Core Insights - Amentum reported first-quarter revenue of $3.24 billion, with adjusted EBITDA of $263 million and an adjusted EBITDA margin of 8.1%, reflecting a year-over-year margin expansion of 40 basis points [1][3][6] - The company attributed margin expansion to strong program performance, reduced indirect spending due to cost synergies, and disciplined expense management during the government shutdown [1][4] - Amentum's underlying growth was characterized as approximately 3%, driven by new contract awards in critical digital infrastructure and space systems [2][4] Financial Performance - For the first quarter, Amentum's revenue was approximately $3.2 billion, with adjusted diluted EPS of $0.54, representing a 6% increase year-over-year [3][6] - The company reported a free cash flow use of $142 million, impacted by timing factors, but expressed confidence in meeting full-year free cash flow guidance [15] - Amentum ended the quarter with $247 million in cash and a fully undrawn $850 million revolver, with no near-term maturities [16] Strategic Wins and Guidance - Management highlighted significant contracts, including a $730 million contract from EDF Energy and a $995 million U.S. Air Force contract, while reaffirming fiscal 2026 guidance [5][16] - Net bookings for the quarter were $3.3 billion, resulting in a book-to-bill ratio of 1.0x for the first quarter and 1.1x for the last twelve months [7][8] - The backlog grew to over $47 billion, with funded backlog rising to nearly $7 billion, up 23% from the prior quarter [8][9] Market Focus and Growth Areas - Amentum emphasized its focus on accelerating growth markets, including space systems, critical digital infrastructure, and global nuclear energy [10][11] - The company reported nearly $1 billion in nuclear awards during the first quarter, with expectations for continued demand growth in both domestic and international markets [11][12] - Management noted that the timing of revenue from nuclear programs typically accelerates once construction begins, with peak revenue opportunities taking two to five years to materialize [12] Segment Performance - In Digital Solutions, revenue was $1.34 billion, up 4% year-over-year, while Global Engineering Solutions reported revenue of $1.9 billion, consistent with the prior year [14] - Adjusted EBITDA for Digital Solutions was $103 million, with a margin of 7.7%, and for Global Engineering Solutions, it was $160 million, with an 8.4% margin [14] Future Outlook - The company anticipates continued progress in core markets, with a focus on mix shift and margin improvement over time, acknowledging that changes in backlog will take time to reflect in results [19]
Amentum Q1 Earnings Call Highlights