Financial Analysis

Commitments and Contingencies Government Contracting Matters - Provision for Claimed Costs U.S. government contracts and subcontracts are subject to extensive legal and regulatory requirements. From time to time and in the ordinary course of business, agencies of the U.S. government, including the Defense Contract Audit Agency (DCAA), audit the Companys claimed costs and conduct inquiries and investigations of our business practices with respect to government contracts to determine whether the Company's operations are conducted in accordance with these requirements and the terms of the relevant contracts. Management believes it has recorded the appropriate provision for claimed costs for any audit, inquiry, or investigation of which it is aware that may be subject to any reductions and/or penalties. As of June 30, 2026 and March 31, 2026, the Company had recorded liabilities (included in accounts payable and other accrued expenses) of approximately $248 million for estimated adjustments to claimed costs based on its historical DCAA audit results, including the final resolution of such audits with the Defense Contract Management Agency (DCMA), for claimed costs incurred subsequent to fiscal 2011. Leases On November 12, 2025, the Company entered into two separate 15-year lease agreements for two corporate office spaces in Reston, Virginia. The Company plans to relocate its headquarters to these office spaces in the fall of 2027, dependent upon the timing of the completion of va …

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Debt Debt consisted of the following at the periods presented below: June 30, 2026 March 31, 2026 Maturity Interest Rate Outstanding Balance Interest Rate Outstanding Balance Term Loan A-1 9/7/2027 4.970 % $ 714 5.018 % $ 714 Term Loan A-2 2/27/2031 4.870 % $ 746 4.923 % $ 750 Senior Notes due 2028 9/1/2028 3.875 % 700 3.875 % 700 Senior Notes due 2029 7/1/2029 4.000 % 500 4.000 % 500 Senior Notes due 2033 8/4/2033 5.950 % 650 5.950 % 650 Senior Notes due 2035 4/15/2035 5.950 % 650 5.950 % 650 Less: Unamortized debt issuance costs and discount on debt (24) (24) Total 3,936 3,940 Less: Current portion of long-term debt (19) (19) Long-term debt, net of current portion $ 3,917 $ 3,921 Booz Allen Hamilton Inc., a wholly owned subsidiary of Booz Allen Hamilton Holding Corporation, as borrower, and Booz Allen Hamilton Holding Corporation, as guarantor, are parties to a Credit Agreement dated as of July 31, 2012, as amended, which as of June 30, 2026, provides the Company with facility term loans of $1,460 million and a $1,500 million revolving credit facility (the Revolving Credit Facility), with a sub-limit for letters of credit of $200 million. The senior notes due 2035, senior notes due 2033, senior notes due 2029 and senior notes due 2028 (together, the Senior Notes) were issued by Booz Allen Hamilton in four separate and distinct tranches, which all bear interest at specified rates and have individual and separate maturity dates. All Senior Notes indentures contain certain cov …

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The following series of tables presents our revenue disaggregated by these categories. Revenue by Contract Type: Three Months Ended June 30, 2026 2025 Cost-reimbursable $ 1,607 57 % $ 1,758 60 % Time-and-materials 616 22 % 638 22 % Fixed-price 577 21 % 528 18 % Total Revenue $ 2,800 100 % $ 2,924 100 % Revenue by Customer Type: Three Months Ended June 30, 2026 2025 National Security 2,028 72 % 2,001 68 % Civil and Commercial 772 28 % 923 32 % Total Revenue $ 2,800 100 % $ 2,924 100 % Revenue by Whether the Company Acts as a Prime Contractor or a Subcontractor: Three Months Ended June 30, 2026 2025 Prime Contractor $ 2,651 95 % $ 2,741 94 % Subcontractor 149 5 % 183 6 % Total Revenue $ 2,800 100 % $ 2,924 100 %

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Income Taxes The Companys effective income tax rates were 21.1% and (25.5)% for the three months ended June 30, 2026 and 2025, respectively. Our effective tax rates for these periods differ from the federal statutory rate of 21.0% primarily due to the inclusion of state income taxes and permanent rate differences, which are predominantly related to certain executive compensation and the accrual of reserves for uncertain tax positions, offset by research and development tax credits, excess tax benefits for employee share-based compensation, and the Foreign-Derived Deduction-Eligible Income deduction. In addition, the fiscal year 2026 effective tax rate was also lower related to adjustments to the Companys uncertain tax position (UTP) reserves as outlined below. As of June 30, 2026 and March 31, 2026, the Company recorded $80 million and $75 million, respectively, of reserves for uncertain tax positions (UTPs) primarily related to research and development tax credits. During the quarter ended June 30, 2025, the Company reduced its UTPs by $89 million , primarily related to an $86 million adjustment from the completion of Internal Revenue Service (the IRS) examination procedures of the Companys amended federal income tax returns through fiscal year 2021. No similar adjustment was recorded in the three months ended June 30, 2026 . Due to the magnitude of the refund requested in the amended returns, the case will be referred to the Joint Committee on Taxation (the JCT) for further …

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Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which is intended to enhance transparency into the nature and function of certain expenses as specified by the ASU. The guidance does not change the expense captions an entity presents on the face of the income statement; rather, it requires public business entities to provide disaggregated disclosures of certain expense captions in the notes to the financial statements. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, and can be applied retrospectively or prospectively. The Company is currently assessing the impact of this update; however, its adoption will affect only the Companys disclosures, with no impacts to its results of operations or financial condition. In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software , to modernize the accounting for and disclosure of internal-use software costs. The guidance removes all references to project stages, defines the threshold to begin capitalizing costs, and clarifies the disclosure requirements of capitalized software costs. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years, and can be applied retrospectively, prospectively, or on a modified transition a …

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Revenue We disaggregate our revenue from contracts with customers by contract type and by customer type, as well as by whether the Company acts as prime contractor or subcontractor, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables presents our revenue disaggregated by these categories. Revenue by Contract Type: Three Months Ended June 30, 2026 2025 Cost-reimbursable $ 1,607 57 % $ 1,758 60 % Time-and-materials 616 22 % 638 22 % Fixed-price 577 21 % 528 18 % Total Revenue $ 2,800 100 % $ 2,924 100 % Revenue by Customer Type: Three Months Ended June 30, 2026 2025 National Security 2,028 72 % 2,001 68 % Civil and Commercial 772 28 % 923 32 % Total Revenue $ 2,800 100 % $ 2,924 100 % Revenue by Whether the Company Acts as a Prime Contractor or a Subcontractor: Three Months Ended June 30, 2026 2025 Prime Contractor $ 2,651 95 % $ 2,741 94 % Subcontractor 149 5 % 183 6 % Total Revenue $ 2,800 100 % $ 2,924 100 % Performance Obligations Remaining performance obligations represent the transaction price of exercised contracts for which work has not yet been performed, irrespective of whether funding has or has not been authorized and appropriated as of the date of exercise. Remaining performance obligations exclude negotiated but unexercised options, the unfunded value of expired contracts, and certain variable consideration that was determined to be …

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