Booz Allen Hamilton Holding Corporation BAH reported mixed fourth-quarter fiscal 2026 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.
The company’s fourth-quarter fiscal 2026 adjusted earnings per share of $1.78 surpassed the consensus mark of $1.32 and increased 10.6% year over year.
Revenues of $2.78 billion missed the consensus estimate of $2.88 billion and declined 6.4% from the year-ago quarter. BAH continued to benefit from strength in its National Security business, while Civil operations remained under pressure amid difficult market conditions.
Booz Allen Hamilton Holding Corporation Price, Consensus and EPS Surprise
Booz Allen Hamilton Holding Corporation price-consensus-eps-surprise-chart | Booz Allen Hamilton Holding Corporation Quote
BAH’s Margins Expand Despite Revenue Pressure
Adjusted EBITDA declined 2.2% year over year to $309 million. The adjusted EBITDA margin on revenues expanded 50 basis points to 11.1% due to disciplined cost management and strong contract execution.
Adjusted net income increased 5.9% year over year to $215 million. GAAP net income rose 6.2% to $205 million, while GAAP earnings per share improved 10.5% to $1.68.
The company noted that profitability benefited from lower taxes, a reduced share count and unrealized investment gains. Operating income totaled $263 million compared with $274 million in the prior-year quarter.
Booz Allen Faces Civil Market Headwinds
Booz Allen’s revenues, excluding billable expenses, decreased 6.8% year over year to $1.91 billion. Per management, the Civil business continued to face challenging comparisons and lower demand levels.
Civil operations were affected by contract reductions and lower Treasury-related work. Management expects the Civil portfolio to remain under pressure in the first half of fiscal 2027, although demand trends are improving gradually.
Meanwhile, the National Security portfolio continued to support overall performance. The business benefited from strong demand in intelligence, cyber and defense technology programs.
BAH’s Backlog & Demand Trends Stay Healthy
Total backlog increased 3.1% year over year to a record $38 billion. The company reported a quarterly book-to-bill ratio of 0.9X and a trailing 12-month book-to-bill ratio of 1.1X.
Management highlighted strong momentum in cyber and defense technology opportunities. During the quarter, Booz Allen secured a $937 million engineering and technology contract supporting the U.S. Army’s modernization initiatives.
The company continued investing in AI-enabled cyber offerings and advanced technology solutions. Management stated that demand for AI-native cyber products and outcomes-based contracts is accelerating across government and commercial markets.
Booz Allen Generates Strong Cash Flow
Booz Allen generated $240 million in operating cash flow during the quarter compared with $218 million in the prior-year period. Free cash flow improved 9.3% year over year to $212 million.
For fiscal 2026, free cash flow totaled $951 million, compared with $911 million in the prior year. The company attributed the improvement to billing efficiencies and strong collections activity.
BAH exited fiscal 2026 with cash and cash equivalents of $728 million compared with $885 million at fiscal 2025-end. Long-term debt, net of current portion, was $3.92 billion compared with $3.91 billion a year ago.
BAH Initiates Fiscal 2027 Outlook
For fiscal 2027, BAH expects revenues to be between $11.2 billion and $11.7 billion, indicating 0% to 4% year-over-year growth, with the midpoint of $11.45 billion below the Zacks Consensus Estimate of $11.55 billion. The company guided adjusted earnings per share between $6.00 and $6.35, with the midpoint of $6.18 marginally above the Zacks Consensus Estimate of $6.17.
The company projects adjusted EBITDA in the range of $1.24-$1.29 billion with an adjusted EBITDA margin of nearly 11%.
Management expects free cash flow to be between $825 million and $925 million. Booz Allen expects continued growth in its National Security business, while the Civil portfolio is likely to remain challenged in the near term.
The company continued returning capital to its shareholders. During fiscal 2026, Booz Allen deployed $1.1 billion through strategic investments, share repurchases and dividends.
Booz Allen carries a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots
Rollins, Inc. ROL reported impressive first-quarter 2026 results. ROL’s adjusted earnings of 24 cents per share matched the consensus mark and rose 9.1% from the year-ago quarter. ROL’s total revenues of $906.4 million surpassed the consensus mark by 1.3% and increased 10.2% year over year.
Waste Connections, Inc. WCN posted impressive first-quarter 2026 results. WCN’s adjusted earnings of $1.23 per share outpaced the consensus mark by 3.4% and rose 8.9% from the year-ago quarter. WCN’s total revenues of $2.37 billion beat the consensus mark by 0.7% and increased 6.4% year over year.
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