Amentum Holdings Inc. (NYSE:AMTM) is one of the best new stocks to buy right now. On September 18, Morgan Stanley raised the firm’s price target on Amentum to $20 from $19, while keeping an Underweight rating on the shares after fine-tuning the firm’s estimates. Prior to this rating, the company also reported its Q3 2025 earnings results, where Amentum made a revenue of $3.561 billion, which was a 66% increase year-over-year. This growth was attributed to the combination of Jacobs’ Critical Mission Soluti ...

Core Viewpoint - Amentum plans to create 3,000 new jobs over the next four years, driven by growth in nuclear power and defense sectors in the UK [1] Company Summary - Amentum is a global leader in advanced engineering and innovative technology solutions [1] - The announcement of job creation aligns with the company's strategic focus on expanding its operations in the UK [1] Industry Summary - The growth in nuclear power and defense sectors is expected to contribute significantly to job creation and economic development in the UK [1] - The UK-U.S. partnership is highlighted as a key factor in supporting Amentum's expansion plans [1]

Core Thesis - Amentum Holdings, Inc. (AMTM) is positioned favorably due to its strong government contracts and increasing U.S. defense spending, which supports its growth potential and market recognition [2][4]. Company Overview - Amentum Holdings is a U.S. government contractor providing engineering, defense, intelligence, and cybersecurity services, with key clients including NASA, the Department of Defense, and the Department of Energy [2]. - The company has experienced a stock price stabilization at $24 following its IPO, indicating market recognition of its fundamentals [2]. Financial Performance - Amentum's revenue has grown by 66% year-over-year and 52% over the last four quarters, driven by organic growth and new contracts [3]. - The company generates approximately $100 million in free cash flow, which helps manage its $3.8 billion long-term debt [3]. - Institutional investor interest is increasing, reflecting confidence in Amentum's future prospects [3]. Investment Case - The investment thesis is based on the durability of defense spending, supported by Amentum's established government relationships that provide revenue stability [4]. - Despite high leverage, consistent cash generation and long-term contracts reduce risk, making AMTM an attractive investment opportunity [4]. - The stock price is viewed as a potentially appealing entry point for investors seeking a mix of growth and reliability [4].

PART I: FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section provides the company's unaudited condensed consolidated financial statements and related explanatory notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | June 27, 2025 | September 27, 2024 | | :-------------------------------- | :------------ | :----------------- | | Total assets | $11,808 | $11,974 | | Total liabilities | $7,219 | $7,422 | | Total shareholders' equity | $4,589 | $4,552 | | Cash and cash equivalents | $738 | $452 | | Goodwill | $5,616 | $5,556 | | Intangible assets, net | $2,075 | $2,623 | | Long-term debt, net of current portion | $4,441 | $4,643 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's revenues, operating income, and net income (loss) for the three and nine months ended June 27, 2025, and June 28, 2024 Condensed Consolidated Statements of Operations (Three Months Ended, in millions, except per share data) | Metric | June 27, 2025 | June 28, 2024 | Change (Millions) | % Change | | :----------------------------------------- | :------------ | :------------ | :---------------- | :------- | | Revenues | $3,561 | $2,142 | $1,419 | 66.2% | | Operating income | $103 | $89 | $14 | 15.7% | | Net income (loss) attributable to common shareholders | $10 | $(26) | $36 | -138.5% | | Basic EPS | $0.04 | $(0.29) | $0.33 | -113.8% | | Diluted EPS | $0.04 | $(0.29) | $0.33 | -113.8% | Condensed Consolidated Statements of Operations (Nine Months Ended, in millions, except per share data) | Metric | June 27, 2025 | June 28, 2024 | Change (Millions) | % Change | | :----------------------------------------- | :------------ | :------------ | :---------------- | :------- | | Revenues | $10,468 | $6,176 | $4,292 | 69.5% | | Operating income | $345 | $264 | $81 | 30.7% | | Net income (loss) attributable to common shareholders | $26 | $(108) | $134 | -124.1% | | Basic EPS | $0.11 | $(1.20) | $1.31 | -109.2% | | Diluted EPS | $0.11 | $(1.20) | $1.31 | -109.2% | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Outlines the company's comprehensive income (loss), including net income and other comprehensive income (loss) components Condensed Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended, in millions) | Metric | June 27, 2025 | June 28, 2024 | | :------------------------------------------------ | :------------ | :------------ | | Net income (loss) including non-controlling interests | $(1) | $(24) | | Other comprehensive income (loss), net of tax | $14 | $2 | | Comprehensive income (loss) | $13 | $(22) | Condensed Consolidated Statements of Comprehensive Income (Loss) (Nine Months Ended, in millions) | Metric | June 27, 2025 | June 28, 2024 | | :------------------------------------------------ | :------------ | :------------ | | Net income (loss) including non-controlling interests | $22 | $(105) | | Other comprehensive income (loss), net of tax | $20 | $(7) | | Comprehensive income (loss) | $42 | $(112) | [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Summarizes changes in the company's shareholders' equity, including retained deficit and accumulated other comprehensive income - Total Shareholders' Equity increased from **$4,552 