# Booz Allen Hamilton Holding Corp: Form 10-Q for the period ended Dec 31, 2025

- Company: [Booz Allen Hamilton Holding Corp](/companies/bah.md) (CIK 1443646)
- Form: 10-Q
- Filed: 2026-01-23
- Accepted by EDGAR: Jan 23, 2026, 06:49 ET
- Period: 2025-12-31
- Accession: 0001628280-26-003187
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1443646/000162828026003187/bah-20251231.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1443646/000162828026003187/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-12-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-10-01 to 2025-12-31 | $2.62bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2025-04-01 to 2025-12-31 | $8.43bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-10-01 to 2025-12-31 | $1.26bn | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2025-04-01 to 2025-12-31 | $4.02bn | us-gaap:CostOfGoodsAndServicesSold |
| Operating income | 3 months, 2025-10-01 to 2025-12-31 | $230.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2025-04-01 to 2025-12-31 | $770.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-10-01 to 2025-12-31 | −$13.0m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2025-04-01 to 2025-12-31 | −$10.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-10-01 to 2025-12-31 | $200.0m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2025-04-01 to 2025-12-31 | $646.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-10-01 to 2025-12-31 | $1.63 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-04-01 to 2025-12-31 | $5.22 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-10-01 to 2025-12-31 | $1.64 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-04-01 to 2025-12-31 | $5.23 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-10-01 to 2025-12-31 | 121,347,528 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-04-01 to 2025-12-31 | 122,907,942 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-04-01 to 2025-12-31 | $801.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2025-04-01 to 2025-12-31 | $62.0m | us-gaap:PaymentsToAcquireProductiveAssets |
| Dividends paid | 9 months, 2025-04-01 to 2025-12-31 | $205.0m | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2025-04-01 to 2025-12-31 | $521.0m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-12-31 | $882.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-12-31 | $3.08bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-12-31 | $7.05bn | us-gaap:Assets |
| Current liabilities | at 2025-12-31 | $1.70bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-12-31 | $6.03bn | us-gaap:Liabilities |
| Long-term debt | at 2025-12-31 | $3.86bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-12-31 | $83.0m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-12-31 | $1.02bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,961 characters.

*The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, and liquidity and capital resources. You should read this discussion in conjunction with our condensed consolidated financial statements and the related notes contained elsewhere in this Quarterly Report on Form 10-Q, or Quarterly Report.*

*The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources, and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 filed with the Securities and Exchange Commission on May 23, 2025, or Annual Report, and under Part II, “Item 1A. Risk Factors,” and “— Special Note Regarding Forward Looking Statements” of this Quarterly Report. Our actual results may differ materially from those contained in or implied by any forward-looking statements.*

*Our fiscal year ends March 31 and, unless otherwise noted, references to years or fiscal are for fiscal years ended March 31. See “—Results of Operations.”*

### Overview

Trusted to transform missions with the power of tomorrow’s technologies, Booz Allen advances the nation’s most critical civil, defense, and national security priorities. As an advanced technology company, we build technology solutions using AI, cyber, and other cutting-edge technologies to advance and protect the nation and its citizens. By focusing on outcomes, we enable our people and customers to transform missions for the nation.

Our approximately 31,600 employees support critical missions for a diverse base of federal government customers, including nearly all of the U.S. government's cabinet-level departments, as well as for commercial customers, both domestically and in select international locations. Our work is designed to protect soldiers in combat, secure our national infrastructure, enable enhanced digital services, and improve government efficiency to achieve better outcomes. Drawing on our deep expertise and leading position as a cybersecurity provider, we bring advanced tradecraft to commercial customers across industries, including financial services, health and life sciences, energy, and technology.

### Factors and Trends Affecting Our Results of Operations

Our results of operations have been, and we expect them to continue to be, affected by the following factors, which may cause our future results of operations to differ from our historical results of operations discussed under “—Results of Operations.” As a result, we began actions in the third fiscal quarter to reduce costs by approximately $150 million annually.

### U.S. Budgetary and Regulatory Environment

The U.S. continues to face an uncertain and evolving budgetary and regulatory environment, and we expect this uncertainty will continue. Our business performance is affected by the overall level of U.S. government spending and the alignment of our offerings and capabilities with the spending priorities of the U.S. government.

