Booz Allen EPS Rises 22% as Book-to-Bill Ratio Improves
The consulting firm reported adjusted diluted earnings per share of $1.81 for the first quarter of fiscal 2027.
Booz Allen Hamilton Holding (BAH) reported a significant increase in quarterly earnings despite a decline in total revenue. The government consulting firm saw a sharp acceleration in profitability and cash flow, signaling a shift in operational efficiency as it manages a contracting revenue base.
Adjusted diluted earnings per share rose 22.3% year-over-year to $1.81. This growth rate accelerated from the 10.6% increase reported in the prior quarter. Revenue decreased 4.2% year-over-year to $2.8 billion, though the pace of decline slowed from the 6.4% drop seen in the fourth quarter of fiscal 2026.
Profitability gains were driven by margin expansion and cost management. Adjusted EBITDA margin on revenue expanded 130 basis points year-over-year to 11.9%, up from a 50 basis point expansion in the previous quarter. Free cash flow increased 171.9% year-over-year to $261 million.
Revenue performance diverged by segment. National Security revenue grew slightly to $2.028 billion from $2.001 billion a year ago, while Civil and Commercial revenue declined to $772 million from $923 million. The company also reduced its total headcount to 30,900 as of June 30, 2026, down from 33,400 in the prior year.
Demand indicators showed a recovery in new business. The quarterly book-to-bill ratio improved to 1.5x, up from 0.9x in the prior quarter. Total backlog rose 3.2% year-over-year to $39 billion. Fixed-price contracts rose to 21% of total revenue from 18% a year ago, while cost-reimbursable contracts fell to 57% from 60%.
Booz Allen maintained its fiscal 2027 guidance. The company expects revenue between $11.2 billion and $11.7 billion, representing growth of 0% to 4.0%. It projects adjusted EBITDA of $1.24 billion to $1.29 billion and adjusted diluted EPS between $6.00 and $6.35.
The company announced a definitive agreement on June 22, 2026, to acquire Ultra I&C Mission Solutions for $720 million. The acquisition is expected to provide strong double-digit revenue growth and EBITDA margins exceeding 20%.