Booz Allen Q4 Earnings: Profit Rises as Revenue Falls

Booz Allen Hamilton’s Q4 earnings on May 22, 2026 showed higher profitability and margin expansion driven by cost actions and mix despite weaker revenue. The results boosted free cash flow and prompted management to highlight a record backlog and an improved outlook for fiscal 2027.

Quarter and Full-Year Results

Booz Allen Hamilton (BAH) reported Q4 revenue of $2.8 billion, down 6.4% year over year. Adjusted diluted earnings per share (EPS) rose 10.6% to $1.78, while net income increased 6.2% to $205 million. The adjusted EBITDA margin expanded by 50 basis points to 11.1%. Operating income declined slightly to $263 million from $274 million in the prior-year quarter.

For fiscal 2026, revenue fell 6.4% to $11.2 billion. Adjusted diluted EPS increased 2.5% to $6.51. Operating income dropped to $1.0 billion from $1.4 billion the previous year. Interest expense rose to $184 million from $168 million, while income tax expense fell sharply to $11 million from $284 million. By segment, defense generated $6.1 billion, intelligence $1.9 billion, and civil $3.2 billion, with civil revenue declining and defense and intelligence growing.

Backlog, Cash Flow and Returns

The company reported a record Q4 backlog of $38.2 billion and a trailing twelve-month book-to-bill ratio of 1.1x, signaling sustained demand. Net cash provided by operating activities for fiscal 2026 was $1.0 billion, and free cash flow totaled $951 million. This supported $1.1 billion in capital deployment, including share repurchases and a quarterly dividend of $0.59 per share payable June 26, 2026, to shareholders of record June 10, 2026.

Management attributed margin expansion and steady fiscal-year margins near 11.0% to cost actions and favorable mix. Lower headcount reduced cost of revenue and billable expenses, while general and administrative costs remained largely flat after a prior-year insurance recovery.

Booz Allen positions itself as an advanced-technology company focused on AI-native products, advanced cyber and defense capabilities, and outcomes-based delivery under its VoLT strategy (Velocity, Leadership, Technology). The company’s filings emphasize heavy reliance on U.S. federal government contracts. Segment results show civil weakness offset by growth in defense and intelligence, which now constitute the majority of revenue.

CEO Horacio Rozanski said, "In a challenging year, Booz Allen delivered strong profitability while continuing to accelerate our transformation."

Investor materials state that strong profitability, disciplined execution, and strategic investments position Booz Allen for improved fiscal 2027 performance. The record backlog and book-to-bill ratio are presented as indicators of demand, while cost actions and mix are expected to continue supporting margins.