Booz Allen Hamilton Holding Corp 10-Q for FY2024 Q1

Booz Allen Hamilton Holding Corp (BAH)

10-Q 2023-07-28 For: 2023-06-30

Added on April 12, 2026

About this 10-Q

Booz Allen Hamilton Holding Corp filed this 10-Q on July 28, 2023, covering the quarter ended June 30, 2023 (FY2024 Q1).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.65B; up 18.0% from $2.25B a year earlier
Net income: $161.39M; up 16.7% from net income of $138.28M a year earlier
Diluted EPS: $1.22; up 18.4% from $1.03 a year earlier

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Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Class A Common Stock	BAH	New York Stock Exchange


		Page
PART I. Financial Information		1
ITEM 1	Financial Statements	1
ITEM 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	37
ITEM 4	Controls and Procedures	37
PART II. Other Information		38
ITEM 1	Legal Proceedings	38
ITEM 1A	Risk Factors	39
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	39
ITEM 3	Defaults Upon Senior Securities	39
ITEM 4	Mine Safety Disclosures	39
ITEM 5	Other Information	39
ITEM 6	Exhibits	40


			Page
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Operations			2
Condensed Consolidated Statements of Comprehensive Income			3
Condensed Consolidated Statements of Cash Flows			4
Condensed Consolidated Statements of Stockholders' Equity			5
Notes to Unaudited Condensed Consolidated Financial Statements			6
1. Business Overview			6
2. Basis of Presentation			6
3. Revenue			7
4. Earnings Per Share			9
5. Acquisition, Goodwill and Intangible Assets			10

6. Accounts Payable and Other Accrued Expenses			11
7. Accrued Compensation and Benefits			11
8. Debt			12
9. Derivatives			14
10. Income Taxes			15
11. Employee Benefit Plans			16
12. Accumulated Other Comprehensive Income (Loss)			16
13. Stock -Based Compensation			17
14. Fair Value Measurements			17
15. Commitments and Contingencies			19


	June 30, 2023		March 31, 2023

	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	209,640	$	404,862
Accounts receivable, net	2,099,966		1,774,830
Prepaid expenses and other current assets	98,150		108,366
Total current assets	2,407,756		2,288,058
Property and equipment, net of accumulated depreciation	183,316		195,186
Operating lease right-of-use assets	183,127		187,798
Intangible assets, net of accumulated amortization	657,780		685,615
Goodwill	2,343,789		2,338,399
Deferred tax assets	696,602		573,780
Other long-term assets	293,947		281,816
Total assets	$	6,766,317	$	6,550,652
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	116,250	$	41,250
Accounts payable and other accrued expenses	1,391,029		1,316,640
Accrued compensation and benefits	372,506		445,205
Operating lease liabilities	46,281		51,238
Other current liabilities	66,389		42,721
Total current liabilities	1,992,455		1,897,054
Long-term debt, net of current portion	2,761,333		2,770,895
Operating lease liabilities, net of current portion	195,473		198,144
Income tax reserves	654,341		552,623

Other long-term liabilities	145,644		139,934
Total liabilities	5,749,246		5,558,650
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, Class A - $0.01 par value - authorized, 600,000,000 shares; issued, 166,521,283 shares at June 30, 2023 and 165,872,332 shares at March 31, 2023; outstanding, 131,116,370 shares at June 30, 2023 and 131,637,588 shares at March 31, 2023	1,665		1,659
Treasury stock, at cost — 35,404,913 shares at June 30, 2023 and 34,234,744 shares at March 31, 2023	(1,972,886)		(1,859,905)
Additional paid-in capital	805,240		769,460
Retained earnings	2,150,361		2,051,455
Accumulated other comprehensive income	32,691		29,333


Total stockholders’ equity	1,017,071		992,002
Total liabilities and stockholders’ equity	$	6,766,317	$	6,550,652


	Three Months Ended June 30,
		2023		2022

Revenue		$	2,654,486	$	2,249,600
Operating costs and expenses:
Cost of revenue		1,251,916		1,074,973
Billable expenses		812,304		674,266
General and administrative expenses		314,001		253,064
Depreciation and amortization		41,847		40,102
Total operating costs and expenses		2,420,068		2,042,405
Operating income		234,418		207,195
Interest expense		(35,474)		(24,655)
Other income (expense), net		1,924		(2,958)
Income before income taxes		200,868		179,582
Income tax expense		39,480		41,489
Net income		161,388		138,093
Net loss attributable to non-controlling interest		—		191
Net income attributable to common stockholders		$	161,388	$	138,284
Earnings per common share (Note 4):
Basic		$	1.22	$	1.04
Diluted		$	1.22	$	1.03


