KBR Reports Third Quarter Fiscal 2025 Results

Core Insights - KBR, Inc. reported third quarter fiscal 2025 results, showing resilience despite revenue headwinds, with a year-on-year double-digit growth in Adjusted EBITDA and strong cash conversion [2][6][8] Financial Performance - Revenues for the third quarter were $1.931 billion, a slight decrease of 0% or $6 million compared to the previous year [5][8] - Operating income increased by 10% to $191 million, driven by strong project execution on an LNG project [9][12] - Net income attributable to KBR was $115 million, up 15% from the previous year, reflecting improved operating income [9][10] - Adjusted EBITDA reached $240 million, a 10% increase, with an Adjusted EBITDA margin of 12.4% [6][12] - Diluted earnings per share attributable to KBR were $0.90, up 20% from the previous year [11][34] Segment Performance - Mission Technology Solutions (MTS) revenues were flat at $1.406 billion, with operating income remaining stable at $114 million [16] - Sustainable Technology Solutions (STS) revenues decreased by 1% to $525 million, but operating income increased by 13% to $118 million [18][20] - Backlog and options totaled $23.4 billion, with a book-to-bill ratio of 1.4x for the quarter [13][20] Capital Management - Operating cash flows from continuing operations were $198 million, a 29% increase, with an operating cash conversion rate of 152% [21] - KBR returned $122 million to shareholders, including $100 million in share repurchases and $22 million in dividends [21] - As of October 3, 2025, liquidity totaled approximately $1.1 billion, with a net leverage ratio of 2.2x [20] Guidance and Strategic Initiatives - KBR revised its fiscal year 2025 guidance, projecting revenues between $7.75 billion and $7.85 billion, down from the previous range [22][23] - The company announced plans to spin off its Mission Technology Solutions segment into a separate publicly-traded company, targeting completion by mid-to-late 2026 [24]