Shares of Booz Allen Hamilton Holding Corporation (NYSE:BAH) climbed 6.7% after the consulting and advanced technology group reported third-quarter fiscal 2026 results that comfortably exceeded earnings expectations, offsetting a notable decline in revenue.
The company delivered adjusted earnings per share of $1.77 for the quarter, well ahead of the $1.29 analysts had forecast. Revenue, however, fell 10.2% year over year to $2.6 billion, missing the consensus estimate of $2.76 billion. Booz Allen attributed roughly $110 million of the revenue shortfall to the U.S. government shutdown, including $50 million tied to work that was not performed and $60 million deferred into the fourth quarter.
“Booz Allen’s third quarter results are on track and reflect disciplined execution in a dynamic environment,” said Horacio Rozanski, Booz Allen Chairman, CEO and President. “We continue to invest and accelerate our growth strategy as we position for the future.”
Despite the revenue pressure, profitability remained robust. Adjusted EBITDA reached $285 million, translating into a margin of 10.9%. The company also reported a record backlog of $38 billion at the end of the third quarter, although its quarterly book-to-bill ratio stood at 0.3x.
Cash generation improved sharply during the period, with free cash flow rising to $248 million from $134 million a year earlier—an increase of 85.1%. Booz Allen deployed $195 million of capital in the quarter and repurchased approximately 1.1% of its outstanding shares.
Looking ahead, the company tightened its full-year fiscal 2026 revenue guidance to a range of $11.3 billion to $11.4 billion, down from the prior outlook of $11.3 billion to $11.5 billion and below the analyst consensus of $11.67 billion. At the same time, Booz Allen raised its adjusted EPS forecast to between $5.95 and $6.15, up from $5.45 to $5.65, with the midpoint of $6.05 slightly under the consensus estimate of $6.07.