BAH

Booz Allen Hamilton Holding Corp

NYSE · INDUSTRIALS · SERVICES-MANAGEMENT CONSULTING SERVICES

75.04

+0.07 +0.09%

USD · close Oct 21

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MKT CAP $9BP/E 11.8DIV YIELD 3.04%FCF YIELD 12.36%REV TTM $11.1B −7.3%NET INCOME $778M −25.3%NET DEBT $3.4B52W 59.71 – 102.23SEC XBRL · TTM TO Invalid Date

How BAH rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

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Risk Factors” and “Introductory Note — Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.
See “— Results of Operations.” Overview Booz Allen is an advanced technology company, building products and solutions for government and business.
We are a leader at the forefront of the nation’s technology ecosystem.
Our approximately 31,500 employees build tech for a diverse base of federal government and commercial customers, both domestically and in select foreign locations.
By investing in emerging technologies, talent, and new business models, including partnerships with leading technology companies, venture investments, and the development of military grade products, we are accelerating the delivery of tech solutions.
Management believes this metric provides useful information about our business.These supplemental performance measurements may vary from and may not be comparable to similarly titled measures by other compani es in our industry.
We have defined the aforementioned non-GAAP measures as follows: • Revenue, Excluding Billable Expenses represents revenue less billable expenses. • EBITDA represents net income before income taxes, interest expense, net and other income (expense), and depreciation and amortization. • Adjusted EBITDA represents net income before income tax expense, interest expense, net and other income (expense), and depreciation and amortization and before certain other items, including the change in provision for claimed costs for historical rate years, financing transaction costs, DC tax assessment adjustment, the reserve associated with the U.S.
Department of Justice (the “DOJ”) investigation disclosed in Note 20, “Commitments and Contingencies,” to the consolidated financial statements contained within our Annual Report on Form 10-K for the fiscal year ended March 31, 2024, the insurance recoveries related to the settlement of that matter, and other corporate expenses.
T able of Contents Below is a reconciliation of our most directly comparable GAAP measures to our non-GAAP measures, Revenue to Revenue, Excluding Billable Expenses and Net income to EBITDA and Adjusted EBITDA , calculated and presented in accordance with GAAP: Fiscal Year Ended March 31, (Amounts in millions) 2026 2025 2024 (Unaudited) Revenue, Excluding Billable Expenses Revenue $ 11,217 $ 11,980 $ 10,662 Less: Billable expenses 3,450 3,780 3,282 Revenue, Excluding Billable Expenses * $ 7,767 $ 8,200 $ 7,380 EBITDA and Adjusted EBITDA Net income $ 851 $ 935 $ 606 Income tax expense 11 284 248 Interest expense, net and other income (expense) 171 151 160 Depreciation and amortization 163 165 164 EBITDA 1,196 1,535 1,178 Change in provision for claimed costs (a) — (113) (18) Financing transaction costs (b) — — 1 DC tax assessment adjustment (c) — — (20) Legal matter reserve (d) — — 27 Other corporate expenses (e) 33 8 7 Insurance recoveries (f) — (115) — Adjusted EBITDA $ 1,229 $ 1,315 $ 1,175 * Revenue, Excluding Billable Expenses includes $113 million of revenue and $18 million revenue for fiscal 2025 and 2024 respectively, resulting from the reduction to our provision for claimed costs (see note (a) below).
(a) Represents the reduction to our provision for claimed costs for years prior to fiscal 2025 recorded during the second quarters of fiscal 2025 and 2024, which resulted in a corresponding increase to revenue, as a result of the Defense Contract Audit Agency's findings related to its audits of our claimed costs for multiple fiscal years.
See Note 19, “Commitments and Contingencies,” to the consolidated financial statements in the Company's Form 10-K for the fiscal year ended March 31, 2025 for further information.
(b) Reflects expenses associated with debt financing activities incurred during the second quarter of fiscal 2024.
(c) Reflects the impact (specifically the revenue from recoverable expenses) of the Company's unfavorable ruling from the District of Columbia Court of Appeals related to contested tax assessments from the District of Columbia Office of Tax and Revenue (“DC OTR”).
(e) In fiscal 2026, other corporate expenses consist primarily of nonrecoverable costs associated with employee severance from cost management and restructuring initiatives, transaction costs associated with a divestiture, and acquisition related costs associated with the acquisition of Defy Security, which closed in the first quarter of fiscal 2027.
See Note 20, “Supplemental Consolidated Financial Information,” to the consolidated financial statements for further information.
In fiscal 2025 and fiscal 2024, other corporate expenses consist primarily of acquisition related costs from the acquisitions of PAR Government Systems Corporation (“PGSC”) and EverWatch Corp.
(f) Reflects insurance recoveries from claims related to the Company’s fiscal 2024 settlement as described in Note 20, “Commitments and Contingencies,” to the consolidated financial statements contained within the Annual Report on Form 10-K for the fiscal year ended March 31, 2024.
