Booz Allen (BAH) Q3 2025 earnings summary

Executive summary

• Achieved double-digit revenue and organic revenue growth in Q3 FY25, with revenue up 13.5% year-over-year to $2.92B and organic revenue up 13%.

• Net income rose 28.4% to $187M, with diluted EPS up 30.6% to $1.45 and adjusted diluted EPS up 9.9% to $1.55.

• Maintained strong operational momentum and cost management, supported by technology investments and strategic partnerships.

• Backlog grew 14.8% to $39.4B, with a trailing twelve-month book-to-bill ratio at 1.41x.

• Quarterly dividend increased by $0.04 to $0.55 per share, and share repurchase authorization expanded by $500M.

Financial highlights

• Q3 FY25 revenue: $2.92B (+13.5% YoY); adjusted EBITDA: $332M (+14.1% YoY) with an 11.4% margin.

• Net income: $187M (+28.4% YoY); adjusted net income: $198M (+7.4% YoY).

• Free cash flow for the quarter: $134M; for nine months: $716.6M, with conversion rates above 100%.

• Net leverage ratio at 2.3x adjusted EBITDA; cash and equivalents at $454M as of Dec 31, 2024.

• Total debt was $3.37B, with no outstanding balance on the revolver.

Outlook and guidance

• FY25 revenue growth expected at 12%–13%, nearly all organic; adjusted EBITDA guidance: $1.31–$1.33B.

• Adjusted diluted EPS guidance raised to $6.25–$6.40; free cash flow forecasted at $950M–$1.025B.

• Operating cash flow forecasted at $950M–$1.025B; free cash flow at $850M–$925M.

• 70% of remaining performance obligations expected to be recognized as revenue in the next 12 months.

• Assumptions include inorganic revenue from the PAR Government Systems acquisition and a 23%–24% effective tax rate.