0001443646false2026Q23/31364xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesbah:employeebah:segmentxbrli:purebah:tranche00014436462025-04-012025-09-3000014436462025-10-2000014436462025-09-3000014436462025-03-3100014436462025-07-012025-09-3000014436462024-07-012024-09-3000014436462024-04-012024-09-3000014436462024-03-3100014436462024-09-300001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2025-06-300001443646us-gaap:TreasuryStockCommonMember2025-06-300001443646us-gaap:AdditionalPaidInCapitalMember2025-06-300001443646us-gaap:RetainedEarningsMember2025-06-300001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-06-3000014436462025-06-300001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2025-07-012025-09-300001443646us-gaap:AdditionalPaidInCapitalMember2025-07-012025-09-300001443646us-gaap:TreasuryStockCommonMember2025-07-012025-09-300001443646us-gaap:RetainedEarningsMember2025-07-012025-09-300001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2025-09-300001443646us-gaap:TreasuryStockCommonMember2025-09-300001443646us-gaap:AdditionalPaidInCapitalMember2025-09-300001443646us-gaap:RetainedEarningsMember2025-09-300001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-09-300001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2025-03-310001443646us-gaap:TreasuryStockCommonMember2025-03-310001443646us-gaap:AdditionalPaidInCapitalMember2025-03-310001443646us-gaap:RetainedEarningsMember2025-03-310001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-03-310001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2025-04-012025-09-300001443646us-gaap:AdditionalPaidInCapitalMember2025-04-012025-09-300001443646us-gaap:TreasuryStockCommonMember2025-04-012025-09-300001443646us-gaap:RetainedEarningsMember2025-04-012025-09-300001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-04-012025-09-300001443646us-gaap:CommonClassAMember2025-07-012025-09-300001443646us-gaap:CommonClassAMember2025-04-012025-09-300001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2024-06-300001443646us-gaap:TreasuryStockCommonMember2024-06-300001443646us-gaap:AdditionalPaidInCapitalMember2024-06-300001443646us-gaap:RetainedEarningsMember2024-06-300001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-3000014436462024-06-300001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2024-07-012024-09-300001443646us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001443646us-gaap:TreasuryStockCommonMember2024-07-012024-09-300001443646us-gaap:RetainedEarningsMember2024-07-012024-09-300001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2024-09-300001443646us-gaap:TreasuryStockCommonMember2024-09-300001443646us-gaap:AdditionalPaidInCapitalMember2024-09-300001443646us-gaap:RetainedEarningsMember2024-09-300001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2024-03-310001443646us-gaap:TreasuryStockCommonMember2024-03-310001443646us-gaap:AdditionalPaidInCapitalMember2024-03-310001443646us-gaap:RetainedEarningsMember2024-03-310001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001443646us-gaap:CommonClassAMemberus-gaap:CommonStockMember2024-04-012024-09-300001443646us-gaap:AdditionalPaidInCapitalMember2024-04-012024-09-300001443646us-gaap:TreasuryStockCommonMember2024-04-012024-09-300001443646us-gaap:RetainedEarningsMember2024-04-012024-09-300001443646us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-09-300001443646us-gaap:CommonClassAMember2024-07-012024-09-300001443646us-gaap:CommonClassAMember2024-04-012024-09-300001443646bah:CostReimbursableContractMember2025-07-012025-09-300001443646bah:CostReimbursableContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646bah:CostReimbursableContractMember2024-07-012024-09-300001443646bah:CostReimbursableContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646bah:CostReimbursableContractMember2025-04-012025-09-300001443646bah:CostReimbursableContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646bah:CostReimbursableContractMember2024-04-012024-09-300001443646bah:CostReimbursableContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646us-gaap:TimeAndMaterialsContractMember2025-07-012025-09-300001443646us-gaap:TimeAndMaterialsContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646us-gaap:TimeAndMaterialsContractMember2024-07-012024-09-300001443646us-gaap:TimeAndMaterialsContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646us-gaap:TimeAndMaterialsContractMember2025-04-012025-09-300001443646us-gaap:TimeAndMaterialsContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646us-gaap:TimeAndMaterialsContractMember2024-04-012024-09-300001443646us-gaap:TimeAndMaterialsContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646us-gaap:FixedPriceContractMember2025-07-012025-09-300001443646us-gaap:FixedPriceContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646us-gaap:FixedPriceContractMember2024-07-012024-09-300001443646