Booz Allen Hamilton Holding Corporation (0HOT.L) QQ2 2026 Results Analysis
Executive Summary
Booz Allen Hamilton reported QQ2 2026 revenue of $2.89 billion, down 8.15% year-over-year and 1.16% quarter-over-quarter. The quarter produced a solid gross margin of approximately 53.6% and an operating margin near 9.8%, with net income of $175 million and earnings per share (diluted) of $1.42. While top-line softness pressured profitability versus the prior year, the company delivered robust free cash flow of $395 million and a strong operating cash flow of $421 million, underpinning a healthy balance sheet characterized by net cash (net debt of -$532 million) and substantial liquidity. In the quarter, Booz Allen continued to deploy capital toward shareholders, with $214 million in share repurchases and $68 million in dividends, while maintaining a conservative approach to investments in people and capabilities aligned with strategic priorities in AI, analytics, cyber, and digital modernization. Absent explicit forward guidance in the provided dataset, the company appears to be steering through margin pressures with a focus on backlog execution, selective growth investments, and disciplined cost management.
Key Performance Indicators
Revenue
2.89B
QoQ: -1.16% | YoY:-8.15%
Gross Profit
1.55B
53.63% margin
QoQ: 3.26% | YoY:-13.12%
Operating Income
283.00M
QoQ: 10.12% | YoY:-48.41%
Net Income
175.00M
QoQ: -34.94% | YoY:-55.14%
EPS
1.42
QoQ: -34.56% | YoY:-52.98%
Revenue Trend
Margin Analysis
Key Insights
Invested in PP&E: $-26M; Total Investing Cash Flow: -$29M
Financing: Net cash used by financing activities: -$287M; Cash dividends paid: $-68M; Shares repurchased: $-214M
Balance Sheet: Total assets $7.153B; Cash & equivalents $816M; Total debt $2.84B; Net debt (-) $-532M; Equity $996M; Goodwill $2.405B; Intangible assets $0.537B; Current ratio ~1.75
Liquidity & Leverage: Net cash position with solid liquidity; Interest expense $48M; Debt/Equity ~2.86x; ROE ≈ 17.6%; Asset turnover ≈ 0.40; Free cash flow generation supports shareholder returns and minimal balance sheet risk in a volatile environment.
Note: YoY and QoQ figures reflect Booz Allen’s QQ2 2026 quarter relative to prior-year and prior-quarter results provided in the dataset. All currency in USD.
Financial Highlights
Revenue: $2.89B; YoY -8.15%, QoQ -1.16%
Gross Profit: $1.55B; YoY -13.12%, QoQ +3.26%; Gross Margin 53.63%
Operating Income: $283M; YoY -48.41%, QoQ +10.12%; Operating Margin 9.79%
Net Income: $175M; YoY -55.14%, QoQ -34.94%; Net Margin 6.06%
EPS (Diluted): $1.42; YoY -52.98%, QoQ -34.56%
EBITDA: $226M; EBITDA Margin 7.82%
Free Cash Flow: $395M; FCF Margin ~13.7%
Operating Cash Flow: $421M; Operating Cash Flow Margin ~14.6%
Capex: $-26M; Net Cash from Investing Activities:
- Invested in PP&E: $-26M; Total Investing Cash Flow: -$29M
Financing: Net cash used by financing activities: -$287M; Cash dividends paid: $-68M; Shares repurchased: $-214M
Balance Sheet: Total assets $7.153B; Cash & equivalents $816M; Total debt $2.84B; Net debt (-) $-532M; Equity $996M; Goodwill $2.405B; Intangible assets $0.537B; Current ratio ~1.75
Liquidity & Leverage: Net cash position with solid liquidity; Interest expense $48M; Debt/Equity ~2.86x; ROE ≈ 17.6%; Asset turnover ≈ 0.40; Free cash flow generation supports shareholder returns and minimal balance sheet risk in a volatile environment.
