Booz Allen (BAH) Q2 2025 earnings summary

Executive summary

• Revenue grew 18% year-over-year to $3.15 billion in Q2 FY25, driven by strong demand, headcount growth, and a $121.7 million reduction in provision for claimed costs.

• Net income surged 128.5% to $390.1 million, with diluted EPS up 133.3% to $3.01 and adjusted diluted EPS up 40.3% to $1.81.

• Adjusted EBITDA rose 25.2% to $364 million, with margin improving to 11.6%.

• Backlog reached $41.3 billion, up 17.7% year-over-year, with a quarterly book-to-bill ratio of 2.61x.

• Raised and narrowed full-year guidance for both top and bottom lines, expecting to exceed the top end of the multi-year investment thesis.

Financial highlights

• Total revenue for Q2 FY25 was $3.15 billion, with organic revenue up 17.1%.

• Adjusted EBITDA was $364 million, margin at 11.6%, and adjusted net income was $233 million, up 37.8% year-over-year.

• Free cash flow for the first half was $583 million, with $587 million from operations and $24 million CapEx.

• Net income margin for the quarter was 12.4%, up from 6.4% a year ago.

• Cash and cash equivalents stood at $559 million as of September 30, 2024.

Outlook and guidance

• FY25 revenue growth guidance raised to 11–13%, with adjusted EBITDA guidance at $1.3–1.33 billion (margin ~11%).

• Adjusted diluted EPS guidance increased to $6.10–$6.30.

• Free cash flow guidance set at $825–$925 million; operating cash flow forecasted at $925M–$1.025B.

• Guidance incorporates discrete benefits from insurance recovery, payroll modernization, and provision changes.

• Management expects sufficient liquidity and resources for the next twelve months.