Booz Allen Raises EPS Outlook to $6.70 Despite 3.9% Revenue Decline
Key Facts
Booz Allen Hamilton reported preliminary results for the second quarter of fiscal 2027 on October 23, 2026, posting adjusted diluted EPS of $1.76, up 18.1% year over year. Adjusted net income rose 15.3% to $211 million, from $183 million in the year-earlier period. Revenue, however, fell 3.9% to $2.778 billion, from $2.890 billion, while free cash flow declined 33.4% to $263 million from $395 million. The results showed improved adjusted EPS alongside lower revenue and cash generation during the quarter. The company raised its fiscal-year adjusted EPS outlook while narrowing its expected revenue range from its previous estimate.
Income measures diverged depending on the metric: ordinary net income rose 3.4% to $181 million, compared with $175 million a year earlier. Adjusted EBITDA, by contrast, fell 3.4% to $313 million from $324 million. Despite the decline, its margin on revenue rose to 11.3% from 11.2%, an increase of 10 basis points. The company said acquisition-related professional fees and lower revenue weighed on EBITDA, partly offset by strong contract execution. It attributed the revenue decline primarily to a slower procurement environment in the prior year, which delayed program starts in the current year, particularly among civil customers, and reduced headcount and billable expenses.
The two segments delivered divergent quarterly results: National Security revenue was $2.076 billion, compared with $2.063 billion a year earlier. Civil and commercial revenue, meanwhile, fell to $702 million from $827 million. The contrast places the larger decline in the civil and commercial segment against a slight increase in National Security. The CEO said the company was "building and scaling its cyber products and defense technologies, and infusing superintelligence into the most important national missions." In the six months ended September 30, 2026, net income was $379 million versus $446 million in the year-earlier period, while adjusted diluted EPS rose to $3.57 from $2.97.
On future business, total backlog stood at about $40.933 billion on September 30, 2026, compared with $40.188 billion on September 30, 2025. The quarterly book-to-bill ratio was 1.5 times, versus 1.7 times in the year-earlier period. On a trailing twelve-month basis, the ratio was unchanged at 1.1 times for the periods ended September 30. Together, the indicators show year-over-year backlog growth and a lower quarterly book-to-bill ratio than a year earlier. They come alongside divergent segment trends, with National Security revenue edging higher while civil and commercial revenue declined.
Booz Allen raised its fiscal 2027 adjusted diluted EPS outlook to $6.50–$6.70, from $6.00–$6.35 previously. Its revenue outlook narrowed to $11.3–$11.6 billion, compared with the previous range of $11.2–$11.7 billion. The company also raised its free cash flow outlook to $850–$925 million from $825–$925 million. The revisions follow a quarter in which adjusted EPS increased alongside declines in revenue and free cash flow. Against the backdrop of its defense business, the company announced on August 24, 2026, that it had completed its acquisition of Ultra I&C's Mission Solutions unit for $720 million.
The company declared a quarterly dividend of $0.59 per share, payable on December 4, 2026, to shareholders of record on November 12. Its shares closed at $78.57 on October 22. A report published on October 23 said the stock rose 2.68% in premarket trading after the results announcement. The earnings call was scheduled for 8 a.m. Eastern Time on October 23, the time the company announced its preliminary results. The company also said it deployed a total of $965 million in capital during the quarter.