Core Insights - Booz Allen Hamilton's stock fell 8.6% after missing earnings expectations and lowering guidance for fiscal Q2 2026 [1][8] - The company reported adjusted earnings of $1.49 per share on sales of $2.9 billion, below the expected $1.51 per share and just under $3 billion in sales [1][3] - GAAP earnings were significantly lower at $1.42 per share, marking a 53% year-over-year decline [3] Financial Performance - Adjusted earnings decreased by under 18%, while revenue declined by 8% [3] - The company cited a "continued funding slowdown" as a reason for weak results, particularly in its civil business, despite growth in its national security portfolio [4] - Booz Allen's full-year revenue guidance was lowered to a maximum of $11.5 billion, representing a 4% reduction and at least a 4% decline year over year [5] Future Outlook - Adjusted earnings are now expected to be no more than $5.65 per share, which is at least 9% worse than previously anticipated [6] - Free cash flow is projected to be around $900 million, leaving the stock looking relatively cheap at 12.6 times free cash flow [6] - Despite a record Q2 backlog of $40 billion and a book-to-bill ratio of 1.7x, the company’s shrinking sales may deter investor interest [5][6]

Market Overview - U.S. equities opened with significant gains, leading major indexes to record highs, driven by a positive reaction to the September inflation report [1][10] - The Dow Jones Industrial Average (DJIA) rose by 267 points (0.6%), while the S&P 500 (SPX) increased by 0.8%, and the Nasdaq Composite (IXIC) climbed 1% [2] Economic Data - The September Consumer Price Index (CPI) report indicated a year-over-year increase of 3.0%, slightly below the expected 3.1%, and a monthly rise of 0.3% [3][4] - The CPI data is crucial as it precedes the Federal Reserve's policy meeting, with expectations for a 25-basis-point interest rate cut [4] Corporate Earnings - Procter & Gamble (PG) stock rose 2% after better-than-expected quarterly results, with earnings per share forecasted at $1.90 [7] - Intel (INTC) shares surged approximately 6% following strong third-quarter results, reporting a profit of $0.23 per share and a revenue increase of 3% to $13.7 billion [7] - Ford Motor (F) saw a revenue jump of 9% to $50.5 billion, exceeding expectations, although it lowered its 2025 adjusted earnings outlook due to a factory fire [7] Corporate News - Target (TGT) and Applied Materials (AMAT) shares increased slightly after announcing layoffs, viewed as cost-cutting measures [7] - President Donald Trump announced the termination of trade negotiations with Canada, potentially impacting North American trade relations [9] Upcoming Events - The economic calendar includes the purchasing managers' index (PMI) report and the University of Michigan consumer sentiment report, which will provide insights into manufacturing and consumer confidence [5]

Financial Data and Key Metrics Changes - The company reported gross revenue of $2.9 billion, an 8% decline year-over-year, and a 9% decline on a revenue ex-billable basis [25] - Adjusted EBITDA for the quarter was $324 million, down 11% from the prior year, resulting in an adjusted EBITDA margin of 11.2%, which is 40 basis points lower than the same period last year [30] - Net income was $175 million, down 55% year-over-year, with diluted earnings per share decreasing 53% to $1.42 [31] Business Line Data and Key Metrics Changes - The national security portfolio grew by 5% year-over-year, while the civil business revenue declined by 22% year-over-year [25] - The company anticipates civil business revenue to decline in the low 20% range for the full fiscal year [20][25] - Gross bookings totaled $7.2 billion in the quarter, with significant awards in the national security portfolio [26] Market Data and Key Metrics Changes - The funded backlog grew about 34% sequentially to roughly $5 billion but was down 6% year-over-year [27] - The total backlog at the end of the quarter reached $40 billion, up 3% year-over-year [27] - The company noted a bifurcated market environment, with civil agencies facing significant challenges while national security markets showed stronger dynamics [7][12] Company Strategy and Development Direction - The company is focusing on three strategic areas: reducing costs through AI, doubling down on strengths in key growth areas, and leading the transition to outcome-based contracting [14][16] - Investments will be directed towards cyber, AI, warfighting technology, and critical national security programs [16] - The company aims to maintain agility and responsiveness to market changes while preparing for long-term growth [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the current quarter's results and acknowledged that the re-acceleration of business will take longer than expected [5][12] - The procurement environment remains challenging, particularly in the civil sector, with expectations for a delayed return to growth [8][22] - Despite near-term headwinds, management remains optimistic about medium-term growth prospects, particularly in national security [5][12] Other Important Information - The company has approved a quarterly dividend of $0.55 per share, payable on December 2nd [32] - A $500 million increase to the share purchase authorization was also approved, bringing the total available capacity to approximately $880 million [33] Q&A Session Summary Question: Is the funding environment for defense and intel business improving? - Management indicated that while the national security business environment is stronger, there are still frictions due to the government shutdown and procurement delays [42][43] Question: What assumptions are baked into the civilian guidance? - Management stated that they do not anticipate further cuts but expect a competitive procurement environment with pricing pressures [46][47] Question: How does the company view its long-term business model? - Management emphasized the importance of flexibility in responding to market shifts and the ongoing investment in technology partnerships [60][62] Question: How is the backlog coverage and pipeline strength? - Management noted that the current guidance is based on existing trends and that they are actively pursuing new opportunities [76][78] Question: What is the outlook for the cyber business? - Management expressed strong confidence in the growth of the cyber business, highlighting its unique position in the national security space [82]