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


			Shares Outstanding as of 7/24/2023
Class A Common Stock			131,043,378


(Amounts in thousands)	Three Months Ended June 30,
	2023		2022
Cash flows from operating activities
Net income	$	161,388	$	138,093
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	41,847		40,102
Noncash lease expense	13,610		13,787
Stock-based compensation expense	17,685		13,696
Amortization of debt issuance costs	1,027		1,161

Net losses on dispositions, and other	1,208		1,293

Changes in assets and liabilities:
Accounts receivable, net	(325,363)		(205,387)
Deferred income taxes and income taxes receivable / payable	31,509		34,802
Prepaid expenses and other current and long-term assets	(10,217)		(11,241)
Accrued compensation and benefits	(56,738)		(61,039)
Accounts payable and other accrued expenses	74,389		(4,287)
Other current and long-term liabilities	(21,877)		(6,614)
Net cash used in operating activities	(71,532)		(45,634)
Cash flows from investing activities
Purchases of property, equipment, and software	(10,488)		(13,734)
Payments for business acquisitions and dispositions	(406)		—
Payments for cost method investments	(4,160)		—


Net cash used in investing activities	(15,054)		(13,734)
Cash flows from financing activities
Proceeds from issuance of common stock	6,925		6,081
Stock option exercises	11,176		4,596
Repurchases of common stock	(128,390)		(73,397)
Cash dividends paid	(63,034)		(58,899)
Repayments on revolving credit facility, term loans, and Senior Notes	(10,313)		(17,095)

Proceeds from revolving credit facility	75,000		—
Net cash used in financing activities	(108,636)		(138,714)
Net decrease in cash and cash equivalents	(195,222)		(198,082)
Cash and cash equivalents––beginning of period	404,862		695,910
Cash and cash equivalents––end of period	$	209,640	$	497,828
Supplemental disclosures of cash flow information
Net cash paid during the period for:
Interest	$	26,091	$	8,735
Income taxes	$	2,868	$	2,952


BOOZ ALLEN HAMILTON HOLDING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
(Amounts in thousands, except share data)	Class A Common Stock			Treasury Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Non-Controlling Interest		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at March 31, 2023	165,872,332	$	1,659	(34,234,744)	$	(1,859,905)	$	769,460	$	2,051,455	$	29,333	$	—	$	992,002
Issuance of common stock	396,569	4		—	—		6,921		—		—		—		6,925
Stock options exercised	252,382	2		—	—		11,174		—		—		—		11,176
Repurchase of common stock (1)	—	—		(1,170,169)	(112,981)		—		—		—		—		(112,981)

Net income	—	—		—	—		—		161,388		—		—		161,388
Other comprehensive income, net of tax	—	—		—	—		—		—		3,358		—		3,358
Dividends declared of $0.47 per share of common stock	—	—		—	—		—		(62,482)		—		—		(62,482)
Stock-based compensation expense	—	—		—	—		17,685		—		—		—		17,685


Balance at June 30, 2023	166,521,283	$	1,665	(35,404,913)	$	(1,972,886)	$	805,240	$	2,150,361	$	32,691	$	—	$	1,017,071

Balance at March 31, 2022	164,372,545	$	1,646	(31,788,197)	$	(1,635,454)	$	656,222	$	2,015,071	$	8,585	$	651	$	1,046,721
Issuance of common stock	385,009	3		—	—		6,078		—		—		—		6,081
Stock options exercised	143,325	1		—	—		4,595		—		—		—		4,596
Repurchase of common stock (2)	—	—		(689,304)	(57,558)		—		—		—		—		(57,558)

Net income	—	—		—	—		—		138,284		—		(191)		138,093
Other comprehensive income, net of tax	—	—		—	—		—		—		5,757		—		5,757
Dividends declared of $0.43 per share of common stock	—	—		—	—		—		(58,262)		—		—		(58,262)
Stock-based compensation expense	—	—		—	—		13,696				—		—		13,696
Contribution to non-controlling interest	—	—		—	—		(959)		—		—		959		—

Balance at June 30, 2022	164,900,879	$	1,650	(32,477,501)	$	(1,693,012)	$	679,632	$	2,095,093	$	14,342	$	1,419	$	1,099,124


	June 30, 2023		March 31, 2023
Current assets
Accounts receivable–billed	$	745,924	$	551,666
Accounts receivable–unbilled (contract assets)	1,354,108		1,223,482
Allowance for credit losses	(66)		(318)
Accounts receivable, net	2,099,966		1,774,830
Other long-term assets
Accounts receivable–unbilled (contract assets)	59,733		59,455
Total accounts receivable, net	$	2,159,699	$	1,834,285
Other current liabilities
Advance payments, billings in excess of costs incurred and deferred revenue (contract liabilities)	$	13,635	$	18,995


