Booz Allen Posts Adjusted EPS of $1.76 Despite 3.9% Revenue Decline
Key Facts
Booz Allen Hamilton reported preliminary results on Oct. 23, 2026, for the second quarter of its fiscal 2027, ended Sept. 30, including adjusted earnings per share of $1.76, up 18.1% year over year. Higher adjusted earnings came alongside a 3.9% decline in revenue to $2.8 billion. Net income also rose 3.4% to $181 million, while adjusted net income increased 15.3% to $211 million. The results present a mixed picture for the period, with adjusted profitability measures improving as sales declined. The company raised its annual earnings outlook while narrowing its revenue-growth range.
Excluding amounts the company bills to third parties, revenue was $2.0 billion, down 0.8% year over year, a slower decline than the 3.9% drop in total revenue. For the first half of the fiscal year, revenue fell 4.1% to $5.578 billion, compared with $5.814 billion in the year-earlier period. By contrast, adjusted net income for the first half rose 16.6% to $428 million. The comparison shows that revenue remained under pressure during the first six months, alongside growth in the adjusted income measure. The company had attributed the slow start of programs in the current year to slower procurement in the prior period, particularly among civilian customers, which led to lower headcount and fewer billable expenses.
Adjusted earnings before interest, taxes, depreciation and amortization were $313 million, down 3.4% from the year-earlier period, even as the margin rose to 11.3% of revenue, an increase of 10 basis points. This means the margin improvement coincided with a decline in the measure's value and does not in itself establish that it offset lower sales. Free cash flow also fell to $263 million, compared with $395 million a year earlier. The cash decline places the margin result in the broader context of the period's financial performance. In its disclosure, the company cautioned that adjusted earnings per share and free cash flow are supplemental measures that are not in accordance with generally accepted accounting principles and should not be considered substitutes for financial information prepared under those principles.
On the demand side, backlog rose 1.9% year over year to $41 billion, and the company posted a quarterly book-to-bill ratio of 1.5 times. Chief Executive Horacio Rozanski said the company was executing its work strongly and investing in its next phase of growth, adding: "We are building and scaling our products in cybersecurity and defense technology." The company links its growth plans to expanding its products in these two areas, while backlog reflects the volume of work it has recorded. That backlog growth does not change the fact that reported revenue fell during the quarter. Reading these indicators also remains tied to the pace of program starts after the procurement slowdown described by the company.
The company raised its adjusted diluted earnings-per-share outlook for fiscal 2027 to $6.50–$6.70, from a previous range of $6.00 to $6.35. It also narrowed its revenue outlook to $11.3–$11.6 billion, from $11.2–$11.7 billion, and set expected revenue growth at 1%–3%, compared with a previous range of 0% to 4%. It kept its adjusted earnings-before-interest-taxes-depreciation-and-amortization margin outlook at about 11%. The company raised its free-cash-flow outlook to $850–$925 million from $825–$925 million. The updated guidance therefore combines a higher earnings range with narrower revenue and annual growth ranges.
The company declared a quarterly cash dividend of $0.59 per share, payable on Dec. 4, 2026, to shareholders of record on Nov. 12, 2026. These dates give shareholders a clear timetable for the payment announced with the results. In trading on Oct. 23, EL7 data showed the company's shares closed at $78.32. EL7's record does not include the stock's daily trading range. The dividend and annual guidance followed the preliminary results announcement, with a call to discuss second-quarter fiscal results scheduled.