Booz Allen Hamilton said demand is picking up across several parts of its business and that cost-cutting initiatives are bearing fruit, resulting in higher-than-expected profit during the recent quarter.

The company's growth currently stems from its national-security portfolio, Chief Executive Horacio Rozanski said. Accordingly, Booz Allen has prioritized investments in advanced cyber and defense technologies, as well as in next-generation technologies such as autonomy, physical artificial intelligence and quantum.

"We continue to make strong progress across these priorities," Rozanski said on a call with analysts Friday.

Shares jumped 15%, to $75.59 in recent trading. The company said it remains on track to meet its outlook for the year despite operating amid challenging market dynamics. Despite the gain, the stock has lost about one-third of its value over the past year.

While Booz Allen's national-security portfolio has benefited from increased investments and demand, its civil portfolio faces very different conditions, Chief Operating Officer Kristine Martin Anderson said.

"We are in a transition," she said, noting near-term revenue remains pressured by recent contract reductions and a slower award environment. The Trump administration has cut spending on federal contracts and has specifically pushed consulting companies, including Booz Allen, to justify their work and to propose substantial cost savings.

Looking ahead, Martin Anderson said leading indicators show that demand in the sector is increasing. Booz Allen continues to win new contracts, she added, but those contracts are generally smaller in scope and have shorter periods of performance.

Booz Allen cut thousands of jobs last year as it faced pressure in its civil business. Total headcount stood at roughly 30,900 as of June 30, down 7.5% from a year earlier.

Still, the workforce reductions, coupled with additional cost-saving measures, have helped the company's bottom line. The company, which has in the past made 98% of its $12 billion in annual revenue from government-related work, said in October it would restructure its business to cut $150 million in costs.

Booz Allen reported adjusted earnings of $1.81 a share in its fiscal first quarter, well above the $1.48 a share that analysts polled by FactSet expected. On a nonadjusted basis, profit came in at $198 million, or $1.63 a share, down from $271 million, or $2.16 a share, a year earlier.

Revenue slipped 4.2% to $2.8 billion, roughly in line with Wall Street models. Total backlog stood at $39.48 billion, up 3.2% from last year.

For the full year, Booz Allen backed its outlook for adjusted earnings of $6 to $6.35 a share on revenue of $11.2 billion to $11.7 billion. Analysts were looking for adjusted earnings of $6.26 a share on revenue of $11.42 billion.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

July 24, 2026 11:38 ET (15:38 GMT)

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