The U.S. government is driving changes in the structure and priorities of U.S. government agencies and the U.S. government is currently in the process of reviewing spending across U.S. government agencies to ensure it aligns with the administration’s priorities of maximizing governmental efficiency and productivity. We have been, and will continue to be, subject to these reviews, and we have had, and may in the future have, certain of our contracts impacted, reduced or canceled as a result of these reviews. We have also experienced price adjustments and renegotiations prior to option exercise of certain of our contracts as a result of these reviews and may in the future continue to experience such adjustments. Further, we are, and may in the future be, subject to customer mandates to formulate additional methods by which to achieve efficiencies in providing our services, and we remain in ongoing discussions with various U.S. government departments and agencies in relation to cost reductions and other potential contract modifications. There can be no assurance that these reviews will not ultimately have a material adverse impact on our business and financial performance.

The administration is putting in place a number of Executive Orders and actions that have and could continue to affect our business. U.S. government agencies are also undertaking their own independent reviews of their contract portfolios and reviewing future procurements in response to recent Executive Orders focused on efficiency in government procurement. At the same time that the scrutiny is increasing, there have been reductions in personnel at U.S. government agencies with which we do business. These reductions in personnel, along with the changing regulatory environment, have led to a slowed procurement environment, with delays in the granting of new contract awards, increased willingness by agencies to not spend government money, delays in the processing of payments by government payment offices, as well as increased processing times for security clearances and other governmental consents. This slowed procurement environment has resulted in a substantial reduction in the ordinary end of government fiscal year funding surge when compared to prior fiscal years and, in the aggregate, has resulted in negative impacts to our business and financial performance.

We have observed preparatory steps by the U.S. government to implement two specific Executive Orders that are intended to (i) simplify and accelerate the procurement process through a review and restructuring of the Federal Acquisition Regulation (“FAR”), and its supplements and (ii) modernize defense acquisitions by promoting commercial solutions, innovative acquisition authorities, and other existing streamlined processes. The FAR Council, the body responsible for issuing and maintaining the FAR, completed the preliminary stage of FAR reform efforts at the end of September 2025. The Office of Federal Procurement Policy and FAR Council have solicited feedback on these efforts and will turn next to the formal rulemaking process. Likewise, in early November 2025, the Secretary of War announced and released an associated memorandum regarding a new acquisition strategy and directing certain reforms addressing Department of Defense purchases of military weapons. The Secretary’s accompanying memorandum and strategy outline a number of actions focused on rebuilding the Defense Industrial Base, elevating and empowering the acquisition workforce, maximizing acquisition flexibility, developing high performance systems, and improving effective lifecycle risk management. While the impact of the aforementioned changes remains uncertain, the new acquisition strategy and streamlined procurement processes have the potential to have positive impacts on our business.

On December 18, 2025, the National Defense Authorization Act was signed into law, which included a number of reforms that may also impact our business. Although the final bill did not adopt more narrow commercial preferences or expand the statutory definition of contractors who qualify as nontraditional contractors, it did exempt contractors who meet that definition from certain burdensome compliance requirements. The continued focus on removing barriers to new entrants and any related future legislation could reduce the likelihood of direct awards to companies like Booz Allen and effect our competitive position.

On November 12, 2025, the President signed into law the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, which funded the U.S. government under a short-term continuing resolution through January 30, 2026. At this time, Congress has failed to approve additional appropriations to fund the U.S. government past that time, which could result in a government shutdown. A prolonged government shutdown could have a negative impact on our business, financial condition and operating results.

On January 7, 2026, President Trump signed an Executive Order, “Prioritizing the Warfighter in Defense Contracting” (the “Executive Order”), that, among other things, limits stock buybacks and the payment of dividends by certain defense contractors. The Executive Order directs the Secretary of War to identify defense contractors that are underperforming on their contracts, not investing their own capital into necessary production capacity, not sufficiently prioritizing United States Government contracts, or whose production speed is insufficient as determined by the Secretary, and that have, during the period of underperformance or insufficient prioritization, investment, or production speed, engaged in any stock buy-back or corporate distribution. If the Company is identified pursuant to the Executive Order, it may have a negative impact on our dividends, stock buyback programs, and our ability to attract and retain talented executives.