Financial Data and Key Metrics Changes - For the second quarter, gross revenue was $2.9 billion, an 8% decline year-over-year, and approximately a 9% decline on a revenue ex-billable basis [25] - Adjusted net income was $183 million, down 21% year-over-year, with diluted earnings per share decreasing 53% to $1.42 per share [31] - The funded backlog was down 6% year-over-year, while total backlog reached $40 billion, up 3% year-over-year [27][32] Business Line Data and Key Metrics Changes - The national security portfolio grew by 5% year-over-year, while revenue in the civil business declined by 22% year-over-year [25] - The company anticipates civil business revenue to decline in the low 20% range for the fiscal year, while the national security portfolio is expected to grow in the mid-single-digit range [18][25] Market Data and Key Metrics Changes - The procurement environment remains challenging, with no major procurement actions observed in the civil sector during the second quarter [8] - Gross bookings totaled $7.2 billion in the quarter, with 90% attributed to national security [9][26] Company Strategy and Development Direction - The company is focusing on three strategic areas: reducing costs through AI, doubling down on strengths in key growth areas, and leading the transition to outcome-based contracting [14][16] - The emphasis is on cyber, AI, warfighting technology, and critical national security programs, with a commitment to leveraging partnerships with tech companies [16][61] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the current quarter's results and the need to lower guidance due to a lack of normalization in the funding environment [12][22] - The company remains optimistic about medium-term growth, particularly in national security, despite near-term headwinds [5][18] Other Important Information - The company is taking significant actions to restructure and reduce costs by $150 million annually, which will support margins returning closer to historical levels by fiscal year 2027 [23][24] - The board approved a quarterly dividend of $0.55 per share and increased the share purchase authorization by $500 million [32][34] Q&A Session Summary Question: Is the funding environment for defense and intel business improving? - Management noted that while the national security business is stronger, there is still friction in the funding process, and ramp-up on new wins is expected to be slower than historical levels [42][43] Question: What assumptions are baked into the civilian guidance? - Management indicated that they do not anticipate further cuts but expect a competitive procurement environment with pricing pressures [46][47] Question: How strong is the backlog coverage? - Management stated that the current guidance does not rely on significant new wins, and they are anticipating that current trends persist [76][77] Question: How does the company balance growth investment with profitability? - Management emphasized that they are managing for the medium and long term, making investments that are prudent for short-term profitability while focusing on long-term growth [94][96]

