Booz Allen Hamilton, a defense IT specialist, exceeded Wall Street’s expectations for the recent quarter and adjusted its full-year guidance upward. This positive news led to a significant increase in the company’s stock, rising 13% by mid-morning.
Booz Allen Hamilton, which provides technology and IT services to military and civil government clients, particularly in the intelligence community, reported earnings of $1.81 per share for its fiscal second quarter ending September 30. This figure surpasses the anticipated $1.49 per share on revenue of $2.97 billion, with actual sales reaching $3.15 billion. The company saw an 18% increase in revenue year over year, with operating income more than doubling. The sales performance was partly due to a favorable audit resolution of claimed costs, and without this benefit, revenue growth would have been approximately 13%.
CEO Horacio Rozanski stated that the strong operational momentum contributed to the excellent second-quarter performance and expects to meet multiyear goals.
The company also reported a book-to-bill ratio of 2.61, indicating strong future growth potential. Booz Allen’s backlog includes about $41.25 billion in future business. Additionally, the company increased its full-year fiscal 2025 net cash from operations forecast by $100 million, now projected at $925 million to $1.025 billion. The full-year earnings guidance has also been raised by $0.30 per share, now ranging from $6.10 to $6.30 per share, compared to the Wall Street estimate of $6 per share.
While defense billings may fluctuate, Booz Allen Hamilton maintains a reliable growth trajectory and strong gross margins over 50%, trading at less than 2.3 times sales. The company presents a compelling option for those interested in defense sector investments.