Factors and Trends Affecting Our Results of Operations Our results of operations have been, and we expect them to continue to be, affected by the following factors, which may cause our future results of operations to differ from our historical results of operations discussed under “—Results of Operations.” T able of Contents U.S.
Political, Budget and Regulatory Environment The U.S. continues to face an uncertain and evolving budgetary and regulatory environment, and we expect this uncertainty will continue.
The U.S. government continues to drive changes in the structure and priorities of U.S. government agencies and continues to review spending across U.S. government agencies to ensure it aligns with the administration’s priorities of maximizing governmental efficiency and productivity.
The administration has put in place a number of executive orders and actions that have and could continue to affect our business.
These reductions in personnel, along with the changing regulatory environment, have led to a slowed procurement environment, with delays in the granting of new contract awards, increased willingness by agencies to not spend government money, delays in the processing of payments by government payment offices, as well as increased processing times for security clearances and other governmental consents.
This slowed procurement environment has resulted in a substantial reduction in the ordinary end of government fiscal year funding surge when compared to prior fiscal years and, in the aggregate, has resulted in negative impacts to our business and financial performance.
We have observed preparatory steps by the U.S. government to implement two specific executive orders that are intended to (i) simplify and accelerate the procurement process through a review and restructuring of the Federal Acquisition Regulation (“FAR”), and its supplements and (ii) modernize defense acquisitions by promoting commercial solutions, innovative acquisition authorities, and other existing streamlined processes.
The FAR Council, the body responsible for issuing and maintaining the FAR, substantially completed Phase 1 of FAR reform efforts at the end of September 2025.
The Office of Federal Procurement Policy and FAR Council have solicited feedback on these efforts and will turn next to the formal rulemaking process.
Likewise, in early November 2025, the Secretary of War announced and released an associated memorandum regarding a new acquisition strategy and directing certain reforms addressing Department of War purchases of military weapons.
The Secretary’s accompanying memorandum and strategy outline a number of actions focused on rebuilding the Defense Industrial Base, elevating and empowering the acquisition workforce, maximizing acquisition flexibility, developing high performance systems, and improving effective lifecycle risk management.
While the impact of the aforementioned changes remains uncertain, the new acquisition strategy and streamlined procurement processes have the potential to have positive impacts on our business.
On Nove mber 12, 2025, the President signed into law the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, which funded the U.S. government under a short-term continuing resolution through January 30, 2026.
Appropriations for the U.S. government’s fiscal year 2026 were delayed, with Congress enacting partial appropriations legislation in multiple tranches, such appropriations ultimately covering a majority of federal agencies.
However, a comprehensive appropriations agreement for the full year has not been reached for all agencies, and certain portions of the government have been funded through continuing resolutions or remain subject to funding uncertainty, including the Department of Homeland Security, for which funding has been provided only on a partial basis, while certain components, including its immigration enforcement operations, remain subject to funding uncertainty.
As a result, uncertainty regarding federal funding levels persists.
A prolonged government shutdown could have a negative impact on our business, financial condition and operating results.
On December 18, 2025, the National Defense Authorization Act was signed into law, which included a number of reforms that may also impact our business.
Although the final bill did not adopt more narrow commercial preferences or expand the statutory definition of contractors who qualify as nontraditional contractors, it did exempt contractors who meet that definition from certain burdensome compliance requirements.
The continued focus on removing barriers to new entrants and any related future legislation could reduce the likelihood of direct awards to companies like Booz Allen and effect our competitive position.
T able of Contents On January 7, 2026, the President signed an executive order, “Prioritizing the Warfighter in Defense Contracting”, that, among other things, limits stock buybacks and the payment of dividends by certain defense contractors.
This executive order directs the Secretary of War to identify defense contractors that are underperforming on their contracts, not investing their own capital into necessary production capacity, not sufficiently prioritizing United States Government contracts, or whose production speed is insufficient as determined by the Secretary, and that have, during the period of underperformance or insufficient prioritization, investment, or production speed, engaged in any stock buy-back or corporate distribution.
If the Company is identified pursuant to this executive order, it may have a negative impact on our dividends, stock buyback programs, and our ability to attract and retain talented executives.

