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Booz Allen Hamilton's Q2 Earnings Beat Estimates, Rise Y/Y

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Booz Allen Hamilton Holding Corp. (BAH - Free Report) reported impressive second-quarter fiscal 2025 results, wherein earnings and revenues beat the Zacks Consensus Estimate.

Quarterly adjusted earnings per share of $1.81 surpassed the Zacks Consensus Estimate by 22.3% and increased 40.3% from the year-ago fiscal quarter’s actual. The company reported revenues of $3.1 billion, which beat the consensus estimate by 6.5% and increased 18% on a year-over-year basis. Revenues, excluding billable expenses, were $2.2 billion, up 18.3% on a year-over-year basis.

The company’s shares have gained 54.4% in the past year, outperforming the 45.2% rally of the industry it belongs to.

BAH’s Backlogs Increase

The total backlog increased 17.7% from the year-ago quarter to $41.3 billion, beating our estimate of $34.5 billion. The funded and unfunded backlog amounted to $6.6 billion and $10.3 billion, respectively. Funded backlog increased 5.3% missing our anticipation of $5.4 billion. The unfunded backlog rose 1.9%, outpacing our estimate of $8.7 billion.

Priced options rose 30.6% to $24.3 billion, surpassing our expectation of $20.4 billion. The book-to-bill ratio was 2.61 compared with 2.41 in third-quarter fiscal 2023. The headcount of 35,800 improved 8.1% on a year-over-year basis.

BAH’s EBITDA Margins Rise

Adjusted EBITDA amounted to $364 million, a 25.2% increase from the year-ago quarter. It missed our projection of $326.9 million. The adjusted EBITDA margin on revenues was 11.6%, up 70 basis points year over year.

Key Balance Sheet & Cash Flow Numbers

Booz Allen exited the quarter with cash and cash equivalents of $558.7 million compared with $297.7 million in the preceding quarter. Long-term debt (net of current portion) was $3.3 billion, flat with the preceding quarter.

The company generated $587.1 million in net cash from operating activities. Capital expenditure was $23.8 million. The free cash flow was $563.3million.

FY25 Outlook

For fiscal 2025, BAH expects revenue growth to be 11-13%. It expects an adjusted EPS of $6.1-$6.3 for the year. The guidance range is higher than the current Zacks Consensus Estimate of $5.97.

Adjusted EBITDA is expected to be $1.3-1.33 billion. The adjusted EBITDA margin on revenues is anticipated to be approximately 11%. Net cash provided by operating activities is projected at $925 million-$1 billion.

Booz Allen currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Earnings Snapshots

Omnicom (OMC - Free Report) reported impressive third-quarter 2024 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.

OMC’s earnings of $2 per share beat the consensus estimate by 3.1% and increased 9.1% year over year. Total revenues of $3.9 billion surpassed the consensus estimate by 2.3% and increased 8.5% year over year.

Equifax (EFX - Free Report) reported mixed third-quarter 2024 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the same.

EFX’s adjusted earnings were $1.8 per share, beating the Zacks Consensus Estimate by a slight margin and increasing by 5.1% from the year-ago quarter’s actual. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but increased 9.3% from the year-ago quarter.


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