Second Quarter Revenue Increases by 5.5 percent to $1.39 billion

Year-over-year Headcount Increase of more than 500

Record backlog of $13.6 billion

Diluted Earnings per Share of $0.41 and Adjusted Diluted Earnings per Share¹ of $0.46

Quarterly dividend of $0.15 per share, payable on November 30, 2016

McLean, Virginia; November 2, 2016 – Booz Allen Hamilton Holding Corporation (NYSE:BAH), the parent company of management and technology consulting and engineering services firm Booz Allen Hamilton Inc., today announced preliminary results for the second quarter of fiscal 2017.

The Company achieved a third consecutive quarter of healthy year-over-year organic revenue growth and delivered improved earnings over the prior-year period. Solid awards in the second quarter of fiscal 2017 generated a book-to-bill ratio of 2.17x and an 8.7 percent increase in total backlog over the prior-year quarter, which itself had been a near three-year high. Additionally, headcount increased by more than 500 employees over the prior-year period and 230 employees over the first quarter of fiscal 2017.

“Our strong second quarter financial results reinforce that Booz Allen is on a steady path to accelerated growth,” said Horacio Rozanski, President and Chief Executive Officer. “Both new and long-standing clients recognize that our people bring uncommon solutions by applying the full breadth of our strengths in consulting, technology, and mission knowledge.”

The Company authorized and declared a regular dividend of $0.15 per share, payable on November 30, 2016, to stockholders of record on November 10, 2016.

Financial Review

Second Quarter 2016 – A summary of additional results for the second quarter of fiscal 2017 and the key factors driving those results is below:

• Gross Revenue was $1.39 billion in the second quarter of fiscal 2017, an increase of 5.5 percent compared with the prior year period, primarily driven by increases in client staff headcount and staff billability, and therefore direct labor, to meet increased client demand.  The growth was also driven by an increase in billable expenses.
• Operating Income increased to $117.7 million from $108.8 million and Adjusted Operating Income¹ increased to $122.0 million from $109.9 million in the prior-year period, both primarily driven by the same factors impacting Gross Revenue.  Additionally, Operating Income for the second quarter of fiscal 2017 included one-time charges associated with the July 2016 debt refinancing transaction.
• Net Income increased to $62.8 million from $56.2 million and Adjusted Net Income¹ increased to $69.2 million from $57.6 million in the prior-year period.  The increases in Net Income and Adjusted Net Income were primarily due to the same factors impacting Operating Income and Adjusted Operating Income, as well as a lower effective tax rate.  The increase in Net Income was partially offset by one-time charges associated with the July 2016 debt refinancing transaction.
• Adjusted EBITDA¹ increased to $135.7 million from $124.2 million in the prior year period.  The increase was driven by the same factors impacting Gross Revenue and Adjusted Operating Income.
• Diluted EPS increased to $0.41 from $0.37 in the prior year period, and Adjusted Diluted EPS increased to $0.46 from $0.39. The increases were driven by the same factors affecting Net Income and Adjusted Net Income, as well as a slight negative impact from a higher diluted share count in the current period, compared to the prior-year period.

As of September 30, 2016, total backlog was $13.6 billion, compared to $12.6 billion as of September 30, 2015, an increase of 8.7 percent.  All components of backlog grew during the quarter as compared to the prior year. Strong awards in the quarter generated a book-to-bill ratio of 2.17x.

First Half Fiscal 2017 – Booz Allen’s cumulative performance for the first and second quarters of fiscal 2017, driven by the same factors discussed above, has resulted in:

• Gross Revenue of $2.82 billion for the first half of fiscal 2017, compared with $2.67 billion for the prior year period.
• Operating Income and Adjusted Operating Income for the first half of fiscal 2017 of $247.0 million and $252.4 million compared with $235.0 million and $237.1 million, respectively, in the first half of fiscal 2016.
• Net Income and Adjusted Net Income for the first half of fiscal 2017 of $130.6 million and $138.5 million compared with $120.5 million and $123.4 million, respectively, in the prior year period.
• Adjusted EBITDA for the first half of fiscal 2016 of $279.5 million compared with $265.4 million in the first half of fiscal 2016.
• Diluted EPS of $0.86 and Adjusted Diluted EPS of $0.92 for the first half of fiscal 2017, compared with $0.80 and $0.83, respectively, for the first half of fiscal 2016.

Net cash provided by operating activities was $217.1 million and Free Cash Flow¹ was $201.9 million in the first half of fiscal 2017.  The increase in cash flow generation from the prior year was primarily due to higher profitability, a reduction in working capital needs and lower cash tax payments during the first half of fiscal 2017 in comparison to the prior year period.

¹ Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Diluted EPS, Adjusted Operating Income, Adjusted Net Income, and Free Cash Flow are non-GAAP financial measures. See “Non-GAAP Financial Information” below for additional detail.

Financial Outlook

For our full fiscal year 2017 we are raising the bottom end of the guidance we issued on May 18, 2016.  For the full year, we expect revenue to increase in the range of three percent to five percent. At the bottom line, for the full year, we are forecasting diluted EPS to be in the range of $1.63 to $1.70 and Adjusted Diluted EPS to be on the order of $1.68 to $1.75.

These EPS estimates are based on fiscal 2017 estimated average diluted shares outstanding of approximately 150 million shares, and a 39.3 percent effective tax rate, which reflects the qualification of certain federal and state tax credits during the second quarter of fiscal 2017.

Conference Call Information

Booz Allen Hamilton will host a conference call at 8 a.m. EDT on Wednesday, November 2, 2016, to discuss the financial results for its second quarter of fiscal year 2017 (ended September 30, 2016).

Analysts and institutional investors may participate on the call by dialing (877) 375-9141 International: (253) 237-1151. The conference call will be webcast simultaneously to the public through a link on the investor relations section of the Booz Allen Hamilton web site at investors.boozallen.com. A replay of the conference call will be available online at investors.boozallen.com beginning at 11 a.m. EDT on November 2, 2016, and continuing for 30 days.