Booz Allen Hamilton Holding Corp
For the period ended Dec 31, 2025. Filed Jan 23, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Jan 23, 2026
BAH$85.35-4.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-24.
0001628280-25-046176
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-01-23.
0001628280-26-003187
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 113 current paragraphs.
79 unchanged; 28 reworded; 6 added; 6 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
We have observed preparatory steps by the U.S. government to implement two specific Executive Orders 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. The FAR Council, the body responsible for issuing and maintaining the FAR, completed the preliminary stage of FAR reform efforts at the end of September 2025. The Office of Federal Procurement Policy and FAR Council have solicited feedback on these efforts and will turn next to the formal rulemaking process. Likewise, in early November 2025, the Secretary of War announced and released an associated memorandum regarding a new acquisition strategy and directing certain reforms addressing Department of Defense purchases of military weapons. The Secretary’s accompanying memorandum and strategy outline a number of actions focused on rebuilding the Defense Industrial Base, elevating and empowering the acquisition workforce, maximizing acquisition flexibility, developing high performance systems, and improving effective lifecycle risk management. While the impact of the aforementioned changes remains uncertain, the new acquisition strategy and streamlined procurement processes have the potential to have positive impacts on our business.
Current report
On December 18, 2025, the National Defense Authorization Act was signed into law, which included a number of reforms that may also impact our business. Although the final bill did not adopt more narrow commercial preferences or expand the statutory definition of contractors who qualify as nontraditional contractors, it did exempt contractors who meet that definition from certain burdensome compliance requirements. The continued focus on removing barriers to new entrants and any related future legislation could reduce the likelihood of direct awards to companies like Booz Allen and effect our competitive position.
Current report
On January 7, 2026, President Trump signed an Executive Order, “Prioritizing the Warfighter in Defense Contracting” (the “Executive Order”), that, among other things, limits stock buybacks and the payment of dividends by certain defense contractors. The Executive Order directs the Secretary of War to identify defense contractors that are underperforming on their contracts, not investing their own capital into necessary production capacity, not sufficiently prioritizing United States Government contracts, or whose production speed is insufficient as determined by the Secretary, and that have, during the period of underperformance or insufficient prioritization, investment, or production speed, engaged in any stock buy-back or corporate distribution. If the Company is identified pursuant to the Executive Order, it may have a negative impact on our dividends, stock buyback programs, and our ability to attract and retain talented executives.
Current report
Other Income (Expense)
Current report
•commitments and other discretionary investments, including potential capital calls for venture capital investments;
Current report
Net cash provided by operations was $801 million for the nine months ended December 31, 2025 compared to $790 million in the prior year period. The increase in operating cash was primarily driven by lower tax payments as compared to the prior year. This was partially offset by the $115 million in insurance recoveries received in fiscal year 2025, along with the change to the Company's payroll cadence during the second quarter of fiscal 2025.
Removed paragraphs (6)
Previous report
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.
Previous report
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.
Previous report
Other (Expense) Income
Previous report
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.
Previous report
•commitments and other discretionary investments;
Previous report
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.
Reworded paragraphs (28)
Previous wording
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.
Current wording
Our approximately 31,600 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.
Previous wording
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.
Current wording
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 the third fiscal quarter to reduce costs by approximately $150 million annually.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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, have 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.
Previous wording
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.
Current wording
On November 12, 2025, the President signed into law the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, which funded the U.S. government under a short-term continuing resolution through January 30, 2026. At this time, Congress has failed to approve additional appropriations to fund the U.S. government past that time, which could result in a government shutdown. A prolonged government shutdown could have a negative impact on our business, financial condition and operating results.
Previous wording
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.
Current wording
Our total backlog consists of contractual values which is inclusive of remaining performance obligations, unexercised option periods and other unexercised optional orders. As of December 31, 2025 and March 31, 2025, the Company had $10.5 billion and $9.5 billion of remaining performance obligations, respectively, and we expect to recognize approximately 65% of the remaining performance obligations as of December 31, 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 December 31, 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.
Previous wording
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.
Current wording
We view growth in total backlog as a key measure of our potential business growth. Total backlog increased by 2% from December 31, 2024 to December 31, 2025. Additions to funded backlog during the twelve months ended December 31, 2025 and 2024 totaled $11.0 billion and $11.8 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.
Previous wording
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.
Current wording
Revenue decreased 10% to $2,620 million, and 6% to $8,434 million, respectively, for the three and nine months ended December 31, 2025 compared to the prior year period. The decrease was primarily driven by the impact of a slowed procurement and funding environment, including the government shutdown that occurred in the third quarter of fiscal 2026. These factors drove a decrease in headcount, as well as a decline in billable expenses. 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.
Previous wording
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.
Current wording
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 the increases or decreases in labor and employee related costs as we are awarded contracts, task orders, and additional work under our existing contracts, and the hiring of people with specific skill sets and security clearances.
Previous wording
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.
Current wording
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 48% and 45% for both the three and nine months ended December 31, 2025 and 2024, respectively. Cost of revenue decreased 4% for the three months ended December 31, 2025, and remained flat for the nine months ended December 31, 2025, as compared to the three and nine months ended December 31, 2024. The decrease for the quarter-to-date period was primarily due to decreases in salaries and related benefits due to overall headcount reductions.
Previous wording
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.
