Government consulting firm Booz Allen Hamilton (NYSE: BAH) missed Wall Street’s revenue expectations in Q2 CY2026, with sales falling 4.2% year on year to $2.8 billion. Its GAAP profit of $1.63 per share was 16.5% above analysts’ consensus estimates.
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Booz Allen Hamilton (BAH) Q2 CY2026 Highlights:
- Revenue: $2.8 billion vs analyst estimates of $2.82 billion (4.2% year-on-year decline, 0.5% miss)
- EPS (GAAP): $1.63 vs analyst estimates of $1.40 (16.5% beat)
- Adjusted EBITDA: $334 million vs analyst estimates of $303 million (11.9% margin, 10.2% beat)
- Operating Margin: 10%, up from 8.8% in the same quarter last year
- Free Cash Flow Margin: 9.3%, up from 3.3% in the same quarter last year
- Market Capitalization: $7.9 billion
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
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $11.09 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 sales grew at a solid 7% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Booz Allen Hamilton’s recent performance shows its demand has slowed as its revenue was flat over the last two years. 
This quarter, Booz Allen Hamilton missed Wall Street’s estimates and reported a rather uninspiring 4.2% year-on-year revenue decline, generating $2.8 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 3.8% over the next 12 months. Although this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average.
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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.
Looking at the trend in its profitability, Booz Allen Hamilton’s adjusted operating margin might have 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.
In Q2, Booz Allen Hamilton generated an adjusted operating margin profit margin of 10.7%, up 1 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Booz Allen Hamilton’s EPS grew at 9.1% compounded annual growth rate over the last five years, higher than its 7% 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 17% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.
In Q2, Booz Allen Hamilton reported EPS of $1.63, down from $2.18 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Booz Allen Hamilton’s full-year EPS to shrink by 5.6% from $6.40 to $6.04.
Key Takeaways from Booz Allen Hamilton’s Q2 Results
It was good to see Booz Allen Hamilton beat analysts’ EPS expectations this quarter. On the other hand, its revenue slightly missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 1.9% to $67.10 immediately after reporting.
Booz Allen Hamilton had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
