Booz Allen Hamilton Holding (BAH) 25 Oct 242025 Q2 Earnings call transcript

Good morning, and thank you for standing by, and welcome to Booz Allen Hamilton's Earnings Call covering Second Quarter Fiscal Year 2025 Results.

[Operator Instructions] I'd now like to turn the call over to Ms. Lindsay Joyce.

Thank you. Good morning, and thank you for joining us for Booz Allen's Second Quarter Fiscal Year 2025 Earnings Call. an this read morning. had we press you've earlier issued hope opportunity the to release We

We our now website also and have provided are on presentation Slide slides on X.

are about and Officer and Officer. Matt President and to Chief Vice President; our Executive Chief me our Chairman, talk financial With results and Horacio Calderone, Rozanski, Executive business Financial

relate are statements will risks, keep results in foregoing future forecasted obligation results revise to Except undertake from our known looking some otherwise. forward-looking by the of that shown the in to speak mind forward entirety future or and as disclaimer As information, events other expressly we or our materially or and discussed are qualified result items of future on that the discuss and SEC required forward-looking we in filings financial date in cautionary their and involve no new update actual events morning as Slide cause on statements, a only differ of this may law, made. whether may uncertainties X, please as and factors this any the by to performance statements publicly and unknown call. All

fiscal second those may to other call, and other from reconciliations they will XXXX most public vary financial explanation be such, the as quarter release our of year investors. for and, today's non-GAAP believe may some provide information and adjustments in GAAP our in Numbers disclosure. measures discuss rounded our metrics, measures non-GAAP During we earnings slides. presented comparable slightly also and useful we an which We of measures include

President, Chairman, the pleasure our to Horacio is turn to CEO my call It Rozanski. over now and

on now X. are We Slide

good you, morning, call. for Thank the everyone. Lindsay, you joining and Thank

the discuss excel circumstances highlight Booz of news to is around the deeply far focused remain focus clients, commitment it people The more excellent continue conflict and that all, of heartbreaking on divisive X will values impact to world, from devastating Allen to Booz ordinary. the of before loss on do, core But we at a here company we the company's and through quarter morning, This years. under see take Yet serving Allen that human people They allow and the this focused, I each of home of recently, politics for our concerning. living other. taking headlines. me Every on XXX our second day, have results. been on and moment Matt This and our acknowledge care hurricanes. the are the

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results items minutes. a In and quarter this further in performance, few also which some addition strong business discuss discrete Matt to realized will we that our enhance

beyond. fiscal year and believe deliver and on challenges the uncertainties are strategically we positioned we environment, Despite and this in operationally well to the

stands growth leadership both positions for Our continues us fuel and to technology strategy, for our and future. velocity, which performance the

end positions XXXX original bottom we our also ambitious multiyear of our and ultimate the tremendously us the to a proud line guidance. in revised investment expect end top XXXX. our EBITDA performance expectations to at which the dollars. and top robust this for pleased is year This set concludes increase now driven and narrow range thesis, our fiscal are has organic raise point deployment of to We am above year. I This exceed have deliver is above people that fiscal Booz proof that in the growth, capital outstanding VoLT Allen revenue expectations disciplined delivered working. and

markets. performance takes Before few the Matt talking depth, our each about minutes to of I would dynamics in spend you through our and a within guidance evolving like

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is And the Matt, that, floor with yours.

and Horacio, you, everybody. Thank good morning,

second operationally financially. and said, we had As strong Horacio a both quarter,

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performance how in have I our results. our that takeaways should frame from the X quarter interpret you

reversal top we operating taking due of significantly some increased organic to in a growth and digits First, in timing-related on At the factors cost discipline the discrete our quarter. nonoperational some operational EBITDA call. even the when last improved solid revenue margins faster discussed had double and of items line, excluding the Adjusted strong was than quarter. hold anticipated performance,

