Amentum Holdings, Inc.(AMTM) - 2025 Q2 - Quarterly Results

Financial Highlights Amentum reported Q2 FY2025 revenues of $3.5 billion, achieving $4 million net income and $268 million Adjusted EBITDA, with a $45 billion backlog Q2 FY2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Revenues | $3.5 billion | | Pro Forma Revenue Growth | 1% | | Net Income | $4 million | | Adjusted EBITDA | $268 million | | Diluted EPS | $0.02 | | Adjusted Diluted EPS | $0.53 | | Operating Cash Flow | $57 million | | Free Cash Flow | $53 million | | Backlog | $45 billion | | YTD Book-to-Bill | 1.0x | - CEO John Heller highlighted solid results, underscoring the strength of the mission-focused portfolio and consistent market demand, enhancing financial flexibility and reinforcing the company's position as a pure-play advanced engineering and technology firm[2] Operating Results Operating results show a 70% GAAP revenue increase due to the CMS acquisition, with pro forma revenue up 1% and Adjusted EBITDA up 3% Overall Performance (GAAP & Pro Forma) Q2 FY2025 vs Q2 FY2024 Operating Results (in millions) | Measure | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | GAAP Measures | | | | | Revenues | $3,491 | $2,051 | 70% | | Operating income | $110 | $89 | 24% | | Net income (loss) | $4 | $(41) | 110% | | Pro Forma & Non-GAAP | | | | | Revenues | $3,491 | $3,465 | 1% | | Adjusted EBITDA | $268 | $260 | 3% | | Adjusted EBITDA Margin | 7.7% | 7.5% | +20 bps | - GAAP revenues increased 70% year-over-year, primarily as a result of the combination with Jacobs' Critical Mission Solutions and Cyber & Intelligence (CMS) businesses[4] - Pro forma revenues increased 1% year-over-year, driven by growth in the Digital Solutions segment, with Pro forma Adjusted EBITDA growing 3% due to higher revenues and improved operating performance[5] Segment Performance Q2 FY2025 Pro Forma Segment Results (in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | Q2 2025 Adj. EBITDA | Q2 2024 Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Digital Solutions | $1,340 | $1,299 | 3% | $107 | $100 | 7% | | Global Engineering Solutions | $2,151 | $2,166 | (1)% | $161 | $160 | 1% | | Total | $3,491 | $3,465 | 1% | $268 | $260 | 3% | - Digital Solutions revenue increased 3% YoY due to higher volume from new commercial contracts, which also drove a 7% increase in Adjusted EBITDA[8] - Global Engineering Solutions revenue decreased 1% YoY due to the expected ramp-down of certain programs, but Adjusted EBITDA still increased 1% due to improved operating performance[9] Cash Flow and Financial Position Amentum generated $57 million in operating cash flow and $53 million in free cash flow, ending Q2 with $546 million cash and $4.7 billion in total debt - Net cash from operating activities was driven by strong cash earnings and disciplined working capital management, partially offset by the timing of tax and interest payments[10] Key Cash Flow and Balance Sheet Items (Q2 FY2025, in millions) | Metric | Value | | :--- | :--- | | Net Cash from Operating Activities | $57 | | Capital Expenditures | $4 | | Free Cash Flow | $53 | | Cash and Cash Equivalents (End of Period) | $546 | | Total Debt (Current + Long-term) | $4,679 | Backlog and Contract Awards Total backlog reached $44.8 billion, significantly up from $27.2 billion due to the CMS acquisition, with notable Q2 awards exceeding $1 billion Backlog Comparison (in billions) | Date | Total Backlog | Funded Backlog | | :--- | :--- | :--- | | March 28, 2025 | $44.8 | $5.8 | | March 29, 2024 | $27.2 | N/A | - Notable Q2 Fiscal Year 2025 Awards: - Intelligence Contracts: Awarded over $1 billion for mission-focused solutions including infrastructure management, cyber security, and intelligence analysis - Sizewell C Nuclear Power Station: Selected as program manager and lead