Booz Allen Hamilton reported fiscal third-quarter adjusted earnings per share of $1.77 on revenue of $2.6 billion, surpassing the consensus profit estimate of $1.27 per share despite coming in slightly below the expected revenue mark of $2.7 billion. The profit beat was driven by improved margins in the firm’s national security and digital solutions segments, where growth in cybersecurity and AI offerings helped offset lower consulting volumes in civil government services.

The company raised its full-year adjusted EPS guidance following a companywide cost-reduction program implemented in response to declines in government consulting budgets. Since the start of the fiscal year, Booz Allen has achieved $150 million in annualized savings by streamlining back-office operations and renegotiating supplier contracts. Management now expects full-year adjusted earnings to increase by 12%–14%, up from prior guidance of 8%–10%, illustrating the impact of these efficiency measures on the bottom line.

During the quarter, Booz Allen entered a strategic collaboration with leading venture capital firm Andreessen Horowitz to co-develop next-generation AI and cloud capabilities for federal clients, positioning the firm to capture a larger share of the growing $30 billion government technology modernization market. In the weeks ahead of the results, several analysts updated their models: Citigroup lifted its target on projected value by 17%, Jefferies and UBS made modest adjustments to reflect the new cost savings trajectory, while one major bank maintained a cautious stance despite acknowledging the stronger-than-expected earnings performance.