Second, under we We not continue to quarter, work awards of second $X.X protest. build booked the significant billion momentum. in including

billion. Our stands now at a record $XX backlog

We increased hire aggressively. fiscal the half continue client to of have first X.X%. staff by we Through year, this

our the price result, all and million through the Horacio immediate shareholders. cover In And capital discrete a pleased of to we top I are XXXX. for in quarter generate as said, or X metrics Fifth, will thesis, significant quarter, the we to our of now items across guidance year worth an Fourth, exceed a long-term as Third, provide of financial of are performance. X.X% average we fiscal $XXX.XX that organic end moment. $XXX we repurchased amount for share. at almost benefits. full in collectively entirely occurred in finally, detail will deployed shares guiding per about raise these investment value to a

X items mentioned, I numbers discrete by our quarter. the As positively headline in impacted were

you detail. Please items me second Let in into walk turn through to XX. dive numbers I more our Slide before these quarter

of cash recovery fiscal a to fiscal in our last EBITDA. year. contemplated quarter not and is adjusted to additive is This operating excluded Department year First, we related was from flow collected from for insurers guidance, $XXX our settlement original the million Justice the

in incurred And costs in resulted July. for a in audits roughly quarter guidance. change to of results years for million all finally, modernization year years. received claimed cost X a was of rate operating historical subsequent in to submission original reflected our estimate we to $XXX received year rate fiscal for our This for we This provision payroll XXXX. fiscal our the this cash tailwind Second, related

decade. disclosed, have not normal for have As we a more audits course government accounting cost Allen than Booz did

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at and are also a with work Booz normal have this collective to along I been the real to from has everyone DCAA, respect collaboration, backlog Teams while review of thanks to yielded mutual Allen, transparency appreciate address be much tirelessly This And progress. our efforts, we audits. hard, worked very done. of focus but DCMA government the now annual counterparts course back on work on cycle. that significant recognizing their remains has to date, efforts and

over this X will effort The frames. of occur impact time

costs rate First, for we all back open fiscal year to for changed provision our XXXX. years estimate of claimed the

million. reduction September was costs second million, from or quarter about EBITDA. revenue excluded as claimed related X.X%. increased reduced to Of the $XXX This $XXX were in for and million to for reserves historical total this thus years Our adjusted of million been $XXX have provision $XXX by XX

Second, impact fiscal we revised original We a year positive EBITDA reduced anticipate million this adjusted claimed our relative and second to the of for for costs forecast the fiscal provision year about the for half. our this first for $XX assumptions. guidance to half

any rate we have Third, of better This reflect forward. industry nor we approximately our consistent resolutions, with note been increase to basis in settlements continue not Please that going progress our XX profitability practice. there regulators, while any open years. related profit final an underlying will our the make is our point cash and to business with margins anticipate

for $X.X I'll now XX%. quarter about year-over-year change increased results Please Organic by the detail. to cover all described growth billion. turn revenue excluding increase grew XX% more was our proportionally X.X%. across quarterly quarterly just I revenue expenses, to revenue provision revenue, cost The X. and XX% Total in for in markets. Slide year-over-year grew This felt increased claimed billable

year particularly years. of for a record Defense turn bookings about to was Please a translated XX% September billion, from Total XX demand. book-to-bill billion, to ago. a up XX-month quarter provides now performance, of This the ample exceptional in fuel X. $X.X were Moving X in X.Xx. continued $XX as and is backlog highest strong for This This quarterly growth. our us Net to and our trailing Slide X.Xx. was Intel, bookings above-market book-to-bill

just as exceed In This our this staff in up performance and half, by to in puts us grew Our growth year the client fiscal the X% X,XXX, supply first side to pace well beyond. increase was staff us X.X% strong. a year target we client sets in of our alone. first and for on X% half

headcount nearly labor staff now higher Allen Our Booz competitive total is year a In resonate. X.X% client employees. continues ago. is value This the a market, to proposition than XX,XXX

approximately the adjusted higher to bottom EBITDA, period. now XX% in $XXX the Moving line. million than prior year delivered We

the prior our profile points XX.X%, and of ahead margin projected to earnings margin first the compared was adjusted moderately year call. we exceeded basis our expectations Our quarter. on ascending was XX EBITDA quarter up This

the expectations For fiscal roughly the EBITDA margin was our XX.X%, adjusted on for our first full par year. half, with