### Contract Backlog

We define backlog to include the following three components:

- *Funded Backlog.* Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.
- *Unfunded Backlog.* Unfunded backlog represents the revenue value of orders (including optional orders) for services under existing contracts for which funding has not been appropriated or otherwise authorized.
- *Priced Options.* Priced contract options represent 100% of the revenue value of all future contract option periods under existing contracts that may be exercised at our customers’ option and for which funding has not been appropriated or otherwise authorized.

Our backlog does not include contracts that have been awarded but are currently under protest and also does not include any task orders under indefinite delivery/indefinite quantity (“IDIQ”) contracts, General Services Administration (“GSA”) Multiple Award schedule contracts (“GSA schedules”) or other master agreement contract vehicles, except to the extent that task orders have been awarded to us under those contracts.

The following table summarizes the value of our contract backlog as of the respective periods presented:

*(In millions)*

| Backlog(1): | December 31, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Funded | $4,206 | $4,658 |
| Unfunded | 10,059 | 8,478 |
| Priced options | 24,191 | 24,743 |
| Total backlog | $38,456 | $37,879 |
| (1)Amounts reflect the Company’s change in policy during the fourth quarter of fiscal 2025 to exclude contracts for which the period of performance has expired. |  |  |

Our total backlog consists of contractual values which is inclusive of remaining performance obligations, unexercised option periods and other unexercised optional orders. As of December 31, 2025 and March 31, 2025, the Company had $10.5 billion and $9.5 billion of remaining performance obligations, respectively, and we expect to recognize approximately 65% of the remaining performance obligations as of December 31, 2025 as revenue over the next 12 months, and approximately 70% over the next 24 months. The remainder is expected to be recognized thereafter. We also expect to recognize revenue from a substantial portion of funded backlog as of December 31, 2025, within the next twelve months. However, given the uncertainties discussed below, as well as the risks described in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025, we can give no assurance that we will be able to convert our performance obligations or funded backlog into revenue in any particular period, if at all. Our backlog includes orders under contracts that in some cases extend for several years. The U.S. Congress generally appropriates funds for our customers on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years to complete. As a result, contracts typically are only partially funded at any point during their term and all or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

We view growth in total backlog as a key measure of our potential business growth. Total backlog increased by 2% from December 31, 2024 to December 31, 2025. Additions to funded backlog during the twelve months ended December 31, 2025 and 2024 totaled $11.0 billion and $11.8 billion, respectively, as a result of the conversion of unfunded backlog to funded backlog, the award of new contracts and task orders under which funding was appropriated, and the exercise and subsequent funding of priced options.

We cannot predict with any certainty the portion of our backlog that we expect to recognize as revenue in any future period and we cannot guarantee that we will recognize any revenue from our backlog. The primary risks that could affect our ability to recognize such revenue on a timely basis or at all include contract modifications, including reductions in contract value, a reduction in U.S. government spending, whether due to cost cutting initiatives or other efforts to reduce spending, delayed funding of our contracts, and the other risks and factors listed under “— U.S. Budgetary and Regulatory Environment” in this Quarterly Report, as well as those listed under “Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2025. In addition, the amount of our funded backlog is also subject to change due to these factors. In our recent experience, the slowed procurement environment and reductions in contract value have had a negative effect on our ability to convert backlog to revenue as of December 31, 2025, and could have additional impacts in the future to our business and financial performance.

### Critical Accounting Estimates and Policies

Our critical accounting estimates and policies are disclosed in the Critical Accounting Estimates and Policies section in Part II, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended March 31, 2025.

### Results of Operations

The following table presents items from our condensed consolidated statements of operations for the respective periods shown:

