The defense and intelligence contractor's civil government business fell sharply as federal spending cuts reduced headcount and billable work
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Full-year fiscal 2026 revenue at Booz Allen Hamilton came in at $11.2 billion, a 6.4% contraction that marked the company's sharpest annual drop in recent memory, with a sluggish federal procurement climate weighing on both staffing levels and billable work. Net income for the year fell 9.0% to $851 million.
Despite lower revenue, adjusted diluted EPS for the year ending March 31, 2026 rose 2.5% to $6.51. In the fourth quarter, adjusted diluted EPS was $1.78, up 10.6% from the previous year, helped by cost controls. The adjusted EBITDA margin stayed at 11.0% for the year.
The biggest drop was in the civil government segment, where revenue fell to $3.25 billion from $4.17 billion last year. Defense revenue increased to $6.07 billion from $5.94 billion, and intelligence revenue grew slightly to $1.90 billion from $1.87 billion.
Headcount fell to approximately 31,500 as of March 31, 2026, down from 35,800 a year earlier. The company's total backlog reached $38.2 billion, up 3.1% from a year earlier, with the trailing twelve-month book-to-bill ratio coming in at 1.1x. Free cash flow for the year increased to $951 million from $911 million.
The company also recorded a one-time tax benefit of $86 million from the release of tax reserves following a favorable agreement with the IRS, as well as $33 million in costs tied to employee severance, a divestiture, and an acquisition.
For fiscal year 2027, Booz Allen Hamilton expects revenue between $11.2 billion and $11.7 billion. The company forecasts adjusted diluted EPS of $6.00 to $6.35 and free cash flow of $825 million to $925 million. The lower EPS guidance reflects a higher expected tax rate of 20% to 23% and fewer diluted shares.
"In a challenging year, Booz Allen delivered strong profitability while continuing to accelerate our transformation," chairman and CEO Horacio Rozanski said in a statement. "We enter FY27 with momentum and are well-positioned for the year ahead."
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