Booz Allen Hamilton Reports Revenue Decline Amid Government Shutdown

Booz Allen Hamilton Holding Corporation reported a decline in financial performance for the three and nine months ended December 31, 2025, with revenues of $2.62 billion and $8.43 billion, respectively, representing decreases of 10% and 6% compared to the same periods in the previous fiscal year. The decrease in revenue was attributed to a slowed procurement and funding environment, exacerbated by a government shutdown during the third quarter. Operating income also fell, decreasing 21% to $230 million for the quarter and 30% to $770 million for the nine-month period, reflecting a decline in operating margins from 10% to 9% and from 12% to 9%, respectively.

In terms of operational metrics, Booz Allen's total assets decreased to $7.05 billion as of December 31, 2025, down from $7.31 billion at the end of the previous fiscal year. The company’s employee headcount stood at approximately 31,600, consistent with the previous period. The company also reported a total backlog of $38.46 billion, an increase of 2% from the prior year, with funded backlog at $4.21 billion and unfunded backlog at $10.06 billion. The company expects to recognize approximately 65% of its remaining performance obligations as revenue over the next 12 months.

Booz Allen's strategic developments included a focus on cost management initiatives, with actions taken to reduce costs by approximately $150 million annually. The company also completed a divestiture on November 30, 2025, resulting in a pre-tax gain of $7 million. Additionally, the company repurchased 4.7 million shares of its Class A Common Stock for $486 million during the nine months ended December 31, 2025, as part of its ongoing share repurchase program, which has approximately $759 million remaining.

The company’s net income for the three months ended December 31, 2025, was $200 million, a 7% increase from $187 million in the prior year, while net income for the nine-month period decreased by 13% to $646 million. The effective income tax rate for the quarter was reported at -7.0%, significantly lower than the 24.7% rate from the previous year, primarily due to a reduction in income tax reserves following the completion of IRS examination procedures. Looking ahead, Booz Allen anticipates continued challenges due to the uncertain U.S. budgetary environment and ongoing regulatory changes, which may impact future performance and contract awards.