Marine Sector Overview - The Marine sector has a strong platform for growth due to specialist capabilities and high barriers to entry[6] - Structural growth is expected from global naval fleet recapitalisation[6] - Increased opportunities are driven by design and build activities with a pipeline exceeding £17 billion and long-term support with a pipeline exceeding £5 billion[6] - The Marine sector is confident in delivering MSD growth and margin improvement to over 9% in the medium term[6] Financial Performance and Pipeline - Marine FY25 revenue is £0.9 billion[9] - The contract backlog for design and build is £0.9 billion, with a pipeline exceeding £17 billion[16] - The contract backlog for support is £1.5 billion, with a pipeline exceeding £5 billion[16] - Advanced manufacturing has a medium-term pipeline exceeding £500 million[68] Design and Build - Design and build revenues are projected to double to £500-£600 million over the medium term[39] - Advanced manufacturing has a backlog of approximately £360 million over 4 years for the US-UK Common Missile Compartment programme, with approximately 80% market share[56]

Financial Data and Key Metrics Changes - The company reported revenues of $2,000,000,000 for Q2 2025, representing a 6% increase year-over-year [37] - Adjusted EBITDA was $242,000,000, up 12% with an adjusted EBITDA margin of 12.4%, an increase of 70 basis points year-over-year [37] - Year-to-date operating cash flow was $308,000,000, up 20% versus the prior year, with a conversion rate against net income of 123% [37] Business Line Data and Key Metrics Changes - In the MTS segment, revenues were $1,400,000,000, up 7% year-over-year, with adjusted EBITDA of $141,000,000, an increase of 6% [38] - The STS segment reported revenues of $540,000,000, up 2% year-over-year, with adjusted EBITDA of $129,000,000, up 17% and margins of 23.9%, an improvement of over 300 basis points [39] Market Data and Key Metrics Changes - The Middle East region saw a 20% growth on a trailing twelve months basis, with significant investments in energy security and infrastructure [20] - The company has a robust pipeline with $19,000,000,000 in bids awaiting award in the MTS segment, of which 72% represent new business [15] Company Strategy and Development Direction - The company is refocusing on its core business of MTS following the termination of the HomeSafe Alliance joint venture contract [7] - KBR aims to expand in key markets through delivery and innovation, achieving leading margins while deploying capital back to shareholders [19] - The company is prioritizing pursuits in MTS that align with the new defense budget and expanding geographical reach in STS [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the conversion of the pipeline as funding from the presidential budget and the Reconciliation Act begins to flow [58] - The geopolitical environment, particularly in the Middle East, poses risks but is also seen as an opportunity for growth [59] - The company remains committed to creating shareholder value and maintaining a disciplined approach to capital allocation [52] Other Important Information - The company updated its revenue guidance for fiscal 2025 to a range of $7,900,000,000 to $8,100,000,000, reflecting the removal of expected revenues from the HomeSafe contract [43] - The adjusted EBITDA outlook remains unchanged despite the revenue guidance reduction [47] Q&A Session Summary Question: What were the upside and downside risk factors in setting the updated guidance? - Management highlighted the importance of pipeline conversion and geopolitical movements as key factors in setting the guidance [58] Question: How does the company feel positioned to win and retain work after the HomeSafe experience? - Management believes there will be no negative impact on win rates due to strong customer relationships and increased engagement [61] Question: What is the outlook for the MTS segment regarding bookings in the second half of the year? - Management expects a more robust second half bookings environment as the award cadence picks up [71] Question: What needs to happen in the next several quarters to support the new targets for 2027? - Management indicated that conversion of the pipeline and winning a fair share of opportunities are crucial for meeting the targets [75]

Core Insights - Ansys, now part of Synopsys, announced the release of 2025 R2, featuring AI-powered capabilities that enhance simulation speed and accessibility [2][3] - The new version includes improved solvers, streamlined workflows, and expanded Python compatibility, enabling better engineering agility and cloud computing [2][3] AI-Driven Enhancements - Ansys Engineering Copilot is introduced as a virtual assistant that provides AI-driven assistance within Ansys products, enhancing user experience and access to resources [4][5] - The integration of Microsoft Azure AI Foundry with AnsysGPT allows for automatic creation, validation, and optimization of simulations, reducing manual effort and human error [5][6] Data Management and Automation - The latest release simplifies data handling and management, boosting efficiency and collaboration across enterprises [7][11] - Enhanced model-based systems engineering (MBSE) capabilities ensure digital continuity and cross-team collaboration [7] Python Compatibility and Customization - Expanded Python compatibility allows for customized automation, accelerating workflows and improving data management [9] - Companies like Danfoss Drives utilize Ansys simulation to validate complex designs, optimizing performance and reducing energy consumption [9][10] Cloud-Based Simulation - Cloud technology and high-performance computing (HPC) capabilities enable faster, scalable simulations, allowing for more design possibilities [15] - Ansys Cloud Burst Compute™ provides on-demand HPC capabilities across multiple products, streamlining setup and eliminating the need for extensive IT support [20] Advanced Computational Tools - Ansys continues to enhance its core technology to solve complex design challenges, enabling faster results and unlocking new product development opportunities [12][14] - New features in Ansys Mechanical improve performance on large transient models and enhance meshing capabilities for complex systems [16]