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    BAH
    Earnings call· Jun 2026(Q1 FY27)

    Booz Allen Hamilton Holding Corp BAH

    Jul 24, 2026 Source

    Executive summary

    Booz Allen Q1 FY27 — Solid Profitability and Strategic Investments Amidst Dynamic Environment

    Booz Allen delivered solid Q1 FY27 results, demonstrating strong operational execution and profitability despite a dynamic and uneven market. The company is on track with its expectations, with national security driving momentum while the civil portfolio navigates a transition. Strategic investments in cyber and defense tech, including the Ultra I&C Mission Solutions acquisition, are accelerating transformation and positioning the firm for future growth amidst a shift towards outcomes-based contracting.

    Highlights

    4

    • Funded backlog increased 15% year-over-year to $4.7 billion, indicating improving demand.

    • Adjusted EBITDA margin expanded by 130 basis points year-over-year to 11.9%, driven by strong execution.

    • Adjusted diluted earnings per share grew 22% year-over-year to $1.81, benefiting from profit growth and lower tax rate.

    • Robust bookings in the quarter resulted in a book-to-bill ratio of 1.5x.

    Concerns

    4

    • Total revenue declined 4.2% year-over-year to $2.8 billion.

    • Civil business revenue declined 16% year-over-year, impacted by contract roll-offs and fewer new program starts.

    • Expect a sequential double-digit decline in Civil revenue next quarter due to contract endings and smaller recompetes.

    • Headcount was down 7% in the first quarter, partly due to civil decline and supply constraints for cleared personnel.

    Guidance & targets

    7
    CategoryTargetConfidence
    Full-year Revenue
    Reaffirmed
    high materiality
    Medium
    Full-year Adjusted EBITDA
    Reaffirmed
    high materiality
    Medium
    Full-year Adjusted Diluted EPS
    Reaffirmed
    high materiality
    Medium
    National Security Revenue Growth
    mid-single digits
    medium materiality
    Medium
    Civil Business Revenue Decline
    high single digits
    medium materiality
    Medium
    Adjusted EBITDA Margin
    approximately 11%
    high materiality
    Medium
    Civil Business Revenue (Q2 FY27)
    sequential double-digit decline
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    National Security
    This business grew in the first quarter and is expected to continue building momentum over the fiscal year. Demand remained strong, and the company is accelerating hiring.
    Funded backlog growth: 23%
    		—1%——
    Civil
    Revenue declined year-over-year, driven by the roll-off of some larger contracts and fewer new program starts. Expected to see a sequential double-digit decline next quarter due to contracts ending and smaller recompetes.
    		—-16%——

    Operational metrics

    14
    Revenue
    $2.8Bdown 4.2% YoY
    Q1 FY27

    Total revenue for the first quarter.

    Revenue ex billable expenses
    down 3.8%vs prior year
    Q1 FY27

    Revenue excluding billable expenses.

    Adjusted EBITDA
    $334M
    Q1 FY27

    Adjusted EBITDA for the first quarter.

    Adjusted EBITDA margin
    11.9%up 130 bps YoY
    Q1 FY27

    Strong performance driven by contract execution, favorable timing of investment spending, and early shift to outcome-based fixed-price contracting.

    Adjusted diluted EPS
    $1.81increased 22% YoY
    Q1 FY27

    Increase driven by profit growth, lower tax rate, and reduced share count, also benefited from an unrealized gain on a venture investment.

    Days sales outstanding (DSO)
    80 daysup 7 days YoY
    Q1 FY27

    Due to revenue recognition treatment related to the nature of the Defy business, expected to remain elevated.

    Capital deployment
    $447M
    Q1 FY27

    Total capital deployed in the first quarter.

    Cash on hand
    $540M
    Q1 FY27

    Cash balance at the end of the quarter.

    Total liquidity
    $2B
    Q1 FY27

    Total liquidity including undrawn facilities at the end of the quarter.

    Net leverage ratio
    2.7x
    Q1 FY27

    Net leverage ratio against adjusted EBITDA.

    Headcount
    down 7%
    Q1 FY27

    Partially related to the decline in the Civil business and supply constraints for cleared personnel.

    Other Transaction Authority (OTA) opportunities
    up 18%YoY
    Q1 FY27

    Indicates a shift towards more flexible, commercially oriented buying models.

    Overall Funding
    up 17%YoY
    Q1 FY27

    Overall funding environment improvement.

    Quantum win
    largest pure content pure quantum win
    Q1 FY27

    Won across commercial, national security, and civil sectors.

    Orderbook & backlog

    5
    Book-to-bill ratio1.5xQ1 FY27
    Trailing 12-month book-to-bill ratio1.1xQ1 FY27
    Total backlogover $39BQ1 FY27

    up 3% YoY

    Funded backlog$4.7BQ1 FY27

    up 15% YoY

    eMAPS 3 renewal$2.7BQ1 FY27

    Largest award in company history, supporting critical missions.

    Deals & partnerships

    6
    Ultra I&C Mission SolutionsAcquisition to expand and scale Defense Tech product line, accelerating growth with complementary products in command and control software, ruggedized edge compute, and encryption management.

    The acquisition will combine product portfolios and sales channels, bringing more differentiated and scaled products to market faster. Management has partnered with Ultra for years and sees a strong strategic fit.

    NVIDIALong-term market partnership to go to market with differentiated offerings.long-term

    Part of industry partnerships and VC investments that act as accelerators for priorities.

    AWSLong-term market partnership to go to market with differentiated offerings.long-term

    Part of industry partnerships and VC investments that act as accelerators for priorities.

