In This Article:
A month has gone by since the last earnings report for Booz Allen Hamilton (BAH). Shares have added about 3.4% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is Booz Allen due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Booz Allen Beats on Earnings and Revenues in Q2
Booz Allen reported strong second-quarter fiscal 2020 results, beating the Zacks Consensus Estimate on both earnings and revenues.
Adjusted EPS of 81 cents beat the consensus mark by 15.7% and improved 19.1% on a year-over-year basis. Total revenues of $1.8 billion surpassed the Zacks Consensus Estimate by 2.9% and increased 12.7% year over year. Revenues excluding billable expenses were $1.3 billion, up 12.7% on a year-over-year basis. Billable expenses accounted for 30% of revenues.
Backlog & Headcount Increase Y/Y
Total backlog increased 7.2% from the prior-year quarter to $22.9 billion. Funded backlog of $4.4 billion improved 4.8%. Unfunded backlog was up 12.3% to $5.4 billion. Priced options went up 6.1% to $13.2 billion. Book-to-bill ratio was 2.68, down 26.8% year over year. Headcount of 26,984 increased 6.5% year over year.
Operating Performance Improves
Adjusted EBITDA of $191.7 million increased 17% year over year. Adjusted EBITDA margin on revenues increased to 10.5% from 10.2% in the year-ago quarter. Adjusted EBITDA margin on revenues, excluding billable expenses, increased to 15% from 14.4% in the year-ago quarter.
Adjusted operating income was $172 million, up 16.7% year over year. Adjusted operating income margin on revenues was 9.5%, up from the year-ago quarter figure of 9.1%. Adjusted operating income margin on revenues, excluding billable expenses, was 13.4% compared with 13% in the year-ago quarter.
Balance Sheet & Cash Flow
Booz Allen exited the fiscal second quarter with cash and cash equivalents of $781.5 million compared with $649.1 million at the end of the prior quarter. Long-term debt (net of current portion) was $2 billion, compared with $2.1 billion in the previous quarter. The company generated $215.7 million of net cash from operating activities. Capital expenditure was $32.6 million and free cash flow was $183.1 million. It paid out dividend worth $32.4 million and repurchased shares worth $2.4 million in the reported quarter.
Fiscal 2020 Outlook
The EPS guidance has been raised to $3-$3.1 from $2.9-$3.05 projected earlier. The company raised its revenue growth projection to 9-11%, from 6-9% expected earlier. Adjusted EBITDA margin on revenues is continued to be anticipated in the low 10% range. Operating cash flow is now expected in the range of $450-$500 million, compared with the previous expectation of $400-$450 million.