Current wording
Billable expenses include direct subcontractor expenses, travel expenses, and other expenses incurred to perform on contracts. Billable expenses as a percentage of revenue were 30% and 32% for the three months ended December 31, 2025 and 2024, respectively, and 31% and 32% for the nine months ended December 31, 2025 and 2024, respectively. Billable expenses decreased 18% and 10% for the three and nine months ended December 31, 2025, respectively, compared to the three and nine months ended December 31, 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 other direct expenses as compared to the prior year.
Previous wording
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.
Current wording
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 was 12% for both the three months ended December 31, 2025 and 2024, respectively, and 11% and 10% for the nine months ended December 31, 2025 and 2024, respectively. General and administrative expenses decreased 7% and increased 6% for the three and nine months ended December 31, 2025, respectively, compared to the three and nine months ended December 31, 2024.
Previous wording
Fiscal 2025 reflects $115 million ininsurance 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.
Current wording
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 the year-to-date period. This was partially offset by decreases in salaries and related benefits, primarily due to overall headcount reductions, which also drove the decrease for the quarter-to-date period.
Previous wording
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 thethree and six months ended September 30, 2025, as compared to thethree and six months ended September 30, 2024.
Current wording
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 remained flat for the three months ended December 31, 2025, anddecreased 2%for thenine months ended December 31, 2025, respectively, as compared to thethree and nine months ended December 31, 2024.
Previous wording
Operating income decreased 48% to $283 million and decreased 33% to$540 millionfor 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.
Current wording
Operating income decreased 21% to $230 million and decreased 30% to$770 millionfor the three and nine months ended December 31, 2025, respectively, compared to the three and nine months ended December 31, 2024, reflecting decreases in operating margin from 10% to 9% and from 12% to 9%. Operating income was driven by the factors noted above.
Previous wording
Interest expense, netincreased 4% and 10% for thethree and sixmonths ended September 30, 2025, respectively, as compared to thethree 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.
Current wording
Interest expense, netincreased 12% and 10% for thethree and nine months ended December 31, 2025, respectively, as compared to thethree and nine months ended December 31, 2024, primarily due to increases of $10 million and $29 million in bond interest expense, respectively, driven by the $650 million Senior Notes due 2035 (issued in March of fiscal 2025). This was partially offset by lower interest rates on the Company’s term loans, as well as increases in interest income, reflecting the higher cash balances following the bond issuance noted above.
Previous wording
Other (expense) income decreased to$(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.
Current wording
Other income (expense), increased to$4 million for the three months ended December 31, 2025 from $(1) million for the three months ended December 31, 2024, and decreased to $5 million for the nine months ended December 31, 2025 from $6 million for the nine months ended December 31, 2024. The increase over the quarter-to-date period was primarily driven by a$7 million gain recognized on the sale of a group of contracts. Larger increases in the fair value of the Company’s investments reflected in fiscal 2025 as compared to fiscal 2026 offset the gain noted above, driving a decrease over the year to date period.
Previous wording
Income tax expense decreased 98% for the sixmonths ended September 30, 2025 as compared to thesix 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.
Current wording
Income tax expense decreased 121% and 104% for the three and nine months ended December 31, 2025 as compared to the three and nine months ended December 31, 2024. The effective tax rate decreased to (7.0)% from 24.7% for the three month period and to (1.6)% from 24.0% for the nine month period. 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 first quarter, the decrease in pre-tax income, and the tax benefit recognized in the third quarter as a result of a higher-than-estimated research and development tax credit and additional foreign derived intangible income deductions.
Previous wording
*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.
Current wording
*Revenue, Excluding Billable Expenses includes $113 million of revenue for the three and nine months ending December 31, 2024, resulting from the reduction to our provision for claimed costs as noted below.
Previous wording
(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”).
Current wording
(b) In fiscal 2026, other corporate expenses consist primarily of nonrecoverable costs associated with employee severance from cost management and restructuring initiatives, as well as transaction costs associated with a divestiture. 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”).
Previous wording
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.
Current wording
As of December 31, 2025, our total liquidity was $1.9 billion, consisting of $882 million of cash and cash equivalents and $1.0 billion 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.
Previous wording
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.
Current wording
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. 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 stockholders through share repurchases, quarterly dividends and special dividends.
Previous wording
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.
Current wording
Net cash used in investing activities was $52 million in the nine months ended December 31, 2025 compared to $184 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, as well as the proceeds from the divestiture of a group of contracts in the current year.
Previous wording
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.
Current wording
Net cash used in financing activities was $752 million in the nine months ended December 31, 2025 compared to $706 million in the prior year period. The increase in financing cash used over the prior year was primarily due to an increase in share repurchases of $24 million and an increase in term loan payments of $22 million.
Previous wording
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.
Current wording
On January 23, 2026, the Company announced a regular quarterly cash dividend in the amount of $0.59 per share. The quarterly dividend is payable on March 2, 2026 to stockholders of record on February 13, 2026.
Previous wording
During thethree 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.
Current wording
During thethree and nine months ended December 31, 2025, quarterly cash dividends of $0.55 and $1.65 per share, respectively, were declared and paid totaling$67 million and $205 million, respectively.
Previous wording
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.
Current wording
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 nine months of fiscal 2026, the Company purchased 4.7 million shares of the Company's Class A Common Stock for an aggregate of $486 million. As of December 31, 2025, the Company had approximately $759 million remaining under the repurchase program.
Previous wording
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.
Current wording
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 nine months ended December 31, 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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.