us-gaap:FixedPriceContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646us-gaap:FixedPriceContractMember2025-04-012025-09-300001443646us-gaap:FixedPriceContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646us-gaap:FixedPriceContractMember2024-04-012024-09-300001443646us-gaap:FixedPriceContractMemberus-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646us-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646us-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646us-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646us-gaap:ProductConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646bah:DefenseClientsMember2025-07-012025-09-300001443646bah:DefenseClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646bah:DefenseClientsMember2024-07-012024-09-300001443646bah:DefenseClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646bah:DefenseClientsMember2025-04-012025-09-300001443646bah:DefenseClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646bah:DefenseClientsMember2024-04-012024-09-300001443646bah:DefenseClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646bah:IntelligenceClientsMember2025-07-012025-09-300001443646bah:IntelligenceClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646bah:IntelligenceClientsMember2024-07-012024-09-300001443646bah:IntelligenceClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646bah:IntelligenceClientsMember2025-04-012025-09-300001443646bah:IntelligenceClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646bah:IntelligenceClientsMember2024-04-012024-09-300001443646bah:IntelligenceClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646bah:CivilClientsMember2025-07-012025-09-300001443646bah:CivilClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646bah:CivilClientsMember2024-07-012024-09-300001443646bah:CivilClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646bah:CivilClientsMember2025-04-012025-09-300001443646bah:CivilClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646bah:CivilClientsMember2024-04-012024-09-300001443646bah:CivilClientsMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646us-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646us-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646us-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646us-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646us-gaap:SalesChannelDirectlyToConsumerMember2025-07-012025-09-300001443646us-gaap:SalesChannelDirectlyToConsumerMemberbah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646us-gaap:SalesChannelDirectlyToConsumerMember2024-07-012024-09-300001443646us-gaap:SalesChannelDirectlyToConsumerMemberbah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646us-gaap:SalesChannelDirectlyToConsumerMember2025-04-012025-09-300001443646us-gaap:SalesChannelDirectlyToConsumerMemberbah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646us-gaap:SalesChannelDirectlyToConsumerMember2024-04-012024-09-300001443646us-gaap:SalesChannelDirectlyToConsumerMemberbah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646us-gaap:SalesChannelThroughIntermediaryMember2025-07-012025-09-300001443646us-gaap:SalesChannelThroughIntermediaryMemberbah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646us-gaap:SalesChannelThroughIntermediaryMember2024-07-012024-09-300001443646us-gaap:SalesChannelThroughIntermediaryMemberbah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646us-gaap:SalesChannelThroughIntermediaryMember2025-04-012025-09-300001443646us-gaap:SalesChannelThroughIntermediaryMemberbah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646us-gaap:SalesChannelThroughIntermediaryMember2024-04-012024-09-300001443646us-gaap:SalesChannelThroughIntermediaryMemberbah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-300001443646bah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-07-012025-09-300001443646bah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-07-012024-09-300001443646bah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2025-04-012025-09-300001443646bah:ContractorConcentrationTypeRiskMemberus-gaap:RevenueFromContractWithCustomerMember2024-04-012024-09-3000014436462025-10-012025-09-3000014436462026-10-012025-09-300001443646us-gaap:RestrictedStockMember2025-07-012025-09-300001443646us-gaap:RestrictedStockMember2024-07-012024-09-300001443646us-gaap:RestrictedStockMember2025-04-012025-09-300001443646us-gaap:RestrictedStockMember2024-04-012024-09-300001443646bah:CustomerContractsAndRelatedCustomerRelationshipsMember2025-09-300001443646bah:CustomerContractsAndRelatedCustomerRelationshipsMember2025-03-310001443646us-gaap:ComputerSoftwareIntangibleAssetMember2025-09-300001443646us-gaap:ComputerSoftwareIntangibleAssetMember2025-03-310001443646us-gaap:TradeNamesMember2025-09-300001443646us-gaap:TradeNamesMember2025-03-310001443646bah:TermLoanMemberus-gaap:SecuredDebtMember2025-09-