*(Unaudited)*

*(Unaudited)*

*(Unaudited)*

*(Unaudited)*

*(In millions)*

*(In millions)*

|  | Three Months Ended December 31, 2025 | 2024 | Percent Change | Nine Months Ended December 31, 2025 | 2024 | Percent Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | $2,620 | $2,917 | (10)% | $8,434 | $9,005 | (6)% |
| Operating costs and expenses: |  |  |  |  |  |  |
| Cost of revenue | 1,259 | 1,305 | (4)% | 4,022 | 4,039 | —% |
| Billable expenses | 774 | 939 | (18)% | 2,573 | 2,852 | (10)% |
| General and administrative expenses | 317 | 342 | (7)% | 948 | 896 | 6% |
| Depreciation and amortization | 40 | 40 | —% | 121 | 123 | (2)% |
| Total operating costs and expenses | 2,390 | 2,626 | (9)% | 7,664 | 7,910 | (3)% |
| Operating income | 230 | 291 | (21)% | 770 | 1,095 | (30)% |
| Interest expense, net | (47) | (42) | 12% | (139) | (126) | 10% |
| Other income (expense) | 4 | (1) | (500)% | 5 | 6 | (17)% |
| Income before income taxes | 187 | 248 | (25)% | 636 | 975 | (35)% |
| Income tax (benefit) expense | (13) | 61 | (121)% | (10) | 233 | (104)% |
| Net income | $200 | $187 | 7% | $646 | $742 | (13)% |

#### Revenue

Revenue decreased 10% to $2,620 million, and 6% to $8,434 million, respectively, for the three and nine months ended December 31, 2025 compared to the prior year period. The decrease was primarily driven by the impact of a slowed procurement and funding environment, including the government shutdown that occurred in the third quarter of fiscal 2026. These factors drove a decrease in headcount, as well as a decline in billable expenses. In addition, revenue was positively impacted in the prior year by $122 million representing the reduction to our provision for claimed costs recorded during the second quarter of fiscal 2025.

#### Cost of Revenue

Costs associated with compensation and related expenses for our people are the most significant component of our operating costs and expenses. The principal factors that affect our costs are the increases or decreases in labor and employee related costs as we are awarded contracts, task orders, and additional work under our existing contracts, and the hiring of people with specific skill sets and security clearances.

Cost of revenue includes direct labor, related employee benefits, and overhead. Overhead consists of indirect costs, including indirect labor relating to infrastructure, management and administration, and other expenses. Cost of revenue as a percentage of revenue was 48% and 45% for both the three and nine months ended December 31, 2025 and 2024, respectively. Cost of revenue decreased 4% for the three months ended December 31, 2025, and remained flat for the nine months ended December 31, 2025, as compared to the three and nine months ended December 31, 2024. The decrease for the quarter-to-date period was primarily due to decreases in salaries and related benefits due to overall headcount reductions.

#### Billable Expenses

Billable expenses include direct subcontractor expenses, travel expenses, and other expenses incurred to perform on contracts. Billable expenses as a percentage of revenue were 30% and 32% for the three months ended December 31, 2025 and 2024, respectively, and 31% and 32% for the nine months ended December 31, 2025 and 2024, respectively. Billable expenses decreased 18% and 10% for the three and nine months ended December 31, 2025, respectively, compared to the three and nine months ended December 31, 2024. The decreases were primarily attributable to decreases in the use of subcontractors driven by customer demand and timing of customer needs, partially offset by increases in other direct expenses as compared to the prior year.

#### General and Administrative Expenses

General and administrative expenses include indirect labor of executive management and corporate administrative functions, marketing and bid and proposal costs, legal costs, and other discretionary spending. General and administrative expenses as a percentage of revenue was 12% for both the three months ended December 31, 2025 and 2024, respectively, and 11% and 10% for the nine months ended December 31, 2025 and 2024, respectively. General and administrative expenses decreased 7% and increased 6% for the three and nine months ended December 31, 2025, respectively, compared to the three and nine months ended December 31, 2024.

Fiscal 2025 reflects $115 million in insurance recoveries from claims related to the Company’s fiscal 2024 settlement as described in Note 20, “Commitments and Contingencies,” to the consolidated financial statements contained within the Annual Report on Form 10-K for the fiscal year ended March 31, 2024, which primarily drove the increase for the year-to-date period. This was partially offset by decreases in salaries and related benefits, primarily due to overall headcount reductions, which also drove the decrease for the quarter-to-date period.

#### Depreciation and Amortization

Depreciation and amortization includes the depreciation of computers, leasehold improvements, furniture and other equipment, and the amortization of internally developed software, as well as third-party software that we use internally, and of identifiable long-lived intangible assets over their estimated useful lives. Depreciation and amortization expense remained flat for the three months ended December 31, 2025, and decreased 2% for the nine months ended December 31, 2025, respectively, as compared to the three and nine months ended December 31, 2024.

#### Operating Income

Operating income decreased 21% to $230 million and decreased 30% to $770 million for the three and nine months ended December 31, 2025, respectively, compared to the three and nine months ended December 31, 2024, reflecting decreases in operating margin from 10% to 9% and from 12% to 9%. Operating income was driven by the factors noted above.