Cash consideration (gross of cash acquired)	$	445,074

Purchase price allocation:
Cash	4,779
Current assets	27,725
Operating lease right-of-use asset	7,894
Other long-term assets	5,078
Intangible assets	108,600
Deferred tax liabilities	(20,394)
Current liabilities	(11,612)
Operating lease liabilities - short-term	(1,362)
Operating lease liabilities - long-term	(6,532)
Total fair value of identifiable net assets acquired	$	114,176

Goodwill	$	330,898


	June 30, 2023						March 31, 2023
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Amortizable intangible assets:
Programs and contract assets, channel relationships, and other amortizable intangible assets	$	591,894	$	186,096	$	405,798	$	599,794	$	169,316	$	430,478
Software	137,944		76,162		61,782		134,152		69,215		64,937
Total amortizable intangible assets	$	729,838	$	262,258	$	467,580	$	733,946	$	238,531	$	495,415
Unamortizable intangible assets:
Trade name	$	190,200	$	—	$	190,200	$	190,200	$	—	$	190,200
Total	$	920,038	$	262,258	$	657,780	$	924,146	$	238,531	$	685,615


	June 30, 2023		March 31, 2023
Vendor payables	$	572,355	$	597,808
Accrued expenses	818,674		718,832
Total accounts payable and other accrued expenses	$	1,391,029	$	1,316,640


	June 30, 2023		March 31, 2023
Bonus	$	27,423	$	120,023
Retirement	79,115		52,480
Vacation	218,914		203,627
Other	47,054		69,075
Total accrued compensation and benefits	$	372,506	$	445,205


	Three Months Ended June 30,
		2023			2022
Cost-reimbursable			$	1,450,184	55	%	$	1,190,828	53	%
Time-and-materials			635,733		24	%	545,902		24	%
Fixed-price			568,569		21	%	512,870		23	%
Total Revenue			$	2,654,486	100	%	$	2,249,600	100	%


	Three Months Ended June 30,
		2023			2022
U.S. government(1):
Defense Clients			$	1,224,317	46	%	$	1,027,811	46	%
Intelligence Clients			476,497		18	%	404,123		18	%
Civil Clients			904,960		34	%	754,660		33	%
Total U.S. government			2,605,774		98	%	2,186,594		97	%
Global Commercial Clients			48,712		2	%	63,006		3	%
Total Revenue			$	2,654,486	100	%	$	2,249,600	100	%


	Three Months Ended June 30,
		2023		2022
	(In thousands)
Term Loan A Loans Interest Expense		26,103		6,359
Term Loan B Loans Interest Expense		—		2,429
Interest on Revolving Credit Facility		17		—
Senior Notes Interest Expense		11,781		11,781
Amortization of Debt Issuance Cost (DIC) and Original Issue Discount (OID) (1)		1,027		1,161
Interest Swap (Income) Expense		(3,568)		2,831
Other		114		94
Total Interest Expense		$	35,474	$	24,655


		Three Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships	Location of Gain or Loss Recognized in Income on Derivatives	Amount of Pre-Tax Gain Recognized in AOCI on Derivatives				Amount of Pre-Tax Gain or (Loss) Reclassified from AOCI into Income (1)
		2023		2022		2023		2022
Interest rate swaps	Interest income (expense)	$	8,599	$	4,966	$	3,568	$	(2,831)


	June 30, 2023				March 31, 2023
	Interest Rate		Outstanding Balance		Interest Rate		Outstanding Balance
Term Loan A	6.45	%	$	1,619,063	5.97	%	$	1,629,375


Revolver	8.50	%	75,000		—	%	—
Senior Notes due 2028	3.88	%	700,000		3.88	%	700,000
Senior Notes due 2029	4.00	%	500,000		4.00	%	500,000
Less: Unamortized debt issuance costs and discount on debt			(16,480)				(17,230)
Total			2,877,583				2,812,145
Less: Current portion of long-term debt			(116,250)				(41,250)
Long-term debt, net of current portion			$	2,761,333			$	2,770,895


	June 30, 2023	March 31, 2023
Current income tax receivable	—	23,633
Long term income tax receivable	167,821	167,821
Current income tax payable	47,984	14,523


	Three Months Ended June 30, 2023
		Post-retirement plans		Derivatives designated as cash flow hedges		Totals
Beginning of period		$	19,450	$	9,883	$	29,333
Other comprehensive income before reclassifications(1)		—		6,356		6,356
Amounts reclassified from accumulated other comprehensive income		(383)		(2,615)		(2,998)
Net current-period other comprehensive (loss) income		(383)		3,741		3,358
End of period		$	19,067	$	13,624	$	32,691


	Three Months Ended June 30, 2022
		Post-retirement plans		Derivatives designated as cash flow hedges		Totals
Beginning of period		$	8,811	$	(226)	$	8,585
Other comprehensive income before reclassifications(2)		—		3,668		3,668
Amounts reclassified from accumulated other comprehensive income (loss)		(2)		2,091		2,089
Net current-period other comprehensive (loss) income		(2)		5,759		5,757
End of period		$	8,809	$	5,533	$	14,342


