Booz Allen reported third-quarter adjusted earnings per share of $1.23, surpassing consensus estimates by $0.05, while revenue of $2.49 billion fell short of the street view by roughly $70 million. The company cited slower federal procurement spending in its national security segment and softer activity in civil markets as primary headwinds. In response, management lowered its full-year fiscal 2026 sales forecast from a prior range of $10.2 billion–$10.4 billion to $10.0 billion–$10.2 billion. Net bookings for the quarter reached $3.1 billion, leaving a total backlog of $38 billion as of January 23, but free cash flow narrowed to $150 million from $210 million a year earlier. Following the earnings release, the stock dipped 8.1%.

U.S. Treasury Secretary Scott Bessent announced the termination of all 31 contracts with Booz Allen, representing $4.8 million in annual spending and $21 million in total obligations. The move stems from a breach between 2018 and 2020 in which former Booz Allen consultant Charles Littlejohn illicitly accessed and leaked confidential tax returns for approximately 406,000 taxpayers, including the returns of a former president. Littlejohn pleaded guilty and received a five-year prison sentence. While Treasury contracts account for slightly under 0.05% of Booz Allen’s projected fiscal 2025 revenue of $12 billion, the cancellation heightens scrutiny of the firm’s risk controls and may pressure future federal award opportunities.