300001443646bah:TermLoanMemberus-gaap:SecuredDebtMember2025-03-310001443646bah:SeniorNotesDue2028Memberus-gaap:SeniorNotesMember2025-09-300001443646bah:SeniorNotesDue2028Memberus-gaap:SeniorNotesMember2025-03-310001443646bah:SeniorNotesDue2029Memberus-gaap:SeniorNotesMember2025-09-300001443646bah:SeniorNotesDue2029Memberus-gaap:SeniorNotesMember2025-03-310001443646bah:FivePointNineFivePercentSeniorUnsecuredNotesDue2033Memberus-gaap:SeniorNotesMember2025-09-300001443646bah:FivePointNineFivePercentSeniorUnsecuredNotesDue2033Memberus-gaap:SeniorNotesMember2025-03-310001443646bah:FivePointNineFivePercentSeniorUnsecuredNotesDue2035Memberus-gaap:SeniorNotesMember2025-09-300001443646bah:FivePointNineFivePercentSeniorUnsecuredNotesDue2035Memberus-gaap:SeniorNotesMember2025-03-310001443646us-gaap:RevolvingCreditFacilityMemberbah:SecuredCreditFacilityMemberus-gaap:SecuredDebtMember2025-09-300001443646us-gaap:LetterOfCreditMemberus-gaap:SecuredDebtMember2025-09-300001443646us-gaap:SeniorNotesMember2025-09-300001443646us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredDebtMember2025-04-012025-09-300001443646us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredDebtMember2025-09-300001443646us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredDebtMember2025-03-310001443646bah:ResearchAndDevelopmentTaxCreditsMember2025-09-300001443646bah:ResearchAndDevelopmentTaxCreditsMember2025-03-310001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-06-300001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-06-300001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-03-310001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-03-310001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-07-012025-09-300001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-07-012025-09-300001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-04-012025-09-300001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-04-012025-09-300001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-09-300001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-09-300001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-06-300001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-06-300001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-310001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-03-310001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-07-012024-09-300001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-07-012024-09-300001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-04-012024-09-300001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-04-012024-09-300001443646us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-09-300001443646us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-09-300001443646us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2025-09-300001443646us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2025-09-300001443646us-gaap:FairValueMeasurementsRecurringMember2025-09-300001443646us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2025-03-310001443646us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2025-03-310001443646us-gaap:FairValueMeasurementsRecurringMember2025-03-310001443646us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2025-09-300001443646us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2025-09-300001443646us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001443646us-gaap:SecuredDebtMemberus-gaap:FairValueInputsLevel2Member2025-09-300001443646us-gaap:SecuredDebtMemberus-gaap:FairValueInputsLevel2Member2025-03-310001443646us-gaap:FairValueMeasurementsNonrecurringMember2025-09-300001443646us-gaap:FairValueMeasurementsNonrecurringMember2025-03-310001443646bah:ClaimedIndirectCostsMemberbah:IncreaseToRevenueToReflectBestEstimateOfFinalCostRatesMember2025-09-300001443646bah:ClaimedIndirectCostsMemberbah:IncreaseToRevenueToReflectBestEstimateOfFinalCostRatesMember2025-03-3100014436462025-04-012025-06-300001443646us-gaap:CostOfSalesMember2025-04-012025-06-300001443646us-gaap:GeneralAndAdministrativeExpenseMember2025-04-012025-06-300001443646us-gaap:SubsequentEventMember2025-10-012025-10-240001443646bah:MatthewCalderoneMember2025-04-012025-06-300001443646bah:MatthewCalderoneMember2025-06-30
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 32,500 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 October to reduce cost 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. There has been a marked increase in negative publicity regarding government contractors (including the Company) in connection with the U.S. government’s efforts to improve efficiency and reduce costs, which could harm our reputation and could have a material impact on our business, results of operations and financial condition.
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, has 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.
