Booz Allen Hamilton Holding Corporation

First-quarter fiscal 2027 revenue declined 4.2% year over year to $2.8 billion, and revenue ex billable expenses fell 3.8%. Adjusted EBITDA was $334 million with an 11.9% margin, up 130 basis points year over year. Adjusted diluted EPS increased 22% year over year to $1.81, helped by profit growth, a lower tax rate, a reduced share count, and a $19 million pretax unrealized gain on a venture investment. Free cash flow was $261 million. Bookings were strong with a 1.5x book-to-bill, trailing 12-month book-to-bill was 1.1x, total backlog was over $39 billion, funded backlog was $4.7 billion (up 15% year over year), cash on hand was $540 million, total liquidity was $2 billion, and net leverage was 2.7x adjusted EBITDA. For the full year, management reaffirmed guidance across all metrics, still expects approximately 11% margins, and continues to expect growth to be back-half weighted. They also expect National Security to grow mid-single digits for the fiscal year, Civil to be down in the high single digits, and a sequential double-digit decline in Civil revenue next quarter.

Horacio Rozanski said the quarter matched the framework set out in May: execution remains strong in a tough macro environment, Civil and National Security are on different trajectories, and growth is coming from National Security. He emphasized that funding is improving, but midterm-year budget uncertainty and procurement reform could create near-term delays, so the company is staying disciplined while accelerating transformation in cyber, defense tech, quantum, and AI. His tone was confident but cautious, repeatedly describing the outlook as dynamic and saying the company is positioned to capture demand from agentic AI and outcomes-based contracting.

Troy Lahr highlighted that the quarter outperformed expectations on profitability and cash flow despite the revenue decline. He cited $334 million of adjusted EBITDA, an 11.9% margin, $1.81 adjusted EPS, and $261 million of free cash flow, and noted that DSO rose 7 days year over year to 80 days because of Defy-related revenue recognition treatment, which he expects to keep DSO elevated versus history. On capital deployment, he said the company used $447 million in the quarter, including $324 million for Defy and venture investments and $123 million for dividends and buybacks, ended with $540 million of cash and $2 billion of liquidity, and expects to close Ultra Mission Solutions in Q2 while eventually delevering over time.

Analysts pressed on whether strong funded backlog reflected pull-forward; management said there was no unusual pull-forward and described the quarter as a clean read on improving funding. Questions also focused on Civil’s second-half path, with management saying Civil should be down in the high single digits for the year but that improving funding and pipeline should help later in the year. Several questions addressed fixed-price contracting, AI-driven cyber demand, and Ultra; management said fixed-price conversion is early but directional, that agentic AI is driving more cyber demand and product traction, and that Ultra should add complementary defense tech capabilities with strong double-digit growth and EBITDA margins above 20%.