Moving for higher down P&L. $XXX million, was the quarter the year-over-year. Net XXX% income

year-over-year XXX% to corporate In increase the Diluted I our $XXX income year-over-year year-over-year to items share included $X.XX previously, to diluted X million per in addition increased Adjusted earnings increased investments $XX per share. share to fund. XX% strategic net per capital $X.XX. noted XX% value venture fair an earnings million. Adjusted increased this to

trailing second months. CapEx. of net and EBITDA for balance less debt $XXX sheet. of ratio the leverage on We of net million. result cash with operations The X.Xx was a $XXX cash of quarter adjusted quarter XX the million for of Free flow $X from of $XX the to $XXX Transitioning the billion hand, cash ended million million

In prior strong year over items by discrete had the addition a a earlier, quarter. the to quarter, I we of improvement impact collection noted DSO X-day evidenced

the we million deployment investments in through strategic in $XX of capital total $XXX a of This million. venture $X to now million included In Turning Slide and second capital X. dividends our on quarterly $XXX fund. share repurchases, deployed quarter, corporate million

our In share, per source us balance as addition, XX. The our note capital December quarterly operating disciplined has X generate record a on a of be a manner to of flexibility strength advantage. and of November the sheet for dividend strategic payable I'll approved It that Board will to stockholders $X.XX remains which of gives ability deploy to of in shareholders. value

us sets first for well volatility the potential half and strong half. performance Our uncertainty up in second

excellent on are fiscal We for year overall. an track

X. we XXXX. through turn XX% you walk updated of Slide At revenue to year guidance Please for line, growth expect our the now me to Let top XX%. now fiscal

We $X.XX of about EBITDA XX%. billion, adjusted million We $X.X guidance EBITDA are billion. margin anticipate to operating million range of $XXX flow This our and now cash between $XXX of $XXX raising adjusted and billion to flow million. $X.XXX an cash free of implies a between and

$X.XX raising extremely we $X.XX closing, performance. proud guidance quarter per share. Lastly, are second ADEPS range our to to our a In are we of of

me Let again X takeaways. core my share

operating First, we strong had quarter. a

we continue significant build to Second, momentum.

for guiding organic investment to our performance, end pleased full are X point provide EBITDA occurred are an exceptional margins. Third, to for This exceed capital amount fiscal discrete Fourth, increase of through we includes items that shareholders. raise truly feat. roughly long-term and we we benefits. Fifth, to a across And almost of top guidance value the anticipated generate XX to financial finally, year significant thesis a metrics all deployed XXXX. basis lasting immediate entirely collectively now

the into As this always, us and deliver quarter, to build in financial continued well future. growth Booz positioning well to Allen returns compounding

the questions. With that, operator, for let's line open

Page from question [Operator first Instructions] with Ellen Our Jefferies. comes

I do there's but of we I growth what a from the drivers think. HX, in election administration? Guidance in of in and How terms in the the think change guess And organic you X% onetime items implies back half? about deceleration. in are contemplating QX, a risk risk

Sure, Why Ellen. don't I start.

is it. of First said, turbulent as you a uncertainty environment this in with all, some

particularly a Our also XX visibility create Chamber just potential will that -- a agendas not civil days in know term, its as from for does said, we're inevitable in that market. White near affect election Congress. priorities and And of controls and affect significant our that but to could who it's reduced of the very we some the change who's in House,

are We and our East X in increasing India Europe of affects in ongoing Eastern the there geopolitically, which tensions entirety also the -- wars Middle and the are Pacific, markets. also

And so external more environment seen we've in taken volatile together, this is a a that while.