#### Interest Expense, net

Interest expense, net increased 12% and 10% for the three and nine months ended December 31, 2025, respectively, as compared to the three and nine months ended December 31, 2024, primarily due to increases of $10 million and $29 million in bond interest expense, respectively, driven by the $650 million Senior Notes due 2035 (issued in March of fiscal 2025). This was partially offset by lower interest rates on the Company’s term loans, as well as increases in interest income, reflecting the higher cash balances following the bond issuance noted above.

#### Other Income (Expense)

Other income (expense), increased to $4 million for the three months ended December 31, 2025 from $(1) million for the three months ended December 31, 2024, and decreased to $5 million for the nine months ended December 31, 2025 from $6 million for the nine months ended December 31, 2024. The increase over the quarter-to-date period was primarily driven by a $7 million gain recognized on the sale of a group of contracts. Larger increases in the fair value of the Company’s investments reflected in fiscal 2025 as compared to fiscal 2026 offset the gain noted above, driving a decrease over the year to date period.

#### Income Tax Expense

Income tax expense decreased 121% and 104% for the three and nine months ended December 31, 2025 as compared to the three and nine months ended December 31, 2024. The effective tax rate decreased to (7.0)% from 24.7% for the three month period and to (1.6)% from 24.0% for the nine month period. The decrease in tax expense was primarily driven by a reduction in the income tax reserve related to the completion of IRS examination procedures in the first quarter, the decrease in pre-tax income, and the tax benefit recognized in the third quarter as a result of a higher-than-estimated research and development tax credit and additional foreign derived intangible income deductions.

### Non-GAAP Measures

We publicly disclose certain non-GAAP financial measurements, including *Revenue, Excluding Billable Expenses, EBITDA* and *Adjusted EBITDA*, because management uses these measures for business planning purposes, including to manage our business against internal projected results of operations and measure our performance. We view *Adjusted EBITDA* as a measure of our core operating business, which excludes the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP measures also provide another basis for comparing period to period results by excluding potential differences caused by non-operational and unusual or non-recurring items. In addition, we use *Revenue, Excluding Billable Expenses* because it provides management useful information about the Company's operating performance by excluding the impact of costs such as subcontractor expenses, travel expenses, and other non-labor expenses incurred to perform on contracts. Billable expenses generally have lower margin and thus are less indicative of our profit generation capacity. Management believes this metric provides useful information about our business. These supplemental performance measurements may vary from and may not be comparable to similarly titled measures by other companies in our industry. *Revenue, Excluding Billable Expenses, EBITDA* and *Adjusted EBITDA* are not recognized measurements under accounting principles generally accepted in the United States (“GAAP”) and when analyzing our performance, investors should (i) evaluate each adjustment in our reconciliation of revenue to *Revenue, Excluding Billable Expenses*, net income to *EBITDA* and *Adjusted EBITDA,* and (ii) use *Revenue, Excluding Billable Expenses, EBITDA* and *Adjusted EBITDA* in addition to, and not as an alternative to, revenue and net income, as measures of operating results, each as defined under GAAP. We have defined the aforementioned non-GAAP measures as follows:

- *Revenue, Excluding Billable Expenses* represents revenue less billable expenses.
- *EBITDA* represents net income before income taxes, interest expense, net and other income (expense), and depreciation and amortization.
- *Adjusted EBITDA* represents net income before income tax expense, interest expense, net and other income (expense), and depreciation and amortization and before certain other items, including change in provision for claimed costs for historical rate years, certain other corporate expenses, and certain insurance recoveries. The Company prepares *Adjusted EBITDA* to eliminate the impact of items it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.

