KBR's Q1 Earnings Surpass Estimates, Revenues Miss, Both Up Y/Y

Core Viewpoint - KBR, Inc. reported strong year-over-year growth in earnings and cash flow for Q1 2025, although revenues slightly missed expectations, leading to a 5.1% increase in stock price following the earnings release [1][2]. Financial Performance - Adjusted earnings per share (EPS) reached 98 cents, exceeding the Zacks Consensus Estimate of 88 cents by 11.4% and reflecting a 27.3% year-over-year increase [3]. - Total revenues amounted to $2,055 million, falling short of the consensus mark of $2,066 million by 0.5%, but showing a 13% increase year-over-year [3]. - Adjusted EBITDA rose 17.4% year-over-year to $243 million, with the adjusted EBITDA margin contracting by 40 basis points to 11.8% [3]. Segment Performance - The Mission Technology Solutions segment saw revenues increase by 13.6% year-over-year to $1.5 billion, supported by strong contributions from Defense & Intelligence and the HomeSafe program [5]. - The Sustainable Technology Solutions segment reported a 12% year-over-year revenue increase to $550 million, surpassing projections [6]. - Adjusted EBITDA for the Mission Technology Solutions segment was $145 million, up from $131 million in the prior-year quarter, with an adjusted EBITDA margin of 11.8% [6]. Backlog and Operational Metrics - As of April 4, 2025, KBR's total backlog was $20.5 billion, down from $21.2 billion as of January 3, 2025, with contributions of $16.51 billion from Mission Technology Solutions and $4.03 billion from Sustainable Technology Solutions [7]. - The trailing 12-month book-to-bill ratio stood at 1.0x at the end of Q1 2025 [8]. Liquidity and Cash Flow - Cash and cash equivalents increased to $442 million as of April 4, 2025, up from $350 million on January 3, 2025 [10]. - Operating cash flow for Q1 2025 totaled $98 million, an increase from $91 million at the end of March 29, 2024 [10]. - KBR returned a total of $176 million to shareholders in Q1 2025, including $156 million through share repurchases and $20 million in dividends [11]. 2025 Outlook - KBR expects total revenues for 2025 to be in the range of $8.7-$9.1 billion, indicating 12-18% growth, with adjusted EBITDA projected between $950 million and $990 million [12]. - Adjusted EPS is anticipated to be in the range of $3.71-$3.95, reflecting 11-18% growth, and operating cash flow is expected to be between $500-$550 million, representing 8-19% growth [12].