million** at September 27, 2024, to **$4,589 million** at June 27, 2025[11](index=11&type=chunk)[18](index=18&type=chunk) - Retained deficit improved from **$(527) million** to **$(501) million** during the nine months ended June 27, 2025[11](index=11&type=chunk)[18](index=18&type=chunk) - Accumulated other comprehensive income increased from **$23 million** to **$43 million** during the nine months ended June 27, 2025[11](index=11&type=chunk)[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Provides an overview of cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Nine Months Ended, in millions) | Metric | June 27, 2025 | June 28, 2024 | Change (Millions) | | :------------------------------------ | :------------ | :------------ | :---------------- | | Net cash provided by operating activities | $273 | $160 | $113 | | Net cash provided by (used in) investing activities | $236 | $(8) | $244 | | Net cash used in financing activities | $(231) | $(189) | $(42) | | Net change in cash and cash equivalents | $286 | $(34) | $320 | - The increase in operating cash flow was due to a **$289 million** increase in cash earnings from the CMS merger, partially offset by **$176 million** in changes in operating assets and liabilities[133](index=133&type=chunk) - Investing cash flow increased significantly due to the **$360 million** sale of the Rapid Solutions business[134](index=134&type=chunk)[136](index=136&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1 — Basis of Presentation](index=10&type=section&id=Note%201%20%E2%80%94%20Basis%20of%20Presentation) Details the company's business, segment realignment, and the significant impact of the CMS merger on financial comparability - Amentum Holdings, Inc. is a global advanced engineering and technology solutions provider to U.S. and allied government agencies[22](index=22&type=chunk) - The company realigned its reporting structure into two segments: Digital Solutions (DS) and Global Engineering Solutions (GES)[23](index=23&type=chunk) - The merger with Jacobs' Critical Mission Solutions (CMS) business on September 27, 2024, significantly impacts the comparability of current and future financial results to historical results[24](index=24&type=chunk)[25](index=25&type=chunk) [Note 2 — Recent Accounting Pronouncements](index=10&type=section&id=Note%202%20%E2%80%94%20Recent%20Accounting%20Pronouncements) Discusses the company's evaluation of new FASB Accounting Standards Updates (ASUs) on Segment Reporting and Income Taxes - ASU No. 2023-07, Segment Reporting, requires disclosure of significant segment expenses and other segment items, effective for fiscal years beginning after December 15, 2023[28](index=28&type=chunk) - ASU No. 2023-09, Income Taxes, enhances transparency of income tax disclosures, effective for fiscal years beginning after December 15, 2024[29](index=29&type=chunk) - The company is currently evaluating the impacts of both new standards on its consolidated financial statements[28](index=28&type=chunk)[29](index=29&type=chunk) [Note 3 — Acquisition and Divestiture](index=11&type=section&id=Note%203%20%E2%80%94%20Acquisition%20and%20Divestiture) Details the CMS acquisition via a Reverse Morris Trust transaction and the divestiture of the Rapid Solutions business - Completed merger with CMS on September 27, 2024, in a Reverse Morris Trust transaction, with CMS shareholders owning **58.5%** of outstanding common stock[30](index=30&type=chunk) - Total consideration for the CMS acquisition was **$4,032 million**, with a preliminary allocation including **$2,918 million** in goodwill and **$1,805 million** in intangible assets[31](index=31&type=chunk)[36](index=36&type=chunk) - Sold the Rapid Solutions business to Lockheed Martin Corporation for **$360 million** in cash on June 26, 2025; the sale was not classified as discontinued operations[37](index=37&type=chunk) [Note 4 — Revenues](index=12&type=section&id=Note%204%20%E2%80%94%20Revenues) Disaggregates revenues by customer type, contract type, and geographic location, highlighting growth drivers and remaining performance obligations Total Revenues by Segment (in millions) | Period | DS | GES |

Financial Data and Key Metrics Changes - The company reported revenues of $3.6 billion, reflecting a 2% growth year-over-year [7][27] - Adjusted EBITDA was $274 million, marking a 7% year-over-year growth with adjusted EBITDA margins increasing by 30 basis points to 7.7% [7][27] - Free cash flow for the quarter was $100 million, contributing to a year-to-date total of $255 million [7][30] - The net leverage ratio was reduced to 3.5 times, ahead of original expectations [8][31] Business Line Data and Key Metrics Changes - Digital Solutions generated revenues of $1.4 billion, representing a 12% growth driven by new contract awards [28] - Adjusted EBITDA for Digital Solutions increased to $114 million, with margins rising to 8% [28] - Global Engineering Solutions reported revenues of $2.1 billion, impacted by the ramp down of certain historical programs [29] - Adjusted EBITDA for Global Engineering Solutions was $160 million, benefiting from strong operational performance [29] Market Data and Key Metrics Changes - The company reported $3.4 billion in net bookings for the quarter, resulting in a book-to-bill ratio of 1.0 times [13] - The imputed book-to-bill ratio, including joint ventures, was 1.8 times for the quarter [13][39] - The total backlog at the end of the quarter was $45 billion, representing 3.2 times annual revenue [13] Company Strategy and Development Direction - The company is focused on optimizing its core business through divestitures, including the sale of its Rapid Solutions business [7][8] - The strategic focus is aligned with long-term growth