Key Takeaways
Booz Allen Hamilton (NYSE: BAH) reported fourth-quarter adjusted earnings of $1.78 per share, beating analyst estimates by 33 percent, even as revenue declined 6.4 percent year-over-year on weakness in its civil business.
"Our focus on cost discipline and strategic investments has positioned us well for future growth, especially in national security and technology sectors," CEO Horacio Rozanski said in the earnings release.
The defense contractor posted revenue of $2.8 billion for the quarter ended March 2026, missing the consensus estimate of $2.87 billion. The significant earnings beat was attributed to strong cost controls and operational execution, which helped deliver an adjusted EBITDA margin of 11.1 percent, a 50 basis point increase from the prior year.
Shares rose 0.9 percent in premarket trading as investors focused on the strong profitability. The company guided for a return to growth in fiscal 2027, forecasting revenue between $11.2 billion and $11.7 billion, driven by an expected mid-single-digit expansion in its national security portfolio.
The company's performance showed a sharp divergence between its main segments. The national security portfolio grew 1.6 percent year-over-year, showing resilience and strong demand for intelligence and technology offerings. In contrast, the civil business declined 23 percent year-over-year, facing headwinds from contract roll-offs and reductions. Management expects the civil portfolio's decline to continue in the first half of fiscal 2027 before momentum accelerates.
For the full fiscal year 2026, Booz Allen reported revenue of $11.2 billion and adjusted EPS of $6.51. The company generated free cash flow of $951 million for the year.
Looking to fiscal 2027, Booz Allen projects adjusted EBITDA between $1.24 billion and $1.29 billion, implying a margin of around 11 percent. The adjusted EPS forecast is set between $6.00 and $6.35. The company is focusing on high-margin areas like national security and technology-driven solutions, including cyber and AI, to drive future growth. CEO Horacio Rozanski highlighted a nearly 90 percent increase in proposal submissions for other transaction authority (OTA) contracts, signaling a strategic shift toward more outcome-based work.
The results come as Troy Lahr takes over as the new Chief Financial Officer. The company also announced that Chief Operating Officer Kristine Martin Anderson has been promoted to the additional role of President.
The guidance suggests management is confident that growth in national security and a focus on high-tech solutions can offset the near-term civil market challenges. Investors will be watching the execution of the company's strategic pivot and the performance of its civil segment in the coming quarters.
This article is for informational purposes only and does not constitute investment advice.
