Booz Allen's approach to prototyping with PAR in its fold
Booz Allen Hamilton's corporate headquarters in McLean, Virginia. Photo by Kevin Dietsch / Getty Images
By
Ross Wilkers
Company leaders describe to Wall Street how they have integrated PAR Government Systems since that acquisition's closure and how they see civilian agencies feeling the turbulence of election season.
Hardware manufacturing is not in the DNA of Booz Allen Hamilton and that most likely will remain the case for the foreseeable future, barring some radical shift in the company’s thinking.
But hardware still represents much of what the Defense Department focuses its buying energy on, so some involvement on Booz Allen’s part is to be expected and especially regarding the software in the platforms.
During Booz Allen’s fiscal second quarter earnings call with investors Friday, one analyst highlighted how the firm’s acquisition of PAR Government Systems in June brought with it both rapid prototyping facilities and a set of offerings for the Tactical Assault Kit.
TAK is a set of Android and Windows smart devices that are designed to facilitate situational awareness for military users and let developers add functionality over time. The Air Force Research Laboratory created TAK in 2010 to demonstrate robust information sharing in a mobile format.
On the analyst call, chief executive Horacio Rozanski said prototyping is an “accelerating area of focus” for Booz Allen in its defense business. The company has integrated much of its prototyping function into three facilities so it can “gain scale and expertise, and accelerate all of that.”
“We think about ourselves as the people that can really integrate across the entirety of that solution, we don't expect we're going to be making a lot of these things,” Rozanski told analysts. “We expect that we can partner, we expect that we can bring to all use technologies to play much faster. We can adapt things that are already out there, perhaps for commercial, even consumer use into these missions.”
The upcoming election was also on the mind of analysts on the call. Rozanski said civilian agencies are the ones facing greater uncertainty and more limited visibility into whatever the next administration’s domestic agenda could look like.
Disruption in the procurement environment is also a fact of life in an environment full of turbulence. For many election years, Booz Allen’s modus operandi has often been to be aggressive in the first half of its fiscal year in preparation for a rockier second half.
When talking with analysts, Rozanski typically does not shy away from those political factors out of the company’s control and did not on Friday either.
“It’s inevitable to know that we're 11 days from a very significant election that will not just affect who's in the White House, but also could affect who controls Congress and that does create some potential for reduced visibility and a change of priorities and agendas in the near term,” Rozanski said.
“Geopolitically, there are two ongoing wars in the Middle East and Eastern Europe and increasing tensions in the Indo-Pacific, which also affects the entirety of our markets, and so taken together, this is a more volatile external environment that we've seen in a while.”
Fiscal second quarter revenue of $3.15 billion was 18% higher than the prior year period, while profit of $364 million represented a 25.2% increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
Booz Allen now sees full-year revenue growing 11%-to-13% and adjusted EBITDA of $1.3 billion-to-$1.33 billion, up from the prior respective ranges given out in the company’s initial outlook to start FY 2025.
Headcount of 35,800 employees as of the quarter’s end showed a 8.2% year-over-year increase.