	June 30, 2023
	Unrecognized Compensation Cost		Weighted Average Remaining Period to be Recognized (in years)
Equity Incentive Plan Options	$	2,834	3.39
Restricted Stock Awards	99,390		2.04
Total	$	102,224


	Recurring Fair Value Measurements as of June 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Current derivative instruments (2)	$	—	$	14,190	$	—	$	14,190
Long-term derivative instruments (2)	—		4,281		—		4,281
Long-term deferred compensation plan asset (1)	27,405		—		—		27,405
Total Assets	$	27,405	$	18,471	$	—	$	45,876
Liabilities:
Long-term deferred compensation plan liability (1)	27,405		—		—		27,405
Total Liabilities	$	27,405	$	—	$	—	$	27,405


	June 30, 2023				March 31, 2023
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Term Loan A	$	1,619,063	$	1,588,706	$	1,629,375	$	1,600,861
3.88% Senior Notes due 2028	700,000		637,896		700,000		638,540
4.00% Senior Notes due 2029	500,000		450,255		500,000		451,930


	Three Months Ended June 30,
(In thousands, except share and per share data)		2023		2022
	(Unaudited)
Revenue, Excluding Billable Expenses
Revenue		$	2,654,486	$	2,249,600
Less: Billable expenses		812,304		674,266
Revenue, Excluding Billable Expenses		$	1,842,182	$	1,575,334
Adjusted Operating Income
Operating income		$	234,418	$	207,195
Acquisition and divestiture costs (a)		3,268		5,093

Significant acquisition amortization (b)		13,108		11,087
Legal matter reserve (c)		27,453		—
Adjusted Operating Income		$	278,247	$	223,375
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin on Revenue & Adjusted EBITDA Margin on Revenue, Excluding Billable Expenses
Net income attributable to common stockholders		$	161,388	$	138,284
Income tax expense		39,480		41,489
Interest and other, net (d)		33,550		27,613
Depreciation and amortization		41,847		40,102
EBITDA		276,265		247,488
Acquisition and divestiture costs (a)		3,268		5,093

Legal matter reserve (c)		27,453		—
Adjusted EBITDA		$	306,986	$	252,581
Net income margin attributable to common stockholders		6.1%		6.1%
Adjusted EBITDA Margin on Revenue		11.6%		11.2%
Adjusted EBITDA Margin on Revenue, Excluding Billable Expenses		16.7%		16.0%



	June 30, 2023		June 30, 2022
	(In millions)
Backlog:
Funded	$	4,903	$	4,020
Unfunded	9,045		9,991
Priced options	17,329		14,617
Total backlog	$	31,277	$	28,628


Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
April 2023	421,941	$94.80	421,941	$	815,893,342
May 2023	423,565	$94.52	423,565	$	775,857,405
June 2023	196,062	$102.01	196,062	$	755,857,452
Total	1,041,568		1,041,568


Exhibit Number						Description

10.1						Tenth Amendment to Credit Agreement, dated as of July 27, 2023, among Booz Allen Hamilton Inc., as borrower, Bank of America, N.A., as administrative agent and the other lenders and financial institutions party thereto.*
10.2						Guarantee Agreement, dated as of July 27, 2023, made by Booz Allen Hamilton Holding Corporation in favor of Bank of America, N.A., as administrative agent.*
10.3						Settlement Agreement, dated as of July 21, 2023, by and among the United States of America, acting through the United States Department of Justice and on behalf of the Department of Defense and the Defense Contract Management Agency, Relator Sarah A. Feinberg, and Booz Allen Hamilton Holding Corporation.*
31.1						Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer*
31.2						Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer*
32.1						Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)*
32.2						Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)*
101						The following materials from Booz Allen Hamilton Holding Corporation’s Quarterly Report on Form 10-Q for the three and three months ended June 30, 2023 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at June 30, 2023 and March 31, 2023; (ii) Condensed Consolidated Statements of Operations for the three months ended June 30, 2023 and 2022; (iii) Condensed Consolidated Statements of Comprehensive Income for the three months ended June 30, 2023 and 2022; (iv) Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2023 and 2022; and (v) Notes to Condensed Consolidated Financial Statements.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)


		Booz Allen Hamilton Holding Corporation
		Registrant


Date: July 28, 2023	By:	/s/ Matthew A. Calderone
		Matthew A. Calderone Executive Vice President and Chief Financial Officer (Principal Financial Officer)


Date: July 28, 2023	By:	/s/ Horacio D. Rozanski
		Horacio D. Rozanski President and Chief Executive Officer (Principal Executive Officer)