Booz Allen Hamilton reported that its revenue for the fourth quarter and full fiscal year 2025 rose 7.3 percent and 12.4 percent year-over-year to $3 billion and $12 billion, respectively.
In an earnings release published Friday, the McLean, Virginia-based IT and management consulting firm said it ended the fourth quarter with a record backlog of $37 billion, up 15 percent from the prior-year period, with a trailing 12-month book-to-bill ratio of 1.39x.
CEO on Government Procurement Reform, GSA Collaboration
At Friday’s earnings call, Horacio Rozanski, president and CEO of Booz Allen and a three-time Wash100 awardee, said the government is leading initiatives to enhance procurement regulations, including revising the Federal Acquisition Regulation. He noted that he expects to see a move to more fixed-price and outcome-based contracts and an increased focus on updating legacy systems and integrating advanced technologies, including artificial intelligence.
Rozanski told analysts and investors that Booz Allen has developed a productive relationship with the General Services Administration, which has resulted in two key outcomes.
“First, GSA got to know us better. They now understand the value we deliver across a full range of missions. This is important because GSA and the Federal Acquisition Service, or FAS, will be driving an efficiency agenda across government for the foreseeable future, including the consolidation of services and acquisition processes,” he noted.
“And second, we have a unique opportunity to offer FAS, our thoughts on how to accelerate the move to outcome based procurement and bring Agentic AI capabilities to enable these conversions. … We believe a more efficient government will buy differently, more commercial technology, more outcomes, streamline processes and greater speed. And looking ahead, we anticipate these procurement improvements will set a foundation for a new kind of growth,” Rozanski added.
Artificial Intelligence Business Growth
The Booz Allen chief executive said the company’s AI business grew over 30 percent year-over-year to about $800 million in FY 2025.
“As AI becomes increasingly foundational to how the government operates, agencies are investing more and moving toward enterprise scale implementation. In Defense and Intelligence, AI is now embedded in mission workflows, enabling faster imagery analysis through computer vision, enhancing decision making through tailored generative models, and delivering autonomous solutions at the tip of the spear,” the 2025 Wash100 awardee stated.
“With more than a decade of investment, enhanced on implementation experience, Booz Allen is well positioned to lead the next phase of AI transformation across the federal enterprise,” he added.
Rozanski on Defense Business, FY 2026 Operating Priorities
Rozanski said the company expects its defense and national security portfolio to continue growing as Booz Allen accelerates the integration of AI and commercial technologies into missions.
He also mentioned Booz Allen’s operating priorities for fiscal year 2026, including restructuring its civil business; pursuing major outcome-based opportunities; advancing partnerships with technology firms; and directing significant resources to potential growth areas, such as Indo-Pacific Command and space missions, agentic AI, quantum and software-defined communications.
Q4 & Full FY 2025 Financial Highlights
The company’s Q4 adjusted net income grew 17.3 percent to $203 million and adjusted diluted earnings per share, or EPS, climbed 21.1 percent to $1.61. For the full FY 2025, adjusted net income was $815 million, reflecting a 13.4 percent increase from the previous fiscal year. Booz Allen’s full FY 2025 adjusted diluted EPS was $6.35, up 11.9 percent.
Booz Allen’s Q4 and full FY 2025 adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, increased 10.5 percent and 11.9 percent to $316 million and $1.315 billion, respectively.
To generate shareholder value, the consulting firm deployed a total of $1.2 billion of capital, including repurchasing approximately 4.3 percent of outstanding shares.
The company reported $911 million in free cash flow in FY 2025, compared with $192 million in the previous year.
FY 2026 Financial Outlook
For the full FY 2026, Booz Allen said it expects to generate $12 billion to $12.5 billion in revenue and adjusted EBITDA of between $1.315 billion and $1.37 billion.
The company noted that it anticipates its free cash flow to be between $700 million and $800 million.
The adjusted diluted EPS is expected to range from $6.20 to $6.55 per share, while the full-year adjusted EBITDA margin on revenue is anticipated to be about 11 percent.