Below is a reconciliation of our most directly comparable GAAP measures to our non-GAAP measures, Revenue to *Revenue, Excluding Billable Expenses* and Net income to *EBITDA* and *Adjusted EBITDA*, calculated and presented in accordance with GAAP:

*(In millions, except share and per share data)*

*(Unaudited)*

*(Unaudited)*

| Revenue, Excluding Billable Expenses | Three Months Ended December 31, 2025 | 2024 | Nine Months Ended December 31, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $2,620 | $2,917 | $8,434 | $9,005 |
| Less: Billable expenses | 774 | 939 | 2,573 | 2,852 |
| Revenue, Excluding Billable Expenses\* | $1,846 | $1,978 | $5,861 | $6,153 |
| **EBITDA and Adjusted EBITDA** |  |  |  |  |
| Net income | $200 | $187 | $646 | $742 |
| Income tax (benefit) expense | (13) | 61 | (10) | 233 |
| Interest expense, net and other income (expense) | 43 | 43 | 134 | 120 |
| Depreciation and amortization | 40 | 40 | 121 | 123 |
| EBITDA | 270 | 331 | 891 | 1,218 |
| Change in provision for claimed costs (a) | — | — | — | (113) |
| Other corporate expenses (b) | 15 | 1 | 29 | 8 |
| Insurance recoveries (c) | — | — | — | (115) |
| Adjusted EBITDA | $285 | $332 | $920 | $998 |

21

\*Revenue, Excluding Billable Expenses includes $113 million of revenue for the three and nine months ending December 31, 2024, resulting from the reduction to our provision for claimed costs as noted below.

(a) Represents the reduction to our provision for claimed costs for years prior to fiscal 2025 recorded during the second quarter of fiscal 2025, which resulted in a corresponding increase to revenue, as a result of the Defense Contract Audit Agency's findings related to its audits of our claimed costs for multiple fiscal years. See Note 19, “Commitments and Contingencies,” to the consolidated financial statements in the Company's Form 10-K for the fiscal year ended March 31, 2025 for further information.

(b) In fiscal 2026, other corporate expenses consist primarily of nonrecoverable costs associated with employee severance from cost management and restructuring initiatives, as well as transaction costs associated with a divestiture. See Note 13, “Supplemental Condensed Consolidated Financial Information,” to the condensed consolidated financial statements for further information. In fiscal 2025, other corporate expenses consist primarily of acquisition related costs from the acquisition of PAR Government Systems Corporation (“PGSC”).

(c) Reflects insurance recoveries from claims related to the Company’s fiscal 2024 settlement as described in Note 20, “Commitments and Contingencies,” to the consolidated financial statements contained within the Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

### Liquidity and Capital Resources

As of December 31, 2025, our total liquidity was $1.9 billion, consisting of $882 million of cash and cash equivalents and $1.0 billion available under the Revolving Credit Facility. In the opinion of management, we will be able to meet our liquidity and cash needs through a combination of cash flows from operating activities, available cash balances, and available borrowing under the Revolving Credit Facility. If these resources need to be augmented, additional cash requirements would likely be financed through the issuance of debt or equity securities.

The following table presents selected financial information for the respective periods shown:

*(Unaudited)*

*(In millions)*

|  | December 31, 2025 | March 31, 2025 |
| --- | ---: | ---: |
| Cash and cash equivalents | $882 | $885 |
| Total debt | $3,940 | $3,998 |

*(Unaudited)*

*(Unaudited)*

*(In millions)*

|  | Nine Months Ended December 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $801 | $790 |
| Net cash used in investing activities | (52) | (184) |
| Net cash used in financing activities | (752) | (706) |
| Net decrease in cash and cash equivalents | $(3) | $(100) |

Historically, we have been able to generate sufficient cash to fund our operations, mandatory debt and interest payments, capital expenditures, and discretionary funding needs. However, due to the trends and developments described above under “—Factors and Trends Affecting Our Results of Operations”, it may be necessary to borrow under our Credit Agreement to meet cash demands in the future. While the timing and financial magnitude of these possible actions are currently indeterminable, we expect to be able to manage and adjust our capital structure to meet our liquidity needs. Our expected liquidity and capital structure may also be impacted by discretionary investments and acquisitions that we could pursue. We anticipate that cash provided by operating activities, existing cash and cash equivalents, and borrowing capacity under our Revolving Credit Facility will be sufficient to meet our anticipated cash requirements for the next twelve months, which primarily include:

- operating expenses, including salaries;
- working capital requirements to fund both organic and inorganic growth of our business;
- capital expenditures which primarily relate to the purchase of computers, business systems, furniture and leasehold improvements to support our operations;
- the ongoing maintenance around all financial management systems;
- commitments and other discretionary investments, including potential capital calls for venture capital investments;
- debt service requirements for borrowings under our Credit Agreement and interest payments for the Senior Notes due 2028, Senior Notes due 2029 and Senior Notes due 2033, Senior Notes due 2035; and
- cash taxes to be paid.