priorities, particularly in defense and advanced engineering solutions [9][12] - The company aims to achieve at least $30 million in net run rate cost synergies by the end of the fiscal year [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the government’s efficiency and the timely execution of contracts, expecting a strong fourth quarter [64] - The company is well-positioned to capitalize on significant investments in national security and advanced technology solutions [9][12] - Management highlighted the importance of the nuclear sector, anticipating substantial growth driven by regulatory support and increasing demand for energy [80][81] Other Important Information - The company completed two divestitures during the quarter, focusing on core business optimization [7][8] - The fiscal year 2025 guidance was raised, with expected revenues between $13.975 billion and $14.175 billion [32] - The company anticipates free cash flow between $475 million and $525 million for the fiscal year [32] Q&A Session Summary Question: Clarification on bookings and Space Force pipeline - Management confirmed an imputed book-to-bill of 1.8 times for the quarter, highlighting the significance of the Space Force Range contract [39][40] Question: Expectations for budget flush opportunities - Management noted that the government is operating efficiently, with RFPs and awards coming out on time, expecting a strong fourth quarter [64][65] Question: Insights on the Golden Dome initiative - Management emphasized their engagement in missile defense and rapid deployment capabilities, viewing it as a significant opportunity [68][70] Question: Nuclear exposure and growth potential - Management indicated that the nuclear segment contributes over $2 billion in business, with a strong pipeline of projects expected to grow significantly [76][80] Question: Backlog and pipeline dynamics - Management reassured that the funded backlog is sufficient for mission-critical work, with a strong pipeline of joint ventures driving future growth [90][92]

Financial Data and Key Metrics Changes - The company reported revenues of $3.6 billion, reflecting a 2% growth year-over-year [6][27] - Adjusted EBITDA was $274 million, marking a 7% year-over-year growth with a margin increase of 30 basis points to 7.7% [6][27] - Free cash flow for the quarter was $100 million, contributing to a year-to-date total of $255 million [6][30] Business Line Data and Key Metrics Changes - Digital Solutions generated revenues of $1.4 billion, representing a 12% growth driven by new contract awards [28] - Global Engineering Solutions reported revenues of $2.1 billion, impacted by the ramp down of certain historical programs but offset by new contract growth [28][29] Market Data and Key Metrics Changes - The company secured $3.4 billion in net bookings for the quarter, resulting in a book-to-bill ratio of 1.0 [13][39] - The total backlog reached $45 billion, representing 3.2 times the annual revenue [13] Company Strategy and Development Direction - The company is focused on optimizing its core business through divestitures, having completed two significant divestitures during the quarter [6][7] - The company aims to achieve at least $30 million in net run rate cost synergies by the end of the fiscal year [7] - The strategic focus includes expanding offerings in defense, space, and nuclear sectors, aligning with government spending trends [9][12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the operational performance and the ability to meet fiscal year 2025 financial objectives [33] - The company anticipates strong demand in the nuclear sector, with a projected market growth that could double in size within the next decade [23][79] - Management highlighted the positive impact of recent government budget initiatives on future growth opportunities [9][12] Other Important Information - The company reduced its net leverage ratio to 3.5 times, ahead of expectations, and aims for less than three times by the end of fiscal year 2026 [31][32] - The company is positioned to benefit from significant investments in national security and infrastructure modernization [9][12] Q&A Session Summary Question: Clarification on JV adjusted quarterly book to bill and Space Force pipeline - The imputed JV book to bill for the quarter was 1.8, with strong performance in business development [38][39] - The Space Force contract is expected to enhance the company's position in commercial space integration [40][41] Question: Expectations for budget flush opportunities and federal contracting - Management noted that the government is operating efficiently, with RFPs and awards proceeding as planned [62][63] Question: Insights on the Golden Dome opportunity - The Golden Dome initiative emphasizes rapid deployment of defensive capabilities, with significant funding already allocated [66][68] Question: Nuclear exposure and growth potential - The company has over $2 billion in nuclear-related business, with a strong pipeline of projects expected to grow significantly [74][80] Question: Total backlog and pipeline picture - The funded backlog is impacted by timing but does not raise concerns about the company's ability to perform mission-critical work [88][90]