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Risk Factors” and “Introductory Note — Cautionary Note Regarding Forward-Looking Statements”.
Our actual results may differ materially from those contained in or implied by any forward-looking statements.
See “— Results of Operations.” Overview Trusted to transform missions with the power of tomorrow’s technologies, Booz Allen advances the nation’s most critical civil, defense, and national security priorities.
As an advanced technology company, we build technology solutions using AI, cyber, and other cutting-edge technologies to advance and protect the nation and its citizens .
By focusing on outcomes, we enable our people and customers to transform missions for the nation.
Our approximately 35,800 employees support critical missions for a diverse base of federal government customers, including nearly all of the U.S. government's cabine t-level departments, as well as for commercial customers, both domestically and in select international locations.
Our work is designed to protect soldiers in combat, secure our national infrastructure, enable enhanced digital services, and improve government efficiency to achieve better outcomes.
Drawing on our deep expertise and leading position as a cybersecurity provider, we bring advanced tradecraft to commercial customers across industries, including financial services, health and life sciences, energy, and technology.
Financial and Other Highlights During fiscal 2025, the Company generated year over year revenue growth of 12%, primarily driven by strong demand for our solutions, outcomes, and services, as well as an increase in headcount to meet that demand, and higher billable expenses.
In addition, revenue was positively impacted by $122 million representing the reduction to our provision fo r claimed costs recorded during the second quarter of fiscal 2025 (as compared to $18 million in the second quarter of fiscal 2024).
See Note 19, “Commitments and Contingencies,” within this Annual Report on Form 10-K for further information.
Operating income increased 35% to $1,370 million in fiscal 2025 from $1,014 million in fiscal 2024, which reflects an increase in operating margin to 11% from 10% in the comparable year.
Operating income was driven by the same drivers benefiting revenue growth, as well as ongoing cost management efforts.
M argins were impacted by a decrease in general and administrative expenses resulting from $115 million in insurance recoveries from claims related to the Company’s fiscal 2024 settlement as described in Note 19, “Commitments and Contingencies,” within this Annual Report on Form 10-K.
Management believes this metric provides useful information about our business.
These supplemental performance measurements may vary from and may not be comparable to similarly titled measures by other compani es in our industry.
We have defined the aforementioned non-GAAP measures as follows: • Revenue, Excluding Billable Expenses represents revenue less billable expenses. • EBITDA represents net income attributable to common stockholders before income taxes, net interest expense, net and other income (expense), net, and depreciation and amortization. • Adjusted EBITDA represents net income attributable to common stockholders before income taxes, net interest, net and other income (expense), net, and depreciation and amortization and before certain other items, including the change in provision for claimed costs for historical rate years, acquisition and divestiture costs, financing transaction costs, DC tax assessment adjustment, the reserve associated with the U.S.
Department of Justice (the “DOJ”) investigation disclosed in Note 20, “Commitments and Contingencies,” to the consolidated financial statements contained within our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and the insurance recoveries related to the settlement of that matter.
Below is a reconciliation of our most directly comparable GAAP measures to our non-GAAP measures, Revenue to Revenue, Excluding Billable Expenses and Net income to EBITDA and Adjusted EBITDA , calculated and presented in accordance with GAAP: Fiscal Year Ended March 31, (Amounts in millions) 2025 2024 2023 (Unaudited) Revenue, Excluding Billable Expenses Revenue $ 11,980 $ 10,662 $ 9,259 Less: Billable expenses 3,780 3,282 2,809 Revenue, Excluding Billable Expenses * $ 8,200 $ 7,380 $ 6,450 EBITDA and Adjusted EBITDA Net income attributable to common stockholders $ 935 $ 606 $ 272 Income tax expense 284 248 97 Interest expense, net and other income (expense), net (a) 151 160 79 Depreciation and amortization 165 164 165 EBITDA 1,535 1,178 613 Change in provision for claimed costs (b) (113) (18) — Acquisition and divestiture costs (c) 8 7 44 Financing transaction costs (d) — 1 7 DC tax assessment adjustment (e) — (20) — Legal matter reserve (f) — 27 350 Insurance recoveries (g) (115) — — Adjusted EBITDA $ 1,315 $ 1,175 $ 1,014 * Revenue, Excluding Billable Expenses includes $113 million of revenue and $18 million revenue for fiscal 2025 and 2024 respectively, resulting from the reduction to our provision for claimed costs (see note (b) below).