From time to time, we evaluate conditions to opportunistically access the financing markets to secure additional debt capital resources and improve the terms of our indebtedness. Some of the possible uses of our remaining excess cash at any point in time may include funding strategic acquisitions and investments, debt repayment, further investment in our business and returning value to stockholders through share repurchases, quarterly dividends and special dividends.

### Cash Flows

#### Operating Cash Flow

Net cash provided by operations was $801 million for the nine months ended December 31, 2025 compared to $790 million in the prior year period. The increase in operating cash was primarily driven by lower tax payments as compared to the prior year. This was partially offset by the $115 million in insurance recoveries received in fiscal year 2025, along with the change to the Company's payroll cadence during the second quarter of fiscal 2025.

#### Investing Cash Flow

Net cash used in investing activities was $52 million in the nine months ended December 31, 2025 compared to $184 million in the prior year period. The decrease in investing cash used over the prior year was primarily due to the Company's acquisition of PGSC in the prior year, as well as the proceeds from the divestiture of a group of contracts in the current year.

#### Financing Cash Flow

Net cash used in financing activities was $752 million in the nine months ended December 31, 2025 compared to $706 million in the prior year period. The increase in financing cash used over the prior year was primarily due to an increase in share repurchases of $24 million and an increase in term loan payments of $22 million.

### Dividends and Share Repurchases

On January 23, 2026, the Company announced a regular quarterly cash dividend in the amount of $0.59 per share. The quarterly dividend is payable on March 2, 2026 to stockholders of record on February 13, 2026.

During the three and nine months ended December 31, 2025, quarterly cash dividends of $0.55 and $1.65 per share, respectively, were declared and paid totaling $67 million and $205 million, respectively.

On December 12, 2011, the Board of Directors initially approved a share repurchase program, which was subsequently increased from time to time, and most recently increased by $500 million to $4,085 million on October 22, 2025. The Company may repurchase shares pursuant to the program by means of open market repurchases, directly negotiated repurchases or through agents acting pursuant to negotiated repurchase agreements. During the first nine months of fiscal 2026, the Company purchased 4.7 million shares of the Company's Class A Common Stock for an aggregate of $486 million. As of December 31, 2025, the Company had approximately $759 million remaining under the repurchase program.

Any determination to pursue one or more of the above alternative uses for excess cash is subject to the discretion of our Board of Directors, and will depend upon various factors, including our results of operations, financial condition, liquidity requirements, restrictions that may be imposed by applicable law, our contracts, and our Credit Agreement as amended and other factors deemed relevant by our Board of Directors.

### Summarized Financial Information

The Senior Notes due 2033 and Senior Notes due 2035 were issued by Booz Allen Hamilton pursuant to the Base Indenture, among Booz Allen Hamilton, the Company and U.S. Bank Trust Company, National Association, as trustee, as supplemented by the respective Supplemental Indenture and are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by the Company pursuant to the Base Indenture.

The tables below present the summarized financial information as combined for the Company and Booz Allen Hamilton as of March 31, 2025 and as of and for the nine months ended December 31, 2025, after the elimination of intercompany transactions and balances between the Company and Booz Allen Hamilton and excluding the subsidiaries of both entities that are not issuers or guarantors of the Senior Notes due 2033 and Senior Notes due 2035, including earnings from and investments in these entities. The summarized financial information is provided in accordance with the reporting requirements of Rule 13-01 under Regulation S-X and is not intended to present our financial position or results of operations in accordance with GAAP.

### Summarized Statements of Financial Condition

*(in millions)*

|  | December 31, 2025 | March 31, 2025 |
| --- | ---: | ---: |
| Intercompany receivables from non-guarantor subsidiaries | $26 | $13 |
| Total other current assets | $3,037 | $3,272 |
| Goodwill and intangible assets, net of accumulated amortization | $1,494 | $1,501 |
| Total other non-current assets | $988 | $978 |
| Intercompany payables to non-guarantor subsidiaries | $19 | $91 |
| Total other current liabilities | $1,690 | $1,819 |
| Long-term debt, net of current portion | $3,857 | $3,915 |
| Total other non-current liabilities | $448 | $535 |

### Summarized Statement of Operations

*(in millions)*

|  | Nine Months Ended December 31, 2025 |
| --- | ---: |
| Revenue | $8,357 |
| Revenue from non-guarantor subsidiaries | $14 |
| Operating income | $810 |
| Operating loss from non-guarantor subsidiaries | $(21) |
| Net income | $657 |
| Net income attributable to the Obligor Group | $657 |

### Commitments and Contingencies

We are subject to a number of reviews, investigations, claims, lawsuits, and other uncertainties related to our business. For a discussion of these items, refer to Note 12, “Commitments and Contingencies,” to our condensed consolidated financial statements.

