Amentum Wins Prime Positions on Multi-billion Pound Sellafield Decommissioning Framework Share Image credit: Sellafield Ltd CHANTILLY, Va.--(BUSINESS WIRE)--Amentum (NYSE: AMTM) has secured positions on a new multi- billion pound framework to deliver expert decommissioning solutions for the Sellafield nuclear site in the United Kingdom. "We will bring world-class, multidisciplinary, end-to-end engineering and project management capabilities to the UK's most significant nuclear legacy challenges." Share Unde ...

Core Insights - The article expresses a positive outlook on the shares of AMTM and SMR, indicating a beneficial long position held by the author [1]. Group 1 - The author emphasizes that the information provided is solely their opinion and does not constitute an offer or solicitation to buy or sell any security [2]. - It is noted that past performance is not indicative of future results, highlighting the uncertainty in investment outcomes [3]. - The article clarifies that the views expressed may not reflect those of Seeking Alpha as a whole, indicating a diversity of opinions among analysts [3].

Core Insights - The Relative Strength Index (RSI) is a key tool for technical analysts to assess stock momentum and identify overbought or oversold conditions [1] - An RSI threshold of 30 indicates potential oversold conditions, suggesting a possible trend reversal for future gains [2] Amentum Overview - Amentum (AMTM) is a defense contractor providing various services, with shares down approximately 20% over the past year despite a strong fiscal Q3 performance [3] - Revenue increased by 66% year-over-year on a GAAP basis, although it fell short of analyst expectations; the company achieved a 3-cent earnings beat and repaid $450 million in debt [4] - Six out of ten analysts rated AMTM as a Buy, with a consensus price target of $28.40, indicating over 27% upside potential from the current price [5] - Amentum's RSI is currently at 25.7, indicating oversold conditions, while short interest has risen by 14% [6] Gogo Overview - Gogo Inc. (GOGO) is a provider of in-flight wireless and entertainment services, with shares currently priced at $9.11 [7] - The company launched its Galileo HDX satcom service and is rolling out enhanced 5G services to compete with Starlink [8] - Gogo reported record equipment sales, leading to free cash flow of $62 million, but shares have fallen nearly 21% in the last month despite a 6% year-to-date increase [9] - Gogo's RSI is at 12.8, indicating oversold conditions, with short interest increasing by almost 8% [10] DoubleVerify Overview - DoubleVerify Inc. (DV) specializes in digital media data and analytics, with shares priced at $11.90 [12] - The company experienced a 21% year-over-year revenue increase and raised its revenue growth guidance from 13% to 15% for the year [13] - DoubleVerify's RSI is at 17.9, suggesting oversold conditions, while short interest has decreased by over 8% [14] - Fourteen analysts rated DV as a Buy, indicating a potential upside of about 62% [14]

Group 1 - Amentum Holdings Inc. (NYSE:AMTM) is currently considered one of the best new stocks to buy, with Morgan Stanley raising its price target to $20 from $19 while maintaining an Underweight rating [1] - The company reported Q3 2025 earnings with a revenue of $3.561 billion, reflecting a 66% year-over-year increase [1][2] - Amentum achieved a net income of $10 million, a significant improvement from a net loss of $26 million year-over-year, with a diluted EPS of $0.04 compared to a loss per share of $0.29 in 2024 [2] Group 2 - Digital Solutions revenues increased by 12% year-over-year to $1.421 billion, driven by new commercial contract awards, leading to a 21% increase in Adjusted EBITDA to $114 million [3] - Global Engineering Solutions' revenues decreased by 3% to $2.140 billion due to the expected ramp-down of certain programs, with a corresponding 2% decrease in Adjusted EBITDA to $160 million [3] Group 3 - Amentum Holdings provides engineering and technology solutions to the US and allied government agencies, although there are suggestions that certain AI stocks may offer greater upside potential with less downside risk [4]

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]

Financial Performance - Q3 FY25 revenue reached $3.6 billion, a 2% increase compared to $3.49 billion in Q3 FY24[43] - Adjusted EBITDA for Q3 FY25 was $274 million, up 7% from $257 million in Q3 FY24[43] - Adjusted Diluted EPS increased to $0.56 in Q3 FY25, compared to $0.51 in Q3 FY24[43] - Free Cash Flow for Q3 FY25 was $100 million[13] Business Development and Backlog - Backlog remained strong at $45 billion[13] - The company secured a Space Force Range Contract worth $4 billion, although it is currently under protest and not included in the backlog[22] - The company received multiple intelligence awards totaling over $500 million[24] - On-contract growth modifications and extensions provided a $2+ billion benefit in bookings[25] Debt and Deleveraging - Net leverage reduced to 3.5x, driven by operating and investing activity contributions[12, 52] - The company targets net leverage of less than 3x by FY26 year-end[54] - The company has $738 million in cash on hand and an $850 million undrawn revolving credit facility[57] Guidance - The company raised its FY25 organic revenue guidance to $13.975 - $14.175 billion[12, 58] - The company anticipates interest expense of $345M - $355M and capital expenditures of $35M - $40M for FY25[66] Nuclear Market - The global nuclear market demand is projected to reach $91 billion by FY2026 and $68 billion by FY2030[33] - The company's total addressable market in the nuclear sector is expected to more than double by 2035, reaching ~$20 billion[40]