, driven by slowed procurement that reduced headcount and billable expenses. Revenue excluding billable expenses fell 3.8% to $2.0 billion. Net income declined 26.9% to $198 million, but adjusted EBITDA rose 7.4% to $334 million and adjusted diluted EPS grew 22.3% to $1.81. Free cash flow was $261 million, up from $96 million a year earlier, and the company reported a quarterly book-to-bill ratio of 1.5x with total backlog of $39 billion.

Strategy

Management is investing in advanced cyber and defense technologies, AI-native products, and outcomes-based delivery to accelerate growth. The company is on track with fiscal 2027 guidance despite what CEO Horacio Rozanski called challenging market dynamics, with demand accelerating in the National Security portfolio while Civil remains challenged. Booz Allen continues to pursue partnerships with leading technology companies, venture investments, and military-grade product development. Capital deployment in the quarter totaled $447 million, and the company maintains a regular quarterly dividend of $0.59 per share.

Risks

• Government spending and priorities — Changes in U.S. government spending and mission priorities, including funding uncertainty and debt ceiling debates, directly affect Booz Allen's contract awards and revenue.
• Competitive bidding and protests — The company faces increasing competition from non-traditional contractors and changes in procurement practices, and contract awards can be delayed or lost due to competitor protests.
• Contract mix and revenue estimates — Variable purchasing patterns under GSA schedules, blanket purchase agreements, and IDIQ contracts, along with changes in revenue recognition estimates, can affect financial results.
• Backlog realization — Booz Allen's ability to realize the full value of its $39 billion backlog and generate revenue under certain contracts depends on timing and customer needs.

Outlook

For fiscal year 2027, management expects revenue of $11.2 billion to $11.7 billion, representing 0% to 4% growth, with adjusted EBITDA of $1.24 billion to $1.29 billion and adjusted diluted EPS of $6.00 to $6.35. Free cash flow is guided to $825 million to $925 million, assuming capital expenditures of approximately $220 million, including $105 million for a new headquarters. The guidance assumes an effective tax rate of 20% to 23% and average diluted shares outstanding of 118 million to 120 million.