### Special Note Regarding Forward Looking Statements

Certain statements contained or incorporated in this Quarterly Report on Form 10-Q (the “Quarterly Report”), include forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “forecasts,” “expects,” “intends,” “plans,” “anticipates,” “projects,” “outlook,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “preliminary,” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. These forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include:

- any issue that compromises our relationships with the U.S. government or damages our professional reputation, including negative publicity concerning government contractors in general or us in particular;
- changes in U.S. government spending, including a continuation of efforts by the U.S. government to reduce U.S. government spending, increased insourcing by certain U.S. government agencies, and shifts in expenditures away from agencies or programs that we support, as well as associated uncertainty around the timing, extent, nature and effect of such efforts;
- U.S. government shutdowns as well as delayed long-term funding of our contracts;
- failure to comply with new and existing U.S. and international laws and regulations;
- our ability to compete effectively in the competitive bidding process and delays or losses of contract awards caused by competitors’ protests of major contract awards received by us;
- the loss of U.S. government GSA Schedules or our position as prime contractor on government-wide acquisition contract vehicles (“GWACs”);
- variable purchasing patterns under certain of our U.S. government contracts and changes in the mix of our contracts including our ability to accurately estimate or otherwise recover expenses, time, and resources for our contracts;
- our ability to realize the full value of and replenish our backlog, generate revenue under certain of our contracts, and the timing of our receipt of revenue under contracts included in backlog;
- internal system or service failures and security breaches, including, but not limited to, those resulting from external or internal threats, including cyber attacks on our network and internal systems or on our customers’ network or internal systems;
- misconduct or other improper activities from our employees, subcontractors, or suppliers, including the improper access, use or release of our or our customers’ sensitive or classified information;
- failure to maintain strong relationships with other contractors, or the failure of contractors with which we have entered into a sub or prime-contractor relationship to meet their obligations to us or our customers;
- inherent uncertainties and potential adverse developments in legal or regulatory proceedings, including litigation, audits, reviews, and investigations, which may result in materially adverse judgments, settlements, withheld payments, penalties, or other unfavorable outcomes including debarment, as well as disputes over the availability of insurance or indemnification;
- risks related to a possible recession and volatility or instability of the global financial system, including the failures of financial institutions and the resulting impact on counterparties and business conditions generally;
- risks related to a deterioration of economic conditions or weakening in credit or capital markets;
- risks related to pending, completed and future acquisitions and dispositions, including the ability to satisfy specified closing conditions for pending transactions, such as those related to receipt of regulatory approval or lack of regulatory intervention, and to realize the expected benefits from completed acquisitions and dispositions;
- risks inherent in the government contracting environment;
- risks related to our indebtedness and credit facilities which contain financial and operating covenants; and
- other risks and factors listed under “Item 1A. Risk Factors” and elsewhere in this Quarterly Report, as well as those listed under “Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2025.

In light of these risks, uncertainties and other factors, the forward-looking statements might not prove to be accurate, and you should not place undue reliance upon them. All forward-looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

## Market risk

As filed, 452 characters.

There have been no material changes during the period covered by this Quarterly Report on Form 10-Q to the information disclosed in the Quantitative and Qualitative Disclosures About Market Risk section in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 filed with the Securities and Exchange Commission on May 23, 2025.

## Controls and procedures

As filed, 972 characters.

### Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

### Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 291 characters.

There have been no material changes during the period covered by this Quarterly Report on Form 10-Q to the risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended March 31, 2025 filed with the Securities and Exchange Commission on May 23, 2025.

Filed Jan 23, 2026.
Source: SEC EDGAR, the filing index for accession 0001628280-26-003187. Last ingested by Listed: Oct 24, 2026, 15:08 ET. No prices; not investment advice.