Booz Allen Hamilton Holding Corporation BAH

The business

Booz Allen sells consulting and technology work (artificial intelligence, cyber, digital, engineering, and analytics) almost entirely to the US federal government, which supplies nearly all of its revenue. The book splits by end market, and on the most recent clean disclosure that was Defense at 47% of revenue, Civil at 34%, and Intelligence at 17%, with a small global commercial remainder. The engine right now is Defense and Intelligence together, roughly 64% of revenue, which grew mid-single-digits in FY26; the Civil book, around 30% of revenue, is where the damage sits, down double-digits as federal agencies slowed spending. By contract type the mix is cost-reimbursable at 59% of revenue, time-and-materials at 22%, and fixed-price at 19%, so most of the book is cost-plus work tied directly to agency funding decisions.

The qualitative fact the financials do not show is that essentially every dollar depends on federal appropriations and the pace of procurement, both of which seized up in the last year. A DOGE-style government-efficiency drive slowed awards and funding, which reduced billable headcount and billable expenses and drove the 6.4% revenue decline, and the fallout from the Charles Littlejohn tax-data breach cost Booz Allen a $21M Treasury contract cancellation in January 2026, a reputational overhang across the federal client base. What changed most recently is the mix of leading indicators: quarterly book-to-bill dipped to 0.9x in the fourth quarter even as the trailing-twelve-month figure held at 1.1x and backlog set a record at $38B, so demand is being awarded faster than it is converting into current revenue. The security-cleared workforce and that backlog are the ballast under the story.