Financial Data and Key Metrics Changes - For Q2 FY 2026, gross revenue was $2.9 billion, an 8% decline year-over-year, with a 9% decline on a revenue ex-billable basis [31] - Adjusted EBITDA was $324 million, down 11% from the prior year, translating to an adjusted EBITDA margin of 11.2%, which is 40 basis points lower than the same period last year [37] - Net income was $175 million, down 55% year-over-year, with diluted earnings per share decreasing 53% to $1.42 [38] Business Line Data and Key Metrics Changes - The National Security portfolio grew by 5% year-over-year, while the Civil business revenue declined by 22% year-over-year [31][32] - The company anticipates that the National Security portfolio will grow revenue in the mid-single-digit range for the full fiscal year, while the Civil business revenue is expected to decline in the low 20% range [22][25] Market Data and Key Metrics Changes - The funded backlog was down 6% year-over-year, while total backlog reached $40 billion, up 3% year-over-year [34] - Gross bookings totaled $7.2 billion in the quarter, with a book-to-bill ratio of 1.7 times [34] Company Strategy and Development Direction - The company is focusing on three strategic areas: reducing costs through AI, doubling down on strengths in key growth areas, and leading the transition to outcome-based contracting [16][19][20] - The company aims to maximize AI capabilities and commercial technology partnerships to drive growth in the Civil business [10] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the current results and lowered guidance across all key metrics due to a challenging procurement environment [5][14] - The company remains optimistic about medium-term growth vectors, particularly in national security, cyber, and AI [6][12][20] Other Important Information - The company announced a quarterly dividend of $0.55 per share and increased its share repurchase authorization by $500 million [41] - The company is taking significant actions to adjust its cost structure and prepare for future growth [45] Q&A Session Summary Question: What is the outlook for funding in the defense and intelligence business? - Management indicated that while there is friction in the funding process, the national security business environment remains stronger, with significant wins expected to ramp up more slowly than historical levels [51][52] Question: What assumptions are baked into the guidance for the federal civilian business? - Management stated that they do not anticipate further cuts and expect a competitive procurement environment with pricing pressures [58][60] Question: How does the company view the profitability profile of the Civil and National Security portfolios? - Management confirmed that the Civil portfolio has higher margins due to a larger share of fixed-price contracts, while the National Security portfolio operates at lower margins [69] Question: What is the company's long-term business model outlook? - Management emphasized the importance of flexibility in operations and the need to adapt to changing market conditions, particularly in technology integration and outcome-based models [72][73]

Core Insights - Booz Allen Hamilton (BAH) reported quarterly earnings of $1.49 per share, matching the Zacks Consensus Estimate, but down from $1.81 per share a year ago [1] - The company posted revenues of $2.89 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 3.05% and down from $3.15 billion year-over-year [2] - Booz Allen shares have declined approximately 22.1% year-to-date, contrasting with the S&P 500's gain of 14.6% [3] Earnings Performance - The company has surpassed consensus EPS estimates three times over the last four quarters [1] - The estimate revisions trend for Booz Allen was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock [6] - Current consensus EPS estimate for the upcoming quarter is $1.64 on revenues of $3.03 billion, and for the current fiscal year, it is $6.31 on revenues of $12.12 billion [7] Industry Context - The Consulting Services industry, to which Booz Allen belongs, is currently in the bottom 33% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Booz Allen's stock performance [5]

Group 1: Booz Allen Hamilton Holding Corporation - Booz Allen Hamilton's shares fell sharply by 10.3% to $90.00 in pre-market trading after disappointing second-quarter earnings and a lowered FY26 outlook [1][2] - The company reported adjusted earnings of $1.49 per share, missing market estimates of $1.51 per share [1] - Quarterly sales were $2.890 billion, which also fell short of expectations of $2.990 billion [1] Group 2: Other Companies - Picard Medical, Inc. shares dipped 65.3% to $4.61 in pre-market trading [4] - Deckers Outdoor Corporation's shares tumbled 11.1% to $91.20 despite posting better-than-expected second-quarter earnings, with fiscal GAAP EPS projected between $6.30 to $6.39 against a $6.28 estimate, and revenue of $5.35 billion versus a $5.45 billion estimate [4] - Newmont Corporation's shares fell 5.8% to $83.69 following third-quarter results [4] - Grupo Televisa, S.A.B. shares decreased by 5.4% to $2.28 in pre-market trading [4] - Coeur Mining, Inc. shares dipped 5.1% to $17.99 in pre-market trading [4] - Alcoa Corporation's shares fell 5.1% to $38.09 after posting downbeat quarterly results [4] - McEwen Inc. declined 4.4% to $19.35 after a 2% gain on Thursday [4]