    Shield AILong-term market partnership to go to market with differentiated offerings.long-term

    Part of industry partnerships and VC investments that act as accelerators for priorities.

    OpenAIPartnership to leverage frontier models and bring unique capabilities, particularly in cybersecurity.

    Booz Allen is working with all major players and bringing something unique to the market, including using methods in their lab extensively.

    AnthropicPartnership to leverage frontier models and bring unique capabilities, particularly in cybersecurity (e.g., Project Glass Wing).

    Booz Allen is working with all major players and bringing something unique to the market, including using methods in their lab extensively.

    Risks & headwinds

    4
    Midterm election year budget uncertaintyH2 FY27

    Complicates the budget process and creates some funding uncertainty, particularly towards the end of the government fiscal year and into our second half.

    Mitigation: Executing with discipline and agility, focusing on what is controllable.

    Procurement reform leading to award delaysNear-term

    Fast-tracking implementation of procurement reform to make fixed price contracts the default approach could lead to near-term delays in awards.

    Mitigation: Executing with discipline and agility, staying focused on what is controllable, and leaning in to help customers with transitions.

    Civil business contract reductions and slower awardsH1 FY27, gradually easing into H2 FY27

    Near-term revenue affected by prior year contract reductions and treasury impacts, slower award environment leading to fewer new starts, and smaller scope/shorter period recompetes.

    Mitigation: Ramping up wins, expanding pipeline, pulling defense tech and cyber solutions through civil agencies, and building on track record.

    Supply constraints for cleared personnelOngoing

    A bit behind on hiring, particularly around those with clearances.

    Mitigation: Addressing the issue to accelerate hiring.

    What to watch in Q2 FY27

    5

    Ultra I&C Mission Solutions acquisition close

    Next quarter
    CurrentExpected to close in Q2 FY27
    TargetAcquisition closed and financial update provided

    Why it matters

    This acquisition is expected to expand and scale Defense Tech product lines and accelerate growth, with financial details to be updated in the next earnings call.

    We're very excited about the Ultra Mission Solutions acquisition and expect this to close during our second quarter. We'll provide an update on the next earnings call.

    Q&A highlights

    6

    How is management approaching guidance given accelerated funding but H2 uncertainty? Are acquisitions included in the current guidance?

    Management is happy with Q1 performance and strong forward indicators but remains cautious due to dynamic legislative environment (NDAA, reconciliation, supplemental bills). Guidance is reaffirmed for now, and the Ultra acquisition will be included in the October update. Cyber and defense tech are strong tailwinds.

    “It is a dynamic environment. To give you a sense of what we're tracking. There's 4 things right now in Congress, all of which have an impact on our industry. The NDAA, a potential reconciliation bill, a potential supplemental and these and how they play out will probably shape whether the funding dynamic continues to be as good as it's been.”

    asked by Jonathan Siegmann · answered by Horacio Rozanski

    2 min read6 chapters

    Detailed Narrative

    01

    Dynamic Environment & Procurement Reform

    The overall market remains dynamic and uneven, with funding up 17% year-over-year in Q1. However, a midterm election year is expected to complicate the budget process and create funding uncertainty, particularly towards the end of the government fiscal year. The government is also accelerating the implementation of procurement reform, making fixed-price contracts the default approach, which could lead to near-term delays in awards as customers adjust.

    02

    Strategic Investments in Cyber

    Booz Allen is accelerating its cyber growth vector, recognizing that Agentic AI has fundamentally changed the cyber threat environment. The company is expanding Vellox, its suite of agentic cyber products, which combines deep understanding of real-world tradecraft and AI expertise. Customer engagement is high, and cyber is expected to drive significant near and long-term growth, with new products like Ranger addressing vulnerability issues at AI speed.

    03

    Defense Tech & Ultra I&C Mission Solutions Acquisition

    The defense tech growth vector focuses on rapidly building, scaling, and operationalizing advanced technologies for warfighting missions, including soldier-worn tech, battle management systems, and autonomy. The recently announced agreement to acquire Ultra I&C Mission Solutions will expand and scale Booz Allen's Defense Tech product line, bringing complementary products in command and control software, ruggedized edge compute, and encryption management to market faster. The acquisition is expected to close in Q2.

    04

    Emerging Technologies (Quantum, AI-RAN)

    Booz Allen is investing in areas where emerging technologies and mission requirements converge, such as Quantum and AI-RAN. The company has been investing in Quantum for over a decade, with a focus on post-quantum cryptography (PQC) and recently secured its largest pure content quantum win. Additionally, they are productizing AI-RAN investments, especially at the edge, and won an award specific to AI-RAN to bring 6G to edge missions.

    05

    Outcomes-Based Contracting & Marketplaces

    The company is leaning into the government's accelerated shift to fixed-price contracts, viewing it as an opportunity for better alignment between cost, accountability, and mission impact. They are also seeing a shift towards more flexible, commercially oriented buying models, with Other Transaction Authority (OTA) opportunities up 18% year-over-year. Booz Allen is positioning its technology solutions on government marketplaces like Trade Winds, ARIS, and Platform One to scale products to mission faster.

    06

    AI in Operations & Mission Delivery

    Booz Allen is injecting AI and Agentic capabilities across its business, using AI to increase productivity and create efficiencies in internal operations (new business pursuit, hiring, talent development). More importantly, AI is embedded in their tech to enable greater mission impact, such as a multi-agent system for intelligence collection and operationalizing AI at the edge for forward-deployed warfighters in contested environments.

    AI-generated summary of the company’s earnings call. Not investment advice.