Booz Allen Hamilton (BAH) - 2025 Q3 - Quarterly Results

Financial Performance - The company reported third quarter fiscal year 2025 revenue of $2.92 billion, representing a 13.5% increase compared to the prior year[4] - Organic revenue growth for the quarter was 12.6%, while revenue excluding billable expenses grew by 11.8%[4] - Net income increased by 28.4% to$ 187.0 million, and adjusted net income rose by 7.4% to $197.9 million[4] - Adjusted EBITDA for the quarter was$ 331.7 million, reflecting a 14.1% increase, with an adjusted EBITDA margin on revenue of 11.4%[4] - Diluted EPS was $1.45, up 30.6% from$ 1.11, while adjusted diluted EPS increased to $1.55, a 9.9% rise from$ 1.41[4] - Revenue for the three months ended December 31, 2024, was $2,917,190, an increase of 13.5% compared to$ 2,569,801 for the same period in 2023[28] - Net income for the three months ended December 31, 2024, was $186,950, representing a 28.4% increase from$ 145,644 in the same quarter of 2023[28] - Adjusted diluted EPS for the nine months ended December 31, 2024, was $5.73, compared to$ 3.62 for the same period in 2023, reflecting a 58.3% increase[28] - Adjusted Operating Income for the three months ended December 31, 2024, was $304,951, up 15.9% from$ 263,107 in the prior year[33] - Adjusted EBITDA for the three months ended December 31, 2024, was $331,721, representing a 14.1% increase from$ 290,623 in the same quarter of 2023[36] - Net income for the nine months ended December 31, 2024, was $742,295 thousand, a significant increase of 55.5% compared to$ 477,750 thousand for the same period in 2023[32] Cash Flow and Liquidity - For the nine months ended December 31, 2024, free cash flow was $716.6 million, significantly up from$ 64.5 million in the prior year[8] - Free Cash Flow for the three months ended December 31, 2024, was $133,591, with a conversion rate of 81%[33] - Net cash provided by operating activities reached$ 789,991 thousand, compared to $115,068 thousand in the previous year, indicating a substantial improvement in cash flow[32] - Cash and cash equivalents decreased to$ 453,539 thousand at the end of the period from $554,257 thousand at the beginning, reflecting a decrease of 18.2%[32] - Cash dividends paid amounted to$ 198,437 thousand, compared to $186,787 thousand in the previous year, indicating an increase of 6.4%[32] - The company reported a net cash used in investing activities of$ 183,765 thousand, compared to $68,254 thousand in the prior year, highlighting increased investment activity[32] - The company experienced a net decrease in cash and cash equivalents of$ 100,718 thousand during the period, contrasting with a net increase of $196,951 thousand in the previous year[32] Guidance and Future Outlook - The company updated its fiscal year 2025 guidance, projecting revenue growth of 12.0% - 13.0% and adjusted diluted EPS of$ 6.25 - $6.40[9] - The company anticipates continued growth driven by strategic acquisitions and expansion efforts in the upcoming fiscal periods[35] - The company expects variability in future GAAP financial results due to unpredictable factors affecting stock price and equity grants[20] - Adjusted EBITDA and Adjusted EBITDA Margin on Revenue guidance for fiscal 2025 is anticipated but specific reconciliations are not available without unreasonable efforts[21] Backlog and Book-to-Bill Ratio - Total backlog increased by 14.8% to$ 39.4 billion, with a quarterly book-to-bill ratio of 0.37x and a trailing twelve-month book-to-bill ratio of 1.41x[4] - Funded backlog increased to $5,330 million in December 2024 from$ 5,246 million in December 2023, while total backlog rose to $39,413 million from$ 34,321 million[42] - Book-to-bill ratio for the three months ended December 31, 2024, was 0.37, down from 0.72 in the same period of 2023, but increased to 1.60 for the nine months ended December 31, 2024, compared to 1.40 in 2023[42] Employee and Headcount - The company experienced a 6.0% year-over-year increase in client staff headcount, totaling approximately 1,800 additional employees[7] - Total headcount reached 35,900 in December 2024, up from 33,800 in December 2023, with client staff headcount increasing to 32,700 from 30,900[43] Assets and Liabilities - Total assets increased to $6,820,989 thousand as of December 31, 2024, up from$ 6,563,688 thousand on March 31, 2024, representing a growth of approximately 3.9%[30] - Total current liabilities rose to $1,814,329 thousand, an increase of 7.2% from$ 1,692,190 thousand as of March 31, 2024[30] - Long-term debt, net of current portion, decreased slightly to $3,291,215 thousand from$ 3,349,941 thousand, showing a reduction of approximately 1.7%[30] - Stockholders' equity increased to $1,209,917 thousand as of December 31, 2024, up from$ 1,046,562 thousand, reflecting a growth of 15.6%[30] - Total Debt as of December 31, 2024, was $3,373,715, with Net Debt at$ 2,920,176 after accounting for cash[36] Legal and Regulatory Matters - The company has set aside reserves associated with the U.S. Department of Justice's investigation, highlighting potential legal challenges[41] - The company faced unfavorable tax assessments from the District of Columbia, affecting revenue from recoverable expenses[40] - Expenses related to debt financing activities were incurred during the second quarter of fiscal 2024, indicating ongoing financial management efforts[41] Acquisitions - The company is involved in acquisition efforts, including EverWatch in fiscal 2023 and PGSC in fiscal 2025, impacting financial statements[40] - The total backlog acquired from PGSC during the nine months ended December 31, 2024, contributed to the overall backlog growth[42]