On January 23, Booz Allen Hamilton reported third-quarter earnings of $1.77 per share, beating the consensus estimate of $1.26 by over 40%. However, revenue fell to $2.62 billion, missing the Zacks Consensus Estimate by nearly 4% and declining from $2.92 billion a year earlier. Management attributed the revenue shortfall to delayed project starts in the commercial segment and softer demand for digital services. The company also trimmed its full-year 2026 sales outlook to a range of $10.8 billion–$11.0 billion, down from prior guidance of $11.0 billion–$11.2 billion, citing continued headwinds in key federal programs. Shares fell 8.1% following the release as investors weighed the mixed earnings beat against the lowered revenue forecast.

U.S. Treasury Secretary Scott Bessent announced the cancellation of all 31 Booz Allen contracts, representing $4.8 million in annual spending and $21 million in total obligations, after concluding the firm failed to safeguard sensitive taxpayer data. The action stems from a 2018–2020 IRS breach in which former employee Charles Littlejohn stole and leaked confidential returns for approximately 406,000 taxpayers, including those of President Trump. Littlejohn pleaded guilty and was sentenced to five years in prison. Despite the contracts accounting for less than 0.05% of Booz Allen’s $12 billion in fiscal 2025 revenue, the stock plunged 8.12% on the news, as investors reassessed the firm’s risk profile and government oversight pressures.