Core Insights - U.S. stock futures are up, with Nasdaq futures increasing by approximately 100 points [1] - Booz Allen Hamilton Holding Corporation reported disappointing second-quarter earnings and reduced its FY26 outlook [1] - The company's adjusted earnings were $1.49 per share, below the market expectation of $1.51 per share [1] - Quarterly sales for Booz Allen Hamilton were $2.890 billion, missing the anticipated $2.990 billion [1] Company Performance - Booz Allen Hamilton shares fell 10.3% to $90.00 in pre-market trading following the earnings report [2] - Picard Medical, Inc. experienced a significant drop of 65.3% to $4.61 in pre-market trading [4] - Deckers Outdoor Corporation's shares decreased by 11.1% to $91.20 despite reporting better-than-expected second-quarter earnings [4] - Newmont Corporation's shares fell 5.8% to $83.69 after its third-quarter results [4] - Grupo Televisa, S.A.B. shares declined by 5.4% to $2.28 in pre-market trading [4] - Coeur Mining, Inc. and Alcoa Corporation both saw a decrease of 5.1% in their share prices, with Coeur Mining at $17.99 and Alcoa at $38.09 [4] - McEwen Inc. shares dropped 4.4% to $19.35 after a previous gain [4]

Financial Performance - Q2 FY26 - Revenue decreased by 8.1% to $2.9 billion, primarily due to a decrease in headcount and a slowed procurement environment[44] - Excluding the prior year change to the provision for claimed costs, revenue was down 4.7%[12, 13] - Adjusted EBITDA decreased by 11.0% to $324 million[12, 21] - Adjusted Diluted EPS decreased by 17.7% to $1.49[12, 21] - Free Cash Flow decreased by 29.8% to $395 million[12] Financial Position - Backlog increased by 3% year-over-year to $40 billion, a Q2 record[13] - Net Leverage Ratio is 2.5x[16, 35] Capital Deployment - $208 million was deployed in share repurchases in Q2 FY26[15] - The company increased repurchase authorization by $500 million[15] - A quarterly dividend of $0.55 per share was approved[15] - $3 million was deployed in strategic investment in Shift5 in Q2 FY26[15] FY26 Guidance Update - Revenue guidance updated to $11.3 - $11.5 billion, representing a growth of (4.0 - 6.0)%[17] - Adjusted EBITDA guidance updated to $1,190 - $1,220 million[17] - Adjusted Diluted EPS guidance updated to $5.45 - $5.65[17] - Free Cash Flow guidance updated to $850 - $950 million[17]

Core Insights - Premarket trading is showing notable activity with significant price movements indicating potential trading opportunities before the market opens [1] Premarket Gainers - Qualigen Therapeutics, Inc. (QLGN) increased by 69% to $6.00 - Inhibrx Biosciences, Inc. (INBX) rose by 62% to $46.04 - MidWestOne Financial Group, Inc. (MOFG) gained 33% to $37.87 - Neuphoria Therapeutics Inc. (NEUP) up by 31% to $5.32 - Nextracker Inc. (NXT) increased by 13% to $102.44 - Avalon Holdings Corporation (AWX) rose by 11% to $2.98 - Beyond Meat, Inc. (BYND) up by 9% to $3.12 - SLM Corporation (SLM) increased by 8% to $29.00 - Reborn Coffee, Inc. (REBN) rose by 7% to $2.40 - Oriental Culture Holding LTD (OCG) increased by 5% to $3.55 [3] Premarket Losers - Picard Medical, Inc. (PMI) decreased by 70% to $3.89 - Fusemachines Inc. Common stock (FUSE) down by 17% to $3.29 - American Rebel Holdings, Inc. (AREB) fell by 16% to $3.14 - Armata Pharmaceuticals, Inc. (ARMP) down by 13% to $6.16 - Coya Therapeutics, Inc. (COYA) decreased by 13% to $6.01 - Deckers Outdoor Corporation (DECK) down by 12% to $90.00 - Safe & Green Holdings Corp. (SGBX) fell by 12% to $2.58 - Beasley Broadcast Group, Inc. (BBGI) decreased by 8% to $5.55 - Booz Allen Hamilton Holding Corporation (BAH) down by 7% to $92.73 - Brera Holdings PLC (SLMT) decreased by 6% to $10.67 [4]