design engineer for the new U.K. nuclear station - IDIQ Task Orders: Awarded over $500 million, including a program with the Naval Surface Warfare center[12] Strategic Developments Amentum agreed to sell its Rapid Solutions business for $360 million, generating $325 million after-tax, to enhance focus on advanced engineering and technology solutions - On April 23, 2025, Amentum agreed to sell its Rapid Solutions business for $360 million in cash, with expected after-tax proceeds of approximately $325 million[14] - The divested business accounts for approximately 1% of Amentum's annual Revenues and Adjusted EBITDA[14] - The divestiture enhances financial flexibility and strengthens the company's focus as a premier pure-play advanced engineering and technology solutions company[2] Fiscal Year 2025 Guidance Amentum reaffirmed its FY2025 guidance, projecting revenues between $13.85 billion and $14.15 billion, and Adjusted EBITDA from $1.065 billion to $1.095 billion Fiscal Year 2025 Guidance (in millions, except per share data) | Metric | Low End | High End | | :--- | :--- | :--- | | Revenues | $13,850 | $14,150 | | Adjusted EBITDA | $1,065 | $1,095 | | Adjusted Diluted EPS | $2.00 | $2.20 | | Free Cash Flow | $475 | $525 | Consolidated Financial Statements The unaudited consolidated financial statements show a net income of $4 million, total assets of $12.0 billion, and positive operating cash flow of $57 million Unaudited Condensed Consolidated Statements of Operations Q2 FY2025 Statement of Operations Highlights (in millions) | Line Item | Three Months Ended Mar 28, 2025 | Three Months Ended Mar 29, 2024 | | :--- | :--- | :--- | | Revenues | $3,491 | $2,051 | | Operating income | $110 | $89 | | Income (loss) before income taxes | $24 | $(22) | | Net income (loss) attributable to common shareholders | $4 | $(41) | Unaudited Condensed Consolidated Balance Sheets Balance Sheet Highlights (in millions) | Line Item | March 28, 2025 | September 27, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $546 | $452 | | Total current assets | $3,266 | $3,084 | | Goodwill | $5,658 | $5,556 | | Total assets | $12,004 | $11,974 | | Total current liabilities | $2,097 | $1,965 | | Long-term debt, net | $4,636 | $4,643 | | Total liabilities | $7,425 | $7,422 | | Total shareholders' equity | $4,579 | $4,552 | Unaudited Condensed Consolidated Statements of Cash Flows Q2 FY2025 Statement of Cash Flows Highlights (in millions) | Line Item | Three Months Ended Mar 28, 2025 | Three Months Ended Mar 29, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $57 | $5 | | Net cash used in investing activities | $(31) | $(3) | | Net cash used in financing activities | $(12) | $(14) | | Net change in cash and cash equivalents | $24 | $(14) | Non-GAAP Financial Measures and Reconciliations The report provides detailed reconciliations for non-GAAP measures, including Adjusted EBITDA and Free Cash Flow, to clarify operational performance - Key non-GAAP measures are defined as follows: - Adjusted EBITDA: GAAP net income adjusted for interest, taxes, D&A, and other discrete items like acquisition costs[36] - Adjusted Net Income: GAAP net income excluding discrete items and their related tax impacts[37] - Free Cash Flow: GAAP cash flow from operating activities less purchases of property and equipment[37] Reconciliation of Net Income to Adjusted EBITDA (Q2 FY2025, in millions) | Line Item | Value | | :--- | :--- | | Net income attributable to common shareholders (GAAP) | $4 | | Add: Interest expense and other, net | $86 | | Add: Provision for income taxes | $22 | | Add: Depreciation expense | $9 | | Add: Amortization of intangibles | $120 | | Add: Acquisition, transaction and integration costs | $21 | | Add: Share-based compensation | $5 | | Other Adjustments | $1 | | Adjusted EBITDA (Non-GAAP) | $268 |