Earnings Conference Call Presentation Q3 FY25 August 6, 2025 Pro Forma and Non-GAAP Measures This presentation includes the presentation and discussion of pro forma financial information that incorporates the results of Jacobs' Critical Mission Solutions and Cyber & Intelligence businesses ("CMS") prepared in accordance with the requirements of Article 11 of Regulation S-X. This presentation also includes the presentation and discussion of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjust ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Amentum reported strong Q3 FY2025 results with pro forma revenue growth, positive net income, and increased Adjusted EBITDA, leading to raised full-year organic guidance and a strong backlog [Third Quarter Fiscal Year 2025 Performance Overview](index=1&type=section&id=Third%20Quarter%20Fiscal%20Year%202025%20Performance%20Overview) Amentum reported strong Q3 FY2025 results with pro forma revenue growth, positive net income, and increased Adjusted EBITDA, leading to raised full-year organic guidance. The company also reduced net debt and maintained a strong backlog Q3 FY2025 Key Financial Highlights | Metric | Value | | :--------------------------------- | :------------------- | | Revenues (pro forma) | $3.6 billion (2% growth) | | Net Income | $10 million | | Adjusted EBITDA | $274 million | | Diluted Earnings Per Share | $0.04 | | Adjusted Diluted Earnings Per Share | $0.56 | | Operating Cash Flow | $106 million | | Free Cash Flow | $100 million | | Backlog | $44.6 billion | | Net Debt | $3.8 billion | | Net Leverage | 3.5x | - Amentum raised its full year organic guidance for fiscal year 2025[1](index=1&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO John Heller highlighted strong execution, benefits from integration efforts, and a positive market environment, further bolstered by the successful divestiture of Rapid Solutions and strategic growth initiatives, positioning the company for future growth and long-term value creation - Amentum's third quarter performance reflects **strong execution** and demonstrates the continued strength of the business[2](index=2&type=chunk) - Benefits from integration efforts and mission-focused portfolio converge with tailwinds from enduring global trends and an improving budget environment[2](index=2&type=chunk) - Successful divestiture of Rapid Solutions combined with strategic growth initiatives enhance financial flexibility and provide momentum for future growth[2](index=2&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) This section details Amentum's GAAP and pro forma operating results, including segment-specific performance for Digital Solutions and Global Engineering Solutions [Summary Operating Results (GAAP & Pro Forma)](index=1&type=section&id=Summary%20Operating%20Results%20(GAAP%20%26%20Pro%20Forma)) Amentum reported significant GAAP revenue growth of 66% year-over-year, primarily due to the CMS acquisition. On a pro forma basis, revenues increased 2%, driven by Digital Solutions, with Adjusted EBITDA growing 7% and Adjusted Diluted EPS increasing 10% [GAAP Results](index=1&type=section&id=GAAP%20Results) GAAP revenues increased 66% year-over-year, primarily due to the CMS acquisition. Operating income, net income, and diluted EPS also improved, benefiting from CMS contributions and lower interest expense Q3 FY2025 GAAP Financials vs. Q3 FY2024 | GAAP Measures (in millions, except per share data) | June 27, 2025 | June 28, 2024 | % Change | | :--------------------------------- | :------------ | :------------ | :------- | | Revenues | $3,561 | $2,142 | 66% | | Operating income | $103 | $89 | 16% | | Net income (loss) | $10 | $(26) | 138% | | Diluted earnings (loss) per share | $0.04 | $(0.29) | 114% | - GAAP revenues increased **66% year-over-year** primarily as a result of revenues from the combination with Jacobs' Critical Mission Solutions and Cyber & Intelligence (CMS) businesses[4](index=4&type=chunk) - GAAP net income and diluted earnings per share improved year-over-year due to higher operating income and lower interest expense[4](index=4&type=chunk) [Pro Forma and Non-GAAP Results](index=1&type=section&id=Pro%20Forma%20and%20Non-GAAP%20Results) Pro forma revenues increased 2% year-over-year, driven by growth in Digital Solutions. Pro Forma Adjusted EBITDA increased 7% to $274 million, and Adjusted Diluted EPS rose 10% to $0.56, reflecting higher revenues and improved operating performance Q3 FY2025 Pro Forma & Non-GAAP Financials vs. Q3 FY2024 | Pro Forma and Non-GAAP Measures (in millions, except per share data) | June 27, 2025 | June 28, 2024 | % Change | | :--------------------------------- | :------------ | :------------ | :------- | | Revenues | $3,561 | $3,490 | 2% | | Adjusted EBITDA | $274 | $257 | 7% | | Adjusted EBITDA Margin | 7.7% | 7.4% | +30 bps | | Adjusted Diluted Earnings Per Share (EPS) | $0.56 | $0.51 | 10% | | Free Cash Flow | $100 | N/A | N/A | - Pro forma revenues increased **2% year-over-year** driven by growth in Digital Solutions[5](index=5&type=chunk) - Pro Forma Adjusted EBITDA increased **7% year-over-year** primarily due to higher revenues and improved operating performance[5](index=5&type=chunk) - Pro Forma Adjusted Diluted Earnings Per Share increased due to higher operating profit partially offset by an increase in interest expense[5](index=5&type=chunk) [Pro Forma and Non-GAAP Segment Results](index=2&type=section&id=Pro%20Forma%20and%20Non-GAAP%20Segment%20Results) Digital Solutions demonstrated strong growth with 12% revenue increase and 21% Adjusted EBITDA growth in Q3, driven by new contract awards. Global Engineering Solutions saw a 3% revenue decrease due to program ramp-downs, resulting in a 2% Adjusted EBITDA decrease Pro Forma and Non-GAAP Segment Results (Q3 & YTD FY2025 vs. FY2024) | (in millions) | June 27, 2025 (Q3) | June 28, 2024 (Q3) | % Change (Q3) | June 27, 2025 (YTD) | June 28, 2024 (YTD) | % Change (YTD) | | :-------------------------- | :------------------ | :------------------ | :-------------- | :------------------ | :------------------ | :-------------- | | **Revenues** | | | | | | | | Digital Solutions | $1,421 | $1,274 | 12% | $4,047 | $3,852 | 5% | | Global Engineering Solutions | $2,140 | $2,216 | (3)% | $6,421 | $6,441 | —% | | **Total Revenues** | **$3,561** | **$3,490** | **2%** | **$10,468** | **$10,293** | **2%** | | **Adjusted EBITDA** | | | | | | | | Digital Solutions | $114 | $94 | 21% | $321 | $293 | 10% | | Global Engineering Solutions | $160 | $163 | (2)% | $483 | $479 | 1% | | **Total Adjusted EBITDA** | **$274** | **$257** | **7%** | **$804** | **$772** | **4%** | [Digital Solutions](index=2&type=section&id=Digital%20Solutions) Digital Solutions revenues increased 12% year-over-year in Q3, driven by higher volume from new commercial contract awards. Adjusted EBITDA for the segment grew 21% due to increased revenues and improved operational performance - Digital Solutions revenues for the third quarter increased **12% year-over-year** driven by higher volume from the ramp up of new commercial contract awards[8](index=8&type=chunk) - Adjusted EBITDA for Digital Solutions increased **21% year-over-year** due to the higher revenues and improved operational performance[8](index=8&type=chunk) [Global Engineering Solutions](index=2&type=section&id=Global%20Engineering%20Solutions) Global Engineering Solutions experienced a 3% year-over-year revenue decrease in Q3, primarily due to the expected ramp-down of certain historical programs, partially offset by new contract awards. Adjusted EBITDA for the segment decreased 2% as a result of lower revenue volume - Global Engineering Solutions revenues for the third quarter decreased **3% year-over-year** as a result of the expected ramp-down on certain historical programs, partially offset by new contract awards and growth on existing programs[9](index=9&type=chunk) - Adjusted EBITDA for Global Engineering Solutions decreased **2% year-over-year** as a result of the lower revenue volume, partially offset by improved operational performance[9](index=9&type=chunk) [Cash Flow and Financial Position](index=2&type=section&id=Cash%20Flow%20and%20Financial%20Position) This section outlines Amentum's cash flow activities, financial position, backlog, and details of recent divestitures [Cash Flow Summary](index=2&type=section&id=Cash%20Flow%20Summary) Amentum generated $106 million in net cash from operating activities and $275 million from investing activities in Q3 FY2025, largely due to $360 million in proceeds from the Rapid Solutions divestiture. The company used $203 million in financing activities, primarily for Term Loan principal payments, and ended the quarter with $738 million in cash and $4.6 billion in gross debt Q3 FY2025 Cash Flow Summary (in millions) | Activity | Amount | | :-------------------------------- | :----- | | Net cash from operating activities | $106 | | Net cash from investing activities | $275 | | Net cash used in financing activities | $(203) | | Free Cash Flow | $100 | | Cash and cash equivalents (end of period) | $738 | | Gross debt (end of period) | $4,600 | - Net cash provided by operating activities was driven by strong cash earnings and disciplined working capital management[10](index=10&type=chunk) - Net cash provided by investing activities included **$360 million in proceeds** from the sale of Rapid Solutions, partially offset by a $70 million payment for the final net working capital position from the CMS merger[10](index=10&type=chunk) - Financing activities consisted primarily of **$200 million in principal payments** on the Term Loan, with an additional $250 million voluntary payment made subsequent to quarter end[10](index=10&type=chunk) [Backlog and Contract Awards](index=2&type=section&id=Backlog%20and%20Contract%20Awards) Amentum's total backlog increased significantly to $44.6 billion as of June 27, 2025, primarily due to the CMS acquisition. The company also highlighted several notable Q3 contract awards, including a $4 billion Space Force Range Contract (under protest), a CAD $1.2 billion Canadian Nuclear Laboratories contract, and over $500 million in multiple intelligence awards Backlog Comparison (in billions) | Metric | June 27, 2025 | June 28, 2024 | Change | | :----------- | :------------ | :------------ | :----- | | Total Backlog | $44.6 | $26.9 | +$17.7 | | Funded Backlog | $5.6 | N/A | N/A | - Total backlog increased primarily due to the acquisition of CMS[11](index=11&type=chunk) - Notable Q3 Fiscal Year 2025 Highlights include: - Space Force Range Contract (SFRC): **$4 billion** single-award indefinite delivery indefinite quantity contract (under protest, not yet included in backlog)[12](index=12&type=chunk) - Canadian Nuclear Laboratories (CNL): **CAD $1.2 billion** annual contract with a six-year base and extension periods up to twenty years[14](index=14&type=chunk) - Multiple Intelligence Awards: Over **$500 million** for advanced engineering and technology solutions[22](index=22&type=chunk) - On-Contract Growth Modifications and Extensions: Over **$2 billion** in bookings from various end-market customers[12](index=12&type=chunk) [Completed Divestitures](index=4&type=section&id=Completed%20Divestitures) Amentum completed the divestiture of Rapid Solutions for $360 million in cash, which accounted for approximately 1% of annual revenues and Adjusted EBITDA. Additionally, the company sold its non-core New Zealand facilities maintenance business, which contributed approximately $50 million in annual revenues - Completed the divestiture of Rapid Solutions for **$360 million in cash**, which accounted for approximately **1% of Amentum's annual revenues and Adjusted EBITDA**[15](index=15&type=chunk) - Completed the sale of its non-core New Zealand facilities maintenance business, which accounted for approximately **$50 million in annual revenues**[15](index=15&type=chunk) [Fiscal Year 2025 Guidance](index=4&type=section&id=Fiscal%20Year%202025%20Guidance) This