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Booz Allen (BAH) Q3 Earnings Beat, Revenues Miss Estimates

Solid top-line growth and strong margin performance boost Booz Allen's (BAH) third-quarter 2021 performance.

This story originally appeared on Zacks

Booz Allen Hamilton Holding Corp. BAH reported mixed second-quarter fiscal 2022 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same.

- Zacks

Quarterly adjusted earnings per share (excluding 12 cents from non-recurring items) of $1.26 beat the consensus mark by 17.8% and increased 22.3% on a year-over-year basis. The bottom line benefited from solid top-line growth and strong margin performance.

Revenues, Backlog & Headcount Increase Y/Y

Total revenues of $2.11 billion missed the Zacks Consensus Estimate by 1.2% but increased 4.3% on a year-over-year basis. Revenues, excluding billable expenses, were $1.47 billion, up 3.6% on a year-over-year basis. Billable expenses contributed 43.6% to revenues.

Total backlog increased 18% from the prior-year quarter’s reported figure to $29 billion. Funded backlog of $4.9 billion increased 8.8% year over year. Unfunded backlog was up 55% to $9.53 billion. Priced options were up 4.3% to $14.5 billion. Book-to-bill ratio was 2.03, up 14.7% year over year. Headcount of 29,228 increased 5.8% year over year.

Strong Margin Performance

Adjusted EBITDA amounted to $256 million, up 12.2% year over year. Adjusted EBITDA margin on revenues was 12.8%, up from the year-ago quarter’s figure of 11.3%. Adjusted EBITDA margin on revenues, excluding billable expenses, increased to 18.4% from 16.1% in the year-ago quarter.

Key Balance Sheet & Cash Flow Numbers

Booz Allen exited the fiscal second quarter with cash and cash equivalents of $788.7 million compared with $621.9 million at the end of the prior quarter. Long-term debt (net of current portion) was $2.76 billion compared with $2.77 billion in the prior quarter.

The company used $470.4 million of net cash in operating activities. Capital expenditures were $20.6 million and free cash flow was $449.74 million. The company paid out dividends worth $50.23 million and repurchased shares worth $108.6 million in the reported quarter.

Reaffirmed Fiscal 2022 Outlook

Booz Allen continues to project revenue growth for fiscal 2022 at the 7-10% range. Adjusted EBITDA margin is anticipated in the mid-10% range. Net cash provided by operating activities is expected in the range of $800-$850 million.

Adjusted diluted EPS is expected in the range of $4.10-$4.30. The midpoint ($4.20) is below the Zacks Consensus Estimate of $4.21.

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

Performance of Some Other Business Services Companies

Equifax’s EFX third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6%. The bottom line declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6%. The top line increased 14.5% year over year on a reported basis and 14% on a local-currency basis.

IQVIA’s IQV third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and rose 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1%. The top line increased 21.7% year over year on a reported basis and 21.1% on a constant-currency basis.

Omnicom’s OMC third-quarter 2021 adjusted earnings of $1.65 per share beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.

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