Note: YoY and QoQ figures reflect Booz Allen’s QQ2 2026 quarter relative to prior-year and prior-quarter results provided in the dataset. All currency in USD.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.89B
-8.15%
-1.16%
Gross Profit
1.55B
-13.12%
3.26%
Operating Income
283.00M
-48.41%
10.12%
Net Income
175.00M
-55.14%
-34.94%
EPS
1.42
-52.98%
-34.56%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No transcript data provided in the dataset. Management quotes and call highlights are not available in the current prompt to synthesize themes or provide verbatim quotes.
N/A
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Forward Guidance
No explicit forward guidance is contained in the provided data for QQ2 2026. Inference from the quarter suggests a focus on margin discipline, cash flow generation, and selective investment in high-growth capabilities (AI, analytics, cybersecurity, and digital modernization) to support a durable services mix. Investors should monitor: (1) backlog evolution and new awards in government and commercial sectors, (2) wage/variable-cost pressure impacting services margins, (3) utilization and productivity trends as headcount grows to fulfill strategic initiatives, and (4) any formal guidance updates in subsequent quarterly reports or earnings calls.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0HOT.L Focus
53.63%
N/A
N/A
N/A
0JVT.L
58.50%
20.70%
8.45%
15.84%
0L5N.L
77.50%
11.10%
3.52%
138.30%
0LEF.L
57.20%
13.90%
2.76%
45.88%
0Y5C.L
45.60%
21.50%
8.94%
19.40%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Booz Allen’s QQ2 2026 results present a mixed near-term picture: revenue declined year over year, and profitability faced headwinds, yet the business generated strong cash flow and maintained a solid balance sheet. Growth is likely to hinge on execution in AI analytics, cyber, and modernization programs, coupled with backlog execution and favorable government spending cycles. The substantial cash flow supports shareholder-friendly actions while preserving liquidity to pursue strategic investments. Relative to peers, Booz Allen’s government-centric model can offer stability, but investors should watch for signs of backlog acceleration, productivity gains, and any explicit guidance that may recalibrate the earnings trajectory in the coming quarters. Overall, the outlook remains cautiously constructive with selective upside driven by secular demand for transformative public-sector technology services and cyber resilience.
Key Investment Factors
Growth Potential
Booz Allen’s growth potential is tied to expanding AI/analytics, cybersecurity, cloud-enabled modernization, and mission-focused services for government and select commercial customers. The company’s deep government relationships, backlog, and capabilities in data science and quantum-related advisory position it to capture large, durable contracts as modernization programs scale.
Profitability Risk
Key risks include government budget volatility and procurement cycles, talent attraction/retention pressures and wage inflation, dependency on a government-heavy revenue mix, potential margin compression from non-billable costs, and impairment risk related to goodwill/intangible assets if growth underperforms expectations.
Financial Position
Healthy liquidity with a net cash position (-$532M) and strong operating cash flow ($421M in the quarter) support flexibility for buybacks and dividends. However, the balance sheet carries substantial goodwill ($2.405B) and intangible assets, which could imply impairment exposure if demand weakens or discount rates rise.
SWOT Analysis
Strengths
Diversified government-focused services portfolio with strong recurring revenue streams
Robust free cash flow generation (FCF $395M in the quarter) and strong operating cash flow ($421M)
Net cash position (net debt of -$532M) supports balance sheet resilience and shareholder returns
Active capital allocation through significant share repurchases ( ~$214M in QQ2 2026) and stable dividend policy
Weaknesses
Revenue decline vs prior-year period (YoY -8.15%), indicating top-line headwinds
Operating margin modest at ~9.8% with elevated non-operating costs contributing to net income decline
High goodwill and intangible asset base (~$2.94B combined) raises impairment risk in a prolonged slowdown
Heavy reliance on government budgets and procurement cycles which can be volatile
Opportunities
Expanding AI-driven analytics, cyber services, and digital modernization across both government and select commercial clients
Upsell of analytics and automation capabilities within existing contracts and across new opportunities
Potential backlog expansion through new awards and multi-year modernization programs
Threats
Public sector budget volatility and shifting procurement priorities
Competition from larger IT services firms and consulting peers narrowing margins
Talent market competition and inflationary pressures on labor costs
Regulatory and geopolitical risks impacting government contracting environment