The President has issued two specific Executive Orders that may cause future changes, the impact of which remains uncertain, 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. Likewise, both the House and Senate versions of the National Defense Authorization Act contemplate “generational” procurement reforms that introduce further uncertainty. The Senate draft contains a provision that would favor new entrants over traditional defense contractors by removing certain obligations only for new entrants. While the impact of these reforms on our business is uncertain, they could potentially lead to changes in the way we interact with the U.S. government. If certain commercial preferences are narrowly defined, these reforms could introduce new barriers that reduce the likelihood of direct award to companies such as Booz Allen.
On March 15, 2025, the President signed into law the Full-Year Continuing Appropriations and Extensions Act, 2025, which funded the U.S. government under a continuing resolution through September 30, 2025. At this time, Congress has failed to approve additional appropriations to fund the U.S. government, resulting in a government shutdown. A prolonged government shutdown is expected to have a negative impact on our business, financial condition and operating results.
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:
| | | | | | | | | | | |
| |
| September 30,
2025 | | September 30,
2024 |
| | (In millions) |
Backlog(1): | | | |
| Funded | $ | 5,440 | | | $ | 5,794 | |
| Unfunded | 10,668 | | | 8,946 | |
| Priced options | 24,080 | | | 24,326 | |
| Total backlog | $ | 40,188 | | | $ | 39,066 | |
| | | |
(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 September 30, 2025 and March 31, 2025, the Company had $12.1 billion and $9.5 billion of remaining performance obligations, respectively, and we expect to recognize approximately 65% of the remaining performance obligations as of September 30, 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 September 30, 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 3% from September 30, 2024 to September 30, 2025. Additions to funded backlog during the twelve months ended September 30, 2025 and 2024 totaled $11.4 billion and $11.7 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 September 30, 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:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
September 30, | | | | Six Months Ended
September 30, | | |
| | 2025 | | 2024 | | | | 2025 | | 2024 | | |
| | (Unaudited) | | (Unaudited) | | Percent | | (Unaudited) | | (Unaudited) | | Percent |
| | (In millions) | | Change | | (In millions) | | Change |
| Revenue | $ | 2,890 | | | $ | 3,146 | | | (8) | % | | $ | 5,814 | | | $ | 6,088 | | | (5) | % |
| Operating costs and expenses: | | | | | | | | | | | |
| Cost of revenue | 1,340 | | | 1,362 | | | (2) | % | | 2,763 | | | 2,734 | | | 1 | % |
| Billable expenses | 918 | | | 968 | | | (5) | % | | 1,799 | | | 1,913 | | | (6) | % |
| General and administrative expenses | 308 | | | 225 | | | 37 | % | | 631 | | | 554 | | | 14 | % |
| Depreciation and amortization | 41 | | | 42 | | | (2) | % | | 81 | | | 83 | | | (2) | % |
| Total operating costs and expenses | 2,607 | | | 2,597 | | | — | % | | 5,274 | | | 5,284 | | | — | % |
| Operating income | 283 | | | 549 | | | (48) | % | | 540 | | | 804 | | | (33) | % |
| Interest expense, net | (48) | | | (46) | | | 4 | % | | (92) | | | (84) | | | 10 | % |
| Other (expense) income | (2) | | | 10 | | | (120) | % | | 1 | | | 7 | | | (86) | % |
| Income before income taxes | 233 | | | 513 | | | (55) | % | | 449 | | | 727 | | | (38) | % |
| Income tax expense | 58 | | | 123 | | | (53) | % | | 3 | | | 172 | | | (98) | % |
| Net income | $ | 175 | | | $ | 390 | | | (55) | % | | $ | 446 | | | $ | 555 | | | (20) | % |
Revenue
Revenue decreased 8% to $2,890 million, and 5% to $5,814 million, respectively, for the three and six months ended September 30, 2025 compared to the prior year period. The decrease was primarily driven by a decrease in headcount due to the impact of a slowed procurement environment and continued uncertainty in the U.S. government and regulatory environment. 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 additional people as we grow our business and are awarded new contracts, task orders, and additional work under our existing contracts, and the hiring of people with specific skill sets and security clearances as required by our additional work.
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 46% and 43% for the three months ended September 30, 2025 and 2024, respectively, and 48% and 45% for the six months ended September 30, 2025 and 2024, respectively. Cost of revenue decreased 2% and increased 1% for the three and six months ended September 30, 2025, respectively, as compared to the three and six months ended September 30, 2024.
