Booz Allen Hamilton Holding Corporation Q1 FY2026 earnings call

• Restructured and reset Civil business in alignment with demand, e.g., awarded a $51 million task order with Customs and Border Protection for cloud modernization. - Reimagining delivery to outcome-based opportunities, such as expanding Thunderdome Zero Trust solution. - Directed resources to growth areas like Defense Technology Group, with examples including the $315 million Tactical Operations Center Light Battle Management System prototype contract. - Advanced partnerships across the tech ecosystem, with a $200 million commitment to Booz Allen Ventures. - Created efficiencies using AI-assisted tools and automation to build software faster and run the business more efficiently.

In the first quarter, gross revenue was down roughly 1% year-over-year to $2.9 billion. Revenue excluding billable expenses grew 2% year-over-year. Defense business revenue was up 7% year-over-year, Intel business revenue was up 6% year-over-year, while Civil business revenue was down 13% year-over-year. The quarterly book-to-bill was 1.42x and total backlog hit an all-time Q1 record of $38 billion.

• Full year free cash flow is expected to be between $900 million and $1 billion due to the federal tax impact from The One Big Beautiful Bill. - Anticipate lower growth in the first half of the fiscal year, particularly in the second quarter, but intend to return to growth in the back half of the year. - Expect the full effects of the civil sector reset to manifest in Q2 financials.

• Near-term funding continues to move slowly through the procurement environment. - Uncertainty remains as submissions and contracts are still being reviewed. - The timing and extent of returning to a more normalized funding environment could impact performance.

Q: As part of your 1.4x book-to-bill, you won several awards... Is the procurement environment better than it was 3 months ago?

A: Horacio Rozanski stated that the procurement environment has improved but is still operating below historical speeds.

Q: Curious if you could comment on the funded backlog trend?

A: Matthew Calderone said it is consistent with winning work but the funding environment is slow.

Q: About Golden Dome, what is the role that Booz Allen could play?

A: Horacio Rozanski said Booz Allen could play various roles in Golden Dome, positioning to participate in the procurement process as it ramps up.