section provides Amentum's updated financial guidance for fiscal year 2025, reflecting adjustments for recent divestitures [Updated Fiscal Year 2025 Guidance](index=4&type=section&id=Updated%20Fiscal%20Year%202025%20Guidance) Amentum raised its fiscal year 2025 organic guidance, increasing the mid-point for revenues by approximately $125 million, Adjusted EBITDA by $5 million, Adjusted Diluted EPS by $0.05, and Free Cash Flow by $20 million, after accounting for the impact of divested businesses Updated Fiscal Year 2025 Guidance Comparison (in millions, except per share data) | Metric | Prior Guidance | Current Guidance | Implied Underlying Organic Increase | | :-------------------- | :--------------- | :--------------- | :-------------------------------- | | Revenues | $13,850 - $14,150 | $13,975 - $14,175 | ~$125 | | Adjusted EBITDA | $1,065 - $1,095 | $1,065 - $1,095 | ~$5 | | Adjusted Diluted EPS | $2.00 - $2.20 | $2.05 - $2.20 | ~$0.05 | | Free Cash Flow | $475 - $525 | $475 - $525 | ~$20 | - The implied underlying organic increase represents increases to the guidance mid-points plus the estimated fourth quarter impact from the divested Rapid Solutions and New Zealand facilities maintenance businesses[17](index=17&type=chunk) [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) This section provides an overview of Amentum, along with important cautionary notes regarding forward-looking statements and explanations of non-GAAP financial measures [About Amentum](index=4&type=section&id=About%20Amentum) Amentum is a global leader in advanced engineering and innovative technology solutions, serving the United States and its allies. Headquartered in Chantilly, Virginia, the company employs over 53,000 people in approximately 80 countries - Amentum is a global leader in advanced engineering and innovative technology solutions, trusted by the United States and its allies[19](index=19&type=chunk) - Headquartered in Chantilly, Virginia, with more than **53,000 employees** in approximately **80 countries** across all 7 continents[19](index=19&type=chunk) [Cautionary Note Regarding Forward Looking Statements](index=4&type=section&id=Cautionary%20Note%20Regarding%20Forward%20Looking%20Statements) This section provides a standard legal disclaimer regarding forward-looking statements, outlining terminology used to identify them, and listing important factors that could cause actual results to differ materially from projections, including economic conditions, regulatory compliance, government contracts, and integration risks - This release contains or incorporates by reference statements that relate to future events and expectations and, as such, could be interpreted to be 'forward-looking statements' as that term is defined in the Private Securities Litigation Reform Act of 1995[23](index=23&type=chunk) - Important factors that could cause actual results to differ materially include changes in U.S. or global economic, financial, business and political conditions, compliance with laws and regulations, risks associated with contracts with governmental entities, and the ability to realize anticipated benefits of the 2024 transaction with Jacobs Solutions Inc[25](index=25&type=chunk) [Pro Forma and Non-GAAP Measures Explanation](index=6&type=section&id=Pro%20Forma%20and%20Non-GAAP%20Measures%20Explanation) This section explains that pro forma and non-GAAP financial measures (like Adjusted EBITDA, Adjusted Diluted EPS, Free Cash Flow, Net Leverage) are provided as supplements to GAAP, offering useful information for evaluating operating results and understanding trends by adjusting for items not indicative of ongoing performance - Pro forma and non-GAAP measures should be considered only as supplements to, and should not be considered in isolation or used as substitutes for, financial information prepared in accordance with GAAP[26](index=26&type=chunk) - Management believes these measures provide useful information in evaluating operating results and understanding operating trends by adjusting for the effects of items not indicative of the Company's ongoing performance[26](index=26&type=chunk) - Backlog, net bookings, and book-to-bill are operational measures useful for investors and management to assess business development performance[28](index=28&type=chunk) [Unaudited Condensed Consolidated Financial Statements (GAAP)](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements%20(GAAP)) This section presents Amentum's unaudited GAAP financial statements, including statements of operations, balance sheets, and statements of cash flows for specified periods [Statements of Operations](index=8&type=section&id=Statements%20of%20Operations) The unaudited condensed consolidated statements of operations show Amentum's GAAP financial performance for the three and nine months ended June 27, 2025, and June 28, 2024, detailing revenues, cost of revenues, operating income, net income (loss), and earnings (loss) per share Unaudited Condensed Consolidated Statements of Operations (in millions, except per share data) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Nine Months Ended June 27, 2025 | Nine Months Ended June 28, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenues | $3,561 | $2,142 | $10,468 | $6,176 | | Cost of revenues | $(3,193) | $(1,936) | $(9,372) | $(5,576) | | Operating income | $103 | $89 | $345 | $264 | | Net income (loss) attributable to common shareholders | $10 | $(26) | $26 | $(108) | | Basic and diluted earnings (loss) per share | $0.04 | $(0.29) | $0.11 | $(1.20) | [Balance Sheets](index=9&type=section&id=Balance%20Sheets) The unaudited condensed consolidated balance sheets present Amentum's financial position as of June 27, 