The decrease for the quarter-to-date period was primarily due to decreases in salaries and related benefits due to overall headcount reductions. The increase for the year-to-date period was primarily due to increases in salary and related benefits. Cost of revenue for the year-to-date period includes costs incurred related to employee severance and related charges from the restructuring disclosed in the first quarter. See Note 13, “Supplemental Condensed Consolidated Financial Information,” to the condensed consolidated financial statements for further information. The increase for the year-to-date period was also due to higher medical benefits partially offset by decreases in other business expenses as a result of 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 32% and 31% for the three months ended September 30, 2025 and 2024, respectively, and 31% for both the six months ended September 30, 2025 and 2024. Billable expenses decreased 5% and 6% for the three and six months ended September 30, 2025, respectively, compared to the three and six months ended September 30, 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 expenses from contracts requiring the Company to incur other direct expenses on behalf of customers 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 were 11% and 7% for the three months ended September 30, 2025 and 2024, respectively, and 11% and 9% for the six months ended September 30, 2025 and 2024, respectively. General and administrative expenses increased 37% and 14% for the three and six months ended September 30, 2025, respectively, compared to the three and six months ended September 30, 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 both the quarter and year-to-date periods. This was partially offset by decreases in salaries and related benefits, primarily due to overall headcount reductions. General and administrative expenses for the year-to-date period include costs incurred related to employee severance and related charges from the restructuring disclosed in the first quarter. See Note 13, “Supplemental Condensed Consolidated Financial Information,” to the condensed consolidated financial statements for further information.
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 decreased 2% for both the three and six months ended September 30, 2025, as compared to the three and six months ended September 30, 2024.
Operating Income
Operating income decreased 48% to $283 million and decreased 33% to $540 million for the three and six months ended September 30, 2025, respectively, compared to the three and six months ended September 30, 2024, reflecting decreases in operating margin from 17% to 10% and from 13% to 9%. Operating income was driven by the factors noted above.
Interest Expense, net
Interest expense, net increased 4% and 10% for the three and six months ended September 30, 2025, respectively, as compared to the three and six months ended September 30, 2024, primarily due to increases of $10 million and $19 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 (Expense) Income
Other (expense) income decreased to $(2) million for the three months ended September 30, 2025 from $10 million for the three months ended September 30, 2024, and decreased to $1 million for the six months ended September 30, 2025 from $7 million for the six months ended September 30, 2024. The decreases in other (expense) income were primarily driven by larger increases in the fair value of the Company’s investments reflected in fiscal 2025 as compared to fiscal 2026.
Income Tax Expense
Income tax expense decreased 53% for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, while the effective tax rate increased to 24.9% from 24.0%. The decrease in income tax expense was primarily driven by the decrease in pre-tax income.
Income tax expense decreased 98% for the six months ended September 30, 2025 as compared to the six months ended September 30, 2024, while the effective tax rate decreased to 0.7% from 23.7%. 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 prior quarter, the decrease in pre-tax income, and the accrual of interest income on the long-term tax receivable.
