Booz Allen Hamilton’s fourth quarter saw sales decline, with results missing Wall Street’s revenue expectations, but the market responded positively due to much stronger than expected non-GAAP profitability. Management attributed the quarter’s performance to swift cost reductions, disciplined contract execution, and advances in outcome-based contracting, particularly in areas like cybersecurity and national security. CEO Horacio Rozanski highlighted that despite challenges from a government shutdown and slow funding, “Booz Allen Hamilton is managing the business tightly while preparing for the future.”
Is now the time to buy BAH? Find out in our full research report (it’s free for active Edge members).
Booz Allen Hamilton (BAH) Q4 CY2025 Highlights:
- Revenue: $2.62 billion vs analyst estimates of $2.72 billion (10.2% year-on-year decline, 3.8% miss)
- Adjusted EPS: $1.77 vs analyst estimates of $1.27 (39.3% beat)
- Adjusted EBITDA: $285 million vs analyst estimates of $279.1 million (10.9% margin, 2.1% beat)
- Adjusted EPS guidance for the full year is $6.05 at the midpoint, beating analyst estimates by 8.6%
- EBITDA guidance for the full year is $1.21 billion at the midpoint, in line with analyst expectations
- Operating Margin: 8.8%, down from 10% in the same quarter last year
- Organic Revenue fell 10.2% year on year (miss)
- Market Capitalization: $10.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Booz Allen Hamilton’s Q4 Earnings Call
- Colin Canfield (Barclays): Asked about the timing for civil segment recovery and the multiyear opportunity. CEO Horacio Rozanski said civil is at an inflection, with pipeline growth and new awards, but acknowledged that challenging quarters remain ahead.
- Gautam Khanna (TD Cowen): Inquired about the realization of cost reduction benefits. CFO Matthew Calderone explained that most cost actions are complete, with the full impact reflected next year, helping reset margin structure after the civil business downturn.
- Sheila Kahyaoglu (Jefferies): Sought detail on the path to civil segment stabilization. Kristine Martin Anderson cited a “year of reset,” with pipeline expansion and increasing award activity as early signs of improvement.
- John Godin (Citi): Questioned Booz Allen Hamilton’s strategy for defense budget changes and investments. Rozanski detailed a focus on core growth vectors, including cyber, AI, and space, with agility to align with federal priorities.
- Seth Seifman (JPMorgan): Asked about competitive threats from new market entrants. Rozanski said the competitive landscape is evolving, but Booz Allen Hamilton’s partnerships and tech ecosystem provide a unique advantage.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be tracking (1) momentum in national security contract awards and backlog, (2) evidence of sustained recovery and award activity in the civil segment, and (3) the financial impact of cost reductions and the transition toward outcome-based contracting. We will also watch for updates on strategic technology partnerships and new product launches as key performance markers.
Booz Allen Hamilton currently trades at $88.70, down from $95.76 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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