Government consulting firm Booz Allen Hamilton (NYSE: BAH) fell short of the markets revenue expectations in Q4 CY2025, with sales falling 10.2% year on year to $2.62 billion. On the other hand, the company’s outlook for the full year was close to analysts’ estimates with revenue guided to $11.35 billion at the midpoint. Its non-GAAP profit of $1.77 per share was 39.3% above analysts’ consensus estimates.

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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

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $11.41 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 7.8% annualized revenue growth over the last five years was solid. This is an encouraging starting point for our analysis because it shows Booz Allen Hamilton’s demand was higher than many business services companies.

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 annualized revenue growth of 5.1% over the last two years is below its five-year trend, but we still think the results were respectable.

This quarter, Booz Allen Hamilton missed Wall Street’s estimates and reported a rather uninspiring 10.2% year-on-year revenue decline, generating $2.62 billion of revenue.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.

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Operating Margin

Booz Allen Hamilton’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 8.8% 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 operating margin might 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 Q4, Booz Allen Hamilton generated an operating margin profit margin of 8.8%, down 1.2 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Booz Allen Hamilton’s EPS grew at a remarkable 11.2% compounded annual growth rate over the last five years, higher than its 7.8% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its 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 10.7% is similar to its five-year trend, implying stable earnings power.

In Q4, Booz Allen Hamilton reported adjusted EPS of $1.77, up from $1.55 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Booz Allen Hamilton’s full-year EPS of $6.35 to shrink by 8.4%.

Key Takeaways from Booz Allen Hamilton’s Q4 Results

It was good to see Booz Allen Hamilton beat analysts’ EPS expectations this quarter. We were also excited its full-year EPS guidance outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue missed. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 7.5% to $102.90 immediately after reporting.

Sure, Booz Allen Hamilton had a solid quarter, but if we look at the bigger picture, is this stock a buy? 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).