2025, and September 27, 2024, detailing assets (current, property, goodwill, intangibles) and liabilities (current, long-term debt, deferred tax) and shareholders' equity Unaudited Condensed Consolidated Balance Sheets (in millions) | Metric | June 27, 2025 | September 27, 2024 | | :-------------------------------- | :------------ | :----------------- | | **ASSETS** | | | | Cash and cash equivalents | $738 | $452 | | Total current assets | $3,427 | $3,084 | | Goodwill | $5,616 | $5,556 | | Intangible assets, net | $2,075 | $2,623 | | Total assets | $11,808 | $11,974 | | **LIABILITIES** | | | | Total current liabilities | $2,172 | $1,965 | | Long-term debt, net of current portion | $4,441 | $4,643 | | Total liabilities | $7,219 | $7,422 | | **SHAREHOLDERS' EQUITY** | | | | Total shareholders' equity | $4,589 | $4,552 | [Statements of Cash Flows](index=10&type=section&id=Statements%20of%20Cash%20Flows) The unaudited condensed consolidated statements of cash flows provide a breakdown of cash generated from or used in operating, investing, and financing activities for the three and nine months ended June 27, 2025, and June 28, 2024, highlighting the net change in cash and cash equivalents Unaudited Condensed Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Nine Months Ended June 27, 2025 | Nine Months Ended June 28, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Net cash provided by operating activities | $106 | $238 | $273 | $160 | | Net cash provided by (used in) investing activities | $275 | $(2) | $236 | $(8) | | Net cash used in financing activities | $(203) | $(161) | $(231) | $(189) | | Net change in cash and cash equivalents | $192 | $74 | $286 | $(34) | | Cash and cash equivalents, end of period | $738 | $271 | $738 | $271 | [Unaudited Non-GAAP Financial Measures Reconciliations](index=11&type=section&id=Unaudited%20Non-GAAP%20Financial%20Measures%20Reconciliations) This section provides definitions and detailed reconciliations of Amentum's non-GAAP and pro forma non-GAAP financial measures to their most directly comparable GAAP equivalents [Definitions of Non-GAAP Measures](index=11&type=section&id=Definitions%20of%20Non-GAAP%20Measures) This section provides the specific definitions for non-GAAP financial measures used by Amentum, including Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow, outlining the adjustments made to GAAP net income - Adjusted EBITDA is defined as GAAP net income attributable to common shareholders adjusted for interest expense and other, net, provision for income taxes, depreciation and amortization, and excludes discrete items such as acquisition, transaction, and integration costs, amortization of intangibles, non-cash GAAP expense (gain), divestitures, loss on extinguishment of debt, utilization of certain fair market value adjustments, and share-based compensation[38](index=38&type=chunk)[40](index=40&type=chunk) - Free Cash Flow is defined as GAAP cash flow provided by operating activities less purchases of property and equipment[39](index=39&type=chunk) [Reconciliation for Three Months Ended June 27, 2025](index=12&type=section&id=Reconciliation%20for%20Three%20Months%20Ended%20June%2027,%202025) This table provides a detailed reconciliation of GAAP net income to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted EPS for the three months ended June 27, 2025, showing the impact of various adjustments Reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS to GAAP measures for Q3 FY2025 (in millions, except per share data and margin percentages) | Metric | As reported | Acquisition, transaction and integration costs | Amortization of intangibles | Divestitures | Loss on extinguishment of debt | Utilization of fair market value adjustments | Share-based compensation | Non-GAAP results | | :------------------------------------------ | :---------- | :------------------------------------------- | :-------------------------- | :----------- | :----------------------------- | :----------------------------------------- | :----------------------- | :--------------- | | Revenues | $3,561 | $— | $— | $— | $— | $— | $— | $3,561 | | Operating income | $103 | $32 | $118 | $— | $— | $5 | $7 | $265 | | Net income (loss) attributable to common shareholders | $10 | $24 | $107 | $(5) | $3 | $(9) | $5 | $135 | | Basic and diluted income per share attributable to common shareholders | $0.04 | $0.10 | $0.44 | $(0.02) | $0.01 | $(0.03) | $0.02 | $0.56 | | EBITDA (non-GAAP) | $240 | $32 | $— | $— | $3 | $(8) | $7 | $274 | | EBITDA margin | 6.7% | | | | | | | 7.7% | [Reconciliation for Nine Months Ended June 27, 2025](index=13&type=section&id=Reconciliation%20for%20Nine%20Months%20Ended%20June%2027,%202025) This table provides a detailed reconciliation of GAAP net income to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted EPS for the nine months ended June 27, 2025, showing the impact of various adjustments Reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted EPS to GAAP measures for YTD FY2025 (in millions, except per share data and margin percentages) | Metric | As reported | Acquisition, transaction and integration costs | Amortization of intangibles | Divestitures | Loss on extinguishment of debt | Utilization of fair market value adjustments | Share-based compensation | Non-GAAP results | | :------------------------------------------ | :---------- | :------------------------------------------- | :-------------------------- | :----------- | :----------------------------- | :----------------------------------------- | :----------------------- | :--------------- | | Revenues | $10,468 | $— | $— | $— | $— | $— | $— | $10,468 | | Operating income | $345 | $62 | $358 | $— | $— | $16 | $15 | $796 | | Net income (loss) attributable