Booz Allen Hamilton Holding Corp. BAH reported mixed first-quarter fiscal 2025 results, wherein earnings missed the Zacks Consensus Estimate, while revenues beat the same.
The stock has gained 3% since the earnings release on Jul 26 despite the earnings miss.
BAH’s quarterly adjusted earnings per share of $1.4 missed the Zacks Consensus Estimate by 9.2% and decreased 6.1% from the year-ago quarter. The company reported revenues of $2.9 billion, which beat the consensus estimate marginally and increased 10.8% on a year-over-year basis. Revenues, excluding billable expenses, were $2 billion, up 8.4% on a year-over-year basis.
The company’s shares have gained 16.7% in the past year, outperforming the 16.2% rally of the industry it belongs to.
Booz Allen Hamilton Holding Corporation Price and EPS Surprise
Booz Allen Hamilton Holding Corporation price-eps-surprise | Booz Allen Hamilton Holding Corporation Quote
Backlogs
The total backlog increased 15.7% from the year-ago quarter to $36.2 billion. This figure beat our estimate of $34.5 billion. The funded and unfunded backlog amounted to $5.1 billion and $10.1 billion, respectively. Funded backlog increased 4.8%, missing our estimate of $5.4 billion. Unfunded backlog rose 11.9%, outpacing our estimate of $8.7 billion.
Priced options rose 20.7% to $20.9 billion, surpassing our expectation of $20.4 billion. The book-to-bill ratio was 1.72 compared with 1.03 in first-quarter fiscal 2024. The headcount of 35,100 improved 7.7% on a year-over-year basis.
EBITDA Margins Rises
Adjusted EBITDA amounted to $302 million, a 1.6% fall from the year-ago quarter. It missed our estimate of $326.9 million. The adjusted EBITDA margin on revenues of 10.3%, down 130 basis points year over year.
Key Balance Sheet & Cash Flow Numbers
Booz Allen exited the quarter with cash and cash equivalents of $297.7 million compared with $554.3 million in the preceding quarter. Long-term debt (net of current portion) was $3.3 billion, flat with the prior quarter.
The company generated $52.1 million in net cash from operating activities. Capital expenditure was $32.4 million. The free cash flow was $19.7 million.
FY25 Outlook
For fiscal 2025, BAH expects revenue growth of 8-11%. It anticipates an adjusted EPS of $5.80-$6.05. The mid-point ($5.9) of the company’s guidance range is lower than the Zacks Consensus Estimate for earnings of $6.
Adjusted EBITDA is expected to be $1.26-1.30 billion. The adjusted EBITDA margin on revenues is anticipated to be 11%. Net cash provided by operating activities is projected at $825-925 million.
Booz Allen currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Investors interested in the broader Business Services sector can consider some better-ranked companies mentioned below.
Robert Half International Inc. RHI reported lower-than-expected second-quarter 2024 results.
RHI’s quarterly earnings of 66 cents per share missed the consensus mark by 7% and declined 34% year over year. Revenues of $1.47 billion missed the consensus mark by 1.7% and decreased 10.2% year over year.
ManpowerGroup Inc. MAN reported mixed second-quarter 2024 results.
MAN’s quarterly adjusted earnings of $1.3 per share surpassed the consensus mark by 2.4% but declined 17.7% year over year mainly due to run-off Proservia Germany business and Argentina-related currency translation losses. Revenues of $4.5 billion lagged the consensus mark by a slight margin and dipped 6.9% year over year on a reported basis and 3% on a constant-currency basis.
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