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:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
September 30, | | Six Months Ended
September 30, |
| (In millions, except share and per share data) | 2025 | | 2024 | | 2025 | | 2024 |
| | (Unaudited) | | (Unaudited) |
| Revenue, Excluding Billable Expenses | | | | | | | |
| Revenue | $ | 2,890 | | $ | 3,146 | | $ | 5,814 | | $ | 6,088 |
| Less: Billable expenses | 918 | | 968 | | 1,799 | | 1,913 |
Revenue, Excluding Billable Expenses* | $ | 1,972 | | $ | 2,178 | | $ | 4,015 | | $ | 4,175 |
| EBITDA and Adjusted EBITDA |
| Net income | $ | 175 | | $ | 390 | | $ | 446 | | $ | 555 |
| Income tax expense | 58 | | 123 | | 3 | | 172 |
| Interest expense, net and other income (expense) | 50 | | 36 | | 91 | | 77 |
| Depreciation and amortization | 41 | | 42 | | 81 | | 83 |
| EBITDA | 324 | | 591 | | 621 | | 887 |
| Change in provision for claimed costs (a) | — | | (113) | | — | | (113) |
| Other corporate expenses (b) | — | | 1 | | 14 | | 7 |
| Insurance recoveries (c) | — | | (115) | | — | | (115) |
| Adjusted EBITDA | $ | 324 | | $ | 364 | | $ | 635 | | $ | 666 |
*Revenue, Excluding Billable Expenses includes $113 million of revenue for the three and six months ending September 30, 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 a cost management initiative and restructuring of the Civil business. 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 September 30, 2025, our total liquidity was $1.8 billion, consisting of $816 million of cash and cash equivalents and $999 million 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:
| | | | | | | | | | | |
| | September 30,
2025 | | March 31,
2025 |
| | (Unaudited) | | |
| | (In millions) |
| Cash and cash equivalents | $ | 816 | | | $ | 885 | |
| Total debt | $ | 3,960 | | | $ | 3,998 | |
| | | | | | | | | | | |
| Six Months Ended
September 30, |
| 2025 | | 2024 |
| (Unaudited) | | (Unaudited) |
| (In millions) |
| Net cash provided by operating activities | $ | 540 | | | $ | 639 | |
| Net cash used in investing activities | (61) | | | (153) | |
| Net cash used in financing activities | (548) | | | (481) | |
| Net (decrease) increase in cash and cash equivalents | $ | (69) | | | $ | 5 | |
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 shareholders through share repurchases, quarterly dividends, and special dividends.
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;
•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.
Cash Flows
Operating Cash Flow
Net cash provided by operations was $540 million for the six months ended September 30, 2025 compared to $639 million in the prior year period. Fiscal 2025 operating cash 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), as well as the change to the Company’s payroll cadence during the second quarter of fiscal 2025, both resulting in a positive operating cash flow impact for fiscal 2025. The overall decrease in operating cash flow was partially offset by lower cash taxes paid in fiscal 2026 as compared to fiscal 2025.
Investing Cash Flow
Net cash used in investing activities was $61 million in the six months ended September 30, 2025 compared to $153 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.
Financing Cash Flow
Net cash used in financing activities was $548 million in the six months ended September 30, 2025 compared to $481 million in the prior year period. The increase in financing cash used year over year was primarily due to an increase in share repurchases of $47 million and an increase in term loan payments of $21 million.
Dividends and Share Repurchases
On October 24, 2025, the Company announced a regular quarterly cash dividend in the amount of $0.55 per share. The quarterly dividend is payable on December 2, 2025 to stockholders of record on November 14, 2025.
During the three and six months ended September 30, 2025, quarterly cash dividends of $0.55 and $1.10 per share, respectively, were declared and paid totaling $68 million and $138 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 six months of fiscal 2026, the Company purchased 3.3 million shares of the Company's Class A Common Stock for an aggregate of $361 million. As of September 30, 2025, the Company had approximately $384 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 six months ended September 30, 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) | September 30, 2025 | | March 31, 2025 | |
| Intercompany receivables from non-guarantor subsidiaries | $ | 14 | | | $ | 13 | | |
| Total other current assets | $ | 3,186 | | | $ | 3,272 | | |
| Goodwill and intangible assets, net of accumulated amortization | $ | 1,505 | | | $ | 1,501 | | |
| Total other non-current assets | $ | 922 | | | $ | 978 | | |
| Intercompany payables to non-guarantor subsidiaries | $ | 3 | | | $ | 91 | | |
| Total other current liabilities | $ | 1,818 | | | $ | 1,819 | | |
| Long-term debt, net of current portion | $ | 3,876 | | | $ | 3,915 | | |
| Total other non-current liabilities | $ | 427 | | | $ | 535 | | |
Summarized Statement of Operations
| | | | | |
| (in millions) | Six Months Ended
September 30, 2025 |
| Revenue | $ | 5,762 | |
| Revenue from non-guarantor subsidiaries | $ | 9 | |
| Operating income | $ | 567 | |
| Operating loss from non-guarantor subsidiaries | $ | (14) | |
| Net income | $ | 453 | |
| Net income attributable to the Obligor Group | $ | 453 | |
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.