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Booz Allen Hamilton (BAH) Beats on Q1 Earnings and Revenues

Zacks Equity Research

Booz Allen Hamilton Holding Corporation BAH reported strong first-quarter fiscal 2020 results, beating the Zacks Consensus Estimate on both earnings and revenues.

Adjusted EPS of 83 cents beat the consensus mark by 11 cents and improved 15.3% on a year-over-year basis. The bottom line benefited from top-line growth, strong contract level performance and operational management.

Shares of the company have gained a massive 49.5% year to date, significantly outperforming the 34.8% rally of the industry it belongs to.

Revenues, Backlog & Headcount Grow Y/Y

Total revenues of $1.83 billion surpassed the Zacks Consensus Estimate by roughly $41 million and increased 10.8% year over year. The top line benefited from continued boost in client demand and increase in headcount.

Revenues excluding billable expenses were $1.27 billion, up 8.9% on a year-over-year basis. Billable expenses accounted for 30.2% of revenues. Booz Allen earns the maximum amount of profit from revenues, excluding billable expenses.

Booz Allen Hamilton Holding Corporation Revenue (TTM)

Booz Allen Hamilton Holding Corporation Revenue (TTM)

Booz Allen Hamilton Holding Corporation revenue-ttm | Booz Allen Hamilton Holding Corporation Quote

Total backlog increased 16.2% from the prior-year quarter to $19.85 billion. Funded backlog of $3.20 billion improved 13.7%. Unfunded backlog was up 5.1% to $4.35 billion. Priced options went up 21.5% to $12.31 billion. Book-to-bill ratio was 1.29, down 21.3% year over year. Headcount of 26,384 increased 7.4% year over year.

Operating Performance Improved

Adjusted EBITDA of $199.07 million increased 12% year over year. Adjusted EBITDA margin on revenues rose to 10.9% from 10.8% in the year-ago quarter. Adjusted EBITDA margin on revenues, excluding billable expenses increased to 15.6% from 15.2% in the year-ago quarter.

Adjusted operating income was $179 million, up 10.8% year over year. Adjusted operating income margin on revenues was 9.8%, flat with the year-ago quarter figure. Adjusted operating income margin on revenues, excluding billable expenses was 14.1% compared with 13.8% in the year-ago quarter.

Balance Sheet & Cash Flow

Booz Allen exited the fiscal first quarter with cash and cash equivalents of $649.10 million compared with $284 million at the end of the prior quarter. Long-term debt (net of current portion) was $2.06 billion, compared with $1.70 billion in the previous quarter. The company generated $50.98 million of net cash from operating activities. Capital expenditure was $27.34 million and free cash flow was $23.65 million.

It paid out dividend worth $32.41 million and repurchased shares worth $12.18 million in the reported quarter.

Fiscal 2020 Outlook

The company expects adjusted EPS to range between $2.90 and $3.05. The Zacks Consensus Estimate is pegged at $3.05. It expects revenue growth of 6-9%. Adjusted EBITDA margin on revenues is anticipated in the low 10% range. It targets another 5% headcount growth for the fiscal year.

Zacks Rank and Other Stocks to Consider

Booz Allen currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting second-quarter 2019 earnings of key players like Genpact G, Green Dot GDOT and Navigant Consulting NCI. While Genpact and Green Dot are slated to report on Aug 7, Navigant Consulting is scheduled to release results on Aug 8.

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