to common shareholders | $26 | $47 | $317 | $(5) | $3 | $(12) | $12 | $388 | | Basic and diluted income (loss) per share attributable to common shareholders | $0.11 | $0.19 | $1.30 | $(0.02) | $0.01 | $(0.04) | $0.05 | $1.60 | | EBITDA (non-GAAP) | $733 | $62 | $— | $— | $3 | $(9) | $15 | $804 | | EBITDA margin | 7.0% | | | | | | | 7.7% | [Definitions of Pro Forma Non-GAAP Measures](index=14&type=section&id=Definitions%20of%20Pro%20Forma%20Non-GAAP%20Measures) This section defines Pro Forma non-GAAP financial measures, including Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin, Pro Forma Adjusted Net Income, Pro Forma Adjusted Diluted EPS, and Net Leverage, which incorporate the results of CMS and specific adjustments - Pro Forma Adjusted EBITDA is defined as pro forma net income attributable to common shareholders, which incorporates the results of CMS, adjusted for pro forma interest expense and other, net, pro forma provision for income taxes, pro forma depreciation and amortization, and excludes specific discrete pro forma items[51](index=51&type=chunk)[54](index=54&type=chunk) - Net Leverage is defined as GAAP total debt (excluding unamortized original issue discount and deferred financing costs) less cash and cash equivalents, divided by last twelve months Pro Forma Adjusted EBITDA[53](index=53&type=chunk) - For FY25 Q3, Net Leverage was **3.5x**, consisting of **$4,560 million of total debt** less **$738 million of cash and cash equivalents**, divided by the last twelve months Pro Forma Adjusted EBITDA of **$1,081 million**[53](index=53&type=chunk) [Pro Forma Reconciliation for Three Months Ended June 28, 2024](index=15&type=section&id=Pro%20Forma%20Reconciliation%20for%20Three%20Months%20Ended%20June%2028,%202024) This table presents the unaudited pro forma combined reconciliation of Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin, Pro Forma Adjusted Net Income, and Pro Forma Adjusted Diluted EPS for the three months ended June 28, 2024, including CMS results Unaudited Pro Forma Combined Reconciliation for Q3 FY2024 (in millions, except per share data and margin percentages) | Metric | Pro Forma results | Acquisition, transaction and integration costs | Amortization of intangibles | Loss on extinguishment of debt | Utilization of fair market value adjustments | Share-based compensation | Pro Forma Non-GAAP results | | :------------------------------------------ | :---------------- | :------------------------------------------- | :-------------------------- | :----------------------------- | :----------------------------------------- | :----------------------- | :------------------------- | | Revenues | $3,490 | $— | $— | $— | $— | $— | $3,490 | | Operating income | $112 | $9 | $132 | $— | $— | $2 | $255 | | Net income (loss) attributable to common shareholders | $17 | $7 | $101 | $2 | $(4) | $2 | $125 | | Basic and diluted income (loss) per share attributable to common shareholders | $0.07 | $0.03 | $0.41 | $0.01 | $(0.02) | $0.01 | $0.51 | | EBITDA (non-GAAP) | $247 | $9 | $— | $3 | $(4) | $2 | $257 | | EBITDA margin | 7.1% | | | | | | 7.4% | [Pro Forma Reconciliation for Nine Months Ended June 28, 2024](index=16&type=section&id=Pro%20Forma%20Reconciliation%20for%20Nine%20Months%20Ended%20June%2028,%202024) This table presents the unaudited pro forma combined reconciliation of Pro Forma Adjusted EBITDA, Pro Forma Adjusted EBITDA Margin, Pro Forma Adjusted Net Income, and Pro Forma Adjusted Diluted EPS for the nine months ended June 28, 2024, including CMS results Unaudited Pro Forma Combined Reconciliation for YTD FY2024 (in millions, except per share data and margin percentages) | Metric | Pro Forma results | Acquisition, transaction and integration costs | Amortization of intangibles | Loss on extinguishment of debt | Utilization of fair market value adjustments | Share-based compensation | Pro Forma Non-GAAP results | | :------------------------------------------ | :---------------- | :------------------------------------------- | :-------------------------- | :----------------------------- | :----------------------------------------- | :----------------------- | :------------------------- | | Revenues | $10,293 | $— | $— | $— | $— | $— | $10,293 | | Operating income | $345 | $20 | $389 | $— | $— | $7 | $761 | | Net income (loss) attributable to common shareholders | $87 | $11 | $279 | $2 | $(14) | $7 | $372 | | Basic and diluted income (loss) per share attributable to common shareholders | $0.36 | $0.04 | $1.15 | $0.01 | $(0.06) | $0.03 | $1.53 | | EBITDA (non-GAAP) | $756 | $20 | $— | $3 | $(14) | $7 | $772 | | EBITDA margin | 7.3% | | | | | | 7.5% |

Group 1 - Amentum (NYSE: AMTM) is a notable company in the defense sector, which is currently under increased scrutiny due to recent developments [1] - The defense sector has been highlighted recently, indicating a potential for growth and investment opportunities [1] Group 2 - The author has extensive experience in the market, particularly in technology, and emphasizes the importance of momentum in investment strategies [1]

Group 1 - Amentum (NYSE: AMTM) has outperformed the S&P 500 since the Buy recommendation in February and Strong Buy recommendation in April [1] - The investment strategy focuses on identifying companies with high potential for substantial revenue and earnings growth over a 5-10 year horizon [1] - The investor prefers less cyclical and higher growth sectors, with a geographical bias towards the United States [1] Group 2 - The investor emphasizes the importance of writing to clarify thoughts and maintain rigor in the research process [1] - Seeking Alpha is recognized as a valuable resource with a thriving community, contributing to the investor's engagement [1]