Executive Summary
Booz Allen Hamilton Holding Corporation reported solid revenue growth of 10.82% year-over-year, reaching $2.94 billion in Q1 2025, driven by strong performance in the defense and civil sectors. Despite the positive momentum, the company faced margin compression, resulting in a lower adjusted EBITDA margin of 10.3%. Key management highlighted operational efficiency as a critical focus while navigating a politically uncertain budget environment. The broad-based growth in defense and civil business offset a modest decline in the intelligence sector, reflecting Booz Allen’s strategic positioning in national priority missions.
Key Performance Indicators
Key Insights
1. **Revenue**: $2.94 billion, up from $2.66 billion YoY, indicating strong demand across sectors.
2. **Gross Profit**: $1.57 billion, reflecting a gross profit margin of 53.39%.
3. **Operating Income**: $255 million, with an operating margin of 8.66%.
4. **Net Income**: $165 million, representing a 2.38% YoY increase.
5. **EPS**: $1.27, up from $1.22 YoY.
6. **EBITDA**: $302 million, down 1.6% YoY, with a margin decline of 130 basis points.
7. **Total Debt**: $3.63 billion, net debt at $3.33 b...
Financial Highlights
1. Revenue: $2.94 billion, up from $2.66 billion YoY, indicating strong demand across sectors.
2. Gross Profit: $1.57 billion, reflecting a gross profit margin of 53.39%.
3. Operating Income: $255 million, with an operating margin of 8.66%.
4. Net Income: $165 million, representing a 2.38% YoY increase.
5. EPS: $1.27, up from $1.22 YoY.
6. EBITDA: $302 million, down 1.6% YoY, with a margin decline of 130 basis points.
7. Total Debt: $3.63 billion, net debt at $3.33 billion, reflecting leverage with a net leverage ratio at 2.7x EBITDA.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.94B |
10.82% |
6.15% |
| Gross Profit |
1.57B |
11.98% |
3.61% |
| Operating Income |
255.16M |
8.85% |
-3.51% |
| Net Income |
165.23M |
2.38% |
29.13% |
| EPS |
1.27 |
4.10% |
28.28% |
Key Financial Ratios
operatingProfitMargin
8.67%
operatingCashFlowPerShare
$0.4
freeCashFlowPerShare
$0.15
dividendPayoutRatio
40.2%
Management Commentary
Strategic Growth and Technology Integration:
- Horacio Rozanski emphasized Booz Allen's VoLT strategy (Velocity, Leadership, and Technology) as pivotal for achieving double-digit organic revenue growth this quarter, stating, "We believe we are on track to meet our fiscal year 2025 guidance and achieve the high end of our investment thesis goals."
- Matt Calderone highlighted strong backlogs with total annualized contracts at a record $36 billion, up 16% year-over-year with a book-to-bill ratio improving to 1.72.
"We have both the demand side and supply side momentum, as well as the operating levers available to us to meet our fiscal year 2025 objectives." - Matt Calderone
— Matt Calderone
"Booz Allen’s momentum shows beyond our financials. It is evident in the quality of the work we win, the innovative capabilities we deliver, and the exceptional talent we attract." - Horacio Rozanski},
— Horacio Rozanski
Forward Guidance
For FY2025, Booz Allen projects revenue growth between 8% and 11%, indicating robust demand across its portfolio. The anticipated adjusted EBITDA guidance is between $1.26 billion to $1.3 billion, translating into an expected EBITDA margin of around 11%. This guidance reflects confidence in capitalizing on current momentum while adapting to potential budgetary uncertainties driven by the electoral landscape.