Booz Allen Hamilton Holding Corp SEC 10-K Report

Booz Allen Hamilton Holding Corp, a leading provider of management and technology consulting services, has released its annual 10-K report, showcasing robust financial performance, strategic initiatives, and key business highlights for the fiscal year. The report underscores the company's commitment to leveraging its expertise in AI, cybersecurity, and digital transformation to drive growth and deliver solutions for critical national missions.

Financial Highlights

• Revenue: $11,980 million, primarily driven by strong demand for solutions, outcomes, and services, as well as an increase in headcount and higher billable expenses.
• Operating Income: $1,370 million, reflecting a 35% increase from the previous year, driven by revenue growth and ongoing cost management efforts.
• Net Income: $935 million, a 54% increase from the previous year, supported by strong collection performance and overall revenue growth.
• Basic Earnings per Share: $7.28, reflecting the company's improved profitability.
• Diluted Earnings per Share: $7.25, indicating a significant increase in earnings per share compared to the previous year.

Business Highlights

• Core Technology and Expertise: Booz Allen leverages its expertise in AI, cybersecurity, digital transformation, space, and emerging technologies to deliver solutions for critical national missions. The company is a leading AI provider to the federal government and has a significant global presence in cybersecurity.
• Customer Segments: The company serves a diverse base of federal government customers, including nearly all U.S. cabinet-level departments, and commercial customers across industries such as financial services, health and life sciences, energy, and technology.
• Defense Customer Revenue: Revenue from defense customers was $5.9 billion, accounting for approximately 49% of total revenue in fiscal 2025, reflecting an increase from $5.1 billion or 47% in fiscal 2024.
• Intelligence Customer Revenue: Revenue from intelligence customers was $1.9 billion, representing approximately 16% of total revenue in fiscal 2025, slightly down from 17% in fiscal 2024.
• Civil and Global Commercial Customer Revenue: Revenue from civil and global commercial customers was $4.2 billion, making up approximately 35% of total revenue in fiscal 2025, compared to 36% in fiscal 2024.
• Contract Types: The company generates revenue through cost-reimbursable, time-and-materials, and fixed-price contracts, with cost-reimbursable contracts accounting for 57% of total revenue in fiscal 2025.
• Backlog Growth: Total contract backlog increased by 15% from March 31, 2024, to March 31, 2025, with significant additions to funded backlog due to new contracts and task orders.
• Human Capital: Booz Allen employs 35,800 people, with 72% holding security clearances and 88% possessing a bachelor's degree or higher. The workforce includes a significant number of veterans and individuals with military experience.
• Operating Model: The company operates as a single profit and loss center, promoting collaboration and allowing for a unified approach to customer engagements.
• Future Outlook: Booz Allen's VoLT strategy (Velocity, Leadership, and Technology) aims to position the company as a market-leading mission partner for the U.S. government by 2030, focusing on speed, agility, and technology integration.

Strategic Initiatives

• Strategic Acquisitions: Booz Allen Hamilton focused on strategic acquisitions to enhance its capabilities, including the acquisition of PAR Government Systems Corporation for $99 million.
• Capital Management: The company actively managed its capital through a combination of share repurchases and dividend payments. It repurchased 5.6 million shares of its Class A Common Stock for $764 million and paid $268 million in dividends, reflecting a dividend of $2.08 per share. Booz Allen Hamilton also maintained a strong liquidity position with $885 million in cash and cash equivalents and $999 million available under its Revolving Credit Facility.
• Future Outlook: Booz Allen Hamilton plans to continue its focus on strategic acquisitions and investments to drive growth. The company anticipates using its liquidity and cash flows to fund operations, capital expenditures, and potential future acquisitions. It also aims to maintain a balanced approach to capital management, including potential further debt issuances or equity financing to support its strategic objectives.

Challenges and Risks

• Industry and Economic Risks: The company faces significant industry and economic risks primarily due to its heavy reliance on U.S. government contracts, which account for 98% of its revenue. Changes in U.S. government spending, mission priorities, and budgetary constraints, including potential government shutdowns and debt ceiling issues, could adversely affect future revenue and growth prospects.
• Competitive Bidding Environment: The competitive bidding environment poses risks of delays and increased costs, especially if competitors protest contract awards. Additionally, the mix of contract types, such as fixed-price contracts, increases financial risk due to potential cost overruns.
• Operational Risks: Internal system failures and cybersecurity threats could damage the company's reputation and hinder future contract wins. The development and use of artificial intelligence introduce potential liabilities and regulatory challenges. The company also faces challenges in attracting and retaining skilled employees, particularly those with necessary security clearances, which are critical for fulfilling government contracts.
• Regulatory Risks: The company must comply with numerous complex laws and regulations, such as the FAR, False Claims Act, and cybersecurity requirements. Non-compliance could result in fines, penalties, or suspension from government contracting. The evolving legal landscape around AI and data privacy adds further complexity and potential costs.
• Inflationary Pressures and Tariffs: Management acknowledges the challenges posed by inflationary pressures and tariffs, which could increase operational costs and reduce profitability, especially under fixed-price contracts.
• Market Risks: The company is exposed to market risks, including fluctuations in economic conditions and credit markets, which could impact customer funding and demand for services. Instability in credit markets could also affect the company's ability to access capital or refinance existing debt, potentially impacting financial stability and growth opportunities.

SEC Filing: Booz Allen Hamilton Holding Corp [ BAH ] - 10-K - May. 23, 2025