Booz Allen (BAH) Q1 Earnings Beat Estimates, Increase Y/Y

Booz Allen Hamilton Holding Corp. BAH reported impressive first-quarter fiscal 2023 results with both earnings and revenues beating the Zacks Consensus Estimate. However, the better-than-expected results failed to impress the market as there has not been any major price change since the earnings release on Jul 29.

The stock appreciated 17.3% over the past year, outperforming the 4.4% rise of the industry it belongs to.

Quarterly adjusted earnings per share of $1.13 beat the consensus mark by 6.6% and increased 5.6% on a year-over-year basis.

Revenues, Backlog & Headcount Increase Y/Y

Total revenues of $2.3 billion beat the Zacks Consensus Estimate by 3% and increased 13.1% on a year-over-year basis. Revenues, excluding billable expenses, were $1.6 billion, up 9.9% on a year-over-year basis. Billable expenses contributed 30% to revenues.

Total backlog increased 6.8% from the prior-year quarter’s reported figure to $28.6 billion. The funded backlog of $4 billion increased 15.1% year over year. Unfunded backlog was up 10.7% to $10 billion. Priced options were up 2.3% to $14.6 billion. Book-to-bill ratio was 0.72, down 44.6% year over year. The headcount of 29,291 increased 2.6% year over year.

Margins Decline

Adjusted EBITDA amounted to $252.6 million, up 6.1% year over year. Adjusted EBITDA margin on revenues was 11.2%, down from the year-ago quarter’s 12%. Adjusted EBITDA margin on revenues, excluding billable expenses, decreased to 16% from 16.6% in the year-ago quarter.

Key Balance Sheet & Cash Flow Numbers

Booz Allen Hamilton exited the quarter with cash and cash equivalents of $497.8 million compared with $695.9 million at the end of the prior quarter. Long-term debt (net of current portion) was $2.7 billion compared with $2.8 billion in the prior quarter.

The company used $45.6 million of net cash in operating activities. Capital expenditures were $13.7 million and free cash flow was $59.4 million. The company paid out dividends worth $58.9 million and repurchased shares worth $73.4 million in the reported quarter.

Reaffirmed Fiscal 2023 Outlook

Booz Allen currently projects revenue growth in the range of 5-9%. It expects adjusted EPS in the range of $4.15-$4.45 per share. The Zacks Consensus Estimate is now anticipated to be $4.36.

Adjusted EBITDA is expected to be $950–$1,000 million. Adjusted EBITDA margin on revenues is anticipated in the range of mid-to-high 10%. Net cash provided by operating activities is expected in the range of $850-$950 million.

Booz Allen Hamilton currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Booz Allen Hamilton Holding Corporation Price, Consensus and EPS Surprise

Booz Allen Hamilton Holding Corporation price-consensus-eps-surprise-chart | Booz Allen Hamilton Holding Corporation Quote

Performances of Some Other Business Services Companies

Equifax EFX reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings IQV reported solid second-quarter 2022 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group OMC reported impressive second-quarter 2022 results, wherein the company’s earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.

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