Letter to Stockholders

Dear Colleagues and Fellow Stockholders,

At Booz Allen Hamilton, fiscal year 2017 was a year of growth and renewal. We had great success winning work that advances clients’ most important missions and solves their most pressing challenges. We expanded, diversified, and strengthened our talent base. We further implemented our long-term strategy for growth. And we energized our culture by rearticulating our purpose and values as an institution.

In a fast-changing world, our operational and strategic progress is built on a foundation of shared values and common purpose. And together, those things are propelling financial success. We are very pleased to report an industry-leading¹ performance in the fiscal year ending March 31, 2017:

• Gross revenue grew 7.4 percent to $5.8 billion
• Revenue excluding billable expenses² grew 4.1 percent to $4.1 billion
• Adjusted net income² grew 6.5 percent to $262 million
• Adjusted Diluted Earnings Per Share² were $1.75, up from $1.65 in fiscal 2016
• Adjusted EBITDA² margin was 9.4 percent, on par with FY16
• Total backlog at fiscal year-end was $13.6 billion, just below the record level set at the end of the second quarter of the fiscal year
• Headcount grew by more than 700 to 23,300

During fiscal 2017, we again increased our regular dividend and delivered strong total shareholder return, at 19 percent. We also further diversified our shareholder base. The Carlyle Group completed the sale of its equity position in the Company in December 2016. For more than 8 years, Booz Allen benefited from Carlyle’s expertise and counsel, and we are proud to have been an excellent investment for them.

Our financial performance rested on a clear plan set out at the beginning of the year and active engagement and stewardship from our Board of Directors. The Board was involved in oversight and decisions related to corporate governance, strategic planning and competitive positioning, executive compensation, risk management, fiduciary responsibility, and shareholder value creation.

In fiscal year 2018 and beyond, we will continue to strive to consistently deliver near- and long-term shareholder value through strong year-to-year operational performance, effective deployment of capital, and the implementation of our strategy for growth, called Vision 2020. 

A Strategy for Continued Growth

Fiscal year 2017 was the fourth year of implementing Vision 2020, which has guided both year-to-year execution of the business and longer-horizon decisions about where to invest to create quality growth that is truly sustainable. It has served as a blueprint as we navigated the contraction of the government market, beginning in 2012, and since our return to growth in 2016.

In fiscal 2017, our global commercial business again produced double-digit growth and our innovation agenda fostered an even more vibrant culture of creativity, teamwork, and possibility. We also grew and further scaled across our client base advanced capabilities in analytics, engineering, cyber, and digital solutions, while integrating them more tightly with our traditional strengths in consulting and mission understanding.

More and more clients—both new and long-standing—see us as the firm that can reliably solve their problems and deliver solutions, a point of differentiation that is bolstered by our growth-strategy investments and firmly grounded in our exceptional people, unique operating model, and collaborative culture.

Energizing Our Culture

Booz Allen’s culture has always been central to our success. In fiscal 2017, we rearticulated our shared values and developed a unifying purpose statement for the firm. The result captures both the meaning and motivation behind our work: At Booz Allen, we empower people to change the world. And we do so by demonstrating ferocious integrity, passionate service, collective ingenuity, unflinching courage, and a champion’s heart.

We believe these fundamentals help make Booz Allen a lasting, powerful investment. They matter to our clients and our strategic and community partners, and they are tremendously important to the people of our firm. Our purpose and values are, in fact, the core strengths of this institution because they challenge us to constantly reach forward and do better.

Thank you, Booz Allen employees and stockholders, for your contributions to our success this past year. After pivoting to growth in fiscal year 2016, we accomplished even more in fiscal 2017—operationalizing our strategy, accelerating our growth, and, most importantly, empowering people to change the world. We are proud of all that we have achieved together and look forward to the opportunities that lie ahead.

Footnotes:

1. Industry consists of CACI, CSRA, Engility Holdings, Leidos, Mantech, and Science Applications International Corp.
2. These measures are non-GAAP financial measures. For a reconciliation of these measures to GAAP, click here.