Government consulting firm Booz Allen Hamilton (NYSE: BAH) missed Wall Street’s revenue expectations in Q1 CY2026, with sales falling 6.4% year on year to $2.78 billion. The company’s full-year revenue guidance of $11.45 billion at the midpoint came in 0.7% below analysts’ estimates. Its non-GAAP profit of $1.78 per share was 33.1% above analysts’ consensus estimates.

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Company Overview

With roots dating back to 1914 and deep ties to nearly all U.S. cabinet-level departments, Booz Allen Hamilton (NYSE: BAH) provides management consulting, technology services, and cybersecurity solutions primarily to U.S. government agencies and military branches.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.

With $11.22 billion in revenue over the past 12 months, Booz Allen Hamilton is larger than most business services companies and benefits from economies of scale, enabling it to gain more leverage on its fixed costs than smaller competitors. This also gives it the flexibility to offer lower prices.

As you can see below, Booz Allen Hamilton’s 7.4% annualized revenue growth over the last five years was solid. This is an encouraging starting point for our analysis because it shows Booz Allen Hamilton’s demand was higher than many business services companies.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Booz Allen Hamilton’s recent performance shows its demand has slowed as its annualized revenue growth of 2.6% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

This quarter, Booz Allen Hamilton missed Wall Street’s estimates and reported a rather uninspiring 6.4% year-on-year revenue decline, generating $2.78 billion of revenue.

Looking ahead, sell-side analysts expect revenue to grow 1.9% over the next 12 months, similar to its two-year rate. This projection is underwhelming and suggests its newer products and services will not lead to better top-line performance yet. At least the company is tracking well in other measures of financial health.

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Adjusted Operating Margin

Booz Allen Hamilton’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 9.9% over the last five years. This profitability was mediocre for a business services business and caused by its suboptimal cost structure.

Analyzing the trend in its profitability, Booz Allen Hamilton’s adjusted operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Booz Allen Hamilton generated an adjusted operating margin profit margin of 9.5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Booz Allen Hamilton’s EPS grew at 10.9% compounded annual growth rate over the last five years, higher than its 7.4% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its adjusted operating margin didn’t improve.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Booz Allen Hamilton, its two-year annual EPS growth of 8.9% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.

In Q1, Booz Allen Hamilton reported adjusted EPS of $1.78, up from $1.61 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Booz Allen Hamilton’s full-year EPS of $6.52 to shrink by 3.5%.

Key Takeaways from Booz Allen Hamilton’s Q1 Results

It was good to see Booz Allen Hamilton beat analysts’ EBITDA and EPS expectations this quarter. EBITDA guidance also exceeded expectations. On the other hand, its revenue missed and its full-year EPS guidance fell slightly short of Wall Street’s estimates. Overall, this quarter was mixed. The stock traded up 7.1% to $81.81 immediately after reporting.

Is Booz Allen Hamilton an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).