(a) Reflects the combination of Interest expense, net and Other income (expense), net from the consolidated statement of operations.
(b) Represents the reduction to our provision for claimed costs for years prior to fiscal 2025 recorded during the second quarters of fiscal 2025 and 2024, which resulted in a corresponding increase to revenue, as a result of the Defense Contract Audit Agency's findings related to its audits of our claimed costs for multiple fiscal years.
See Note 19, “Commitments and Contingencies,” to the consolidated financial statements contained within this Annual Report on Form 10-K for further information.
(c) Represents costs associated with the acquisition efforts of the Company related to transactions for which the Company has submitted a letter of intent to acquire a controlling financial interest in the target entity.
Transactions primarily include the acquisitions of EverWatch Corp.
(“EverWatch”) in fiscal 2023 and PAR Government Systems Corporation (“PGSC”) in fiscal 2025.
See Note 5, “Acquisitions and Divestitures,” to the consolidated financial statements contained within this Annual Report on Form 10-K for further information.
(d) Reflects expenses associated with debt financing activities incurred during the second quarters of fiscal 2024 and 2023.
(e) Reflects the impact (specifically the revenue from recoverable expenses) of the Company's unfavorable ruling from the District of Columbia Court of Appeals related to contested tax assessments from the District of Columbia Office of Tax and Revenue (“DC OTR”).
(g) Reflects insurance recoveries from claims related to the Company’s fiscal 2024 settlement as described in Note 19, “Commitments and Contingencies,” to the consolidated financial statements contained within this Annual Report on Form 10-K.
Factors and Trends Affecting Our Results of Operations Our results of operations have been, and we expect them to continue to be, affected by the following factors, which may cause our future results of operations to differ from our historical results of operations discussed under “—Results of Operations.” U.S.
Political, Budget and Regulatory Environment The U.S. continues to face an uncertain and evolving political, budget and regulatory environment, and we expect this uncertainty will continue.
The U.S. government is driving changes in the structure and priorities of U.S. government agencies and the U.S. government is currently in the process of reviewing spending across U.S. government agencies to ensure it aligns with the new administration’s priorities of maximizing governmental efficiency and productivity.
There has been a marked increase in negative publicity regarding government contractors (including the Company) in connection with the U.S. government’s efforts to improve efficiency and reduce costs, which could harm our reputation and could have a material impact on our business, results of operations and financial condition.
The new U.S. government administration is putting in place a number of Executive Orders and actions that have and could continue to affect our business.
These reductions in personnel, along with the changing political and regulatory environment, has led to a slower procurement environment, with delays in the granting of new contract awards, delays in the processing of payments by government payment offices, as well as increased processing times for security clearances and other governmental consents, each of which could result in negative impacts to our business and financial performance.
The President has issued two specific Executive Orders that may cause future changes, the impact of which remains uncertain, that are intended to (i) simplify and accelerate the procurement process through a review and restructuring of the Federal Acquisition Regulation (FAR), and its supplements and (ii) modernize defense acquisitions by promoting commercial solutions, innovative acquisition authorities, and other existing streamlined processes.
While the impact of these reforms on our business is uncertain, they could potentially lead to changes in the way we interact with the U.S. government.
If certain commercial preferences are narrowly defined, these reforms could introduce new barriers that reduce the likelihood of direct award to companies such as Booz Allen.
On March 15, 2025, the President signed into law the Full-Year Continuing Appropriations and Extensions Act, 2025 (the “2025 Appropriations Act”), which funds the U.S. government under a continuing resolution through September 30, 2025, its fiscal year end.
In total, the fiscal year 2025 continuing resolution funding is roughly equivalent to the U.S. government’s fiscal year 2024 funding with a few anomalies and other smaller shifts in funding between appropriations titles.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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