against So doing backdrop, proud of. job and that managing very an we're is half X that The the in all first team did of things. the performance that something exceptional through

of all, driving delivering importantly, results, excellent First momentum. but

you they when you so leading hiring, backlog, when at degree, at and, look look business, all are of ahead pace. of extremely the And when look indicators at all the some to positive of you

So about There's we very the event. black feel are. swan-type possibility good of always where a we

anything know not have because that contemplated definition by can't that be. into what could We you

be And else. operating change out to and more to will past you in of changing how is and administration. like to figure is third when our necessarily Allen. to look we change becomes decade third than this there's faster time priorities clients this. mall a of future outpace change my in indication demands that I And in support because my job all there's change new adapt will at unique asset able of we be tend while not that, tell anybody many Booz really this an a in priorities this, But when a against to almost my This of the been I've administration then to

feel this bottom where business, as absent but as and at again, coming the the so and about I I unforeseen, line just at I the something are, And look we very totally next at into top line both bullish year. look at not year,

Matt. Helpful. And maybe for one

the impact in change haven't help us the you range that outcomes Can What that? what's of a you mentioned seen from could cash -- audit You understand there? adjustments.

think although expectation. a reminder, which we seen I in not build of impact. gave these do changing X cash fully But exploitation and the for cash the impact models. us of we that a settled any appropriately should would have now, have Right And not haven't rate We be we're the your reserved, we audits, estimates into years, your backlog. comfort

of our line it moment question, next the von Cowen. with Rumohr One and from comes TD for Cai

Good results.

got what, think basically to regarding And you about, your get that mentioned good it the Matt, modernization days. and number competitors. Ellen's how of there? the point to That's the go? benefits you in you've Where So your can still of many payroll above do well take XX would improvement claims, long DSOs

are quarter, to aspire up mentioned, days net we quarter, days more operationally. I've as the our X recovery improved persist, we're your days think happy days embedded think very Obviously, with on tied as year, bring is I these to backlog We to flow the resolution XXX% And in cash continue And or good to at want onetime DSOs the audits. we conference, generate We full free Cai. about said, improve numbers guy net insurance Cai. where in to But continue work the going X to and of income. our closer Look, to Thanks, and it to in you that there, close this year. excellent us relative we're in performance this to X will performance DSO we of cash was the that of overall. X for be. DSO

process. going Where Terrific. at quarter? end prior the of And pipeline In metrics bookings proposals potential the given and terms gauging your quarters, all were of were of you've great, the then proposals obviously, some submitted they forward. in would useful that's be That qualified in fabulous.

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with pleased book-to-bill. really our we're So

been excludes in but we're As demand as as good under really a a half you decade protest, we've in place perspective. last this a from the know, water

right. absolutely that's Yes,

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Our from of comes next the Louie line William Blair. with DiPalma question

strong sway to the overall the think, contract strong alluded contract of of particular next Matt, contracts Deloitte. was potentially incident company? relative related you revenue a awarded Affairs And there Is one that trajectory from to isn't organic Department any so a Veterans environment really or the churn enough to demand year. recent the a that to how just to you X Can is discuss Advana contract at demand seems be headwind I a to conference, how

question. that's Louie, a great

X are going the of want to it. comment think potentially I to us on

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I are competition. more You a look seeing at price mentioned, our civil little business, as we

We while. seen more disruption than are seeing procurement we've in a little

and out, regardless most I of a change there's administration a election turns think this how administration. part of is affected that the agenda is driven by the in domestic fact that change when is the

beginning And to that. see we're so

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the line Strauss David from of with comes question Barclays. next Our

is Josh actually This David. for on Korn,

more impact quarter, would little I of and margin progress like So sort that. contract off time you And things from hiring slowly and QX. about of suggested year a talked the throughout last think things you

quarter So the I they just wanted to trended the to ask second about factors those and margin contributing increase improved how this time. big in how

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and to concludes back comments. session, Rozanski call the turn this And his for our concluding will I Q&A Horacio

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Thank you, ladies disconnect. and gentlemen. now you program, This our and concludes may