Booz Allen Hamilton Holding Corporation (BAH) Q4 2026: Revenue Decline, Profitability Gains — Cautiously Optimistic

Booz Allen Hamilton Holding Corporation (BAH) reported its fourth quarter results for fiscal 2026, revealing a revenue decline of $191 million or -6.4% year-over-year, with total revenue of $2.8 billion. Despite this drop in revenue, the company achieved a net income increase of $12 million or +6.2% year-over-year, totaling $205 million. This mixed performance presents a complex picture for shareholders.

Key Financial Metrics

• Q4 Revenue: $2.783 billion, a decrease of $191 million or -6.4% YoY
• Net Income: $205 million, an increase of $12 million or +6.2% YoY
• Adjusted Net Income: $215 million, an increase of $12 million or +5.9% YoY
• Adjusted EBITDA: $309 million, a decrease of $7 million or -2.2% YoY
• Adjusted EBITDA Margin: 11.1%, an increase of 50 basis points YoY
• Adjusted Diluted EPS: $1.78, an increase of $0.17 or +10.6% YoY
• Free Cash Flow: $212 million, compared to $194 million in the prior year
• Total Backlog: $38 billion, an increase of $1.16 billion or +3.1% YoY

Analyst Opinion

This quarter presents a mixed bag for Booz Allen Hamilton shareholders. While the revenue decline is concerning, the increase in net income and adjusted EPS indicates that the company is managing its costs effectively and maintaining profitability. The adjusted EBITDA margin improvement suggests operational efficiency, which is a positive sign for future profitability. However, the anticipated declines in the Civil business and the overall revenue drop could raise concerns about the company's growth trajectory.

Dividend and Share Buyback

Booz Allen Hamilton declared a regular quarterly dividend of $0.59 per share, payable on June 26, 2026, to stockholders of record on June 10, 2026. This consistent dividend payment reflects the company's commitment to returning value to shareholders, even amid challenging revenue conditions.

Guidance and Future Outlook

Looking ahead, Booz Allen Hamilton provided guidance for fiscal 2027, projecting revenue between $11.2 billion and $11.7 billion, which indicates a growth range of 0% to 4.0%. The company expects adjusted EBITDA to be between $1.240 billion and $1.290 billion, with an adjusted EBITDA margin around 11%. Adjusted diluted EPS is forecasted to be between $6.00 and $6.35, suggesting a cautious optimism for the upcoming fiscal year.

Forward Catalyst

Investors should closely monitor Booz Allen's performance in the National Security portfolio, which is expected to drive growth, while also keeping an eye on the Civil business segment for any signs of recovery or further decline. The company's ability to leverage its record backlog of $38 billion will be crucial in determining its performance in the next quarter and beyond.

In summary, while Booz Allen Hamilton's fourth quarter results reflect some challenges, the company's profitability and strategic investments position it for potential growth in fiscal 2027. Shareholders should remain cautiously optimistic as the company navigates these dynamics.

Note: The following tables present amounts in millions.

Three Months Ended March 31	Fiscal Year Ended March 31
2026	2025	2026	2025
Revenue	$ 2,783	$ 2,974	$ 11,217	$ 11,980
Operating costs and expenses:
Cost of revenue	1,283	1,378	5,305	5,419
Billable expenses	877	928	3,450	3,780
General and administrative expenses	318	352	1,266	1,246
Depreciation and amortization	42	42	163	165
Total operating costs and expenses	2,520	2,700	10,184	10,610
Operating income	263	274	1,033	1,370
Interest expense, net	(45)	(43)	(184)	(168)
Other income (expense)	8	11	13	17
Income before income taxes	226	242	862	1,219
Income tax expense	21	49	11	284
Net income	$ 205	$ 193	$ 851	$ 935
Earnings per common share:
Basic	$ 1.69	$ 1.53	$ 6.92	$ 7.28
Diluted	$ 1.68	$ 1.52	$ 6.90	$ 7.25

March 31	2026	2025
Assets
Current assets:
Cash and cash equivalents	$ 728	$ 885
Accounts receivable, net	2,063	2,271
Prepaid expenses and other current assets	170	157
Total current assets	2,961	3,313
Property and equipment, net of accumulated depreciation	171	177
Operating lease right-of-use assets	147	178
Intangible assets, net of accumulated amortization	509	563
Goodwill	2,399	2,405
Deferred tax assets	294	332
Other long-term assets	637	344
Total assets	$ 7,118	$ 7,312
Liabilities and stockholders' equity
Current liabilities:
Current portion of long-term debt	19	83
Accounts payable and other accrued expenses	909	987
Accrued compensation and benefits	641	702
Operating lease liabilities	43	41
Other current liabilities	51	33
Total current liabilities	1,663	1,846
Long-term debt, net of current portion	3,921	3,915
Operating lease liabilities, net of current portion	139	180
Other long-term liabilities	290	368
Total liabilities	6,013	6,309
Stockholders’ equity:
Common stock, Class A — $0.01 par value — authorized, 600,000,000 shares; issued	2	2
Treasury stock, at cost — 49,463,881 shares at March 31, 2026 and 43,643,540 shares at March 31, 2025	(3,673)	(3,082)
Additional paid-in capital	1,155	1,042
Retained earnings	3,644	3,070
Accumulated other comprehensive loss	(23)	(29)
Total stockholders’ equity	1,105	1,003
Total liabilities and stockholders' equity	$ 7,118	$ 7,312

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